Dental Laboratories Business Plan Example

Dental Laboratories Business Plan

Wright’s Dental Laboratory aims to provide dentists with high-quality restorations using state-of-the-art esthetic materials. Our focus is on understanding each doctor’s unique needs and providing creative solutions. With over twenty-five years of experience and investment in advanced techniques and implant systems, our products and services enhance restorative treatment plans for aesthetic, reinforced teeth.

Keys to Success:

1. Continuously adapt to evolving dentistry challenges and dental professional aspirations.

2. Maintain consistent product excellence as a core principle.

3. Develop opportunities for each team member to maximize their potential.

Objectives:

1. Increase annual sales significantly.

2. Aggressively expand the number of dentists using lab services.

3. Extend service area to include the entire LochJaw tri-county area.

Company Summary:

Wright’s Dental Laboratory offers state-of-the-art dental restoration services. Founded by Charles and David Wright, who combined their expertise, the lab ensures leading-edge technologies and progressive services. Charles is committed to continuing education, having completed training in metal-free restoration techniques and all premier implant systems. David has over ten years of experience with esteemed practitioners and is proficient in fixed and removable techniques.

Start-up Summary:

The start-up cost primarily involves equipment. Charles and David will invest personal funds and secure a long-term loan.

Company Ownership:

Owned by Charles and David Wright, Wright’s Dental Laboratory operates as a general partnership. Located in an 8,000 square foot facility with advanced restoration production systems, the lab offers custom-designed services using the latest technologies.

Products:

Wright’s Dental Laboratory offers a range of products including ceramics, porcelain restorations, dentures, and other orthodontic appliances.

Market Analysis Summary:

The LochJaw tri-county area has over 300 dentists. We aim to provide cost-effective dental lab services since they are a significant expense for dentists. With only four full-service dental labs in the area, Wright’s Dental Laboratory can set a new standard by investing in the latest technology and materials, benefiting both children and seniors.

Market Segmentation:

Our target customers include dental professionals specializing in services for seniors, children, and general dental care.

Sales Strategy:

Wright’s Dental Laboratory will offer discounted services to dental professionals, focusing on new techniques and equipment that assist in serving special populations.

Sales Forecast:

Sales are expected to grow rapidly after the initial establishment phase. The projected sales for the first three years are as follows:

Year 1: $615,000

Year 2: $750,000

Year 3: $880,000

Management Summary:

Charles and David Wright will be responsible for marketing, sales, customer relations, and managing the dental lab operation, respectively.

Personnel Plan:

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The lab will initially have seven employees comprising a marketing/sales manager, lab manager, four lab techs, and one customer service representative. An additional customer service operator will be hired in the second year.

Financial Plan:

Start-up funding will come from personal investments by Charles and David, along with a long-term loan. The total funding required is $250,000.

Break-even Analysis:

The monthly break-even point is projected to be $49,013.

Projected Profit and Loss:

The expected profit and loss for the next three years are as follows:

Year 1: Profit of $69,587

Year 2: Profit of $93,161

Year 3: Profit of $106,198

Pro Forma Profit and Loss:

Year 1 Year 2 Year 3
Sales $615,000 $750,000 $880,000
Direct Cost of Sales $221,000 $269,250 $315,920
Other Production Expenses $0 $0 $0
Total Cost of Sales $221,000 $269,250 $315,920
Gross Margin $394,000 $480,750 $564,080
Gross Margin % 64.07% 64.10% 64.10%
Expenses
Payroll $264,000 $290,000 $324,000
Sales and Marketing and Other Expenses $24,000 $30,000 $35,000
Depreciation $12,000 $12,000 $12,000
Leased Equipment $0 $0 $0
Utilities $6,000 $6,000 $6,000
Insurance $7,200 $7,200 $7,200
Rent $24,000 $24,000 $24,000
Payroll Taxes $39,600 $43,500 $48,600
Other $0 $0 $0
Total Operating Expenses $376,800 $412,700 $456,800
Profit Before Interest and Taxes $17,200 $68,050 $107,280
EBITDA $29,200 $80,050 $119,280
Interest Expense $12,463 $12,520 $11,777
Taxes Incurred $1,421 $16,659 $28,651
Net Profit $3,316 $38,871 $66,852
Net Profit/Sales 0.54% 5.18% 7.60%

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.

Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $153,750 $187,500 $220,000
Cash from Receivables $343,250 $536,598 $635,057
Subtotal Cash from Operations $497,000 $724,098 $855,057
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $40,000 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $537,000 $724,098 $855,057
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $264,000 $290,000 $324,000
Bill Payments $314,168 $418,284 $475,335
Subtotal Spent on Operations $578,168 $708,284 $799,335
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $9,864 $9,864 $5,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $588,032 $718,148 $804,335
Net Cash Flow ($51,032) $5,950 $50,722
Cash Balance $20,668 $26,618 $77,340
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Projected Balance Sheet:

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

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Sales Forecast

Year 1 Year 2 Year 3
Assets
Current Assets
Cash $20,668 $26,618 $77,340
Accounts Receivable $118,000 $143,902 $168,846
Inventory $30,800 $31,307 $35,377
Other Current Assets $12,000 $12,000 $12,000
Total Current Assets $181,468 $213,827 $293,562
Long-term Assets
Long-term Assets $80,000 $80,000 $80,000
Accumulated Depreciation $12,000 $24,000 $36,000
Total Long-term Assets $68,000 $56,000 $44,000
Total Assets $249,468 $269,827 $337,562
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $42,317 $33,669 $39,552
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $42,317 $33,669 $39,552
Long-term Liabilities $130,136 $120,272 $115,272
Total Liabilities $172,453 $153,941 $154,824
Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Dental Products 0% $0 $30,000 $30,000 $40,000 $40,000 $50,000 $60,000 $65,000 $70,000 $70,000 $80,000 $80,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $0 $30,000 $30,000 $40,000 $40,000 $50,000 $60,000 $65,000 $70,000 $70,000 $80,000 $80,000
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Dental Products $0 $12,000 $12,000 $15,000 $15,000 $18,000 $21,000 $22,000 $25,000 $25,000 $28,000 $28,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $12,000 $12,000 $15,000 $15,000 $18,000 $21,000 $22,000 $25,000 $25,000 $28,000 $28,000

Personnel Plan

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Marketing/Sales Mgr 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Lab Mgr 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
4 Lab Techs 0% $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Customer Service 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Total People 7 7 7 7 7 7 7 7 7 7 7 7
Total Payroll $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000

General Assumptions

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
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Pro Forma Profit and Loss

Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $0 $30,000 $30,000 $40,000 $40,000 $50,000 $60,000 $65,000 $70,000 $70,000 $80,000 $80,000
Direct Cost of Sales $0 $12,000 $12,000 $15,000 $15,000 $18,000 $21,000 $22,000 $25,000 $25,000 $28,000 $28,000
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $12,000 $12,000 $15,000 $15,000 $18,000 $21,000 $22,000 $25,000 $25,000 $28,000 $28,000
Gross Margin $0 $18,000 $18,000 $25,000 $25,000 $32,000 $39,000 $43,000 $45,000 $45,000 $52,000 $52,000
Gross Margin % 0.00% 60.00% 60.00% 62.50% 62.50% 64.00% 65.00% 66.15% 64.29% 64.29% 65.00% 65.00%
Expenses
Payroll $22,000 $22,000 $22

Pro Forma Cash Flow

Cash Received

Cash from Operations

Cash Sales

Cash from Receivables

Subtotal Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received

New Current Borrowing

New Other Liabilities (interest-free)

New Long-term Liabilities

Sales of Other Current Assets

Sales of Long-term Assets

New Investment Received

Subtotal Cash Received

Expenditures

Expenditures from Operations

Cash Spending

Bill Payments

Subtotal Spent on Operations

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current Borrowing

Other Liabilities Principal Repayment

Long-term Liabilities Principal Repayment

Purchase Other Current Assets

Purchase Long-term Assets

Dividends

Subtotal Cash Spent

Net Cash Flow

Cash Balance

Pro Forma Balance Sheet

Assets

Starting Balances

Current Assets

Cash

Accounts Receivable

Inventory

Other Current Assets

Total Current Assets

Long-term Assets

Long-term Assets

Accumulated Depreciation

Total Long-term Assets

Total Assets

Liabilities and Capital

Current Liabilities

Accounts Payable

Current Borrowing

Other Current Liabilities

Subtotal Current Liabilities

Long-term Liabilities

Total Liabilities

Paid-in Capital

Retained Earnings

Earnings

Total Capital

Total Liabilities and Capital

Net Worth

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