For all the boomers, millennials and xers, the way you’re going to run a dental practice in the future has completely changed. Are you ready for what’s ahead of you?
Gone are the days when dentists just hung their shingle/sign out and drilled and filled the local community to a successful career. The profession has evolved, people expect more, new health care laws, student debt and the digital technology have affected how dentists work and run dental practices.
The impact of the global financial crisis and subsequent drop in demand for dental care has driven much of this decline, but the increase in the number of practicing dentists needs to be taken into account also. The cost of opening a dental practice, either from scratch or purchasing an existing establish practice isn’t getting any cheaper either.
Equipment is a huge outlay, if you want the latest cameras and lasers or you want the latest and greatest software you are going to have to get finance. This is where things can go wrong if you have not yet worked out that you are now walking in the boots of a business owner as well as the boots of a dentist.
Let’s look at this element for a moment. You went to Uni/school to learn dentistry (and paid a lot of money for the privilege) to become the qualified dentist you are today, give or take a few years of practice/mentoring. What training have you given yourself before you walk in the boots of a dental practice owner (Business owner)? Have you learnt how to put together a financial plan, so you can approach lending establishments? Have you gone on a course to understand your accounting needs, legal requirements, marketing approach? Do you know what your HR (Human Resources) requirements are? Have you ever employed staff before? Do you understand what insurances you require? These are just a few issues that come to mind, and let me assure you, as you move in and start working on your own practice there will be an abundance of issues to contend with on a daily basis. You’re next question should be “When do I do any dentistry?” Let me tell you, the clever dentist establishes a “TEAM”, the really smart dentists establish a “SPECIALIST TEAM”.
I’m going to assume that I am speaking to the “really smart dentists” and explain what the “Specialist Team” should look like. First issue we need to cover is “Can you afford to go into Practice (Business) Ownership?” This is my specialty. As a specialist dental accountant, I can help you make that call and generally I have had a relationship with the said dentist during their first years in the industry. The dentist (who would come under the category of “very smart”) would ask my opinion, asking such questions as: “Is it a good time to buy dental practices at the moment?” ‘Do you know of any practices for sale?” “You know my finances do you think the time is right?” All very pertinent questions that only a specialist dental accountant can answer.
Talking about pertinent, now is a good time to explain what you should look for in a specialist accountant. Unlike other specialists in the medical or legal fields, accountants can claim they are accountants (which is not always the case) and that they are specialists in any given field of industry. So assuming that you know that you are speaking to a qualified accountant (CA or CPA) with all the correct insurances to cover for malpractice, you have to ask: “What is the percentage of dentists they have on their books?” So often I hear accountants spouting that they have X amount of dentists on their books, so this makes them a specialist dental accountant. In a lot of cases this means anywhere from 5 to 15 dentists, which usually means a mix of dentists, dental practices and dental technicians. But the deciding factor should be the answer to, “What is the percentage of their total client base?” In my practice I have about 85% dental, and that I would break down to, 50% dentists/specialist dentists and 35% dental practices. What this shows is that my staff and I are working on clients in the dental industry on a daily basis. I am in an enviable position of being able to say and do so regularly, “I only accept dentists as my clients” and refer non-dental potential clients to other colleagues. The other 15% of clients (non-dental) are family members of my dental clients their wives, husbands and children etc., usually members of the clients corporate structure. This is your true Specialist Dental Accountant.
Now, back to the rest of your Specialist Team to help you succeed in your business venture, (your newly acquired or soon to be, dental practice). Your true Dental Specialist Accountant would be able to help you on a number of levels. Firstly, he would work regularly with Specialist Lawyers, Dental Brokers and Money Lenders, so you should ask for his advice on these matters. I deal with a number of these specialists and would give you a choice of 1 to 3 or use my discretion as to who would best suit your needs. Again, working on a daily basis with all these specialists, the rapport we have means you end up saving time and money. Why? Because I trust the paper work coming from these specialists, where if it is an unknown Lawyer or Money Lender, I have to check the integrity of the work and often have to phone and correct their assumptions when dealing with a dentist.
Do not underestimate the knowledge of these 3 Specialists, the accountant, the lawyer, and the money lender. The set-up/start-up of a Dental Practice is very unique compared with other medical practices. The tax structure is completely different to medical practices. The Legal issues on purchasing are different to medical practices. The way you borrow money is crucial to your tax implications when purchasing a dental practice. My advice to any dentist purchasing a practice, whether as a start-up or existing is to get these 3 specialists correct and save the heart ache later.
So, because I am a true specialist dental accountant, I attract other industry specialists who all in their own way make up this Specialist Team I refer to all the time. Marketing is critical and expensive, so find someone who has worked with dentists regularly, in this case the percentage rules do not have to apply. Dental Fit-outs should be handled by a specialist company, so many times I see corners cut in this area only to come back and bite (no pun intended) later. Mentoring and practice management training is also a specialized area, with a number of great companies out there who will guide and train you in your leadership and management skills and much more when it comes to improving your staff training and the all so important, client retention.
Hopefully you now understand the benefits of having a specialist team. So get your first 3 team members (Accountant, Lawyer and Broker) correct and add to the team as you progress, there is no reason why the transition of walking in both the dentists boots and the business owners boots should not be an enjoyable and wealthy journey. Having a team means you are not walking alone, so if you would like some help to put your team together then contact my office or checkout my website.
If you are unsure whether you are getting the specialist taxation advice that you require, or are concerned over your practices’ performance and need some assistance with tax planning, Albert Gigl deals with both simple and complex tax matters for dentists on a daily basis and is ready to assist you.
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