Dental Laboratories Business Plan

Wright’s Dental Laboratory is being established with the goal of providing dentists with restorations of superior quality and value. We offer all the state-of-the-art esthetic materials. Our product quality and services are excellent.

At Wright’s Dental Laboratory, we recognize that every practice is different… and every doctor is unique. We will take the time to listen to casework problems. Examine the doctor’s individual situation. In short, we reach a full understanding of their needs before we recommend a solution. Then, working as their partner, we put our extensive resources to work for them.

The result is creative and practical solutions to their casework needs on a consistent basis. All backed by over twenty-five years of experience and an investment in the techniques that enhance patient care quality like Product C*, Brand B, Brand B Model 2, and Product E, as well as all the premier implant systems. At Wright’s Dental Laboratory, our products and services are a valuable complement to well-established restorative treatment plans that promote aesthetics, tooth reinforcement and conservative preparation techniques.

*Registered Trademark brand and product names have been disguised throughout this sample plan.

Keys to Success

The keys to success for Wright’s Dental Laboratory are:

1. Our dental laboratory must continually adjust its methods to meet the constantly evolving challenges of dentistry and aspirations of the dental professional.
2. Our dental laboratory must be deeply and loyally committed to maintaining CONSISTENT product excellence.
3. Our dental laboratory’s only dynamic resource is people. It must develop opportunities for each person to use his/her abilities to the utmost of their potential.

Objectives

The objectives of Wright’s Dental Laboratory are as follows:

• Increase sales significantly each year.
• Increase the number of dentists using lab services aggressively each year.
• Expand service area to include the entire LochJaw tri-county area.

Wright’s Dental Laboratory offers state-of-the-art dental restorations services to dental professionals.

Charles Wright attended State University and is a certified dental technician. He entered the dental laboratory industry in 1994 and by 2000 he had established his own small dental laboratory. Charles now joins his expertise with that of his brother, David, to create Wright’s Dental Laboratory. The synergy of their respective talents will allow the precision restorative capabilities of Wright’s Dental Laboratory to consistently provide leading-edge technologies and a high index of progressive services to the profession in the greater LochJaw area.

As an advocate of continuing dental education, Mr. Wright’s commitment to continuing education is illustrated by his involvement with metal-free restorations. Charles has successfully completed training in such state of the art techniques as Product E and Product E model 2 and Brand B model 2. He has also completed training for all the premier implant systems including Brand J, Brand K, Product L, Product M, Brand N, and Brand O.

Among his accomplishments, Charles has held the posts of vice president, secretary and treasurer of the Oregon State Dental Laboratory Association. Additionally, he is a member of the National Association of Dental Laboratories (NADL), the State Dental Laboratory Association and the American Academy of Cosmetic Dentistry (AACD).

David Wright attended State University and is a certified dental technician. He has spent over ten years working with some of the region’s most respected practitioners. David is committed to continuing education and has successfully completed Corporation X’s Advanced Crown & Bridge Dental Studies. He has also successfully completed training in all the premier implant systems including Brand J, Brand K, Product L, Product M, Brand N and Brand O.

David entered the dental laboratory industry in 1991. He began his training under the tutelage of his father with various phases of fixed and removable techniques. Over the years, David completed his training to become fully proficient in the design and fabrication of precision attachment restorations, implants and full mouth rehabilitation cases.

Start-up Summary

The start-up cost of Wright’s Dental Laboratory will consist primarily of equipment. Charles and David will each invest personal funds and also secure a long-term loan.

Company Ownership

Wright’s Dental Laboratory, located in a custom designed, 8,000 square foot facility using the latest, state-of-the-art restoration production systems and computerized case tracking, is owned by Charles and David Wright. The company will operate as a general partnership with both Charles and David performing management functions.

Wright’s Dental Laboratory offers state-of-the-art dental restorations services to dental professionals.

Charles Wright attended State University and is a certified dental technician. He entered the dental laboratory industry in 1994 and by 2000 he had established his own small dental laboratory. Charles now joins his expertise with that of his brother, David, to create Wright’s Dental Laboratory. The synergy of their respective talents will allow the precision restorative capabilities of Wright’s Dental Laboratory to consistently provide leading-edge technologies and a high index of progressive services to the profession in the greater LochJaw area.

As an advocate of continuing dental education, Mr. Wright’s commitment to continuing education is illustrated by his involvement with metal-free restorations. Charles has successfully completed training in such state of the art techniques as Product E and Product E model 2 and Brand B model 2. He has also completed training for all the premier implant systems including Brand J, Brand K, Product L, Product M, Brand N, and Brand O.

Among his accomplishments, Charles has held the posts of vice president, secretary and treasurer of the Oregon State Dental Laboratory Association. Additionally, he is a member of the National Association of Dental Laboratories (NADL), the State Dental Laboratory Association and the American Academy of Cosmetic Dentistry (AACD).

David Wright attended State University and is a certified dental technician. He has spent over ten years working with some of the region’s most respected practitioners. David is committed to continuing education and has successfully completed Corporation X’s Advanced Crown & Bridge Dental Studies. He has also successfully completed training in all the premier implant systems including Brand J, Brand K, Product L, Product M, Brand N and Brand O.

David entered the dental laboratory industry in 1991. He began his training under the tutelage of his father with various phases of fixed and removable techniques. Over the years, David completed his training to become fully proficient in the design and fabrication of precision attachment restorations, implants and full mouth rehabilitation cases.

Start-up Summary

The start-up cost of Wright’s Dental Laboratory will consist primarily of equipment. Charles and David will each invest personal funds and also secure a long-term loan.

Company Ownership

Wright’s Dental Laboratory, located in a custom designed, 8,000 square foot facility using the latest, state-of-the-art restoration production systems and computerized case tracking, is owned by Charles and David Wright. The company will operate as a general partnership with both Charles and David performing management functions.

Wright’s Dental Laboratory offers the following products:

The LochJaw tri-county area has over 300 dentists. Next to salaries and benefits for associates, assistants and hygienists, dental laboratory fees are a dentist’s greatest expense.

Currently, there are seven dental labs in LochJaw. Of the seven, only four are full service. Most importantly, a new lab has not opened in the LochJaw area in the past six years. Over the past six years, the area’s population has grown tremendously. The current labs have not invested in the newest technology. Wright’s Dental Laboratory will set a new standard for products and services.

No where is this more important than in the dental care for children and seniors. The new materials and techniques creates more options for dentists to serve their young and senior patients. Wright’s Dental Laboratory is investing heavily in these new techniques and materials.

Market Segmentation

Wright’s Dental Laboratory will focus on dental professionals who work in the following three areas:

• Dental services for seniors;
• Dental services for children;
• General dental services.

Wright’s Dental Laboratory will aggressively pursue dental professionals in the LochJaw area by offering discounted services to encourage them to try the new lab. Charles Wright will manage the marketing campaign to promote the business. He has extensive contacts in the dental community that will be critical to the building of the business.

Sales Strategy

The sales strategy will focus on offering dental professionals the new techniques and equipment that will assist them in serving their speciality populations (i.e., children and seniors).

Sales Forecast

For the first month there will be no sales, as the company will be establishing its operations. We anticipate that sales will grow quickly during the second and third month of operation.

The following is the sales forecast for three years.

The management team for Wright’s Dental Laboratory will be Charles and David Wright. Charles will be responsible for marketing, sales, customer relations. David will be responsible for managing the dental lab operation.

Personnel Plan

The personnel plan for Wright’s Dental Laboratory is as follows:

• Marketing/sales manager
• Lab manager
• Lab techs (4)
• Customer service (1)

Part way through the second year of operation it is estimated that the Lab will have to hire an additional customer service operator.

The following is the financial plan for Wright’s Dental Laboratory.

Start-up Funding

Each of the two Wright’s, David and Charles, will invest in the venture. An additional long-term loan will be secured from the SBA, or local lenders, with an interest rate not more that 10%.

Break-even Analysis

The following table and chart display the monthly break-even point.

Projected Profit and Loss

The following table and charts will highlight projected profit and loss for the next three years.

Projected Cash Flow

The following table and chart highlight the projected cash flow for three years. It will be necessary for each Wright brother to loan the company additional funds mid-year.

Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8072, Dental Laboratories, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	n.a.	21.95%	17.33%	6.60%
Percent of Total Assets
Accounts Receivable	47.30%	53.33%	50.02%	15.10%
Inventory	12.35%	11.60%	10.48%	4.50%
Other Current Assets	4.81%	4.45%	3.55%	56.00%
Total Current Assets	72.74%	79.25%	86.97%	75.60%
Long-term Assets	27.26%	20.75%	13.03%	24.40%
Total Assets	100.00%	100.00%	100.00%	100.00%
Current Liabilities	16.96%	12.48%	11.72%	34.20%
Long-term Liabilities	52.17%	44.57%	34.15%	18.20%
Total Liabilities	69.13%	57.05%	45.87%	52.40%
Net Worth	30.87%	42.95%	54.13%	47.60%
Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	64.07%	64.10%	64.10%	0.00%
Selling, General & Administrative Expenses	63.37%	58.73%	56.34%	70.40%
Advertising Expenses	3.90%	4.00%	3.98%	0.20%
Profit Before Interest and Taxes	2.80%	9.07%	12.19%	10.10%
Main Ratios
Current	4.29	6.35	7.42	1.81
Quick	3.56	5.42	6.53	1.25
Total Debt to Total Assets	69.13%	57.05%	45.87%	52.40%
Pre-tax Return on Net Worth	6.15%	47.92%	52.26%	18.10%
Pre-tax Return on Assets	1.90%	20.58%	28.29%	38.00%
Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	0.54%	5.18%	7.60%	n.a
Return on Equity	4.31%	33.54%	36.58%	n.a
Activity Ratios
Accounts Receivable Turnover	3.91	3.91	3.91	n.a
Collection Days	56	85	86	n.a
Inventory Turnover	10.48	8.67	9.48	n.a
Accounts Payable Turnover	8.42	12.17	12.17	n.a
Payment Days	28	34	28	n.a
Total Asset Turnover	2.47	2.78	2.61	n.a
Debt Ratios
Debt to Net Worth	2.24	1.33	0.85	n.a
Current Liab. to Liab.	0.25	0.22	0.26	n.a
Liquidity Ratios
Net Working Capital	$139,152	$180,158	$254,010	n.a
Interest Coverage	1.38	5.44	9.11	n.a
Additional Ratios
Assets to Sales	0.41	0.36	0.38	n.a
Current Debt/Total Assets	17%	12%	12%	n.a
Acid Test	0.77	1.15	2.26	n.a
Sales/Net Worth	7.99	6.47	4.82	n.a
Dividend Payout	0.00	0.00	0.00	n.a