If you’ve ever been involved in construction of any kind, or have heard of horror stories of dealing with contractors, plumbers, electricians, – you’ll agree with me when I tell you that construction of anything from scratch sounds like a LONG and SCARY journey.
But it doesn’t have to be.
Choosing a dental office contractor for the construction phase is an important step in your startup journey that’s going to turn your vision of a dream office into a reality.
To avoid the chaos involved in construction, the following is an absolute MUST READ for finding and working with the right contractor.
What you need to consider when choosing a dental office contractor to build your office
What questions you need to ask your potential contractors when you interview them
Specific elements of the contract document with your Contractor
If you’re reading this, I’m assuming at this point you’re closing in on the negotiations of your dental office space.
You also have the final office design drawings with all revisions completed. It doesn’t have to have a final signature from the architect until you’ve signed the lease just in case the lease negotiations fall through.
If you don’t have your office design drawings yet, stop and go here to read on Dental Office Design Floor Plan – How to Review and Revise.
So I’m hoping you’ve understood so far that lot of these important pieces are moving in parallel. What I mean by that is, as I’ve said before, you don’t have to wait until your office lease is signed to start looking for a dental contractor, or to start working with a designer / architect for the drawings of your office.
You could have potential contractors come look at the site to give you a general idea. The contractors can give you a ballpark figure of what to expect.
They’ll let you know if there’s something in the space that could potentially lead to a problem down the line when the office is being built.
And this is all before signing anything with them!
But not all contractors are same. There are contractors who have experience building dental offices, and there are others who are general contractors who may have tons of experience with building residential and/or commercial buildings but never built a dental office before.
How do you know who to work with? Should you go with a dental contractor or an experience general contractor who has never built a dental office before?
What do you need to think about when selecting the right person to work with to put your vision to reality?
So let’s get right into it!
What you need to consider when choosing a Dental Office Contractor to build your dental office
Where do you find them?
- If you’re working with an architect/designer for your office design drawings, they may already have worked with a dental contractor in the past that successfully turned their designs into reality. So go ahead and ask them for a recommendation. Make sure to get more than one name so you can compare bids later.
- Speak with your local dental society: Next time you meet your colleagues, ask around to see if they or someone they know who has gone through this process can recommend some names to you.
- Dental supply company: If you’ve already gotten your office plans ready and thought about equipment and chairs, ask the dental supply company to give you names of at least two contractors.
- Google: Go ahead and type in “dental contractors in [your county]”, “dental contractors in [your state]” – try both options. See what results come up. Try to stay local to your office space. Call them up and let them know what you’re up to. Ask them to come visit the site.
Dental vs. Non-Dental Contractors: How do you decide?
To answer this question, let me re-phrase this question: Do you go with someone who has built tons of dental offices before? or do you choose an experienced contractor who has NOT built dental offices before?
Maybe, I just confused you more by making it even more difficult to decide.
For me, this was a no-brainer. I knew I was going to spend at least 60% of my budget for a startup dental office on construction.
For that reason, I chose the route that would MINIMIZE any risk of future problems. I decided to work with a contractor that had built dental offices before.
I’m sure there have been offices built by general contractors with no dental experience and have been just fine. But if there are multiple options, why NOT go with someone with experience?
Why is this a big deal and why is it so important?
Well, it all comes down to the cost.
There are a gazillion options when it comes to finding a general contractor to help you build something, who will either do their own plumbing and electrical work – or they may have subcontractors who do it for them.
Depending on how much time you’re willing to spend yourself on the project, there are many ways to cut costs.
You may save some money by working with a non-dental contractor. But what happens during the construction phase when something unplanned comes along?
How are they going to oversee the plumbing if they don’t know what’s involved in plumbing of a dental office.
Any small complication can delay the opening of your office – which is costing you far more in the long run.
A non-dental contractor is usually not aware of all things involved in building a dental office. For that reason, their bid will certainly not reflect any complications that may occur. It’s harder for them to adapt to problem that may pop up, leaving you with expensive change orders.
A contractor with experience of building dental offices may have an idea or can plan for any future issues that may arise – and most importantly, avoid delays, so you can open the doors to your office sooner.
If you’re comparing their bid against the non-experience guy, then their bid will be higher but it’ll save you in the long run due to minimal change orders.
Last, if you’re going to select a non-dental contractor anyways, then at least make sure they use a plumber and an electrician who have dealt with dental offices.
What questions you need to ask your potential contractors when you interview them
As dentists, some of us are more conservative or aggressive than others when it comes to treating caries. We all have our way of doing things.
Same way, even with your office design blueprint, different contractors will have their own ways of doing things. Some may be more organized than others. Your interests may align more with one contractor than the other.
During the interview phase, you need to go beyond the numbers or the cost of building your office.
You may find out that one contractor’s philosophy and passion aligns more with your vision of bringing your dream office to a reality. They may not be the cheapest, but you believe in them in enough to bring your vision to a reality in a timely manner.
But how do you find out? – You NEED to interview them to find out what they’re about.
Here are the questions you need to ask your dental office contractors:
- Can you tell me a little bit about yourself? How did you get into dental office construction? – Stop talking and let them talk. Listen and you’ll learn a lot about them in first 30 seconds.
- How many dental offices have you built? – Even with their experience, do they show the passion and dedication and ability to execute on your vision? Get names of at least three doctors whose offices they’ve built – contact these guys personally and visit their offices.
- How many offices are you currently building? – If you’re one of ten projects, you’ll have less attention.
- How are you supervising the construction and the subcontractors? – If they have multiple projects on hand, you need to know the contractor who is in CHARGE personally who does the inspection at different phases of the project. They also need to provide you with weekly status report
- Do you use subcontractors or in-house guys?
- How do you handle customer service? What are some ways doctors keep in touch with you during the construction phase?
- How do you handle change orders?
- What’s included in your fees? Does the fee include building permit fee? – Some contractors include it in their fees, some don’t. I paid separately for my permits. Permit fees vary depending on the area and the building department.
- Are you licensed, insured, and bonded? – First, it protects you as the consumer and helps ensure that you’re working with a reputable professional. This is especially important if you’re going to be working with an inexperienced contractor, which I would advise against.
Bonding will protect you as the dentist when your contractors doesn’t complete the job, fails to pay for supplies or his subcontractors, or covering any damages caused to your property by the contractor’s workers. Usually the contractors pay a premium to a company to be bonded.
So how do you know the contractor you’re working with is bonded? You can ask them for a bond number and certification. Contractor must also carry a workers’ compensation policy that provides payment benefit to injured workers.
- Have you worked with the building department in the community (of the space you’re interested in) before? – This shouldn’t be a deal breaker, but if they’ve worked with the department before, it’s BIG plus because they’ll know the ins and out of the administrative paperwork.
- Can you propose a written deadline in the contract?
When meeting with your contractors, don’t be afraid to take the time to write down their answers to your questions.
Let them know you’re talking to multiple contractors and you need to stay organized, so you need to write information down.
They need to know they’re speaking to a knowledgeable professional, and not just a doctor who knows nothing about construction.
Even if you have no knowledge of dental office construction, (I know I didn’t at that point), you need to at least create an impression hat you know what you’re talking about.
Important Elements in the Contract with your Dental Contractor:
Dental Office Construction Cost Per Square Foot:
What does it mean? – Total cost proposed by your contractor for the construction of your office per available square foot space.
Do NOT compare bids from your contractors simply by looking at the cost per square foot.
What I mean by that is, when you’re comparing bids from contractors, you simply do not eliminate the most expensive bid. It also means that the cheapest bid by cost per square foot is not always a great deal.
There are dozens of factors that affect the estimated cost per square foot in a contractor’s bid:
- First and most obviously, cost will vary by region. Building in New York City will be much much higher cost than building in a rural area.
- Cost for removal of wastage materials: If there’s no place to store a dumpster next to the space where construction is going on, you will incur labor cost to remove materials – usually by cost-per-ton.
- If the space below yours is occupied by another business, then there are additional labor costs for working (setting up and cleaning up) before and after each working day.
- Is there a concrete slab on the floor already? – Then the contractor needs to trench the concrete floor for the plumbing, water and suction lines. Here’s a picture below of my office with metal framing and exposed trenching:
So besides the cost of the materials and labor in the actual construction process of the office, the points above will be factored into the cost per square foot in the contractor’s bid.
It’s a mutual consent between two parties (the dentist and the contractor) to change the contract. It may involve change to the original contract in terms of work involved, price, and time frame.
Here’s a picture of the change order clause in my contract:
It basically means that the base price quoted on the initial contract will change depending on the nature of the change order.
It also states that if a change order requires a change in, for example, the type of flooring or tiles in the bathroom, the amount of time required to finish the job will depend on how fast the contractor can get the specific type of tile or the flooring from the manufacturer.
The delivery of my flooring panels took longer than two weeks instead of the expected 3-4 days after finding out from the distributor that the item was on back order.
If you’re working with an inexperienced contractor, you’re most definitely going to run into higher number of change orders, which will add significantly to your construction cost.
Penalty clause in your contract allows you to indicate a deadline for your dental office contractor to finish the job. It’s there for possible delays during construction and it’s usually associated with a dollar amount to be paid by the contractor, either per day or per week – whatever time frame you decide before you sign off on the contract.
Your contract should indicate some sort of time frame to complete the project. You should include a completion date, which gives the contractor a reasonable but limited time to complete the project.
Of course this is subject to change depending on weather conditions or some other uncontrollable circumstances that may pop up during the process.
You do want to be careful in adding a penalty clause. To avoid causing any distrust factor, you may want to include an award or incentive for finishing early.
Penalty clause can be $x dollars per day for every day the project goes beyond the completion date. As an incentive, you can provide a fixed dollar amount for finishing early. For example, if they finish three weeks early, there will be a bonus of $2000.
I did not have the penalty clause or a set completion date in my contract. I did ask my contractor during the interview when he expects to finish and I countered with a date two weeks earlier, which he fully agreed to.
BUT, it was never written in the contract, so it meant nothing. Fortunately for me, my project only went over the expected completion date by three weeks. One of the three weeks was due to not having received the flooring panels from the distributor on time.
If I were to do this again, I would most definitely work with an attorney to review the contract and have them add an incentive and a penalty clause in the contract.
Payments need to be made to the contractor on a continuing basis based on some sort of a payment schedule. Whatever that payment schedule may be needs to be discussed during your initial interview with the contractor.
Here’s a picture of my payment schedule in my construction contract:
The bank you’re working with for your practice loan will also give you information on how these payments will be made to the contractor on your behalf.
Whenever a payment is requested throughout different stages of the construction, you will request that specific amount by filling out a payment authorization form, which the bank will provide to you.
Going back to financing of your practice loan, this is why it’s helpful to work with banks that make this process smooth. Because the contractor won’t move forward with the next phase unless he’s been paid. Remember, he needs to run the payroll for his subcontractors also.
If a bank has a tedious process of processing payment authorizations, then it will most definitely cause delays in the project. This is one reason you want to stay AWAY from SBA (Small Business Administration) loans.
If you have not yet read my post on how to finance your startup practice, or need a refresher, makes sure to refer to this post on Financing Dental Startup Practice.
Never pay the contractor in full until the project is completed. You need to do your final walk through with the contractor, going from room to room making sure everything’s according to your plans.
To turn your vision for a dream office into reality, you need the right team behind you.
The way to avoid getting overwhelmed is to do your due diligence prior to signing ANYTHING with a dental contractor.
Choosing a contractor who has experience building dental offices will make the entire process much easier.
If you’ve found multiple contractors who are experienced, asking them the right questions at the initial interview will help you avoid costly mistakes down the line.
During the interviewing process, find the contractor whose philosophy and passion align with your vision of turning your dream office from office design plans to reality.
Keep in mind the cost of building per square foot is a function of MANY variables: region, experience of the contractor, physical condition of the space you’re starting with, bells and whistles you’ll want to put into the space, etc.
Do not do what I did. Get your self an attorney to read over the contract and make sure to include a completion date with a penalty clause. If the contractor you go with will be busy with multiple projects, make sure to provide an incentive for completing your project earlier than the deadline.
Talk to your bank right away BEFORE signing the final contract how payment authorizations work and the time it can take to make a payment to the contractor.
Hold back 5-10% of the full project cost until a final walk-through is completed and is to your satisfaction.
Continue pushing ahead and you’re one step closer to your dream office!
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