As I walk you through the cost of a new dental office, you should also think carefully about two questions:
1. What is your production number?
2. What can you get of income producing value for every dollar that you spend?
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Instead of focusing on the dollar amount for building a new dental office, you need to focus first on two things:
1. What will my PERCENTAGE of production cost be once I am up and running - 6 to 12 months from the start?
You shouldn’t have your amortized monthly cost be more than 10% of production.
* So, focusing on what your PRODUCTION number will be should actually be the starting point. *
At Design Ergonomics, we have a large number of client offices where this percentage is actually 5%. So, at that point, the cost of the building is noise. In fact, in our one year post-completion surveys, far too many offices report that they should’ve listened and actually built bigger! To learn more about how to right size your office, refer to this resource regarding the math of growth:
desergo.com/math-of-growth/
But now let me get to directly to the most important question to focus on:
2. There is a concept referred to as competitive strategy. People that understand real business understand this. Dentists don’t. In the mindset of competitive strategy your understanding would be that you CAN’T control the average construction cost in your area.
* What you CAN control are the results. *
And so, the far more important question instead of “What is the cost?” would be:
* “What can I get of income producing VALUE for every dollar that I spend?” *
When you focus on THAT question, you become laser focused on your design! Your focus changes from dollar cost to:
- Efficiency of construction
- The effectiveness of space planning
- The productive results of the equipment you plan to use
As an aside ... I'm sorry to say that, your focus should not, at least at the onset, be about what the logo should look like or which music you will play! (You know … the things that you’ve been dreaming about.)
All of this is with the end goal of being more productive - by design - than anyone else in your region! The rest of the cost; of leaseholds, the cost of land in your area, construction costs, permitting delays, you largely can’t control!
* Bad planning is therefore your biggest expense. *
So, if your area is one of those places where the cost to build is $450 a square foot (OMG) then that is what every competitor has to spend too!
So, figure out how you can do that:
- with 1/3 less space to get the same amount of treatment rooms.
- with a layout plan that is twice as productive.
So, do that with equipment that costs less but gets better results.
What results from this - as understood by the rest of the business world is referred to as Sustainable Competitive Advantage. Every other dentist that has NOT done what YOU do to create this advantage will have a very difficult barrier to compete. Forever! They can buy new technology or spend more on marketing, and do anything to train people ... but they will always have higher costs! Which, for example, means that you’ll always be able to pay higher wages for better people.
If you’ve done this correctly, you’ll have clear and simple systems - by design - so your staff will be able to get up to speed faster.
Training will take less time. Room turnaround will be faster and cost you less. In each and every aspect of what you do YOU simply pull further and further ahead.
So how much does it cost to build a dental office? There are some numbers in this video at 3:42 ( • How Much Does It Cost ... . I put them on a slide because we’ll have to renew this constantly. And there’s your challenge. You see the wide variation in cost - sometimes over double - in range. So this problem is not simply because of material costs. Labor is also a huge factor.
So here we are. You probably have more questions at this point than you have answers. I suspect that I just have told you some things that may stretch your understanding of what is possible. But, simply stated, in over 2 decades we have NEVER had a dentist take our advice and fail. EVER! So, if you have more questions, feel free to email or call (1-800-275-2547) the Design Ergonomics team. We probably know great builders in your area and more importantly, we know how to get you what you really need - that forever advantage - and the knowledge that with it nobody can catch you!
At Design Ergonomics (www.desergo.com), we help dentists create the most efficient, productive, and beautiful practices to meet their unique goals. Our design approach, developed over 25 years of working exclusively for the dental industry, has a proven track record for high-flow, high-efficiency success.