Executive Summary
Overview: Family Smiles Dental Care is a new dental clinic in Oregon that offers high-quality dental services to its clients. Steve, a licensed dental services manager, leads Family Smiles Dental Care. Steve’s new firm will be based on his previous experience as a single practitioner. His past experience, along with his forward-thinking, customer-centric business strategy, will enable him to quickly build a loyal patient base. By the tenth month, profitability will be achieved, and sales will be at a comfortable level by the end of the second year.
Mission: “Family Smiles Dental Treatment’s objective is to provide the finest dental care available. We exist to attract and retain customers.”
Vision: “If we follow this principle, everything else will fall into place.” Our services will go above and beyond the expectations of our customers.”
Industry Overview: In 2020, the worldwide dental market was expected to be worth USD 28.12 billion. During the period 2021-2028, the market is expected to increase at a CAGR of 6.4 percent, from USD 29.63 billion in 2021 to USD 45.68 billion in 2028. COVID-19 has had a massive and unprecedented worldwide effect, with the market experiencing a negative demand shock across all areas as a result of the pandemic.
Financial Overview:
Financial Highlights:
| Liquidity | 2020A | 2021A | 2022F | 2023F | 2024F |
| Current ratio | 6 | 12 | 23 | 32 | 42 |
| Quick ratio | 6 | 11 | 22 | 31 | 40 |
| DSO | 8 | 8 | 8 | 8 | 8 |
| Solvency | |||||
| Interest coverage ratio | 8.2 | 11.1 | 14.2 | ||
| Debt to asset ratio | 0.01 | 0.01 | 0.2 | 0.18 | 0.16 |
| Profitability | |||||
| Gross profit margin | 51% | 51% | 53% | 53% | 53% |
| EBITDA margin | 12% | 14% | 21% | 22% | 22% |
| Return on asset | 5% | 6% | 13% | 14% | 14% |
| Return on equity | 5% | 6% | 16% | 17% | 17% |
Fund Usage:
Industry Analysis:
Overview: According to our research, the worldwide dental market would shrink by -7.6% in 2020. The sharp increase in CAGR is due to the market’s demand and growth reverting to pre-pandemic levels after the pandemic has passed. Dental care expenditures have risen dramatically globally, owing to a variety of factors ranging from increased knowledge of oral health to an increased desire for oral aesthetics. These pervasive tendencies have resulted in a significant rise in demand for new items, resulting in the development of a number of creative products. The need for technologically improved goods is predicted to grow as the frequency of dental disorders such as malocclusion and caries rises. In addition, increased demand for aesthetics such as transparent aligners is likely to boost market development. Leading corporations are expected to increase their involvement in R&D activities as the demand for these goods continues to grow. This is intended to lead to the creation of new products, with enhanced and better patient outcomes as a consequence. Product adoption rates are expected to increase as a consequence of such innovative product development. Furthermore, the market is expected to rise at a solid pace throughout the projected period, owing to considerable growth in disposable income levels, particularly in emerging markets.
In addition, owing to the cancellation of operations like orthodontics, the pandemic has had a detrimental influence on the sales of these items across the world. In the fiscal year 2020, a number of well-known corporations in the market reported steep sales decreases. Dentsply Sirona, for example, a major player in the worldwide industry, reported a 17.1% drop in sales from FY 2019 to FY 2020. Other companies, such as Institut Straumann AG and Henry Schein, saw a significant drop in product sales. However, growing acceptance of digital technologies, along with the progressive reopening of practices throughout the globe, is likely to allow the industry to recover to pre-pandemic levels of growth.
Market Segmentation:
The market is divided into solo practices, dental service organizations (DSO)/group practices, and others, depending on the end-user. During the projected period, the solo practices category is predicted to be the most popular. The presence of a large number of experts operating as solo private practitioners in dentistry ensures the greatest degree of freedom possible. As a result, such factors are likely to add to the segment’s domination during the projection period. According to the Bureau of Labor Statistics (BLS), roughly 92 percent of dentists in the United States work in private practices. Due to an increase in the number of dentists joining such organizations, the DSO/group practices market is likely to rise substantially during the projection period. This is mostly due to the unique services provided by these organizations, such as insurance reimbursement assistance, lowering the professional overhead load for new dentists, membership incentives, and debt forgiveness. As a result of these factors, market growth is expected to shift from solo practices to group practices, resulting in a strong growth rate for the category.
The worldwide market may be divided into two types: dental consumables and dental equipment, based on type. In terms of market share, the consumables category had a commanding position. Due to the existence of essential items such as orthodontics in this market, it is expected to grow significantly by 2020. segment. The introduction of a new product is one of the major factors fueling this segment’s expansion. Implants, braces, and clear aligners are all new products in this market. In addition, The segment’s robust performance is projected to be bolstered by increased demand for cosmetic dentistry. During the forecasted term, performance 123-Align, for example, has announced the debut of a new product. At a lesser cost, ‘Smiles for All,’ an at-home clear aligner system. In 2020, the dental equipment category had the second-largest market share, with a lower CAGR. The worldwide expansion of the dental equipment industry is being fueled by an aging installed base of equipment, as well as technical advancements by leading manufacturers to provide new and innovative products to the market. For example, in November 2019, Formlabs, a prominent manufacturer of 3D dental printers, announced the formation of a new business unit called “Formlabs Dental,” as well as the launching of Form 3B dental printers and other worldwide product lines.
Marketing Plan:
List Family Smiles Dental Care in local phone books and directories.
Advertise Family Smiles Dental Care on our official website and use marketing methods to drive visitors to it. Advertise our company in Health magazines and on the internet.
Local Organization and Events: Family Smiles Dental Care will publicize its opening several weeks ahead of time in a variety of local newspapers and magazines. Advertisements will run regularly to keep relevant markets informed. A large promotion effort will be made through community newspapers, school publications, youth sports programs, and other similar channels.
Commute Advertising: We’ll hire people to display signs along [road or highway] to draw attention to Family Smiles Dental Care. Advertising on regularly frequented commute routes allows us to reach out to a huge number of working people with disposable income.
Pre-Opening Events: Family Smiles Dental Care will host pre-opening activities for potential consumers, neighborhood retailers, and media contacts before the store’s official debut. These events will raise awareness and generate buzz about Family Smiles Dental Care in the community.
Customer Loyalty Program: Family Smiles Dental Care will develop a successful customer loyalty program that will entice patients to return time and time. When our specialists and other personnel are not actively offering services to consumers in the store, they will call customers frequently. These phone calls will (a) guarantee that clients are happy with their treatments, and (b) remind consumers that they may need a fresh facial or massage after a specific period has passed. Customers who have been with the company for a long time will be eligible for the loyalty program, and referrals will be recognized as well.
Organogram:
Financial Plan:
Earnings:
Break-Even Analysis:
Income Statement:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| ANNUAL REVENUE | |||||
| Item 1 | 9,217 | 59,117 | 175,410 | 415,277 | 781,357 |
| Item 2 | 34,701 | 222,558 | 660,368 | 1,563,394 | 2,941,580 |
| Item 3 | 4,067 | 19,561 | 46,432 | 78,519 | 114,905 |
| Total annual revenue | 47,985 | 301,236 | 882,211 | 2,057,189 | 3,837,842 |
| % increase | 528% | 193% | 133% | 87% | |
| COST of REVENUE | |||||
| Item 1 | 360 | 2,259 | 6,617 | 15,429 | 28,784 |
| Item 2 | 480 | 3,012 | 8,822 | 20,572 | 38,378 |
| Item 3 | 52,000 | 65,000 | 78,000 | 91,000 | 104,000 |
| Item 4 | 720 | 3,615 | 8,822 | 16,458 | 23,027 |
| Item 5 | 140,000 | 336,000 | 560,000 | 840,000 | 1,120,000 |
| Item 6 | 60,000 | 144,000 | 240,000 | 360,000 | 480,000 |
| Item 7 | 32,000 | 61,333 | 85,533 | 112,153 | 141,435 |
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| ANNUAL REVENUE | |||||
| Item 1 | 9,217 | 59,117 | 175,410 | 415,277 | 781,357 |
| Item 2 | 34,701 | 222,558 | 660,368 | 1,563,394 | 2,941,580 |
| Item 3 | 4,067 | 19,561 | 46,432 | 78,519 | 114,905 |
| Total annual revenue | 47,985 | 301,236 | 882,211 | 2,057,189 | 3,837,842 |
| % increase | 528% | 193% | 133% | 87% | |
| COST of REVENUE | |||||
| Item 1 | 360 | 2,259 | 6,617 | 15,429 | 28,784 |
| Item 2 | 480 | 3,012 | 8,822 | 20,572 | 38,378 |
| Item 3 | 52,000 | 65,000 | 78,000 | 91,000 | 104,000 |
| Item 4 | 720 | 3,615 | 8,822 | 16,458 | 23,027 |
| Item 5 | 140,000 | 336,000 | 560,000 | 840,000 | 1,120,000 |
| Item 6 | 60,000 | 144,000 | 240,000 | 360,000 | 480,000 |
| Item 7 | 32,000 | 61,333 | 85,533 | 112,153 | 141,435 |
| Total Cost of Revenue | 285,560 | 615,220 | 987,794 | 1,455,612 | 1,935,625 |
| as % of revenue | 595% | 204% | 112% | 71% | 50% |
| Gross Profit | -237,575 | -313,984 | -105,583 | 601,578 | 1,902,218 |
| SELLING & ADMIN EXPENSES | |||||
| Item 1 | 28,000 | 96,800 | 154,880 | 175,692 | 193,261 |
| Item 2 | 75,000 | 105,000 | 120,000 | 120,000 | 120,000 |
| Item 3 | 36,000 | 96,000 | 108,000 | 120,000 | 120,000 |
| Item 4 | 8,000 | 12,000 | 12,000 | 12,000 | 12,000 |
| Item 5 | 3,839 | 18,074 | 44,111 | 61,716 | 115,135 |
| Item 6 | 3,359 | 12,049 | 26,466 | 41,144 | 76,757 |
| Item 7 | 5,600 | 10,000 | 12,904 | 15,034 | 17,376 |
| Item 8 | 6,667 | 14,000 | 22,067 | 30,940 | 40,701 |
| Total selling & admin expenses | 166,464 | 363,924 | 500,428 | 576,525 | 695,230 |
| as % of revenue | 347% | 121% | 57% | 28% | 18% |
| Net profit | -404,039 | -677,907 | -606,011 | 25,052 | 1,206,987 |
| Accumulated net profit | -404,039 | -1,081,947 | -1,687,957 | -1,662,905 | -455,918 |
Cash Flow Statement:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| CASH FLOW from OPERATING ACTIVITIES | |||||
| Net profit before tax | -$404,039 | -$677,907 | -$606,011 | $25,052 | $1,206,987 |
| Depreciation | $44,267 | $85,333 | $120,504 | $158,127 | $199,512 |
| Payables | |||||
| Item 1 | $4,333 | $5,417 | $6,500 | $7,583 | $8,667 |
| Item 2 | $11,667 | $28,000 | $46,667 | $70,000 | $93,333 |
| Item 3 | $6,250 | $8,750 | $10,000 | $10,000 | $10,000 |
| Item 4 | $3,000 | $8,000 | $9,000 | $10,000 | $10,000 |
| Item 5 | $667 | $1,000 | $1,000 | $1,000 | $1,000 |
| Total payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| change in payables | $25,917 | $25,250 | $22,000 | $25,417 | $24,417 |
| Receivables | |||||
| Item 1 | $320 | $1,506 | $3,676 | $5,143 | $9,595 |
| Item 2 | $360 | $1,807 | $4,411 | $8,229 | $11,514 |
| Total receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| change in receivables | -$680 | -$2,634 | -$4,773 | -$5,285 | -$7,736 |
| Net cash flow from operating activities | -$334,536 | -$569,958 | -$468,280 | $203,311 | $1,423,180 |
| CASH FLOW from INVESTING ACTIVITIES | |||||
| Item 1 | $16,000 | $13,200 | $14,520 | $15,972 | $17,569 |
| Item 2 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Item 3 | $28,000 | $22,000 | $14,520 | $10,648 | $11,713 |
| Item 4 | $96,000 | $88,000 | $72,600 | $79,860 | $87,846 |
| Item 5 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Net cash flow/ (outflow) from investing activities | -$180,000 | -$167,200 | -$150,040 | -$159,720 | -$175,692 |
| CASH FLOW from FINANCING ACTIVITIES | |||||
| Equity | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net cash flow from financing activities | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net (decrease)/ increase in cash/ cash equivalents | -$114,536 | -$297,158 | -$134,320 | $575,991 | $1,833,128 |
| Cash and cash equivalents at the beginning of the year | – | -$114,536 | -$411,693 | -$546,014 | $29,978 |
| Cash & cash equivalents at the end of the year | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
Balance Sheet:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| NON-CURRENT ASSETS | |||||
| Item 1 | $16,000 | $29,200 | $43,720 | $59,692 | $77,261 |
| Item 2 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Item 3 | $28,000 | $50,000 | $64,520 | $75,168 | $86,881 |
| Item 4 | $96,000 | $184,000 | $256,600 | $336,460 | $424,306 |
| Item 5 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Total | $180,000 | $347,200 | $497,240 | $656,960 | $832,652 |
| Accumulated depreciation | $44,267 | $129,600 | $250,104 | $408,231 | $607,743 |
| Net non-current assets | $135,733 | $217,600 | $247,136 | $248,729 | $224,909 |
| CURRENT ASSETS | |||||
| Cash | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
| Accounts receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| Total current assets | -$113,856 | -$408,380 | -$537,927 | $43,349 | $1,884,214 |
| Total Assets | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |
| LIABILITIES | |||||
| Account payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| Total liabilities | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| EQUITIES | |||||
| Owner’s equity | $400,000 | $840,000 | $1,324,000 | $1,856,400 | $2,442,040 |
| Accumulated net profit | -$404,039 | -$1,081,947 | -$1,687,957 | -$1,662,905 | -$455,918 |
| Total equities | -$4,039 | -$241,947 | -$363,957 | $193,495 | $1,986,122 |
| Total liabilities & equities | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |
