Reading concerns about taking on and expanding dental practices as one of the Hexagon legs of business. The average general dentist startup of a 1500 sf dental office with up to 8 treatment/chair stations is just under $400,000. The average gross billings for a general practice is about $650,000 per year and a specialized practice at just over 1 million per year.
Now, keep in mind that the average dentist only works 5-6 days per week until they have reached ROI on the startup cost and then scale back to 3 days per week while keeping close to the same profit margin as 5 day weeks. This is accomplished through reduction in operational cost, primarily in labor and labor related costs.
My point in going though these stats is that the average dr. will not fill 8 chairs all at once. Thus the same office can accually handle 2-3 dentists taking the office gross billings from $650k to over $1.8 million per year in billables. This does not take into account any specialty billings. Times this by 30 locations and this leg of Hexagon could bring in up to or over $54,000,000 per year in billable revenues.
But wait, there’s more. Dentistry has become largely a cash based business, thus reducing the labor and costs associated with insurance billing and followup needed in collections with the insurance companies, not to mention the reductions in payments from them due to U&C charges (Usual & Customary). This is money that is added to the bottom line that in the medical practice is written off by contract agreement with the insurance company.
Of potential advantage is that a large portion of dental patients do not receive treatment due to lack of coverage and ability to pay for routine care and will wait until it becomes problematic and requires urgent care. Urgent care does not necessarily cost more than your regular dentist as they need to stay competitive. Also, urgent care dentistry can also serve as primary or regular dentist. With dental treatment being so expensive, another potential for income is dental treatment financing.
We have not even touched on the elderly dentistry aspect in providing mobile dentistry to the various care facilities or homes of patients. This is also a great potential revenue generator without the $400k startup cost associated with a brick and mortar office. I do not know what SB’s plans are and if they are anything like I have rolled out, but I could easily see this leg bringing in 100+ million in revenues yearly once established and once put up on the market would be a desirable acquisition by another company. Obviously JMO.
