From idea to opening day

By Thomas Coates

Opening a new dental practice involves much more than securing premises. This practical guide explains the property, regulatory, employment and ownership decisions prospective practice owners need to address.

The route from an initial idea to opening the doors involves several important decisions, each with implications for the practice you are building. Addressing them in the right order, and with the right advice, can prevent avoidable problems later.

That should not take the shine off what is an enormously exciting and fulfilling venture, but it does mean that organisation and the right professional support from the outset are essential. There are a few key areas that every prospective practice owner needs to think about.

Start with the right premises

The property is inevitably one of the first major decisions. You may be negotiating a brand new lease, taking an assignment of an existing lease or purchasing a freehold. Whichever route you choose, the temptation is understandably to focus on the immediate objective of getting the keys and starting the fit out. The property arrangements you agree at the beginning, however, can have consequences long after the excitement of opening day has passed.

A lease needs to work not only for the practice you intend to open today, but for the business it may become in five or ten years. Does it permit the alterations you need? Is there sufficient flexibility if you want to expand? Are the repairing obligations commercially sensible? What does the landlord need to approve? Are the lease terms acceptable to your funder and, looking much further ahead, will they be attractive to somebody wanting to buy the practice from you one day? Getting the bricks and mortar right at the outset creates the foundation for everything that follows.

CQC preparation begins early

Finding the building does not, unfortunately, mean that you can simply fit some dental chairs and open the doors. Anyone establishing a new practice also needs to navigate the initial CQC registration process, and that involves considerably more than completing an application form and waiting patiently for a certificate to arrive.

There are detailed applications to prepare, policies and procedures to put in place, evidence to collate and the CQC interview process to prepare for. Quite rightly, the regulator wants reassurance that the systems, governance and leadership necessary to provide safe and effective care will exist from day one. The difficulty for somebody opening their first practice is that they are being asked to demonstrate all of this before they have actually started operating it.

This is one of those areas where specialist guidance can remove a considerable amount of unnecessary anxiety. Our in house Compliance Team, led by Sofia Mendes, regularly takes new owners through the entire process, from preparing the policies and procedures underpinning the application to assisting with the registration and preparing for the CQC interview. The objective is not simply to obtain registration, but to make sure the practice begins life with a compliance framework that actually works once the doors open.

Build your team on strong foundations

While all of that is happening, there is the small matter of assembling a team. Recruiting the right people is obviously important, but so too is making sure that the arrangements governing those relationships are properly documented from the beginning.

Employment contracts, staff handbooks and Associate Agreements are unlikely to be the reason anybody dreamed of owning their own dental practice, but they are amongst the things that can cause the greatest headaches when they are not dealt with properly. We regularly become involved in disputes where the fundamental problem can be traced back years to an agreement that was unclear, inappropriate or, occasionally, borrowed from somebody else’s practice and amended in Word. It is invariably easier, and considerably cheaper, to establish clear expectations before somebody joins the business than to argue about what everybody thought had been agreed several years later.

The same principle applies to associates. Restrictive covenants, notice provisions, remuneration, laboratory costs, holiday arrangements and responsibility for remedial treatment are much easier to agree when everybody is enthusiastic about working together. They become considerably more contentious once the relationship has broken down.

Protect the business you build together

An increasing number of new practices are being established by friends, colleagues or associates going into business together. It is easy to understand the attraction. Combining experience, sharing the financial commitment and bringing different clinical interests together can make enormous commercial sense. Most people embarking upon these ventures have known one another for years and cannot imagine a situation in which they might seriously disagree. I sincerely hope they never do.

Unfortunately, life has an irritating habit of refusing to follow the business plan. People retire earlier than expected, move abroad, become ill, have families, receive opportunities they cannot turn down or simply decide that they want to do something different. None of those things necessarily means the relationship has failed. They simply mean that a business owned by more than one person needs an agreed mechanism for dealing with change.

Whether that means a Shareholders’ Agreement, Partnership Agreement or Expense Sharing Agreement will depend upon how the practice is structured, but the underlying questions are much the same. What happens if one owner dies or becomes seriously ill? What happens if somebody wants to leave? How is their interest valued? Can they sell to somebody outside the business? Who makes the major decisions? What happens if the practice needs further investment and one owner cannot, or does not want to, contribute? These are not particularly cheerful conversations to have when everybody is excitedly planning the new practice, but that is precisely when they should take place.

I tend to describe these agreements as being a little like a “pre-nup”. The best outcome is that the document is signed, put in a briefcase and never looked at again. If everybody remains happy and aligned for the next twenty years, wonderful. If they do not, there is at least an agreed framework to fall back upon rather than two people paying solicitors tens of thousands of pounds to argue about something they could have agreed over a coffee at the beginning. In my experience, some of the most expensive disputes do not arise because either party has behaved outrageously. They arise because nobody ever agreed what was supposed to happen when circumstances changed.

Create strong foundations early

These decisions are easier to make before the pressure of an opening date takes over. Taking advice early gives each workstream a stronger foundation and helps the legal, regulatory and people arrangements support the practice you want to create.

How we can help

Planning to open a new dental practice? Our fixed fee startup service brings Commercial Property and Compliance support together under one roof, with teams working closely throughout the journey. We can also help with employment contracts, Associate Agreements and the ownership structure, giving you practical, joined-up support as you move towards opening day. Get in touch by email or call 0330 088 2275 to talk through your plans.