November 11, 2024

Writing a business plan can be daunting, but it doesn’t have to be. This article addresses Step 7—writing the industry background section.

The industry background section is critical to positioning your practice within the broader dental industry. This part of the plan should highlight your understanding of the industry landscape, the competitive environment, and the factors influencing practice growth. A well-developed industry background section demonstrates your awareness of the business environment and provides a foundation for strategies you plan to implement.

To craft a comprehensive industry background section, use the following guiding questions:

1. What is the Industry?

• Defining the Dental Industry: Start by clearly identifying the scope and characteristics of the dental industry. Include details about available services, from preventive and restorative care to cosmetic and specialized services. Highlight trends in patient preferences, such as an increase in demand for cosmetic procedures or orthodontic services, as they reflect dentistry's diversity and evolving nature.
• Characteristics and Profitability: Consider dentistry's typical business model and revenue drivers. Analyze how these impact overall profitability, as private dental practices often have specific operational costs and profit margins distinct from other healthcare sectors.
  
  

2. What is the Industry Outlook?

• Emerging Trends: Discuss the trends shaping the dental industry. Digital advancements like tele-dentistry, 3D printing, and patient management software are transforming how practices operate. Highlight other shifts, such as the rise in patient-centered care and an increased focus on cosmetic treatments.

• Growth Factors: Review factors influencing the growth rate of private practices, including economic shifts, patient demographics, and regulatory changes. Explain how market dynamics—like rising healthcare costs and changes in insurance reimbursements—might impact your practice's growth prospects.
• Growth Patterns: Identify current growth patterns within dentistry. For example, urban areas might see faster growth due to the demand for advanced cosmetic treatments, while rural areas could experience slower expansion due to population density. These details give context to your practice's place in the industry landscape.
  
  

3. Who Competes in the Industry?

• Competitor Landscape: Identify who your main competitors are, whether they are large multi-location practices, solo practitioners, or corporate-backed dental service organizations. Examine how their resources, such as staffing, technological capabilities, and financial backing, compare to yours.
• Competitive Differentiators: Highlight what differentiates your practice. This could be a unique patient experience, advanced technology, or a niche specialization. Acknowledge that while competition exists, your practice offers a unique value that meets specific patient needs.
  
  

4. How Will You Adapt to Change?

• Proactive Strategy: Outline your strategies for adapting to potential changes in the private practice environment. For instance, if economic downturns lead to reduced discretionary spending on cosmetic services, you could pivot to emphasize essential services like preventive care.
• Flexibility and Resilience: Demonstrate that your practice is designed to remain resilient, even if the business climate becomes challenging. This might involve cross-training staff, adjusting service offerings, or implementing cost-saving measures to remain profitable without compromising patient care.

These guiding questions can help you write a detailed and insightful industry background that situates your practice within the dental sector, providing the perspective potential investors and stakeholders look for.

Not sure where to start? Contact us today!

References

https://hbr.org/product/creating-business-plans-hbr-20-minute-manager-series/16998?sku=16998-PBK-ENG