No Cash To Start With?

(How to arrange money for your clinic)

Suppose you have no cash with you. I mean really no cash to start with.

Don’t think and expect your dad will give you money for the clinic.

Also, think you don’t have a place of your own. No dad’s or relatives place. No money from wife’s or husband’s house.

If you have these help, the job gets easier. But I want you to think and plan for the toughest way to make a clinic. That will make you more resourceful and once you have the plan of action to tackle the toughest scenario then any other additional help will propel you to success faster.

SO the biggest Question –

from where should I arrange the Money?

Yes, you guessed it right – Bank Loan. As we told before no money from your parents or any of your relatives.

But which bank loan to take?

From which bank should I take the loan?

How much loan should I take?

Will I be able to pay back the loan?

 

Your mind will ask you so many questions. But you got to have courage.

Bank loan is the only way you can raise the fund necessary for your clinic. You are just like an entrepreneur who has to raise money from the market for their ventures.

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Check out some of the most used loans for dental graduates to start a clinic.

(Here we are are mentioning about the loans available to Indian doctors. If you are based outside India, then do enquire in the banking sectors of your country.)

SBI Dental Doctor Plus Bank loan

Simplified and collateral free bank loan from SBI for registered Dentist who has BDS and above qualification. The details of Dental Doctor Plus of SBI is given below

Eligibility for availing SBI Dental Doctor Plus bank loan

• Individuals / Partnership firms / Ltd. Co / Trust.
• Promoters should have minimum BDS and should be registered practitioners.

Purpose of Dental Doctor Plus

• To boost the financing to Dental equipment under tie-up arrangement.
• To finance qualified dentists
• For buying equipment
• Any other activities related to Dental profession

Nature of facility

Term loan

Margin

• Up to Rs. 25,000 – NIL
• Over Rs. 25,000 and up to Rs. 5 Lakhs – 10%
• Over Rs. 5 Lakhs and up to Rs. 10 lakhs – 20%

Tenure of Loan

• Maximum period of 5 to 10 years with maximum moratorium period of 6 months
• For construction purposes the moratorium period is 12 months (can be relaxed upto 24 months at the discretion of an authority one level higher than the sanctioning authority)

Primary security

Hypothecation of assets financed by the Bank

Collateral security

NIL

Loan amount

Maximum of Rs.10 Lakhs.

SBI Dental Doctor Plus Bank Scheme

SBI Doctor Plus Scheme allows a hassle free financing solution for qualified medical practitioners in any discipline. Although Doctor Plus loan scheme can be opted for all qualified medical practitioners, it is more suitable for freshers who has a entrepreneurial attitude. Here we will find what are the features, eligibility, security, documents required and other things to be considered for availing Doctor Plus Bank Loan offered by State Bank of India.

• For buying medical equipments (For dentists doctors, the loan also covers dental implants besides equipments; for orthopedists, the loan also covers various replacements / implants for hip / knee / shoulder / spine etc.)
• Setting up clinic, X-ray lab, nursing home, pathological lab, drug stores etc.
• For purchase of vehicles, ambulance, computers, etc.
• Expansion / renovation / modernisation of existing premises.
• For marketing exercises, business trips.
• Any other activities related to medical profession.

Eligibility for Doctor Plus Finance Scheme

• Individuals / partnerships / Corporates / Trusts (with powers to borrow)
• Promoters should be registered practitioners and possess minimum qualification such as MBBS / BAMS / GAMS / BDS / BHMS
• Key promoters should be qualified doctors.

Loan Amount offered through SBI Doctor Plus

Maximum of Rs. 5 crores of which a sub ceiling for Working Capital limits at:

• 10% of total loan amount for upto Rs 1 crore
• 5% of total loan amount for above Rs 1 crore

Repayment of SBI Loan for Doctors

• Maximum period up to 7 years
• Maximum moratorium 12 months, except for construction purpose, for which moratorium can be upto 24 months

Primary Security for SBI Doctor Loan

Hypothecation of Assets financed by the Bank.

Collateral Security for SBI Doctor Loan

No need for tangible collateral security for loan amounts upto Rs 15 lakhs for Allopathic professionals and upto Rs 10 lakhs for other professionals (Homeopathic, Ayurvedic, Unani etc)

Above Rs 10/15 lakhs: Tangible *collateral security of at least 25% and Personal guarantee of promoters.

*There is provision for concession on collateral security

Insurance for SBI Doctor Loan

Insurance of assets purchased out of Bank loan and in respect of vehicles, comprehensive insurance as laid down.

Margin of SBI Doctor Loan

• Upto Rs 5 lacs: *10%
• Above Rs 5 lacs: *15%

* There is provision for concession on margin

Interest rates of SBI Doctor Loan

*Interest rate is based on score obtained on simplified credit scoring model

*There is provision for concession on interest rates

Processing Charges for SBI Doctor Loan

0.5% of Loan Amount

Minimum Rs 500; Maximum Rs 50,000

**Sanctioning of loans upto Rs 25 lacs is based on credit scoring model. 50% and above scorers will qualify to avail this facility

***Sanctioning of loans above Rs 25 lacs is based on CRA rating.

Documents required for SBI Doctor Loan

As per SME documentation

Special features of SBI Doctor Loan

• Eligibility as per credit scoring model – Minimum score – 50% for limits upto Rs.25 lacs; For above Rs.25 lacs, CRA model is applicable
• Disbursements can be made in installments over a period of 24 months

• Half yearly inspection is stipulated

Loans for Dentists From Central Bank Of India

This is exclusively for all dentists who are members of IDA

This does give you some basic ideas. But you might still be confused. And also the bank schemes keep changing every year with new schemes coming. These schemes we mentioned were there in the year 2013 & still continuing. But please do verify with the nearest SBI branch for all the latest schemes and benefits.

Please do notice that – there are private banks also that provide the loans but we chose to mention your the govt. sector banking loans.

So, get out of your house and esquire all the nearest banks and see who is giving you the best loan scheme as per your requirements.

So Let’s Say You Took out a Loan of Around 7 Lakhs.

Now the real work begins.

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See Next Slide: Loan Taken!

Now How To Utilize that Loan for the Clinic?

 

Planning & making a list of the expenditures is a very difficult task. But don’t worry we are here to help you.

FocusDental.in – One of the biggest online dental e-market stores in India has elaborated a nice list to explain the young dentists all the basic requirements and expenditures on setting up the dental clinic.

The first step is to visualize and get even the minor details on paper. Basically, you need to ask yourself a lot of questions and ensure that you have satisfactorily answered all of them. If possible meet a few practicing dentists from the area where you want to start the clinic and get their opinion. Some of the important aspects of planning have been discussed below.

The planning process will involve working on the following activities:

• Finding the right place: A minimum requirement of 200 – 225 sq ft for a single chair practice (in a city like Mumbai even 150 sq ft should be OK). Get a property broker to help you find the right place.
• Getting proposals from suppliers for equipment…
  1. Dental Chair Choice of the chair depends largely on the budget. A wide range of chairs are available in the market. Best place is a conference trade exhibition as one can compare the price, deal as well as check out the actual size. Important to check the inlet-outlet points, spittoon size & position.Depending on the budget one can mix & match an average chair with good quality unit/trolley. in day to day practice smooth functioning of the air-rotor, air motor etc is far more important than the comfort of the chair. An electrical chair is a better option with the facility to have additional points, attachments in future. Doctor stool’s comfort & height is another important point. Some stools cannot be raised higher & could cause a problem due to the awkward arm/elbow position especially since we nowadays tend to work for a longer period at a time.
  1. Compressor
     1. 2 HP Compressor is advisable if the suction is not motorized (though motorized suction is a better option in the long run)
     2. Care must be taken to avoid/reduce the noise made by the compressor & the position planned along with the chair.
     3. Plug point to be next to the compressor but the switch should be on the chair side panel.
     4. Compressor tubes to be underground.
  2. Ultra Sonic Scalier
  3. X-Ray machine/ RVG
  4. Curing Light
  5. Sterilization
     1. Autoclave
     2. Ultra Sound Cleaner
     3. Glass bead sterilizer – for undo files, burs etc
     4. UV chamber
• Getting budget and time estimates from interior designers…One should not compromise on the quality & number of electrical points, cables etc. Visualize your practice 3-5 yrs down the road & plan.The interior cost could be anywhere between 1000 Rs/sq ft to 3000 Rs/sq ft or more.If one is likely to have 2 chairs in the near future, better to have plumbing & electrical arrangements made right at the beginning.

• Other activities of the Planning Process would include…
  1. Investigating regarding landlines & broadband in your area for telephone & internet access.
  2. Project feasibility study involving sitting with an accountant and calculating the Cash Flow, Return on Investment, Months required for break-even etc.
  3. If financing from bank take your project report and meet at least 10 banks so that you can choose the bank that gives you the best rate of interest. Consult your accountant before you finalize with the bank.
  4. Spreading the word around talk about your new venture wherever you go and meet people in your social network. While the interior work is being done, you can have a hoarding informing passers-by about your clinic.

Now that the planning process is over and you are completely aware of how the clinic is going to look like when it shapes up, it’s time to commit and turn your dream into a reality.

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Now how to set the clinic?

OK ! Money arranged & Planning done! What’s Next?

See Next Slide

 

 

Decide the place and complete formalities to take possession of the premises. It’s better to take the services of a good property lawyer and pay him fees so that you are shielded from unscrupulous elements trying to make some quick money from you. Once you have possession of the premises, inspect it properly and if you are going to engage an interior designer then get him/her to inspect the premises.

• Interior Work While your architect plans a good design for your clinic – the most important things should be taken care of like the position of each equipment for ease of use.
• Dental Chair
  1. PositionEnough space should be left around the chair for movement of the dentist as well as the dental assistant. Ideal to have a working platform behind the headrest as it allows for easy access to the instrument trays as well as space for other equipment used regularly like the Curing Light, Scaler, Apex Locater, Air motor etc.When the platform is behind, chair position can be determined with the cut-out of the chair in the most comfortable (for the dentist) backrest position/ most reclining position. Better to finalize the chair before starting interior work as it allows optimum chair positioning. This will allow for the plumbing, the electrical input/output as well as connection to the compressor to be underground avoiding a whole lot of wires hanging around the chair.
  2. Plumbing
     1. Drainage line has to be underground & planned well with proper slope, ease of cleaning etc as clogging is one of the most common problems.
     2. In the case of an attached toilet, if possible have 2 separate basins: 1 in the operatory, 1 inside/outside the toilet as it allows for separate wash areas: for the dentist & instruments etc. If possible have separate drainage pipes as well.
  3. Electricals Try & avoid a clutter of wires around the chair. Have at least 2 points more than the required no. next to the chair. Have at least 2 5/15 points next to the chair as some of the equipment may require 15 amp points. Compressor plug will be next to the compressor but the switch should be on the chairside panel.Extra points at the consultation table & reception area are a must.

• Compressor: Refer planning section above.
• Ultra Sonic Scaler: There are three basic types – magnetostrictive, piezo-electric and Odontoson™. Most commonly used is piezo-electric scaler.The scaling tip vibrates in the ultrasonic range of 20-45 kHz (i.e. 20,000 to 45,000 times per second), with an optimum frequency between 18 Khz and 32 Khz.
• X-Ray machine/ RVG: Variety of dental X-Ray machines are available. Price ranges from Rs. 40000 to 80000 /-.
• Curing Light
• Sterilization / Infection Control: Various viruses and bacteria colonize or infect the oral cavity and respiratory tract. These organisms can be transmitted in dental settings most often through direct contact with blood, oral fluids or other patient materials and indirect contact with contaminated objects (e.g. instruments, equipment, or environmental surfaces)Infection Control in the dental practice focuses on the use of sterilization procedures that will be able to eliminate cross-infection from a dental professional to a patient, from a patient to the dental professional and between two patients.The use of barriers such as gloves, masks, instrument trays, tray covers, covers of the working surfaces and light handles.There are certain disposable instruments used in the dental practice like gloves, masks syringes etc that control cross-infection efficiently. Those which are meant for repeated use are cleaned through a series of steps such as chemical cleaning, ultrasound cleaning, heat sterilization, using various equipment and applicable cycles followed by proper handling after sterilization.Some of the most popular equipment is listed below:
  
  1. Autoclave – Programmed autoclave machines are better than conventional steel drum type as they have a shorter cycle, need less space & more convenient to use. No doubt they are costlier but are more reliable.
  2. Dry Heat Sterilizers.
  3. Ultra Sound Cleaners are used to remove debris from instruments before putting them through Autoclave or Dry Heat Sterilizers.
  4. Glass Bead Sterilizer – for endo files, burs etc.
  5. UV chamber
  6. Chemical sterilization.
• Tools & Instruments
  1. Dental Instruments (download list)
     • 15-20 sets of mirror, tweezers, probes.
     • 2-3 sets of a straight elevator, moon’s probe: best to buy at conferences as one gets a wider choice.
  2. Dental Material (download list)
• Installation & CommissioningIs carried out by the respective companies providing the equipment.Estimated date of delivery of the Dental Chair & X-ray machine has to be coordinated with the completion of interior work.

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See Next Slide 

Do you Need To Hire More People?

(Remember you will need to pay salaries)

Ideally, you should have a helper & receptionist. But at the beginning of the practice when the funds are tight it is not easy to do so. You are already spending monthly on room rent and bills. You personally have to do the receptionist work.

It’s not so tough. Rather than any receptionist being the first person to see a patient/client, you become the 1st person. One thing many dentists do is to find a completely new boy. He might be from a village or related to you. Teach him the basic crafts of running a clinic and simple works like arranging the instruments, mixing alginate etc.

One thing many dentists do is to find a completely new boy. He might be from a village or related to you. Teach him the basic crafts of running a clinic and simple works like arranging the instruments, mixing alginate etc. In a few months, he can be very efficient & helpful in managing the practice.

Don’t get complex seeing the big dental clinic with a receptionist, few technicians, and all other modern features.

Spread your legs till where your blanket ends.

When you run a modest clinic the risks are also low. So you are going to pull a profit from a small investment. And once you start having a regular profit then you can start expanding you clinics gradually. Patience is the name of the game.

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See Next Slide: To Succeed in Clinical Practice

Patience is the name of the game

THE POWER TO PLAY “WAITING GAME”

(It’s a Long Waiting Game … The One Who Waits For The correct Time, Reaps the Crop)

You finally completed building your clinic with great care and investments. You hope that soon you will be in a position to recover the money. But it is not that easy.

Setting up a clinic by investing and recovering money from the investment are two different things completely.

IT TAKES TIME TO HAVE SOLID NET PROFIT IN YOUR HANDS

For example, if you have taken the place for your clinic in a rental then it’s not that easy to recover the amount. Some times you will just be breaking even at the end of the month.

Sometimes you will just be breaking even at the end of the month.

My seniors have told me that you have to sit in the market for at least 5 years to be a known dentist and then only you can hope for a regular income via profit.

It’s an unending cycle and every new dental professional has to go through it.

The Waiting Game

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See Next Slide 

The Recap of All Necessary Steps

So, by now you are ready with all that’s necessary to start and run a clinic.

Let’s recap a little

This is just the beginning of the journey. Now your clinic is ready and you are ready to enter the clinical sector. Be courageous.

Once you start the clinic, the monthly recurring expenditures are always tough to maintain.

If you have kept at least one staff then by the month end you need to give that person salary too.

But don’t worry. Every business goes through the establishment charges. Try not to get too tensed for that.

In a couple of months, you will get enough patients so that you can meet your monthly expenditures plus a little profit. That’s enough for now.

Please do keep in mind that the practice will start to show a serious profit only after a waiting period of 3 to 4 years. So until that time, you will need to show patience. In fact it’s the time to keep yourself more updated with latest advances that will make your practice more comfortable.

And the day will come when you will get that sweet taste of success. Success in terms of not only making a good regular profit financially but the realization that you planned and executed everything on your own.

There have been few recent cases of dentists committing suicide due to financial pressure and losses in the clinic. You must realize that the economic times are tough. Investing a huge amount in a clinic (if you do not have the financial backup) and then being under a constant pressure is not wise. Take small steps and take it easy.

That’s the time tested rule.

Conclusion:

We have presented you the toughest scenario to make a clinic – on your own with no help from anyone.

Now that you know it – any additional help is welcome. Family always comes to your help. Rather than taking a loan from a bank your parents or close relative will lend you the money in affection. You can return that money little by little without any pressure. Rather than taking a place for rent you might have your own place. For each individual, there will be some help along the way. So, all the best for your clinic and we sincerely hope that you all do well.

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We would like to mention some references and useful links that helped us to get the information for this article

lopol.org & focusdental.in

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