Dental Office Construction Costs – The 5 Budget-Killing Costs that Ruin Dental Offices
Dental Office Construction Costs
Before we get into the “Meat and Potatoes” of this article, please play “make believe” with me for a moment…
…allow me to pretend you’re in need of a sinus lift and 3 immediate implant placements next week. A fairly significant case for any dentist, wouldn’t you say? (I will get to how this ties in to dental office construction costs in just a minute.)
You don’t have a dentist that you go to regularly, but you remember meeting a dentist one time at a little league game. Though you could look up any dentist in your town and get the same results, you think you should give him a shot.
What was his name, anyway?
Does he do surgery you wonder?
Oh well, why wouldn’t you give him a chance at the case? He seemed like a decent guy. Besides, all dentists are trained and all dentistry will have the same end result, you tell yourself. There are no differences as long as you like the dentist and they have a nice waiting room….
I hope you heard the sarcasm dripping.
Of course there are differences in a large case like that! Significant differences. I’m dramatizing the scene and I can’t imagine you thinking that way but we should agree that, beyond the most detailed of clinical skills needed there are some important traits you would seek out: Experience, exposure, training, intuition, confidence, empathy, education and history.
I hope I can convince you that it’s the same with contractors.
Go to the specialist. This is your Big Case.
The purpose of this article is to point out the most egregious, expensive and avoidable mistakes that dental office projects and dental office construction costs fall into.
If you’re considering opening a new office or going through a renovation anytime, ever, please keep a mental note of the following 5 Budget Killing Dental Office Construction Costs.
Here are the 5 WORST Budget Killing Construction Costs…
Budget Killing Dental Office Construction Cost
Budget Killing Cost: Free to $50,000.
Permits are cheap. Let’s call it a couple hundred bucks in most areas.
Well, guess what?
While permits are cheap, permits are also horribly expensive – call it 10, 20 or even $50,000. How, you ask?
Allow me to elaborate…This is one area where I might want to take my grandmother’s advice about saying nothing when having nothing nice to say…but I can’t resist myself so I’ll let it all out…
Some of my closest friends work for local municipalities and planning commissions. They’re good people. But for some reason good people don’t mean good, efficient systems in local government services. When it comes to permits for building dental offices, the fluctuations are stupefying.
Each municipality has its unique code requirements, timelines, favorite people in the community and unwritten rules. Were a doctor to get on their bad side, it could mean another year of delays. I’m not kidding. Meanwhile, other municipalities stun me with their rapid turnaround time. There is no rhyme or reason. Or maybe there is and I’m the confused one in this mix.
But either way, permits and the people who issue them can be the #1 most expensive dental office construction cost of your new office project.
Question: How does a cheap permit also cost thousands?
The answer is “delays”.
Consider the following math on a hypothetical 3 month permitting delay for your new office:
What might happen if you have 3 months of delays because you can’t get the permitting department to give you the green light?
A) First, lets consider the “Cost” of Your Construction Loan:
Partial Use of Your Construction Loan (used for initial fees, down-payments, etc.)
Estimated at $50,000
Your Monthly Cost of that Loan: Approximately $500/mth
$500/mth x 3 mth = $1500
B) Next, remember that you have a “dormant” office space. This costs money every month.
Rent/Mortgage = $3000/mth (average is $2500-5000 per month)
$3000/mth x 3 months of permit and inspection delays = $9000
TOTAL = $10,500 in costs due to delays.
Each month COSTS you.
These delays are budget killers!
Your rent or mortgage is surely thousands of dollars each month. And each month that passes by is an irreplaceable few thousand dollars that is gone from your wallet forever; all because of a permit delay.
And remember, this loss doesn’t include the loss of income from not producing in that new space. What would you have been able to produce that month in the new space if you were in the facility, not waiting on delays? Surely, its tens of thousands of unmet production.
I’ve seen these delays happen many times and its painful to watch because doctors are left helpless, at the mercy of a nebulous zoning and inspections department’s hierarchy, watching week after week pass them by.
And don’t neglect the intangible costs. Your stress is also worth something.
All these things pile up and negatively affect you while you wait for the permitting guy to stamp your paperwork. All of these costs snowball while waiting for permits to be issued and it doesn’t have to be that way.
As my team works with dentists, we work on your behalf and get to know as much as we can about the local code requirements and coordinate that with the architects, engineers, contractors and timing of dental equipment installation. We save dentists thousands of dollars on this single topic of permits alone. This way, you can be a dentist while you have a trusted partner coordinating all the moving parts for you.
If all of these dental office construction costs are managed correctly, you will save a LOT of money because your funds will be dispersed at the right times – not too early – keeping more money in your pocket and less paying interest on loans, mortgages and leases prior to your days of chair-side production.
So as you move forward, here are some things that we’ve seen work well for other clients. Hopefully you can incorporate these into your project.
1) We submit two full sets of drawings to the building department for plan approval.
2) We do this in conjunction with all the other vendors like the architect, the contractor and even the people in the permitting department all having agreements on what is to be expected. That way we’re all on the same page.
3) With a well planned, unified front, we can avoid unnecessary delays in the permitting stage. In those situations where revisions are needed, necessary corrections can be made without horribly expensive permitting delays.
Don’t let permits kill your budget!
Approach the local permitting and zoning departments as necessary teammates who you need to earn goodwill with.
You’ll need their buy-in, their support and their collaboration.
Let’s see how many thousands of dollars of permitting delays we can help dentists avoid!
Budget Killing Dental Office Construction Cost
#2 – Forgetting the Future
Last year we had a client who wanted to incorporate a 3D Imaging unit in his office. His office is a big place with 3 other doctors and they were ready to incorporate 3D technology with an iCAT. The location in the building offered the best clinical and patient-flow location and it was the obvious spot where a high-use item should be located.
But the problem is that the building needed $8,000 of renovations to accommodate the device.
If the space had been planned properly years ago when they first designed the floor plan, we could have avoided the $8,000 in dental office construction costs, the mess, the disruption to their working days during those 3 weeks, etc.
So don’t forget your future! As you plan out your space, be sure to project forward at least 10 years and leave room for the things you have in mind down the road.
Here are some good examples of spaces to keep in mind as the future of dentistry continues to evolve and keep more and more under one roof:
– Cad Cam – leave room in the plans make it a showpiece and use it on patient tours!
– Cone Beam – larger footprints than older, traditional pans.
– Associate Ops – will you have room for 2 doctors to work while hygiene is taking place?
– The Overflow Room – when a practice gets busy, the best news in the world is an extra room for the emergency patient.
– Recovery Room – might you embrace more surgical procedures with implants on the rise?
– VIP Patient Area – could you have a high-end area of your practice where boutique services are offered like spa-style treatments, cosmetic enhancements in the dental office.
– Consult Room – the largest cases may be better communicated outside of a dental chair.
– Lecture Room – could you promote big implant cases to the public? One client does this twice per month, bringing in 80 prospective implant case attendees to their lecture room.
– 3D Printing – not cone beam but 3D printing. Where and how will your practice be able to embrace the biggest technology to come this century?
– Business Strategy Room – This is not a “business manager office”. This is your antidote to the tsunami of corporate dentistry coming your way. More and more practices will need focused, strategic planning with a true business team to keep the practice profitable and efficient. Don’t let PPOs, corporate dentistry and inefficiencies hold your practice back…build in a place to have true planning sessions with your team.
Here is a $150,000 annual loss to consider: The wrong number of treatment rooms.
The average practice produces $150,000 PER OPERATORY every year.
Let’s not leave $150,000 on the table in your future practice! Forgetting the Future with respect to the wrong number of treatment rooms will actually cost you many times more than $10k of dental office construction cost when you calculate unmet production.
Try to calculate how much production you would lose this month if you lost 2 operatories in your office? The estimates might make you uncomfortable but they’re real. This is hundreds of thousands of dollars on the line. All through planning the right number of ops into your new space.
That is what we’re referring to here – in terms of planning for the future.
How many operatories is ideal?
That question is handled in a separate blog post on my website at www.HowToOpenADentalOffice.com
The complex answer to the “Right Number of Operatories” is: It Depends.
Some of the clarity needs to come at the beginning of your planning process. Most of the clarity can be answered by digesting the question you’ll see below.
When planning for your future, your Practice Project Team should be asking you questions like these:
a) How many days per week do you want to work?
b) What income do you need and want to achieve in the new facility?
c) How many truly active patients do you have?
d) How many patients are appointed in the next 6 months?
e) What growth do you want in the next 5 years?
f) What specialties do you plan on keeping in house or bringing a specialist in for?
g) Do you have or will you ever want an associate?
By pushing through these “deeper” questions, you’ll have better clarity and confidence on the direction for your new office planning.
The Profitability of The Extra Operatory
But equipment is expensive!
And a larger office is expensive!
How can we decide confidently AND afford all this?
Here are some thoughts to address those very valid questions…
The average operatory will cost approximately $30k-$50k (construction and equipment) and the investment in that operatory in your new office will create, on average $100-$150k per year in production. That’s a GREAT investment!
If I told you that you could put $50k in the stock market and get back $150k, I think you’d join me, right?
“Each operatory wields the power of $100-$150k in production on average, please be sure your design process today in including your future plans.”
For that reason, please make sure you have the capacity to match your current and future practice plans as you design your new office. Don’t forget the future!
When we work with clients, we often tell them to plan for the space and “equip” it later. Plan for the future, have the space and make sure it’s available to use so you can care for the patients who trust you.
The extended conversation above deals with some of the surface discussions on operatories but there are a dozen other topics that must be addressed in planning for your future. Don’t get stuck paying tens of thousands of dollars for unnecessary construction upgrades later. Plan it out right the first time and avoid the massive budget killing dental office construction cost down the road.
Find a team that can help you think through and plan through your future…Don’t forget the future!
Budget Killing Dental Office Construction Cost
#3 – The $20,000 Floor
Estimated Cost: $5-$25,000
I wish #3 of the budget-killing costs was something fun like Italian Marble or gold-lined bamboo. But it’s not that fun.
Frankly – this is a cost you will NEVER get to enjoy seeing.
This topic is about Plumbing. Pipes. Yup, boring, unseen, ungratifying pipes.
Unfortunately, this is a dental office construction cost that you will get no emotional satisfaction from when it’s done right. But if it’s done incorrectly, your office will shut down, costing you untold levels of stress and lost production.
Can you imagine what would happen to your schedule if all the floors had to be jackhammerd this week? It can and has happened so let’s make sure we plan this out properly and avoid you having to pay dearly for floors.
The cost to lay the pipes in the floor for the specific needs of a dental office is pricey but there are ways to plan and keep the cost as low as possible.
The Floor and Your Office Location
I’m about to guide you to know how to save up to $20,000 in your new location…ready?
If all other things are equal, choose the dental office location with a basement. There are some serious reasons why your location choice will impact your finances and plumbing with a basement is one of them.
Plumbing is already the most expensive part of a dental construction project but the style of your building will dictate how much more expensive this will become, based on 3 general scenarios.
These are the 3 scenarios if your plumbing goes beneath the floor of your operatory space:
1) Into a basement.
2) Into the foundation of the building.
3) Into the concrete floor of the multi-level commercial building (like an office building).
The basement option is the least expensive so factor this into your site selection process. If you find a building with a basement, you can save yourself a lot of money in the dental office construction cost because the plumbing bill will be thousands of dollars lower. See, if a plumber can slip a pipe down through a wood subfloor, into the basement and then start fitting pipes while working, the cost is low. The skill level is reduced, the time to complete is faster and the cost to you is lower. Basements are good for dental plumbing and good for your budget!
But many areas of the country don’t have basements and many ideal locations (like multi-floor office buildings) don’t have the inexpensive basement option either.
So what are the options for those who don’t have basements?
The foundation of a building is the second scenario. Here, a trench needs to be dug through the existing foundation of the building to make room for the plumbing to lie below the operatory floor. Of the 3 options for dental plumbing, this one will cost you the most. The reality is that most commercial retail spaces only have this single option. The process involves “trenching” the slab of the foundation and there isn’t any way around it. But you can try to remember this as you are considering possible locations for your new office.
This dentist’s office has a concrete floor and a trench was dug in the concrete to place pipe in the proper places. This is the most expensive plumbing scenario but very common.
Core Drilling. This is the third scenario for your floors.
Core Drilling a concrete floor between two stories of building is the mid-priced option for dental plumbing. The majority of dentists in high-rise buildings or other modern office buildings will be faced with this as their only option. The process involved cutting a hole in the concrete floor, exposing the void of space between the floor of your office and the ceiling of the tenant below. Once the hole is opened, the plumber can run the pipes from one location to the other. Dental plumbing done this way is less expensive than trenching a foundation but it’s still expensive.
Core drilling is LOUD! If there are other tenants in the building, you probably won’t be allowed to do it during normal working hours. Be sure to abide by this so you don’t break your lease or your friendship with your office-neighbors!
Those are the 3 options you have for plumbing in your new dental office.
So because it’s such an expensive process, regardless of the style you’re left to work with, make sure you have a team who can plan it and install it correctly. If the plumber you have on your job site hasn’t done at least 10 dental office projects, get a new plumber NOW!
The wrong size air, water, or nitrous lines can shut down a practice. But you shouldn’t bear the brunt of knowing the details on plumbing line maximum lengths, diameters and fittings. You should bear the responsibility of choosing a plumber and contractor team who has the right experience.
We have a vetting process we take clients through to make sure the contractor needs that the doctor has match up with the contractor’s skills. Your dental project needs and contractor’s skills must be aligned or you could be digging up concrete floors.
Save the headache of a horribly expensive and stressful dental plumbing project.
Choose the right contractor team, choose the right plumbing team who has the experience for your specific project and choose the right location, knowing all the costs of that building.
We’re happy to help in any way we can. Let us know what we can do to help you through this process!
Budget Killing Dental Office Construction Cost
#4 – ADA Membership – (the “other” ADA)
Estimated Cost: $0-$100,000
Do you have one of those little green and white stickers in your office window?
Well, the dues for the “Other” ADA are insanely more expensive.
Becoming compliant with the American’s with Disabilities Act can easily run you $20,000.
Two ADAs….A huge difference impacting dentists’ new offices.
I was just with a client this week whose project just completed. Let’s call him Dr. Smith. As Dr. Smith and I walked through the whole office, my jaw was on the floor with how amazing the project looked in its final stage. I can’t imagine the pride that bursts out of him when he’s giving patients their “new patient tour”.
But what confused me was when Dr. Smith pointed out the back door at his entry steps.
There were steps, yes. But there was no wheelchair ramp.
No wheelchair access. My mind tells me this could be a problem. Why?
See, the ADA sets out federal regulations that require businesses to make access for those who are disabled. Basically, people need to be able to enter you place of business, even if they have to come in a wheelchair.
You may already know this but the Americans with Disabilities Act says:
“Each facility or part of a facility constructed by, on behalf of, or for the use of a public entity shall be designed and constructed in such manner that the facility or part of the facility is readily accessible to and usable by individuals with disabilities, if the construction was commenced after January 26, 1992.”
In other words, you need to make it possible for those unfortunate people in wheelchairs to enter your building.
While I was standing there, scratching my head, looking at Dr. Smith’s exterior steps from the back door, I had these ADA words rolling around in my memory.
This topic is a big deal for patient access, of course. But it’s also a big deal because of dental office construction cost to the dentist.
This is a cost that ALL dentists need to consider when they’re planning out their space. This is also one of the reasons why constructing a dental office can be so expensive!
– $15,000-$25,000 for a wheelchair lift or
– $20,000-$100,000 for an elevator or
– $5,000-$20,000 for a wheelchair ramp AND
– $1,000 – $10,000 for an ADA approved bathroom (typically, we need to design bathrooms at least 7’1” x 6’ with a door swinging out to a 5’ hallway)
There are more ADA related costs than this but these few costs will be enough to cover in this conversation.
So as I stood there, scratching my head next to Dr. Smith, I asked the inevitable question, “How did you get your Use and Occupancy Permit without a ramp or elevator”.
His answer surprised me. “I was quoted $14k-$20k for a wheelchair lift but my landlord is best friends with the local inspector. They were able to find some legal language that grandfathered my building into a historical classification.”
Essentially, the drinking buddies of the landlord and the inspection guy found an ethical way to have the building fit into an ADA approved loophole about historically significant buildings.
Because this historic building was positioned in strange way, close to the adjoining parcel of land on a main road, their options were limited. But their options left them with an exemption from the need for an elevator, ramp or lift.
Here is why:
a) Option A: Install a lift that would encroach on a shared sidewalk between the building and the neighbor, effectively blocking the flow of pedestrians or
b) Option B: Install a ramp that was 50 feet long (the ADA says the ramp needs to be 12 inches in length for every inch of vertical travel…a 50 inch height from the sidewalk to the entry door, therefore, requires a 50 foot long ramp!!). The building parcel couldn’t fit a 50 foot long ramp.
c) Pray for an exemption. Like a historical loophole. WOW.
Most of the time, a budget to build a dental practice can’t count on the landlord having friends such as Dr. Smith’s.
But when you’re planning your office, make sure you leave room for unanticipated dental office construction costs.
The satisfaction and capabilities that come with owning your own facility are a life-changing achievement. I see it on client’s faces every time we complete their project. It’s a look of exhaustion from a long process but confidence, pride and renewal that hadn’t been there before.
Imagine walking patients through a new facility that you’re proud of…when you can be proud in every area of the building. Imagine the confidence you’ll exude when your community and family walk into that stunning new facility.
Your future practice can bring you pride like this! Just make sure you have a Practice Project Team who has the experience and success to guide you through the process!
Estimated Cost: $5-$500,000
You Must Avoid –The typical cost driven contractor comparison.
You Must Include – Your Practice Project Team in choosing the right contractor with the best dental experience in the region who will get done on time, on budget and on quality. In other words, you must have…
The Best Dental Contractor. Period.
Before elaborating, please remember this truth: my perspective is unbiased. I’m not a contractor and don’t pretend to be. But I’ve helped coordinate hundreds of various contractors over the years and I hope the observations below can help you in your new dental office!
A doctor we know selected the local contractor who had no dental specific experience. Trying to be a nice local member of the community, the result was that the doctor was left with 4 months of delays and $45,000 of overages.
The contractor probably meant well and wanted to do things up to the doctor’s standards but without the right knowledge, he was doomed before he started. The irony of this? The local contractor’s bid seemed glaringly too low from the outset. That’s a polite way of saying he gambled…and it’s the doctor who lost.
My team and I help Dentists avoid this.
If you care nothing about Time, Money or Stress, please use any contractor you desire. Otherwise, trust me on the conversation here…
While the most expensive issue is the topic of delays, there are dozens of issues that can go wrong with non-dental contractors when you’re building a new dental office.
The Dentists who choose the “Wrong Guy” as their contractor could probably have avoided the problem by simply working with a Practice Project Team who has completed a few dozen good dental projects and interviewed the contractors for the doctor.
I would guess that 90% of all other budget busting problems for dentists in their new office are related to the topic of a contractor not having true dental practice construction experience.
And remember the upside of choosing the right contractor…The contractor you choose will make this experience fun and fulfilling…or it will make the process horrible and your greatest loss of sleep ever.
So let’s push this topic a little harder: beyond simply having dental experience, does your contractor have the right dental experience?
In a particular city on the east coast, we’ve seen 2 dental contractors get the majority of projects. One finishes on time, every time. The other frequently misses his time line and leaves multiple issues behind. Both dental contractors tend to get good references, do good work and tend to get referrals because both are good.
But one of them is great.
So here are a few rules of thumb to cross check your gut instincts with a contractor’s true dental experience:
– Your golfing buddy who builds high end homes isn’t the right guy.
– The landlord’s handyman who promised to beat the lowest bid is not the guy.
– The husband of your lifelong friend who needs the work isn’t the right guy and
– The local contractor with some impressive awards…still not the right guy.
Remember – this is your “big case”, similar to the patient who needs a sinus lift and immediate implants place. It’s a big case that needs the right hands needs to do the quality of work you deserve.
This is your big case!
Entrust your big case to the right, experience hands. The right dental contractor.
How do you KNOW it’s the right contractor?
Frankly, you won’t.
It’s like one patient asking another, which endodontist is the best. There is just no way for them to have enough experience with endodontists to know.
So how does a dentist, who builds a new office once or twice in a career find a contractor with confidence in their choice?
I’m about to do something dangerous…I’m going to give you an unfair, simple answer to this question.
Read the simple answer but then remember there is a much more complex and safe way to do this.
The simplest of answers is this: It’s imperative that you choose a contractor who has managed and actively participated in at least 10 stunning, wow-factor new dental office projects because the thousands of unforeseen, nuanced issues specific to a dental construction project are vastly different from contractor’s other projects.
The more complex, safer answer is: Use our 13 Point Contractor Interrogation questions. We give clients our 10 years of experience whittled down into 14 pointed questions that will unveil the right and wrong contractors. This will clearly and remarkably offer you clarity, confidence and protection in the building of your new practice.
Use our 13 point Contractor Interrogation and win!
See, dental construction bids MUST include very specific elements…there are about two dozen unique to dentistry that, if overlooked, could create budget-killing dental office construction cost overruns worse than the examples we’ve discussed here. If any of those elements are missing or priced incorrectly, it becomes obvious that something is wrong. Like my dad told me when I was a kid, “If it seems too good to be true, it probably is”. True dental contractors will bid in reality.
Dentists should be pointed to the best-of-breed contractors who can give bids in reality, that represent all the topics we’ve mentioned here in addition to a few dozen other important criteria.
Topics like Permits, ADA Access, Plumbing and not Forgetting the Future are all at the core of making sure your budget doesn’t get blown away.
One of our clients is a woman in her early 40s who was about to make her childhood dream come true. The practice she dreamt of and we helped her design was about to begin.
We introduced her to two of the best in the region and she was able to choose confidently, knowing we guided her with our experience of doing this dozens of times. When examining both bids from the final two contractors, it was clear which one was best suited for her. She created a drop-dead-gorgeous facility from scratch and has a tidal wave of momentum carrying her success forward now.
It was on time, on budget and on quality.
By working with the best Practice Project Team, she was able to rest with confidence, knowing that all of the variables were checked on her behalf. She made the final decision but she had an unbiased, team in our group who was not a contractor to expose and highlight all the angles to consider.
Once she made her final choice, our group oversaw the project, making sure each element was implemented properly. And her project came together beautifully!
I hope some of the conversation of dental office construction costs we’ve covered here gives you an added dose of confidence and understanding in the big process of opening your new dental practice.
Your big day is coming…its closer now than it’s ever been.
That will be a day when you are the doctor who gets to walk through the doors, cut the ribbon and stand boldly in the space you’ve been dreaming of. This is possible and within reach so take action today with a clear vision and another step forward in the journey.
Let our team know if we can be a sounding board for your project. We would love to hear about your vision and your plan!
Your family, your community and your legacy will all be reflected in this process.
Good luck in your next steps forward!
All the best,