Top Financial Tips for Dentists
As a dentist, you will face a unique set of financial challenges that not many other medical professionals have to deal with.
You will require an area that has multiple private treatment areas and a wide variety of expensive equipment.
But the question then becomes – how can you build a successful practice, run a business and achieve your financial plan without going into too much debt?
Do your research.
Building your own practice is rewarding and can provide you with a good retirement, if it is done right.
The questions you need to ask yourself are:
- But should you start your own clinic from scratch?
- Buy into a practice with other dentists or join a dental group?
- Purchase an existing practice?
Each presents its own pros and cons. You will need to consider all before making a decision.
Know your market and pick the location accordingly.
The choices you make about who you wish to market your practice to and its location will influence the potential profit you generate.
Do your due diligence to find out what the demand for dental services and the amount of competition in a given location before progressing with your plans.
Don’t go too big, too quick.
You might be thinking to go big at the outset in anticipation of a big inflow of new patients. But you also need to be realistic about your potential growth. Utilise the space you have to its maximum before you make plans for expansion. Start your expansion only when your revenue and client base justifies it.
Purchasing dental equipment – have a plan.
Dentists will generally have to outlay a lot more to fitout their practice than most medical professionals, given the treatment chair and other specific tools you require.
Yes, you can pay cash, but that can impact the cash flow of the practice You can also go second hand or a lower quality product, but would that give the give the right impression for your practice or provide the best experience for you patients.
Financing the equipment may be an alternative. Medical professionals can, if you are able to find the right provider, get access to some great deals for finance. Make sure you get advice from a medical finance expert, who understands your practice, knows what you can afford and can find the best deal that is suitable to you.
If you decide to enter into a loan, you will need to understand and be aware of the cash flow impact on your practice and the legal implications that go along with the finance agreement.
Don’t under insure.
Insurance, for business owners, is quite often something they think about but never end up doing, or they take the cheapest option. Insurance should provide full coverage– protecting your expensive dental equipment, protect your practice, protecting your staff and your family and finances in the event something goes wrong.
Run a lean machine.
You don’t want to go cheap and cut corners, but the secret to saving your practice money lies in reducing your overheads. This may include changing electricity providers or review your supply ordering process (as you may be holing too much stock).
Are you overstaffed? Can new technology or automation streamline processes and same time and money?
This is an ongoing process so always review your costs as small changes all add up.
Be aware of your tax obligations.
Many medical professionals, including dentists, struggle at tax time. As a high-income earner, you will owe a lot in tax so it’s important to be prepared. Talk with your advisor to help you understand your position and if you can be doing things differently to help your tax position out.
Get adviceWhen it comes to accounting, finance and financial planning, it pays to work with the best people who know the medical profession
Contact us today to discuss how we can help with your practice.