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Payroll for Dentists

Running a dental practice is demanding. Between patient care, appointments, and managing staff, payroll can easily become an overwhelming task. With intricate regulations, constantly shifting tax laws, and the delicate balance between employee contentment and business profitability, it’s understandable that many dental practices find themselves grappling to meet their payroll responsibilities.

From deciphering the nuances of NHS pensions to following Auto Enrolment regulations, managing payroll can feel like walking a minefield. Payroll is more than simply writing out pay cheques and distributing them to your team. Payroll involves intricate regulations, employee classification, and meticulous record-keeping. Failing to navigate payroll correctly can result in costly errors, discontent among staff, and potential legal ramifications.

In this guide, we’ll break down everything you need to know about payroll so you can run your practice smoothly.

Understanding the Importance of Accurate Payroll

Managing payroll accurately is crucial for the success of any dental practice. It’s not just a matter of paying your employees on time, it’s also about fulfilling your legal responsibilities as an employer.

In the UK, HMRC scrutinises payroll accuracy closely, with even minor errors carrying the risk of substantial penalties and fines. Furthermore, errors in payroll can lead to disgruntled employees, denting morale, and productivity within your practice.

Imagine your diligent dental nurses or hygienists receiving incorrect pay slips or, worse yet, experiencing delays in payment. The repercussions can be extensive, impacting both employee contentment and your standing as a dependable employer.

Moreover, maintaining precise payroll is imperative for upholding compliance with UK employment laws, including Auto Enrolment, National Minimum Wage, and Statutory Payments.

Non-compliance with these regulations can result in severe financial penalties, legal repercussions, and tarnishing of your professional image. By ensuring accurate payroll management, you can sidestep these potential pitfalls and ensure your practice operates smoothly and legally. In doing so, you’ll be able to concentrate on your primary objectives – delivering exceptional patient care and advancing the growth of your practice.

Action Points:

Conduct a Payroll Audit: Regularly review your payroll processes to ensure accuracy, identify errors, and make improvements. This helps maintain compliance and avoid penalties.
Understand and Update Legal Knowledge: Stay informed about updates to UK employment laws affecting payroll, such as Auto Enrolment and National Minimum Wage. This knowledge is crucial for maintaining legal compliance. Full information can be found on the HMRC and Gov.uk websites.
Implement Regular Payroll Reviews: Schedule regular reviews of your payroll system to adapt to legal changes and enhance accuracy. This proactive approach prevents discrepancies and ensures employee satisfaction.

Understanding Payroll Basics

Understanding the basics of payroll is important for making sure your staff get paid correctly and on time. Firstly, you need to know the difference between gross pay, which is how much someone earns before deductions, and net pay, which is what they take home after deductions like tax and National Insurance.

It’s also important to understand common deductions, like money for pensions or paying off student loans, as well as any allowances they might be entitled to. You also need to think about how often you want to pay your staff, whether it’s every month or every two weeks, and what works best for your practice and your employees.

Action Points:

Identify Common Deductions: Recognize common payroll deductions like pension contributions, student loan repayments, and others.
Understand Allowances: Be aware of potential employee allowances that can affect pay.
Determine Pay Frequency: Decide on a pay schedule (monthly, bi-weekly) that suits both your practice and your staff.

The Role of HMRC in Dental Practice Payroll

As a dentist, understanding the role of HMRC (Her Majesty’s Revenue and Customs) within your dental practice’s payroll operations is essential.

HMRC is responsible for the collection of taxes, including National Insurance contributions, income tax, and student loan repayments, deducted from employees’ wages. As the authority on the UK’s tax system, HMRC ensures that employers comply with the payroll regulations.

In dental practice payroll, HMRC provides essential guidance on payroll taxes, specifying the rates and thresholds for income tax, National Insurance, and student loan repayments. They also issue instructions on how to calculate and deduct these taxes from employee earnings and are responsible for collecting these payments. It is essential you understand these rules and regulations.

As a dental practice owner, it’s crucial you fulfil your HMRC obligations. This includes business registration, submission of tax returns, and punctual payments. Failing to comply with HMRC regulations can attract penalties, fines, and potential legal repercussions. By grasping HMRC’s role within your dental practice’s payroll ecosystem, you can avoid common pitfalls and ensure the smooth operation of your practice.

Action Points:

Register with HMRC: If you haven’t already, ensure your dental practice is registered with HMRC. This is crucial for legal compliance and to enable you to start processing payroll.
Stay Informed: Keep updated on the latest changes in tax rates, thresholds, and regulations from HMRC to ensure your payroll system remains compliant.
Ensure Compliance: Strictly follow HMRC guidelines for calculating and deducting taxes from employees’ wages. This includes income tax, National Insurance, and student loan repayments.
Timely Submissions and Payments: Set up a reliable system to submit accurate tax returns and make payments by the due dates to avoid penalties and ensure the smooth financial operation of your practice.

What are the Different Types of Employees in a Dental Practice?

In running a dental practice, it’s important to know the different employment types of people who work there. There are dental nurses, hygienists, associates, and receptionists, and each plays a big role in how well the practice runs. But what might surprise you is that each of these roles has its own rules and details when it comes to paying them.

In a dental practice, you might have different kinds of work arrangements. Some people work full-time, some part-time, some are hired on contracts, and others work as freelancers. Some might have hours that change, or they might only get paid based on how much work they do. It’s important to understand all these different types of employees so that you can follow the rules about paying them correctly. This includes things like figuring out taxes, making National Insurance contributions, and enrolling them in a pension scheme.

For example, do you know the difference between an employee and a worker? Or how to tell if someone is a self-employed contractor or a freelancer? Understanding these things can help you avoid making expensive mistakes and make sure you’re following the laws about employing people.

Action Points:

Identify Staff Roles & Regulations: Be aware of the different dental practice staff roles (nurses, hygienists, associates, receptionists) and their specific pay regulations.
Understand Employment Types: Recognize the various work arrangements (full-time, part-time, contract, freelance) and their impact on pay and benefits.
Classify Employees Correctly: Differentiate between employees, workers, self-employed contractors, and freelancers to ensure proper classification for tax and benefit purposes.
Comply with Employment Laws: Familiarize yourself with regulations regarding taxes, National Insurance contributions, and pension schemes for different employee types.
Avoid Costly Errors: By understanding these classifications, you can avoid mistakes in payroll and ensure compliance with employment laws.

Calculating employee salaries and wages

Deciding how much to pay your employees is an important part of managing payroll for dental practice owners. You must be really careful to get it right, so that you don’t make any mistakes that could upset your employees or get you into trouble with HMRC. When you work out how much to pay someone, there are lots of things to think about, like their basic pay, how much tax and National Insurance to take off, and any other deductions they might have, like student loan repayments or pension contributions.

To make sure you get it all right, you need to know all about the different tax rules and allowances that apply to the people who work for your dental practice. For example, you need to understand things like tax-free allowances for things like mileage or pension contributions, and make sure you use the right tax codes for each person.

You also need to keep up with any changes to tax rates or allowances, as well as any updates to the National Minimum Wage or National Living Wage. By carefully working out how much to pay your employees, you can make sure your dental practice follows all the tax laws and rules in the UK and keeps everyone happy and working well together.

Action Points:

Research Tax & National Insurance: Thoroughly understand tax rules and National Insurance contributions for your dental practice employees.
Factor in Allowances & Deductions: Consider tax-free allowances (mileage, pension contributions) and deductions (student loans) when calculating pay.
Utilize Correct Tax Codes: Ensure you assign the appropriate tax code to each employee.
Stay Updated on Regulations: Monitor changes in tax rates, allowances, National Minimum Wage, and National Living Wage.

National Insurance Contributions (NICs) for Dental Practice Employees

Being a dentist involves more than just looking after people’s teeth. You also have to deal with paying your staff and sorting out taxes. One important part of this is National Insurance Contributions (NICs), which can be really confusing for dental practice owners. NICs are a big part of what your employees get paid, and if you get them wrong, you could end up with fines and a bad reputation. By understanding how NICs work, you can make sure you pay the right amount, avoid mistakes, and keep your staff happy and motivated.

Action Points:

Understand National Insurance Contributions (NICs): Gain a thorough understanding of how NICs work for dental practice employees.
Prioritize Accurate NIC Payments: Ensure you pay the correct amount of NICs to avoid penalties.
Minimize Payroll Errors: Understanding NICs helps prevent payroll mistakes and keeps employees satisfied.

Understanding Auto Enrollment and pension schemes

One important thing to remember when managing employees is setting up pension schemes through auto-enrolment. It’s important to get this right, not just to avoid fines but also to show your staff that you appreciate them and want to support their future.

Auto-enrolment is part of a government plan to encourage people to save for when they retire. As an employer, you have to provide a pension scheme for eligible staff. This means automatically signing up those who qualify for the scheme and making contributions to their pension pot. But don’t worry, it’s not as complicated as it sounds at first.

If you understand the basics of auto-enrollment, pension schemes, and your responsibilities as an employer, you can handle this part of managing payroll confidently, focusing on what you do best – giving great care to your patients.

Action Points:

Implement Auto-Enrolment Pension Scheme: Establish a pension scheme for eligible dental practice staff.
Auto-Enrol Qualifying Employees: Automatically sign-up staff who meet the eligibility criteria.
Contribute to Employee Pension Pots: Make contributions towards employee retirement savings.
Understand Auto-Enrollment Basics: Gain a basic understanding of auto-enrollment, pension schemes, and employer responsibilities.

How to Handle Paye and Tax Deductions

Understanding how PAYE and tax deductions work is important when managing payroll, and it can be tricky, even for experienced dental practice owners. Your main job is taking care of your patients, not dealing with complicated tax rules and laws. But mistakes in this area can lead to fines, penalties, and a lot of stress. So, how can you make sure you’re getting PAYE and tax deductions right?

Firstly, it’s important to know that as an employer, you have to take Income Tax and National Insurance Contributions (NICs) from your employees’ wages using the PAYE system. This means working out how much tax to take off each person’s pay, based on their tax code and personal situation. It might seem simple, but it gets more complicated when tax rates, allowances, and reliefs change.

You also need to think about other deductions, like student loan repayments, pension contributions, and any court orders. And with Real Time Information (RTI), you have to report your payroll details to HMRC as it happens, so accuracy is really important.

Action Points:

Grasp PAYE System: Understand the PAYE system for deducting Income Tax and National Insurance from employee wages.
Calculate Accurate Tax Withholdings: Utilize tax codes and personal information to determine proper tax deductions.
Stay Updated on Tax Changes: Monitor updates to tax rates, allowances, and reliefs.
Consider All Deductions: Factor in student loans, pension contributions, and court orders when calculating deductions.
Maintain Accurate & Timely RTI Reporting: Ensure precise and real-time payroll information is reported to HMRC.

Managing Employee Benefits and Expenses

Making sure that your employees get the right benefits and expenses is an important part of managing payroll, but it often gets overlooked. It’s important to offer good benefits to attract and keep the best people working for you, while also keeping an eye on costs to make sure your practice stays profitable. This includes things like pensions, life insurance, and extra perks for employees, such as gym memberships or help with childcare.

When it comes to expenses, you need to think about all the costs involved in running a dental practice, like buying equipment, getting supplies, and covering travel expenses. You also need to follow the rules from HMRC and make sure your employees are reimbursed correctly for any work-related costs they have.

To manage benefits and expenses well, you need to understand the rules about payroll and have a good system in place to keep track of everything accurately. If you do this properly, you can create a happy and rewarding workplace for your employees while also keeping your practice financially healthy.

Action Points:

Offer Competitive Benefits Packages: Provide attractive benefits (pensions, life insurance) to recruit and retain top talent.
Balance Costs & Benefits: Maintain a balance between offering desirable benefits and keeping practice finances healthy.
Track Expenses Accurately: Implement a system to meticulously record all practice expenses (equipment, supplies, travel).
Comply with Reimbursement Rules: Ensure employees are reimbursed correctly for work-related expenses according to HMRC guidelines.

Outsourcing Payroll vs. In-House Management

When it comes to managing your dental practice’s payroll, you have to decide whether to do it yourself or hire someone else to do it. Each option has its good points and bad points, so you need to think carefully about what’s best for you.

Managing payroll yourself might seem like the cheaper and more controllable option at first. But it can take up a lot of your time and resources. You’ll need to buy payroll software, make sure your team knows how to use it and keep up with all the rules, and spend time doing the payroll each month. You’ll also have to deal with any questions or mistakes that come up. And because the rules about payroll are always changing, it can be hard to keep up and make sure you’re doing everything right.

On the other hand, hiring a specialist payroll provider can take a lot of the pressure off you. These experts know exactly what they’re doing and have all the right tools to get the job done accurately and on time. They’ll make sure you follow all the rules and that your employees get paid correctly. They can also give you advice on tricky payroll issues, like setting up pensions or dealing with student loan payments. By outsourcing your payroll, you can free up your time to focus on what you do best – looking after your patients and growing your dental practice.

Action Points:

Evaluate Payroll Management Options: Consider both in-house and outsourced payroll management.
Assess In-House Payroll Challenges: Be aware of the time commitment, software costs, training needs, and regulatory updates associated with managing payroll internally.
Recognize Benefits of Outsourcing Payroll: Understand the advantages of using a payroll provider, including expertise, accuracy, time savings, and access to expert advice.

The Importance of Payroll Record-Keeping and Compliance

As a dentist, you know how important it is to keep careful records in your practice. From notes on patients to plans for treatments, every little detail matters. The same goes for keeping records of your payroll and following the rules.

It’s important to keep accurate and detailed records to make sure you’re following the law as an employer and that your staff get paid correctly. HMRC says that employers have to keep good records of how much their employees earn, what tax is taken off, and any national insurance contributions. If you don’t follow these rules, you could end up with fines or legal problems. Plus, if your record-keeping isn’t up to scratch, you might make mistakes when paying your staff, which could affect your practice’s money and reputation.

By keeping careful records of your payroll, you can make sure you’re following all the laws, like the National Minimum Wage and rules about working hours and pensions. Good records also make it easier to give your staff the right information when they ask and help you make smart decisions about things like hiring and how to use your resources.

There are lots of tools and software available to help you keep track of your payroll and follow the rules. From online systems to programs that do reports for you, there are plenty of options to make managing your payroll easier. By using these tools, you can reduce the risk of making mistakes and save time.

Action Points:

Maintain Accurate & Detailed Payroll Records: Ensure comprehensive records on employee earnings, tax deductions, and National Insurance contributions.
Comply with HMRC Regulations: Adhere to HMRC guidelines for payroll record-keeping to avoid legal issues and fines.
Prevent Payroll Errors: Accurate records minimize the risk of employee pay mistakes, protecting your practice’s finances and reputation.
Payroll Tools & Software: Explore online systems and reporting software to streamline record-keeping and reduce errors.

How to Choose the Right Payroll Software for your Dental Practice

Choosing the right payroll software for your dental practice is a big decision. It can make things run smoother, cut down on mistakes, and make sure you’re following the rules from HMRC. But with so many options out there, it can be hard to know which one is best for your practice.

When you’re looking at payroll software, there are a few important things to think about. First, it should be easy to use, with a simple layout that anyone can understand, no matter how much they know about payroll. It should also have features that automate tasks, so you don’t have to spend ages doing things manually. And it needs to be able to grow with your practice, so it can handle changes like hiring more staff or changing how much people get paid.

It’s also important that the software works well with any other systems you already use, like your practice management software. This makes it easier to transfer data between them and reduces the risk of mistakes. And having real-time reporting features is a big plus too, because it means you can see how your practice is doing financially whenever you need to.

Action Points:

Prioritize User-Friendliness: Select software with a simple and intuitive interface for ease of use.
Automate Tasks: Opt for software with features that automate payroll processes to minimize manual work.
Scalability: Choose software that can adapt to growth, accommodating additional staff or changing pay structures.
Integration: Ensure compatibility with existing practice management software to facilitate data transfer and reduce errors.
Real-Time Reporting: Prioritize software with real-time reporting functionalities.

Understanding Your Business Structure

Understanding the different types of business structures is important for managing your finances properly.

If you’re a sole trader, you’re in charge of everything, but you’re also personally responsible for any money the business makes or loses. You’ll need to fill in a Self-Assessment tax return each year, which includes income tax and Class 2 NICs on your profits.

If you’re in a partnership, you and your partners share the money the business makes or loses based on what you’ve agreed. Each partner pays tax and Class 2 NICs on their share of the profits.

If you have a limited company, your personal money is separate from what the business makes. You’ll get paid a salary and might also get dividends, which have different tax rules. The company pays Corporation Tax on its profits, and has to pay Employer’s NICs.

Action Points:

Identify Business Structure: Understand the financial implications of your chosen business structure (sole trader, partnership, limited company).
Sole Trader Taxes: Be aware of personal responsibility for business finances and the requirement to file Self-Assessment tax returns (income tax & Class 2 NICs).
Partnership Taxes: Recognize shared responsibility for profits/losses with partners and individual tax obligations based on profit share (income tax & Class 2 NICs).
Limited Company Taxes: Distinguish between personal income (salary/dividends) and company profits. Salary and dividends have separate tax implications.
Company Tax Obligations: The company is liable for Corporation Tax on profits and Employer’s NICs.

Paying Yourself as a Practice Owner

Deciding how to pay yourself as a practice owner involves thinking about a few things. Firstly, you need to consider what’s fair for you and how much money the practice can afford to pay you. Then, you might want to think about whether to pay yourself through a salary or dividends.

If you pay yourself a salary, you’ll have to pay income tax and National Insurance on it, but you can also make contributions towards your pension. On the other hand, if you pay yourself dividends, you might pay less tax overall, but it depends on how much profit the practice makes and your personal tax situation. It’s important to get advice from a professional accountant to make sure you’re making the best choice for you and your practice.

Action Points:

Balance Fair Pay & Practice Affordability: Determine a salary that is fair for your contributions while considering the financial health of the practice.
Salary vs. Dividends: Evaluate the pros and cons of paying yourself through salary (income tax & National Insurance but allows pension contributions) or dividends (potentially lower tax but depends on profits and personal tax situation).
Seek Professional Advice: Consult with an accountant to determine the optimal compensation strategy for you and your practice.

Payroll for Dentists FAQs

What is payroll, and why is it important for dental practices?

Payroll is the process of managing employee compensation, including salaries, wages, bonuses, and deductions. It’s crucial for dental practices to ensure accurate and timely payments to staff, comply with tax laws, and meet obligations like PAYE (Pay As You Earn) and National Insurance contributions. Proper payroll management also helps with financial planning, maintaining staff satisfaction, and avoiding penalties from HMRC for late or incorrect filings.

How do I set up payroll for my dental practice?

To set up payroll for your dental practice, start by registering as an employer with HMRC to obtain a PAYE (Pay As You Earn) reference. Choose payroll software that suits your needs, ensuring it can handle tasks like calculating taxes, National Insurance contributions, and managing employee benefits. You’ll need to keep accurate records, submit Real Time Information (RTI) to HMRC each time you pay employees, and ensure compliance with auto-enrollment pension requirements.

What are PAYE and National Insurance contributions?

PAYE (Pay As You Earn) is a system where employers deduct income tax and National Insurance contributions from employees’ wages before they are paid. National Insurance contributions are payments made by both employers and employees to fund state benefits like the NHS and pensions. These contributions are calculated based on earnings and must be reported to HMRC through payroll. Managing PAYE and National Insurance correctly is crucial for compliance and ensuring employees receive the correct entitlements.

What are the key payroll deadlines for dental practices?

Key payroll deadlines for dental practices include:

Monthly PAYE submissions: Must be sent to HMRC on or before each payday.
PAYE payments: Due to HMRC by the 22nd of the following month (or the 19th if paying by post).
End-of-year tasks: Submit final Full Payment Submission (FPS) by 5th April and issue P60s to employees by 31st May.
P11D forms: Must be submitted by 6th July for employee benefits.

Missing these deadlines can result in penalties from HMRC.

How do I manage auto-enrollment for pensions?

To manage auto-enrollment for pensions in your dental practice, first, assess your employees’ eligibility. Then, select a suitable pension scheme that meets government criteria. Automatically enroll eligible employees and ensure contributions are made both by the employee and the employer. Communicate with your staff about the scheme and their rights, including how they can opt out if they choose. Regularly review and update your payroll systems to ensure ongoing compliance with auto-enrollment regulations.

What payroll software is recommended for dental practices?

Recommended payroll software for dental practices typically includes features like automated PAYE calculations, National Insurance management, and pension auto-enrollment. Popular options are Xero, QuickBooks, and Sage, which offer user-friendly interfaces and integration with other accounting tools. These platforms can help streamline payroll processing, ensure compliance with HMRC regulations, and manage employee benefits efficiently. Choosing software that meets the specific needs of your practice is crucial for effective payroll management.

Can I outsource payroll management?

Yes, you can outsource payroll management for your dental practice. Outsourcing to a specialized payroll service provider can save time, reduce errors, and ensure compliance with tax laws and regulations like PAYE, National Insurance, and pension auto-enrollment. It also allows you to focus more on patient care and practice management while ensuring that payroll is handled professionally and accurately.

How do I handle payroll for part-time and full-time staff?

To handle payroll for both part-time and full-time staff, ensure that pay calculations reflect their respective hours worked. For full-time staff, calculate their pay based on their contracted salary or hourly rate. For part-time staff, calculate based on the actual hours worked or their agreed part-time schedule. Apply appropriate tax, National Insurance contributions, and benefits proportional to their working hours. Using payroll software can help automate these calculations and ensure accuracy.

What are the tax implications of paying bonuses?

Paying bonuses to employees has tax implications, as bonuses are treated as part of their income and are subject to income tax and National Insurance contributions. The bonus amount is added to the employee’s regular earnings for that period, which may push them into a higher tax bracket, resulting in higher tax rates on the bonus. Employers must also consider their own National Insurance contributions on the bonus amounts paid.

How do I report employee benefits through payroll?

To report employee benefits through payroll, you must use the P11D form to inform HMRC of any taxable benefits provided to employees, such as company cars, private health insurance, or other perks. You’ll also need to calculate the Class 1A National Insurance contributions on these benefits and pay them to HMRC. If you use payrolling benefits, the tax on these benefits is deducted through payroll, simplifying the process and reducing the need for P11D forms.

What are RTI (Real Time Information) submissions?

Real-Time Information (RTI) submissions are reports that employers must send to HMRC every time they pay employees. These submissions include details of pay, tax, National Insurance contributions, and other deductions. RTI ensures that HMRC has up-to-date information on each employee’s income and tax status, which helps reduce errors and streamline the process of tax collection. It is a mandatory process for all employers in the UK.

How do I manage payroll for locum dentists?

To manage payroll for locum dentists, treat them as either self-employed contractors or temporary employees, depending on their employment status. If they are self-employed, ensure they invoice your practice, and no tax deductions are made; they handle their own tax and National Insurance. If they are temporary employees, include them in your PAYE system, making appropriate tax and NI deductions. Accurate record-keeping is essential to ensure compliance with HMRC regulations.

What records should I keep for payroll?

For payroll, you should keep records of:

Employee details (names, addresses, National Insurance numbers).
Pay details (gross pay, net pay, deductions, bonuses).
Tax and National Insurance contributions.
Hours worked (especially for part-time and hourly staff).
RTI submissions to HMRC.
Payslips provided to employees.
Records of any benefits provided.
Pension contributions and auto-enrollment details.
Contracts and terms of employment.
Any adjustments or corrections made to payroll.

How do I correct payroll errors or discrepancies?

To correct payroll errors or discrepancies, first identify and verify the mistake, whether it’s an underpayment, overpayment, or incorrect tax calculation. Once confirmed, adjust the payroll records and inform the affected employee(s) of the correction. Submit an amended Full Payment Submission (FPS) to HMRC if necessary. It’s crucial to document the error and the steps taken to correct it, and ensure future payroll runs are accurate to prevent recurring issues.

What are the consequences of missing payroll deadlines?

Missing payroll deadlines can lead to several consequences, including penalties and interest charges from HMRC for late submissions or payments. Employees may also face issues with their tax codes and National Insurance contributions, potentially leading to underpayments or overpayments of tax. Additionally, repeated delays can damage employee trust and morale. It’s crucial to meet all payroll deadlines to avoid these financial and legal complications.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

Whether you’re a dental associate, run your own practice or own a dental group and are looking to save time, money and effort on your accounts and tax then we want to hear from you. Our digital platform takes the hassle and the paperwork out of accounts.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

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Dental Accounts & Tax: Further Information

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Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

How to Manage Accounts for a Dental Group

Over the last 20 years, we have seen many dental groups emerge across all parts of the world. Some very large, others smaller, but often seeking to be acquired by the larger groups at some stage, or even the vague hope of an IPO (Initial Public Offering).

The basic premise has always been to buy a dental practice or office at a certain price multiple of EBITDA , add a few more, or a few hundred more, and then sell the whole group at a much higher multiple (with a much bigger EBITDA) than what the individual practices have been acquired for.

Sounds simple – what could go wrong?

Well in a rising market, buyers and group owners who timed their exits rightly have done well financially.

But what about the many hundreds or even thousands of dental groups across the globe that still are operating, but the arbitrage exit opportunity they were hoping for has not manifested?

In the UK in this current high-interest rate environment things look very different for many dental groups.

When rates were low, borrowing was cheap, which aided the growth strategies of many of these groups, yet today, whilst some groups are buying, the appetite to purchase a practice has drastically diminished from not only the smaller groups but also PE-backed ventures too.

Along with the aforementioned higher interest rates, the cost-of-living crisis, and a difficulty in recruitment, have also contributed to the slowdown in many dental groups.

The lack of available manpower has contributed to many NHS-funded dental groups, returning funds to the Department of Health unable to meet their UDA targets.

According to the FT, NHS Dental clawback was around £150million in 2022-23. I expect it won’t be very pretty this year either, from the groups I have been talking to.

Whilst some private dental groups, have struggled to grow the top line as quickly as they had hoped, again due to manpower issues, increased competition and a lack of personnel.

In the good times, its relatively straightforward to make money building a dental group, but in my view it will be the groups that really get to grips with their financials that will emerge strongest in the down times.

With my wealth of experience over the last 20 years working with a whole host of groups, these are my 6 tips to build a finance and accounting function that will actually grow your EBITDA, but also ensure you achieve the price multiple you desire upon exit.

Tip 1: Have you got a Systems Based Mindset?

The backbone of anything successful organisation are its systems – with the financial and accounting function paramount to success. Unfortunately, I have seen this as a major afterthought by many dental group or DSO owners, seeing it as an overhead rather than something that could help them grow a successful empire.

The first step really is about changing your mindset, and thinking about what data and information do you need to have available at your fingertips to make better decisions.

As it will be interpreting the data to ensure high quality decisions that will determine the success of your group.

You will need robust systems for everything from HR to marketing to compliance to accounting.

I personally like to call it a Systems Based Mindset. So, If you have this, you are on the right track.

Now in the context of finance and accounting, you need to have a solid framework and system in place.

If you don’t, that’s your first starting point. So ask yourself what financial data do you need to know to make good decisions? Examples could include:

Profitability by location
Profitability by Associate Dentist
Hourly rate of each Associate Dentist
Key Overheads as a % of Turnover
Cost of acquiring a new patient
EBITDA to interest coverage ratio

The list is endless, but the above are a good starting point.

Click here to read our article on How to Build a Dental Group.

Tip 2: The Framework for Success

The framework will depend on your business structure and how you organised your group but the key factor here is you must be able to see the performance of each of your practices in your group.

There really is no excuse to not be able to see which sites are doing great and which ones aren’t.

They may all be under one company, but it really is essential to have the financial visibility of each site. If you don’t have this, you are at a significant disadvantage when it comes to making quality decisions.

Remember, quality business decisions can only occur when you have visibility of performance. If it’s all jumbled together, you will only get so far, and you won’t be able to develop your group further until you have clarity of performance.

Click here to find out more about our accounts for dental groups services.

Tip 3: Technology and Software Requirements

Once you know you need to have financial performance information for each site, then there are numerous accounting systems available to really help you gather the information and automate much of this process.

But the key has to be implementing this correctly. You will need to consider the following:

How to get invoice and income information into the system?
Will it be with an automated OCR system?
Which bookkeeping system is most suitable?
What about standardised charts of accounts?
Will all information be centralised, or will each practice have to send the information separately?
What about purchasing and payment authorities? Do you have controls in place?
Have you a hierarchy in place for this for sign offs?
What about automating much of the accounts payable side of things to speed up payments to suppliers and make your group much more efficient?

More questions than answers, but this process of evaluating the right technology and software is paramount to ensure an efficient finance and accounting function for your dental group.

Click here for more information on how to structure your dental practice’s finances.

Tip 4: Choosing the right accounting tech stack for your group.

The world of accounting software has exploded in the last decade.

Of course, the software should be cloud-based, but apart from that you will need professional help to determine the right accounting technology stack for your dental group.

In terms of bookkeeping software, there are well-known products such as Xero, Quickbooks, Sage just to name a few.

But then there is the range of additional apps that could help you streamline and speed up the whole data capture side of things, these include Dext, hubdoc, Approvalmax, Lightyear.

Then when it comes to accounts payable you will want software that will integrate into your chosen bookkeeping software. Software such as Telleroo, Crezco, Payhawk are examples here.

Then for reporting purposes, you may want to consider Spotlight, Syft or Joinn.

The right tech stack can only be implemented once a full understanding of the workflow within your accounting function has been determined.

Tip 5: What About Your Accounting Team?

Time and time again, I have seen inexperienced non-accounting team members get involved in probably one of the most important parts of the group – the money.

Why have a practice manager perform the bookkeeping, when a bookkeeper could do this efficiently and properly?

Garbage in means, garbage out, it is essential to have accurate data entry in a standardised manner, or else any reports you rely on will be inaccurate and lead to poor decision-making.

Therefore, having the right people doing the right job is a pre-requisite here.

The larger the dental group the larger the team will be, which will include bookkeepers and accountants.

You can hire internally for these roles, or alternatively outsource this to firms like ours that have the experienced manpower to support your group.

Click here to find out more about offshoring your accounts.

Tip 6: The Numbers Ultimately Tell The Story

The bookkeeping should be done daily, with the management accounts available at the end of each month, and a review of each practice’s performance should be evaluated – that’s when you know if things are going to plan.

Without a regular review of performance, assuming you have followed steps 1 to 5 above, it would have been a pointless exercise.

Therefore, make sure you review the performance of each site and then take any necessary action swiftly.

The numbers always tell the story, but your whole finance and accounting function must been structured and enabled to tell you the full story, not a half-baked cobbled-together story of your dental group’s performance.

Click here to find out more about our financial health check up services.

Want to know more?

If you are a Dental Group or DSO anywhere across the world, with our shared service centre with talented team members, we can help you implement and run a much more efficient accounting and finance function but also help you grow a better dental group or DSO.

As that’s the ultimate aim, to build a quality dental group that creates value for all stakeholders.

Good luck, and get in touch if you need assistance.

Book a call with us today.

Case Study

Dental group struggled financially due to poor accounting & NHS clawback. This required the group to take out expensive short-term loans, which only further exacerbated their problems. Without clear financial data, their existing lender was not keen to refinance them, which put them into a further difficult situation.

Our team of bookkeepers and accountants then implemented a digital workflow with Xero and a variety of other apps to streamline the process, so the client could gain visibility of income and expenditure of each location.

The client could clearly see the underperforming sites and then put a plan of action into rectify things.

Then a set of month consolidated financial statements could be prepared to show to lenders the overall performance and why the client was a good bet to lend to.

Dental Group Accounts FAQs

How should I set up accounting systems for a dental group?

To set up accounting systems for a dental group, start by choosing robust accounting software that can handle multiple locations and centralize financial data. Implement standardized processes across all practices for tracking income, expenses, and payroll. Set up a unified chart of accounts to maintain consistency in financial reporting. Ensure regular financial reviews and reconciliations to monitor performance and cash flow. Finally, train staff on the accounting procedures to ensure accuracy and compliance.

What are the best practices for managing cash flow across multiple practices?

To manage cash flow across multiple dental practices, maintain a centralized cash flow management system to monitor income and expenses. Implement standardized invoicing and payment processes to ensure timely billing and collection. Regularly review cash flow statements to identify trends and address issues quickly. Use budgeting and forecasting tools to plan for future cash needs and allocate resources efficiently. Keep reserves for unexpected expenses and consider inter-practice loans to balance cash flow between locations.

How do I ensure compliance with tax regulations for a dental group?

To ensure compliance with tax regulations for a dental group, centralize your accounting to track all income, expenses, and payroll accurately. Regularly review tax obligations for each practice, including VAT, corporation tax, and PAYE, and ensure timely submissions to HMRC. Implement standardized processes across all locations and work with a tax advisor familiar with dental practices to stay updated on regulatory changes. Conduct regular audits to identify and correct any discrepancies.

What accounting software is recommended for dental groups?

For dental groups, recommended accounting software includes options like Xero, QuickBooks, and Sage. These platforms offer features tailored for multi-practice management, such as centralized financial tracking, payroll integration, and real-time reporting. They also provide scalability to accommodate the growth of your dental group and ensure compliance with tax regulations. It’s important to choose software that integrates well with other tools you use and provides robust support for managing multiple locations.

How can I streamline payroll for multiple dental practices?

To streamline payroll for multiple dental practices, use centralized payroll software that handles multi-location payroll processing efficiently. Automate calculations for salaries, taxes, and benefits across all practices, ensuring consistency. Set up a unified system for employee records and time tracking to simplify payroll management. Regularly review and update payroll data to ensure accuracy and compliance with tax regulations. Outsourcing payroll management to a specialized provider can also reduce administrative burden and ensure efficiency.

What financial reports are essential for managing a dental group?

Essential financial reports for managing a dental group include:

Profit and Loss Statement: Tracks income and expenses, showing overall profitability.
Cash Flow Statement: Monitors cash inflows and outflows, ensuring liquidity.
Balance Sheet: Displays the group’s assets, liabilities, and equity.
Budget vs. Actual Report: Compares projected budgets with actual financial performance.
Payroll Report: Details employee compensation, including taxes and benefits.

These reports are critical for making informed financial decisions and maintaining the financial health of the dental group.

How do I handle inter-practice billing and expenses?

To handle inter-practice billing and expenses within a dental group, establish a centralized system to track and allocate costs accurately across all practices. Use accounting software to automate the allocation of shared expenses, such as marketing or administrative costs, to ensure each practice bears its fair share. Implement clear policies for inter-practice billing, detailing how expenses will be tracked, billed, and reconciled. Regularly review these processes to maintain transparency and ensure accuracy.

What are the key considerations for budgeting in a dental group?

Key considerations for budgeting in a dental group include:

Revenue Projections: Estimate income for each practice based on patient volume and services offered.
Expense Management: Track fixed and variable costs, including salaries, rent, and supplies.
Cash Flow Planning: Ensure liquidity to cover operational costs and unforeseen expenses.
Capital Expenditures: Plan for investments in new equipment or technology.
Profit Margins: Monitor profitability across all practices to maintain financial health.

How often should I review financial performance across practices?

You should review financial performance across practices on a monthly basis. Regular monthly reviews help you monitor key metrics like revenue, expenses, and profitability, allowing you to address issues promptly and adjust strategies as needed. Quarterly reviews can provide a broader perspective on trends, while annual reviews are essential for strategic planning and setting long-term goals. Consistent monitoring ensures that each practice remains financially healthy and contributes positively to the overall group.

How do I manage debt and credit within a dental group?

To manage debt and credit within a dental group, first, establish clear policies for borrowing and repayment to maintain healthy cash flow. Regularly review debt levels across practices and prioritize paying off high-interest debt to reduce financial strain. Use credit responsibly to finance essential investments, and monitor credit terms closely to avoid penalties. Maintain a strong relationship with lenders and ensure that all practices contribute to meeting debt obligations.

What role does inventory management play in accounting for a dental group?

Inventory management plays a crucial role in accounting for a dental group by ensuring accurate tracking of supplies and materials across practices. Effective inventory management helps control costs, reduce waste, and maintain optimal stock levels, which directly impacts cash flow and profitability. It also supports accurate financial reporting by aligning inventory levels with expenses, ensuring that supplies are accounted for in the right periods. Implementing inventory management software can streamline this process and improve overall financial efficiency.

How can I optimize tax planning for a dental group?

To optimize tax planning for a dental group, consider consolidating expenses and leveraging tax-efficient structures like group relief to offset profits and losses across practices. Utilize capital allowances for equipment and property investments, and ensure that you maximize allowable deductions and credits. Strategic timing of income and expenses, along with regular reviews of tax liabilities, can help reduce the overall tax burden. Consulting with a tax advisor who specializes in dental practices can provide tailored strategies for your group.

What are the benefits of centralized vs. decentralized accounting?

Centralized Accounting:

Offers consistency and control by consolidating financial data from all practices in one place.
Enhances efficiency through standardized processes and reporting.
Facilitates easier compliance with regulations.

Decentralized Accounting:

Allows individual practices to maintain control over their financial operations.
Can be more responsive to the specific needs of each practice.
May lead to inconsistencies and require more oversight to ensure accuracy and compliance across the group.

How do I track profitability for each practice in a dental group?

o track profitability for each practice in a dental group:

Use Individual Profit and Loss Statements: Generate P&L statements for each practice to monitor revenue, expenses, and net income.
Allocate Shared Costs: Distribute shared expenses, like marketing or administrative costs, proportionally.
Monitor Key Metrics: Track metrics such as patient revenue, cost per patient, and operating margins.
Use Accounting Software: Implement software that supports multi-practice financial tracking.

Regularly review these reports to assess performance and make informed decisions.

What challenges might I face in managing the accounts of a growing dental group?

Managing the accounts of a growing dental group can present several challenges:

Complexity: Increased financial transactions and inter-practice billing can complicate accounting.
Consistency: Ensuring standardized financial processes across multiple practices is difficult.
Compliance: Keeping up with tax regulations and legal requirements across all practices can be challenging.
Cash Flow Management: Balancing cash flow between practices and funding growth without overextending resources is essential.
Scalability: Accounting systems may need upgrades to handle the expanded operations effectively.

I have a small dental group of just 2 sites, does the methodology outlined apply here too?

Yes.

In our experience, having a well-thought-through workflow which is expandable is key to success. Get this structure right, and you then have a solid platform for your 2 sites, and any additional sites you acquire or start up.

This sounds complex, can Samera help my dental group?

Simply yes. We can help you with the whole set up and running of the accounting and finance operation of your dental group, or just one aspect, including providing experienced team members to carry out all aspects of the work required.

What’s the first step in setting this all up?

In our experience, the key is to understand your existing processes and workflows, and then define a detailed workflow for your organisation. Our advice would be to implement this stage by stage, rather than all at once.

How much experience does team Samera have in this area?

We have been working with Dental groups and DSO’s for over twenty years, so we have seen most things, and also through our sister business, The Neem Tree Dental Group, we test all our processes, to ensure they are robust before sharing with our dental group clients.

Does team Samera work with international Dental Group clients?

Yes.

Our expertise in this area is second to none, so we can work with DSO’s or Dental Groups across the UK, Europe, North America, the Middle East and Asia.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult

Dental Accounts & tax

Dental Accounts & Tax: Further Information

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Bookkeeping Tips for Dentists

Simplifying Bookkeeping: Essential Tips for Dentists

Running a successful dental practice involves more than just being a good dentist. You also need to take care of your money. Keeping track of your finances and managing your payroll are important, but they can be complicated and take up a lot of time.

With accurate records and keeping track of your money, you’ll be on top of things like taxes, have enough cash to keep the office running, and be able to make smart choices about your practice, like buying new equipment or hiring more staff.

As a dentist, your time is valuable and should be spent on treating your patients well. That’s why it’s important to simplify your financial tasks. In this article, we’ll explain the basics of bookkeeping and give you essential tips and methods to help you make your financial tasks easier. We’ll talk about everything from choosing the right accounting software to outsourcing your financial tasks. By following these tips, you’ll be able to improve your financial management and focus on providing good dental care to your patients.

What is Bookkeeping?

Bookkeeping is like having a detailed diary for your dental practice’s financial activities. It’s all about jotting down every penny that comes in (like payments from patients) and every penny that goes out (like paying bills for supplies or staff salaries). Basically, it’s keeping track of all the money-related things happening in your practice.

Now, let’s talk about bookkeeping versus accounting. Think of bookkeeping as the groundwork, like laying bricks for a house. It’s about recording every financial move and keeping things organized day-to-day.

On the flip side, accounting is like taking those bricks and building a whole house. Accountants use the info from bookkeeping to analyse how your practice is doing financially. They look at stuff like how much money is coming in, how much is going out, and how profitable your practice is. They also help with smart money decisions and making sure you’re all good with taxes.

So, in short, bookkeeping is like keeping track of the score by writing down every money move. And accounting is taking that score and figuring out what it all means for your practice’s financial health.

The Bookkeeping Process Explained

Conducting bookkeeping for your dental practice involves several key steps:

Choosing a System: With recent changes in UK tax and accounting laws, it is now required that you use an automated, digital accounting software. This software has to be compliant with the Making Tax Digital regulations. Systems like Xero and Quickbooks are some of the more well known.
Recording Transactions: It’s crucial to track income and expenses daily to maintain accurate financial records. This includes recording payments from patients, insurance reimbursements, supplier invoices, payroll expenses, and any other financial transactions related to the practice. Daily tracking ensures that no transactions are overlooked and provides real-time insight into the practice’s financial health.
Categorizing Expenses: Proper expense categorization is essential for generating accurate financial reports and analysing spending patterns. Dentists should categorize expenses into relevant categories such as office supplies, rent, utilities, payroll, equipment maintenance, and marketing. Consistent categorization makes it easier to track and manage expenses and ensures compliance with tax regulations.
Reconciling Bank Statements: Dentists should regularly reconcile their bank statements with their bookkeeping records to verify accuracy and identify any discrepancies. This involves comparing the transactions recorded in the bookkeeping system with those listed on the bank statement and investigating any discrepancies. Reconciliation ensures that all transactions are accounted for and helps detect errors or unauthorized charges.
Generating Reports: Dentists should regularly generate basic financial reports such as income statements and balance sheets to assess the practice’s financial performance and position. Income statements provide an overview of revenue and expenses over a specific period, while balance sheets summarize the practice’s assets, liabilities, and equity. These reports help dentists track profitability, monitor cash flow, and make informed financial decisions to support practice growth and sustainability.

By following these steps, practice owners. can effectively conduct bookkeeping for their dental practice, ensuring accurate financial records, compliance with regulations, and informed decision-making to achieve long-term success.

The Importance of Simplified Bookkeeping and Payroll for Dentists

As a dental practice owner, it’s crucial to understand your practice’s finances and follow the rules for the dental industry and the UK’s tax codes. Here’s why:

Informed Financial Decisions: Accurate bookkeeping provides dentists with a clear picture of their practice’s financial health, enabling them to make informed decisions about important investments such as equipment purchases and staffing levels. By understanding their revenue streams and expenses, dentists can allocate resources effectively to support the growth and efficiency of their practice.
Payroll Management: Managing payroll is equally important for dentists. As a business owner, you have legal responsibilities to your employees, including making accurate payroll calculations, making timely payments, and complying with labor laws. By simplifying your payroll process, you can ensure that your staff are paid correctly and on time, reducing the risk of disputes or legal complications.
Accurate Tax Filing: Proper bookkeeping ensures that dentists maintain detailed records of income, expenses, and deductions, facilitating accurate tax filing. By staying organized throughout the year, dentists can minimize their tax liabilities and avoid penalties or audits from tax authorities.
Practice Profitability: Through diligent bookkeeping, dentists can track practice profitability by analysing revenue, expenses, and profit margins. This insight allows them to identify areas for improvement, optimize operational efficiency, and maximize profitability over time.
Cash Flow Management: Effective bookkeeping helps dentists manage cash flow by monitoring incoming revenue and outgoing expenses. By staying on top of cash flow, dentists can ensure they have sufficient funds to cover operational expenses, such as payroll and supplies, and maintain financial stability even during periods of fluctuating income.
Insurance Payments and Patient Billing: Bookkeeping also plays a crucial role in managing insurance payments and patient billing. By accurately recording insurance reimbursements and patient payments, dentists can track outstanding balances, follow up on unpaid invoices, and maintain strong financial relationships with insurance providers and patients.

In summary, improved accounting and payroll are essential for dentists to ensure financial stability, compliance with regulatory requirements, and efficient practice management. By paying attention to these aspects of your business, you can streamline your operations, reduce stress, and allocate more time to delivering excellent dental services to your patients.

In the following sections, we will explore practical tips and strategies to help you simplify your accounting and payroll processes, empowering you to take control of your dental practice’s financial well-being.

Understanding the Specific Bookkeeping and Payroll Requirements for Dentists

As a dentist, it’s important to know the unique financial rules that apply to your job. Dental practices have their own money-related considerations that are different from other businesses. Being aware of these details will make it easier to manage your finances.

One crucial thing to think about is the money coming in and going out. In dentistry, you might have various sources of income, like patient fees, payments from government healthcare programs, and insurance payments. It’s essential to keep accurate records of all these income sources for proper financial reporting.

Dental practices also have various expenses, such as staff salaries, dental supplies, equipment maintenance, and rental costs. Keeping detailed records of these expenses will not only help with accurate financial reports but also identify areas where you can save money and plan your budget.

Besides income and expenses, dentists need to follow the rules set by organizations like the General Dental Council (GDC) and HM Revenue and Customs (HMRC). These organizations have specific requirements for record-keeping and tax obligations. Failing to meet these requirements can lead to penalties and legal problems. So, it’s crucial to stay updated on the latest rules and make sure your financial processes follow the necessary guidelines.

To simplify your financial management as a dentist, consider using specialized accounting software designed for dental professionals. These software solutions often have features that cater to the unique needs of dentists, such as tracking lab fees, managing patient records, and generating reports tailored to the dental industry. Implementing such software can streamline your financial processes, save you time, and reduce the chances of errors.

By understanding the specific financial requirements for dentists, you can ensure accurate financial records, compliance with regulations, and more efficient management of your dental practice’s finances. Improving these processes will not only save you valuable time and effort but also contribute to the overall success and stability of your dental business.

Action points

Identify Income Sources: List all the ways your practice generates income (patient fees, insurance, government programs).
Track Expenses by Category: Separate your business costs into categories (salaries, supplies, equipment, rent) for better budgeting.
Research GDC & HMRC Regulations: Look up the latest record-keeping and tax requirements from the GDC and HMRC to ensure compliance.

Click here to learn more about Making Tax Digital for dentists.

Choosing the Right Accounting Software for Efficient Record-keeping

Choosing the right accounting software is crucial for dentists to maintain efficient record-keeping practices. Thanks to technology advancements, dentists have various options to choose from, each with its own unique features and benefits.

First, it’s important to consider your dental practice’s specific needs. Look for accounting software designed for healthcare professionals, offering features like invoicing, expense tracking, and payroll management. This ensures you have a comprehensive system that can handle all your financial and payroll requirements.

Another important factor to think about is how easy the software is to use. As a dentist, you may not have extensive accounting knowledge or experience, so it’s essential to choose user-friendly software that is easy to navigate. Look for features like a simple interface, clear instructions, and helpful customer support to make the transition to using the software smooth.

Integration capabilities are also worth considering when selecting accounting software. Look for software that can seamlessly work with other systems you use in your dental practice, such as appointment scheduling or patient management software. This will save you time and effort by eliminating the need for manual data entry and ensuring that all your systems work together smoothly.

Security should be a top priority when choosing accounting software. As a healthcare professional, you handle sensitive patient information, so it’s crucial to pick software that prioritizes data security and confidentiality. Look for software that offers encryption, regular data backups, and strong access controls to protect your financial and patient data.

Finally, consider your budget when selecting accounting software. There are both free and paid options available, so it’s important to weigh the features and benefits against the cost. While free software may be tempting, keep in mind that paid options often offer more robust features and better customer support.

By carefully considering these factors and choosing the right accounting software, dentists can streamline their accounting and payroll processes, saving time and ensuring accurate financial records for their practices.

Action points

Consider your dental practice’s specific needs, such as features like invoicing, expense tracking, payroll management, and integration with other systems.
Choose software that is easy to use and navigate, with a simple interface, clear instructions, and helpful customer support.
Prioritize data security by choosing software that offers encryption, regular data backups, and strong access controls.
Consider your budget when weighing the features and benefits against the cost.
Free software may be tempting, but keep in mind that paid options often offer more robust features and better customer support. We recommend looking into Xero and Sage.

Did You Know?

Dentists in the UK must keep accurate financial records for all business transactions. This requirement is set out in the General Dental Council (GDC) Standards for Dental Professionals (2019), which state that dentists must “keep accurate and up-to-date records of all your financial transactions, including income and expenditure.”

Dentists in the UK must deduct tax and National Insurance contributions from their employees’ salaries. This is required by the Income Tax (Earnings and Pensions) Act 2003 and the National Insurance Contributions Act 2010.

Dentists in the UK must submit VAT returns to HMRC quarterly. This requirement is set out in the Value Added Tax Act 1994.

Dentists in the UK must submit payroll information to HMRC monthly. This requirement is set out in the Pay-as-You-Earn (PAYE) Regulations 2003.

Dentists in the UK must also submit an annual tax return to HMRC. This requirement is set out in the Income Tax (Self Assessment) Act 1996.

Click here to watch our webinar on automating your finances with Xero.

Organizing and Categorizing Expenses for Easy Tracking and Tax Purposes

When it comes to handling the money side of your dental practice, organizing and sorting your expenses is important for easy tracking and tax purposes. Keeping your expenses clear and properly categorized helps you stay organized and ensures you’re taking advantage of all eligible tax deductions.

To make this process easier, start by setting up a system to record and categorize your expenses. This can be as simple as using a spreadsheet or investing in accounting software designed for small businesses. Make sure to create categories that match the tax rules in the UK, such as office supplies, equipment, professional services, and marketing expenses.

To stay on top of your expenses, establish a regular schedule for recording and categorizing them. Allocate dedicated time each week or month to review your receipts, invoices, and financial documents. This will help you identify any missing or undocumented expenses and ensure that everything is accurately categorized.

In addition to organizing and categorizing expenses, it’s essential to keep all relevant documents in a reliable and easily accessible place. This includes receipts, invoices, bank statements, and any other financial records. Having these documents readily available will make it easier for you to provide accurate information during tax season and any potential audits.

By focusing on the organization and categorization of expenses, you’ll simplify your accounting and payroll processes and ensure compliance with tax regulations. This will give you peace of mind and allow you to focus on providing quality dental care to your patients.

Action points

Set up a system to record and categorize your expenses, such as using a spreadsheet or accounting software.
Create categories that match the tax rules in the UK, such as office supplies, equipment, professional services, and marketing expenses.
Establish a regular schedule for recording and categorizing expenses, such as each week or month.
Keep all relevant documents in a reliable and easily accessible place, such as receipts, invoices, bank statements, and other financial records.

Click here to read our guide on expenses for dentists.

Streamlining Payroll Processes for Dental Staff

As a dentist, managing the payroll for your dental staff can be a time-consuming task. However, streamlining your payroll processes can help you save time and ensure accuracy in your financial records. Here are some basic tips to improve your dental staff payroll:

Use payroll software: Invest in reliable payroll software designed specifically for small businesses. This software can automate various payroll tasks like calculating wages, deductions, and tax payments. It will also generate pay stubs for your dental staff, making the process more efficient and error-free.
Create a consistent payroll schedule: Establish a consistent payroll schedule, such as bi-weekly or monthly, and clearly communicate it to your dental staff. This will help them know when they will be paid, reducing any confusion or inquiries.
Implement direct deposit: Encourage your dental staff to sign up for direct deposit, where their wages are electronically transferred directly into their bank accounts. This eliminates the need for physical checks, reduces the risk of loss or theft, and saves time on manual check distribution.
Maintain accurate employee records: Keep detailed records for each dental staff member, including personal details, tax information, and employment contracts. This ensures that you have all the necessary information readily available for payroll calculations and reporting.
Stay updated with payroll regulations: Payroll regulations and tax rules can change frequently. It’s important to stay informed about any updates that may affect your dental staff’s wages and deductions. Consider consulting with a professional payroll service provider or an accountant to ensure compliance with the latest regulations.
Automate tax calculations and filings: Tax calculations can be complex, especially when considering deductions and allowances specific to the dental industry. Use payroll software that can automatically calculate taxes based on the latest tax rates and rules. Additionally, consider automating your tax filing process to ensure timely and accurate submissions.

By implementing these tips, you can streamline your dental staff payroll processes, reduce administrative burdens, and ensure accurate financial records for your dental practice. Simplifying accounting and payroll will not only save you time but also contribute to the overall efficiency and success of your dental business in the UK.

Action points

Invest in payroll software designed specifically for small businesses.
Establish a consistent payroll schedule and communicate it to your staff.
Encourage your staff to sign up for direct deposit.
Keep detailed records for each staff member.
Stay updated with payroll regulations and tax rules.
Automate tax calculations and filings.

Click here to learn more about our payroll services.

Implementing Automated Systems for Accurate and Timely Payments

Using automated systems for accurate and timely payments can be a great benefit for dentists. Managing finances and payroll can often be time-consuming and prone to mistakes, leading to unnecessary stress and financial difficulties.

By using automated systems, dentists can streamline their payment processes and ensure that employees and suppliers are paid correctly and on time. This not only saves valuable time but also helps maintain positive relationships with staff and vendors.

One effective way to implement automated systems is by using accounting software specifically designed for dentists or small businesses. These software solutions are tailored to the unique needs of dental practices, offering features like automated payroll calculations, invoice generation, and expense tracking.

With the help of such software, dentists can easily input employee hours, track leave entitlements, and calculate deductions for taxes and benefits. This eliminates the need for manual calculations and reduces the risk of errors in payroll processing.

Moreover, automated systems can integrate with online payment platforms, allowing dentists to electronically pay suppliers and contractors. This ensures prompt payments and provides a convenient and secure method for financial transactions.

Additionally, automated systems can generate detailed reports and summaries, providing dentists with valuable insights into their practice’s financial health. These reports can help identify areas for cost savings, track revenue streams, and monitor overall efficiency.

In summary, implementing automated systems for accurate and timely payments is a crucial step in simplifying accounting and payroll for dentists. By embracing technology and streamlining financial processes, dentists can focus more on providing quality dental care while ensuring the financial stability of their practice.

Action points

Use accounting software specifically designed for dentists.
Input employee hours and track leave entitlements to automate payroll calculations.
Integrate with online payment platforms to electronically pay suppliers and contractors.
Generate detailed reports and summaries to monitor financial health and identify areas for improvement.

Click here to learn more about how to organise your dental practice finances.

Staying Compliant with HMRC Regulations and Reporting Requirements

Staying in line with HMRC (His Majesty’s Revenue and Customs) rules and reporting requirements is important for dentists in the UK. As the owner of a dental practice, it’s your responsibility to make sure that your financial and payroll processes follow the specific rules set by HMRC.

One of the first steps to stay compliant is to register your dental practice with HMRC. This will allow you to get a Unique Taxpayer Reference (UTR) number, which is essential for all tax-related communication.

Next, you need to establish a strong accounting system that accurately records all financial transactions and keeps the necessary documents. This includes keeping track of income, expenses, invoices, receipts, and any other important financial records.

Staying updated with payroll regulations is also crucial. This involves correctly categorizing your dental staff as employees or self-employed contractors and ensuring that their wages are calculated accurately, including any deductions for taxes and national insurance contributions.

In addition to accurate record-keeping, you must also meet reporting requirements set by HMRC. This includes submitting timely and accurate VAT returns, payroll information, and annual tax returns. Failure to meet these obligations can result in penalties and potential legal issues.

To simplify the process, consider using advanced accounting and payroll software designed specifically for dentists. These tools often come with features that automate calculations, generate detailed reports, and remind you of important deadlines.

Staying compliant with HMRC rules might seem overwhelming, but with proper organization and the right tools, you can streamline your financial and payroll processes, ensuring that you meet all requirements and avoid any unnecessary penalties.

Action points

Register your dental practice with HMRC and get a Unique Taxpayer Reference (UTR) number.
Establish a strong accounting system that accurately records all financial transactions and keeps the necessary documents.
Stay updated with payroll regulations and correctly categorize your dental staff as employees or self-employed contractors.
Ensure that your dental staff’s wages are calculated accurately, including any deductions for taxes and national insurance contributions.
Meet reporting requirements set by HMRC by submitting timely and accurate VAT returns, payroll information, and annual tax returns.
Consider using advanced accounting and payroll software designed specifically for dentists to automate calculations, generate detailed reports, and remind you of important deadlines.

Click here to watch our webinar on managing your dental practice accounts.

Outsourcing Bookkeeping and Payroll Tasks to Professionals

Outsourcing accounting and payroll tasks to experts can be a big advantage for dentists. As a dentist, your main focus should be on providing top-quality dental care to your patients. However, administrative tasks like accounting and payroll can be time-consuming and take away valuable hours from your practice.

By outsourcing these tasks to professionals, you can free up your valuable time to concentrate on what you’re good at – serving your patients. Professional accounting and payroll services have the skills and knowledge to handle all the financial aspects of your dental practice efficiently and accurately.

One of the significant benefits of outsourcing is that you can rely on the expertise of professionals who specialize in accounting and payroll for dentists. They understand the unique financial challenges and regulations that dental practices face, ensuring compliance with tax rules and regulations specific to the industry.

Moreover, outsourcing these tasks can help you save money in the long run. Instead of hiring an in-house accountant or payroll expert, which comes with additional costs like salaries, benefits, and training, outsourcing allows you to pay for the services you need on a contractual basis. This can significantly reduce your overhead costs and improve your practice’s financial health.

Additionally, outsourcing accounting and payroll tasks can give you a sense of peace of mind. You can trust that professionals will handle your financial records and transactions accurately and securely, maintaining confidentiality and data protection. This can alleviate the stress and anxiety associated with managing these sensitive aspects of your practice on your own.

In summary, outsourcing accounting and payroll tasks to professionals is a smart move for dentists. It allows you to focus on patient care, ensures compliance with industry-specific regulations, saves money, and provides peace of mind. Consider partnering with a reputable accounting and payroll service provider to improve your practice’s financial management and streamline your operations.

Action points

Identify a reputable accounting and payroll service provider that specializes in working with dentists.
Review their services and pricing to ensure that they meet your specific needs and budget.
Schedule a consultation to discuss your requirements and expectations.
Sign a contract that outlines the services to be provided, the fees, and the termination terms.
Provide the service provider with the necessary access to your financial records and systems.
Review the service provider’s work regularly and provide feedback to ensure that your needs are being met.

Click here to book a free consultation about outsourcing your bookkeeping and accounts.

Tips for Maintaining Accurate and Up-to-Date Financial Records

As a dentist, it’s crucial to maintain accurate and up-to-date financial records for the success of your practice. This not only ensures compliance with legal and regulatory requirements but also provides a clear picture of your practice’s financial health.

Here are some simple tips to help you streamline your accounting and payroll processes and ensure accuracy in your financial records:

Use accounting software: Invest in reliable accounting software designed for small businesses or dental practices. These tools can automate many aspects of accounting, such as tracking income and expenses, creating invoices, and generating financial reports. They also provide a secure platform to store and access your financial data.
Separate business and personal finances: It’s essential to maintain separate bank accounts and credit cards for your dental practice. Mixing personal and business finances can lead to confusion and make it challenging to accurately track and categorize expenses. Keep all business-related transactions separate to maintain clarity in your financial records.
Regularly reconcile accounts: Reconciliation involves comparing your financial records with bank statements to ensure accuracy and identify any discrepancies. This process helps catch errors, detect fraudulent activity, and maintain the integrity of your financial data. Set aside time each month to promptly reconcile your accounts and address any discrepancies.
Track expenses diligently: Keep a record of all your operating expenses, including supplies, equipment, rent, utilities, and professional fees. Use categories or expense codes to accurately match and categorize expenses. Maintaining a detailed record of your expenses allows you to identify areas where you may reduce costs and improve profitability.
Stay on top of invoicing and payments: Timely and accurate invoicing is crucial for maintaining a steady cash flow. Establish a system to generate and send invoices promptly to your patients or insurance company. Monitor outstanding payments and follow up on any overdue invoices. Consider offering convenient payment options, such as online payments, to streamline the collection process.
Seek professional assistance: If managing accounting and financial tasks becomes overwhelming, consider hiring a professional accountant or bookkeeper with experience in the dental industry. They can ensure your records are accurate, assist with tax planning, and provide valuable financial insights to support the growth of your practice.

By implementing these tips, you can simplify your accounting and payroll processes, maintain accurate financial records, and focus more on providing excellent dental care to your patients. Remember, effective financial management is the foundation for a successful and thriving dental practice.

Action points

Use accounting software designed for small businesses or dental practices.
Separate business and personal finances.
Regularly reconcile accounts.
Track expenses diligently.
Stay on top of invoicing and payments.
Seek professional assistance from an accountant or bookkeeper with experience in the dental industry.

Managing finances can be overwhelming, especially for busy professionals like dentists. However, with the simple tips provided in this article, you can simplify your accounting and payroll processes, saving time and ensuring accuracy. By using these strategies, you can concentrate more on providing excellent dental care to your patients while maintaining an efficient financial system.

Click here to read our tax saving tips for dentists.

The Benefits of a Dental Accountant

The benefits of hiring a dental accountant for your practice are numerous:

Expertise: A dental accountant possesses specialized knowledge of the unique financial aspects and challenges within the dental industry. They understand the nuances of dental practice management, including revenue cycles, insurance billing, overhead costs, and tax deductions specific to dentists. This expertise allows them to offer tailored financial advice and solutions that address the specific needs of dental practices.
Time-Saving: By entrusting financial tasks to a dental accountant, dentists can save valuable time that can be redirected towards patient care and practice management. Instead of juggling bookkeeping, tax preparation, and financial analysis on their own, dentists can focus on providing high-quality care to their patients while the accountant handles the intricacies of financial management.
Accuracy and Compliance: Dental accountants ensure that financial records are accurate and compliant with regulatory requirements. They stay up to date with tax laws, accounting standards, and industry regulations, minimizing the risk of errors, omissions, or non-compliance penalties. With a dental accountant overseeing financial matters, dentists can have peace of mind knowing that their practice’s finances are in capable hands.
Strategic Planning: Beyond day-to-day financial tasks, dental accountants play a crucial role in strategic planning for practice growth and sustainability. They can analyse financial data, identify trends, and develop strategic plans and budgets to optimize practice performance. Whether it’s expanding services, investing in technology, or improving operational efficiency, dental accountants provide valuable insights and guidance to help dentists achieve their long-term goals.

In summary, hiring a dental accountant offers numerous benefits, including specialized expertise in the dental industry, time-saving opportunities, assurance of accuracy and compliance, and strategic financial planning for future growth. By partnering with a skilled accountant, dentists can streamline financial management, minimize risks, and position their practices for success.

Our Expert Opinion

“As an accountant who has been working with dentists for over 20 years, we have seen much change in how book-keeping is done in dental practices. Historically, much of this was done by hand or on excel, but in today’s environment the need to be efficient with one’s time and to be on top of the numbers is imperative.

By doing the monthly bookkeeping accurately, as a dentist you will be able to see the financial trends in your practice, this will then help you make better decisions. These decisions could include increasing prices, reducing costs or looking to improve chair utilisation in your practice. This information can form the foundation of growth for your practice, i.e., should you invest, or should you change the structure of your business – the list is endless, but it’s the numbers that help tell the story.

The key is to implement a system of bookkeeping, so you know each month the numbers, and what is occurring in your practice. Without this, it’s like going on an expedition without a map or a compass.

Having access to up-to-date numbers is essential for any successful dental practice, and with the plethora of options available there is really no excuse to not knowing how you are doing.”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Bookkeeping Tips for Dentists FAQs

Why is bookkeeping important for dentists?

Bookkeeping is crucial for dentists as it ensures accurate financial records, which are essential for tracking income, managing expenses, and maintaining cash flow. It helps in staying compliant with tax regulations, preparing for audits, and making informed financial decisions. Good bookkeeping practices also simplify year-end accounting, aid in budgeting, and reduce the risk of financial errors that could impact the practice’s profitability.

What expenses should dentists track?

Dentists should track a variety of expenses to ensure accurate financial management, including:

Dental Supplies: Consumables like gloves, masks, and dental materials.
Equipment: Purchases and maintenance of dental tools and machinery.
Rent and Utilities: Costs for office space and utilities.
Staff Salaries and Benefits: Wages, taxes, and benefits for employees.
Marketing and Advertising: Costs associated with promoting the practice.
Professional Fees: Insurance, licenses, and association memberships.

How often should I update my financial records?

You should update your financial records regularly, ideally on a daily or weekly basis. Frequent updates help ensure accuracy, keep track of cash flow, and make it easier to spot and address discrepancies early. Regular updates also simplify tax preparation and financial reporting, allowing you to make informed decisions and maintain compliance with regulations.

What accounting software is recommended for dental practices?

Recommended accounting software for dental practices includes Xero, QuickBooks, and Sage. These platforms offer features tailored for healthcare professionals, such as managing income, expenses, payroll, and compliance with tax regulations. They provide user-friendly interfaces, integration with other business tools, and robust reporting capabilities to help dentists maintain accurate financial records and make informed decisions.

How do I stay compliant with tax regulations?

To stay compliant with tax regulations, dentists should maintain accurate and up-to-date financial records, track all income and expenses, and meet key tax deadlines. Regularly review tax obligations, including VAT, PAYE, and corporation tax, and ensure that all filings are accurate and timely. It’s also beneficial to work with a tax advisor who understands the specific tax laws affecting dental practices.

What are the benefits of hiring a professional accountant?

Hiring a professional accountant for your dental practice offers several benefits, including accurate financial management, ensuring compliance with tax laws, and maximizing tax savings through expert advice. Accountants can also help streamline bookkeeping, prepare financial reports, and offer strategic insights to improve profitability. They take the burden of complex financial tasks off your shoulders, allowing you to focus on patient care.

How do I manage cash flow effectively?

To manage cash flow effectively in a dental practice, regularly monitor income and expenses, maintain a budget, and forecast future cash needs. Ensure timely invoicing and follow up on payments to avoid cash shortfalls. Control costs by reviewing expenses and optimizing inventory levels. Keeping a cash reserve for unexpected expenses can also help maintain financial stability. Using accounting software to track cash flow in real-time can further enhance management.

What records should I keep for tax purposes?

For tax purposes, dentists should keep detailed records of income, expenses, receipts, invoices, payroll records, bank statements, and any correspondence with HMRC. It’s also essential to maintain documentation for business expenses, including equipment purchases, rent, utilities, and professional fees. These records should be retained for at least six years to comply with tax regulations and support any tax returns or audits.

How can I avoid common bookkeeping mistakes?

To avoid common bookkeeping mistakes, keep your financial records organized and up to date, regularly reconcile accounts, and use accounting software to automate tasks. Avoid mixing personal and business expenses, and ensure all transactions are accurately categorized. Regularly review your financial statements to catch errors early. Finally, consider working with a professional accountant to help spot potential issues and maintain accuracy.

What financial reports are essential for my practice?

Essential financial reports for your dental practice include:

Profit and Loss Statement: Tracks income, expenses, and profitability.
Cash Flow Statement: Monitors the flow of cash in and out of the practice.
Balance Sheet: Shows assets, liabilities, and equity.
Accounts Receivable Report: Tracks outstanding patient payments.
Expense Report: Details where your money is being spent.

These reports help you make informed financial decisions and ensure the financial health of your practice.

How do I handle invoicing and payments?

To handle invoicing and payments efficiently, use accounting software to generate and track invoices, ensuring timely billing. Clearly outline payment terms on each invoice, including due dates and accepted payment methods. Follow up promptly on overdue payments to maintain cash flow. Automating payment reminders and offering multiple payment options can help speed up the process. Keeping accurate records of all invoices and payments is essential for tracking income and managing accounts receivable.

How can I prepare for year-end accounting?

To prepare for year-end accounting, start by reconciling all accounts, including bank statements and credit cards. Review income and expenses to ensure they are correctly categorized and all transactions are recorded. Organize and verify receipts and invoices, and ensure all outstanding invoices are addressed. Generate key financial reports like the profit and loss statement and balance sheet. Lastly, consult with your accountant to finalize tax planning and ensure compliance with all regulations.

What is the importance of regular financial reviews?

Regular financial reviews are crucial for maintaining the financial health of your dental practice. They help you monitor cash flow, track expenses, and ensure that your practice is on target to meet its financial goals. By regularly reviewing financial reports, you can identify trends, address issues early, and make informed decisions. These reviews also ensure compliance with tax regulations and prepare you for year-end accounting, ultimately supporting long-term profitability and growth.

How do I track inventory expenses?

To track inventory expenses in your dental practice, start by recording all purchases of supplies and materials in your accounting software. Regularly update inventory levels to reflect usage and new stock. Implement an inventory management system that tracks costs associated with each item, including purchase price and delivery fees. Conduct periodic physical inventory counts to reconcile records with actual stock levels. Analyzing inventory turnover can also help in managing costs and optimizing stock levels.

What should I do if I find discrepancies in my records?

If you find discrepancies in your records, start by reviewing the entries to identify where the error occurred. Check original documents, such as receipts and invoices, against your records. Reconcile your accounts by comparing your financial statements with your bank and credit card statements. Correct any errors you find and document the changes. If the issue persists or is complex, consult with your accountant to ensure accuracy and compliance with financial regulations.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

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Dental Accounts & tax

Dental Accounts & Tax: Further Information

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Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

How AI will Change Running a Dental Practice

Unlocking the Power of AI: Revolutionising Dental Practice Management

Artificial intelligence (AI) is changing the way we live, work, and do business. It’s having a big impact on various industries like education, healthcare, and finance. One field that is benefiting from AI is dental practice management. AI is helping dental practices streamline their operations and enhance patient care. It’s changing the way dental practices work by automating administrative tasks and predicting patient needs. In this post, we’ll explore how AI is used to manage dental practices and how it can improve patient outcomes, increase efficiency, and generate more revenue. If you’re a dentist looking to enhance your practice management, keep reading to discover how AI can create new opportunities for your dental practice.

The role of AI in revolutionising dental practice management

Artificial Intelligence (AI) is changing the field of dentistry too. It can handle lots of information and do complex tasks, which is why it’s being used to manage dental practices. AI offers dentists and their teams opportunities to be more efficient, accurate, and provide better patient care.

Traditionally, managing dental practices required a lot of manual work and human judgement. But AI has become a valuable tool that streamlines operations, improves diagnosis and treatment planning, enhances patient communication, and overall improves the dental experience.

AI is great at automating administrative tasks like scheduling appointments, reminding patients, handling billing and insurance claims. It does these tasks quickly and accurately, freeing up valuable time for dental professionals to focus on giving the best care.

AI algorithms can analyse huge amounts of patient data like medical history, X-rays, and treatment outcomes. By finding patterns and insights, dentists can make more accurate diagnoses, create personalised treatment plans, and predict potential oral health issues before they become serious. With AI technology, dentists can provide proactive and preventive care, leading to better patient outcomes and satisfaction.

AI is also improving patient communication and engagement. Chatbots and virtual assistants powered by AI can answer common questions, provide educational materials, and even schedule appointments. This not only increases patient satisfaction but also reduces the workload on dental staff, allowing them to focus on more critical tasks.

Furthermore, AI helps dental practices optimize their operations and resource allocation. By analyzing patient flow, appointment patterns, and staff efficiency, AI algorithms can identify bottlenecks and inefficiencies. Practice managers can then make data-driven decisions to improve workflow and staff schedules. This leads to increased productivity, shorter wait times, and a smoother patient experience.

Understanding the challenges faced by dental practices

Running a dental practice comes with its own set of challenges that can hinder efficiency and growth. Understanding these obstacles is crucial for utilizing the potential of AI and improving dental practice management.

One major challenge faced by dental practices is appointment scheduling. It can be difficult to keep track of a full schedule with multiple patients and different types of appointments. Manual planning processes often lead to errors, double bookings, and significant delays for patients.

Patient engagement and communication are also problematic for dental practices. It can be inefficient and time-consuming to keep patients informed about their appointments, treatment plans, and preventive care. Lack of effective communication can result in missed appointments, low patient satisfaction, and ultimately, loss of revenue.

Managing dental records and information presents another obstacle. Traditional paper-based systems are not only cumbersome but also prone to errors and data loss. Retrieving patient records becomes a time-consuming process, affecting the overall efficiency of the practice.

In addition, efficient management of dental supplies and equipment is essential. Lack of proper equipment or supply shortages can lead to disruptions in patient care and unnecessary delays.

These challenges highlight the need for innovative approaches to simplify dental practice management. AI-powered technologies can revolutionize the way dental practices operate by addressing these challenges and improving overall efficiency and patient satisfaction. AI has the potential to automate appointment scheduling, send automated reminders to patients, implement electronic health record systems, and optimize inventory management. Embracing AI in dental practice management can result in improved efficiency, increased revenue, and enhanced patient experiences.

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The potential of AI in solving dental practice management issues

It’s amazing how artificial intelligence (AI) can revolutionize dental practice management. With advancements in technology, AI has become a powerful tool that can address various challenges faced by dental professionals and streamline their daily tasks.

One significant challenge that AI can tackle is appointment booking. Traditionally, dental practices have handled appointments manually, which can be time-consuming and prone to errors. However, AI-powered systems can automate this process by intelligently analyzing patient information, dentist availability, and other factors to schedule appointments efficiently. This not only saves time but also ensures optimal use of resources and improves patient satisfaction.

AI can also play a crucial role in enhancing treatment planning and diagnosis. AI algorithms can assist dentists in making more accurate and well-informed decisions by analyzing a large amount of patient data, such as X-rays, dental records, and medical history. This can result in better patient care, fewer mistakes, and improved treatment outcomes.

Moreover, AI can improve patient communication and engagement. AI-powered chatbots can instantly answer common questions, schedule appointments, and make personalized recommendations. This enhances the patient experience, reduces wait times, and increases customer loyalty.

Additionally, AI can streamline administrative tasks like billing, inventory management, and insurance claims processing. By automating these processes, dental practices can save time and resources, allowing their staff to focus on more critical aspects of patient care.

While AI in dental practice management is still in its early stages, its potential is immense. We can expect AI to become increasingly important in transforming dental practices, increasing efficiency, and providing improved oral healthcare to patients as technology continues to advance. By incorporating AI into practice management, dental professionals can enter a new era of innovation and productivity.

Streamlining appointment scheduling and patient management with AI

Managing a dental practice can be complex and time-consuming in today’s fast-paced world. Dental professionals face numerous challenges, including patient management and appointment scheduling. However, with the advancements in artificial intelligence (AI), these challenges can now be overcome more efficiently and effectively than ever before.

One area where AI is transforming dental practice management is appointment booking. In the past, dental practices relied on manual scheduling, which often led to double bookings, missed appointments, and unhappy patients. AI-powered scheduling systems have eliminated these issues.

AI algorithms analyse various factors, such as dentist availability, patient preferences, and treatment durations, to automatically schedule appointments in a way that maximises efficiency and minimises conflicts. This reduces wait times and ensures smooth appointment experiences, saving time for dental professionals and increasing patient satisfaction.

Furthermore, AI can assist in patient management by organising and analysing large amounts of patient data. By using AI algorithms, AI systems can identify patterns and trends in patient data, allowing dental professionals to make more informed decisions regarding treatment plans and personalised care.

For example, AI can help identify patients at higher risk for certain dental conditions based on their medical history, lifestyle factors, and genetic predispositions. By proactively addressing potential issues and providing individualised preventive care, overall oral health outcomes for patients improve.

Additionally, AI-powered chatbots can enhance patient communication and support. These virtual assistants can provide instant responses to common inquiries, such as information about treatment options, post-operative care instructions, and appointment availability. By automating these interactions, dental practices can free up staff resources and improve patient engagement, even outside of office hours.

In conclusion, AI has the potential to transform dental practice management by streamlining appointment booking, optimizing patient management, and enhancing communication. By harnessing the power of AI, dental professionals can unlock new levels of efficiency, productivity, and patient satisfaction, ultimately revolutionizing the way dental practices operate in the modern era.

Enhancing patient communication and engagement through AI-powered tools

Artificial intelligence (AI) is transforming various industries, including dental practice management. One area where AI is making a significant impact is in improving patient communication and engagement.

In the past, dental practices relied on phone calls, emails, and face-to-face interactions to communicate with patients. However, these methods often proved to be time-consuming and inefficient. AI-powered tools are changing the game by streamlining communication processes and providing a seamless experience for patients.

One way AI is enhancing patient communication is through the use of chatbots. By integrating intelligent virtual assistants into dental practice websites or mobile apps, patients can easily ask questions, schedule appointments, or get immediate support. Chatbots offer quick and accurate responses, reducing the need for patients to wait on hold or wait for a reply to their messages.

Moreover, AI-powered tools can analyse patient data and preferences to personalise communication. For instance, dental practices can utilise AI to automatically send appointment reminders, follow-up messages after treatments, or even oral health tips tailored to each patient’s specific needs. This level of personalised communication improves patient satisfaction and fosters a stronger relationship between the patient and the dental practice.

Additionally, AI enables dental practices to engage with patients through voice-controlled assistants. Using smart speakers, patients can access educational content, receive guidance on post-treatment care, and ask questions about oral hygiene. These voice-activated assistants allow patients to stay connected with their dental office in a convenient and interactive manner, ultimately leading to improved oral health outcomes.

By utilising AI-powered tools for patient communication and engagement, dental practices can enjoy several benefits. These include increased patient satisfaction, personalised experiences, and improved efficiency. As the dental industry embraces the potential of AI, it becomes evident that it is reshaping how dental practices manage patient interactions and prepare for a technologically advanced and patient-centred future.

Leveraging AI for accurate diagnosis and treatment planning

In the field of dentistry, the use of artificial intelligence (AI) has brought about a significant breakthrough in diagnosis and treatment planning. By harnessing the power of AI, dentists can now achieve more precise and effective results than ever before.

AI algorithms have the ability to analyse large amounts of patient data, such as medical history, X-rays, and clinical notes, with impressive accuracy and speed. This allows dentists to detect even the smallest dental conditions or abnormalities that might be missed by human observation alone.

Furthermore, AI-powered software can provide valuable insights and recommendations based on the analysed data to assist in treatment planning. By considering factors like patient preferences, clinical guidelines, and best practices, AI algorithms can create customised treatment plans that improve both patient outcomes and practice efficiency.

The ability of AI to learn and adapt over time is one of its greatest advantages in dental practice management. As more data is fed into the system, the algorithms continuously improve their diagnostic accuracy and treatment planning capabilities. This enhances patient care and allows dentists to stay at the forefront of their field by leveraging the latest advancements in AI technology.

Additionally, incorporating AI into dental practice management can streamline workflows and reduce human error. By automating routine tasks and integrating AI-powered systems into existing practice management software, dentists can save valuable time and resources while ensuring consistent and reliable results.

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It is important to note that while AI is revolutionising dental practice management, it is not meant to replace the expertise and skill of dental professionals. Instead, it serves as a powerful tool that complements their knowledge and experience, assisting them in providing superior patient care and achieving improved outcomes.

By embracing the power of AI, dental professionals have the potential to usher in a new era of innovation, precision, and efficiency in diagnosis and treatment planning. With the help of AI, dentists can elevate their practice to new heights, benefiting both their patients and their own professional growth.

Automating administrative tasks and improving efficiency with AI

Artificial intelligence (AI) is a game-changer in many industries, including dental practice management. One of the great advantages of AI in this context is its ability to automate administrative tasks, streamlining operations and improving overall efficiency.

Traditionally, dental practices have had to deal with tasks like appointment scheduling, patient record management, and billing. These tasks are not only time-consuming but also prone to human errors. However, with the power of AI, these processes can be automated, allowing dental professionals to focus more on patient care.

AI-powered systems can intelligently handle appointment scheduling by analysing the availability of both the dentist and the patient. AI algorithms optimise scheduling by considering various factors, such as treatment duration and required equipment, to maximise efficiency and minimise patient wait times.

Another area where AI can revolutionise dental practice management is patient record management. With AI-powered systems, patient records can be digitised and organised in a structured manner. This enables quick access to patient information, including medical history, treatment plans, and progress. AI algorithms can analyse this data to provide personalised treatment recommendations based on patient-specific factors, ultimately improving the quality of care provided.

Moreover, AI can simplify the billing process by automating tasks such as insurance checks, claims processing, and payment reminders. This not only makes it easier for dental staff to perform their jobs but also reduces the likelihood of payment processing errors or delays.

By automating these administrative tasks, dental practices can achieve significant time and cost savings. This allows dental professionals to focus on providing exceptional patient care and enhancing the overall dental experience, as resources can be allocated more effectively.

In conclusion, the impact of AI in dental practice management cannot be underestimated. By automating administrative tasks and improving efficiency, AI empowers dental professionals to streamline operations, provide better patient care, and ultimately revolutionise the way dental practices operate. Embracing AI technology can usher in a new era of efficiency and effectiveness in dental practice management.

Addressing concerns and misconceptions about AI in dental practice management

Like any new technology, there are often misunderstandings and concerns when it comes to AI in dental practice management. However, it’s important to address these concerns and provide accurate information in order to fully understand the potential benefits and capabilities of AI in this field.

One common concern is the fear that AI will replace human dental professionals. While AI can automate certain tasks and streamline processes, it is not meant to replace the expertise and judgement of dental professionals. Instead, AI serves as a powerful tool to assist and enhance their work, allowing them to focus more on patient care and complex procedures.

Another misconception is the belief that AI is too complex or expensive to implement in dental practices. However, thanks to advancements in technology, AI is now more accessible and user-friendly than ever before. Many dental practice management software now incorporate AI features that are specifically designed to improve workflows, enhance efficiency, and provide valuable insights for better guidance.

Additionally, some may have concerns about the security and privacy of patient data when using AI in dental practice management. It is crucial to select reputable software vendors that prioritise data security and comply with industry regulations. Strong security measures, such as encryption and access controls, can help protect patient data and maintain confidentiality.

Lastly, the accuracy of AI in diagnosis and treatment planning may raise questions. While AI algorithms are constantly improving, they are not meant to replace the diagnostic skills and experience of dental professionals. Instead, AI can assist in analysing large datasets, identifying patterns, and providing insights to support more informed decision-making.

By addressing these concerns and misconceptions, dental professionals can embrace the potential of AI in practice management. It allows for more efficient operations, better patient care, and staying at the forefront of technological advancements in the field. AI has the potential to transform dental practice management, empowering dentists and practitioners to provide exceptional care in an increasingly digital world.

Embracing the future: Steps to incorporate AI in your dental practice

Incorporating artificial intelligence (AI) into your dental practice can completely transform the way you manage and treat patients. AI has become a powerful tool that can improve various aspects of your practice, from patient scheduling to treatment planning, thanks to advancements in technology. Here are some steps to help you embrace the future and successfully integrate AI into your dental practice.

Identify areas for AI integration: Start by assessing your current workflows and identifying areas where AI can make a significant impact. This could include automating appointment scheduling, streamlining administrative tasks, analysing scans or X-rays, or enhancing patient communication.

Explore AI solutions: Once you have identified the areas for AI integration, research different AI solutions available on the market. Look for reputable companies that specialise in AI for dental practice management and have a proven track record of successful implementations. Consider factors like ease of use, compatibility with your existing systems, and the level of support provided.

Implement AI gradually: Introducing AI to your practice doesn’t have to be an all-or-nothing approach. Start by implementing AI in one area of your practice, such as automated appointment reminders or improving patient communication. This way, you can gradually familiarise yourself and your team with the technology and assess its impact on your workflow.

Train and support your team: As you bring AI into your practice, it’s important to provide adequate training and support to your team. Ensure that everyone understands how to use the AI tools effectively and how it can enhance their daily tasks. This will help maximise the benefits of AI and ensure a smooth transition for everyone involved.

Click here to read our article on building a dental team.

Evaluate and monitor performance: Regularly monitor and evaluate the effectiveness of the AI tools you have implemented. Assess whether they are improving the patient experience, increasing efficiency, and achieving the desired outcomes. Make any necessary adjustments and stay updated on new AI technology updates.

By embracing the future of AI and carefully planning, implementing, and evaluating its integration, you can unlock its potential to streamline operations, enhance patient care, and take your dental practice to new heights. It has the power to transform the way you manage your practice and provide exceptional dental care.

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AI can play a significant role in enhancing marketing efforts in a dental practice

Using AI can greatly improve the marketing efforts of a dental practice. Here are a few examples of how AI can enhance marketing strategies:

Data analysis and customer segmentation: AI can analyze large amounts of data from sources like patient records, website analytics, and social media. By finding patterns, AI can segment the target audience more effectively. It can identify potential leads and create personalized marketing campaigns based on patient preferences, behaviors, and demographics.

Personalized marketing campaigns: AI-powered algorithms can generate customized marketing content, such as emails, social media posts, and ads. By using patient data and preferences, AI can create personalized messages and offers, leading to higher engagement and conversion rates.

Click here to read our article on email marketing for dentists.

Chatbots and assistants: AI-powered chatbots can provide instant responses to patient inquiries on websites, social media platforms, or messaging apps. They can answer frequently asked questions, schedule appointments, provide basic dental information, and even offer personalized oral health recommendations. This improves customer satisfaction and streamlines administrative tasks.

Click here to read more about growing a dental practice with social media.

Predictive analytics: AI can analyse historical patient data to predict future behaviours and outcomes. By identifying trends and patterns, AI can anticipate patient needs and preferences. This allows dental practices to anticipate demand and adjust marketing strategies accordingly.

Image analysis and treatment planning: AI can analyse dental X-rays, scans, and images to assist in treatment planning and diagnosis. By providing accurate and efficient analysis, AI can enhance the patient experience, contribute to better treatment outcomes, and even be used for patient education and case presentations.

Online reputation monitoring and sentiment analysis: AI can track brand reputation and monitor patient sentiment through online reviews and social media platforms. This data helps dental practices identify areas for improvement, address customer concerns promptly, and leverage positive feedback for marketing purposes.

Optimization of marketing campaigns: AI can analyse real-time performance of marketing campaigns, enabling dental practices to make data-driven decisions. By monitoring key metrics such as click-through rates, conversion rates, and engagement levels, AI can provide insights and suggestions to optimise marketing efforts for improved results.

Click here to read our article on how to market your dental practice onlin e.

It’s important to remember that while AI can enhance dental practice marketing, it should be used in conjunction with human expertise. Dental professionals and marketing experts should collaborate to develop effective strategies and ensure that AI applications align with ethical considerations and patient privacy regulations.

Click here to read more about Marketing to Millennials for Dentists.

How AI tools (like ChatGPT plugins) can help analyse and suggest solutions for SEO or website issues for dental practise

In a dental practice, AI tools like ChatGPT plugins can help analyse and suggest solutions for SEO or website issues. Here’s how they can be useful:

Website analysis: AI tools can analyse the structure, content, and performance of a dental practice’s website. They can identify issues like broken links, missing meta tags, duplicate content, slow page loading times, and other SEO-related problems. By examining the website, AI can create a comprehensive report highlighting areas that need improvement.

Keyword research: AI tools can help identify relevant keywords and search terms that potential patients might use when looking for dental services. By analysing search patterns and user behaviour, AI can suggest optimal keywords to target in website content, blog posts, or meta tags, thereby improving the website’s search engine visibility.

Click here to read our article on how to create a website for dentists.

Content optimization: AI tools can assist in optimising website content for search engines. They can analyse existing content, suggest improvements to enhance keyword usage, recommend formatting changes, and provide insights to improve readability and user experience. Additionally, AI can suggest topics for blog posts or articles to increase traffic and help identify content gaps.

Competitor analysis: AI tools can analyse SEO strategies and competitor websites. They can identify keywords, backlinks, or content strategies that competitors are using successfully. Dental practices can use this information to gain a better understanding of their industry’s competitive landscape and make well-informed decisions regarding their own SEO strategies.

SEO performance tracking: AI tools can monitor the SEO performance of a dental practice’s website over time. They can track key metrics like search rankings, organic traffic, and conversion rates. AI can assist dentists and marketers in understanding the impact of their SEO efforts and making data-driven decisions to enhance performance by providing regular reports and insights.

On-page optimization tips: AI tools can provide real-time suggestions for on-page optimization while creating or editing website content. For example, as a dentist writes a blog post, an AI module can analyse the content in real-time and suggest improvements to optimise headings, meta descriptions, or internal linking to ensure best SEO practices are followed.

Voice search optimization: AI tools can help dental practices optimise their websites for voice search queries. With the rise of voice assistants like Siri, Alexa, or Google Assistant, AI can analyse conversational search patterns and suggest content improvements to align with voice search queries and provide answers to common dental questions.

Click here to read more about SEO for dental websites in 5 steps.

It’s important to remember that AI tools can provide valuable insights and suggestions, but they should be used in conjunction with human expertise. Dentists and marketers should interpret the insights provided by AI tools, apply their industry knowledge, and make informed decisions to truly enhance their SEO strategies.

We hope you found our blog post on using AI for dental practice management helpful and inspiring. Embracing AI can revolutionise how dental practices operate as technology continues to advance. By automating administrative tasks, streamlining patient management, and enhancing diagnostic capabilities, AI has the potential to greatly improve efficiency, accuracy, and patient satisfaction. We encourage you to stay informed about the latest developments and collaborate with experts in the field as you consider implementing AI solutions in your dental practice.

How AI will Change Running a Dental Practice FAQ

How will AI impact dental practices?

AI will enhance dental practices by improving diagnostics, streamlining administrative tasks, personalizing patient care, and optimizing treatment planning, making operations more efficient and patient-centric.

Can AI help with diagnosing dental issues?

Yes, AI can assist in diagnosing dental issues by analyzing X-rays, 3D scans, and patient data to identify early signs of problems like cavities, gum disease, and oral cancers with greater accuracy.

How can AI improve patient care in a dental practice?

AI can personalize treatment plans based on individual patient data, enhance appointment scheduling, and provide predictive analytics for more proactive and customized care.

What administrative tasks can AI automate in a dental practice?

AI can automate administrative tasks like appointment scheduling, patient reminders, billing, and data entry, freeing up staff to focus more on patient care.

Will AI reduce errors in dental practices?

Yes, AI will help reduce errors in dental practices by improving accuracy and efficiency across various processes. Here’s how:

Accurate Diagnoses: AI can analyze dental images such as X-rays and 3D scans with greater precision, identifying issues like cavities, gum disease, and other oral health problems earlier and more accurately than manual methods.
Automated Data Entry: AI can automate administrative tasks such as data entry, reducing human errors related to patient records, billing, and appointment scheduling.
Consistent Treatment Plans: AI-based systems can standardize treatment plans by analyzing patient data and providing evidence-based recommendations, minimizing variability in treatment decisions.
Reduced Human Error: By automating routine and repetitive tasks, AI reduces the risk of mistakes caused by manual input or oversight, ensuring better patient care and safety.

Incorporating AI into dental practices can significantly enhance precision, reduce costly errors, and improve overall operational efficiency.

Can AI improve the patient experience in dental practices?

AI can enhance the patient experience by offering faster diagnosis, more personalized care, and efficient appointment scheduling, leading to shorter wait times and improved patient satisfaction.

How does AI assist in treatment planning for dental procedures?

AI can analyze large datasets to recommend the best treatment options, predict outcomes, and assist dentists in creating more precise and effective treatment plans for procedures like implants, orthodontics, and restorations.

Can AI help manage dental practice finances?

Yes, AI tools can help manage finances by tracking expenses, optimizing billing processes, and providing financial insights that enable better decision-making and profitability.

Is AI in dentistry safe?

Yes, AI in dentistry is safe when implemented and used correctly. AI technologies undergo rigorous testing and adhere to strict healthcare regulations to ensure patient safety and accurate results. Here’s why AI is considered safe in dental practices:

Regulatory Compliance: AI tools used in dentistry must comply with healthcare standards like HIPAA (in the U.S.) or GDPR (in the EU), ensuring data privacy and secure handling of patient information.
Thorough Testing: AI algorithms are thoroughly tested and validated before being used in clinical settings, ensuring their accuracy in diagnosing dental conditions and planning treatments.
Assistive Role: AI enhances a dentist’s ability to diagnose and treat by providing data-driven insights, but the final decision is always made by a qualified professional, reducing the risk of misdiagnosis.
Continuous Learning: AI systems improve over time by learning from vast datasets, making them increasingly reliable in identifying dental issues and suggesting treatment options.

Overall, AI is a safe, reliable tool that supports dentists in delivering accurate, personalized care, while adhering to strict medical and ethical standards.

How can AI improve patient communication?

AI-powered chatbots and virtual assistants can handle patient inquiries, provide appointment reminders, and assist with post-treatment follow-up, improving communication and patient engagement.

Will AI replace dentists in the future?

No, AI is not expected to replace dentists. Instead, it will augment their capabilities by offering advanced tools for diagnostics, treatment planning, and patient management, allowing dentists to focus on more complex clinical work.

How will AI affect dental staff roles?

AI will likely change dental staff roles by automating repetitive tasks, allowing staff to focus more on patient care, improving workflow, and increasing overall efficiency within the practice.

How can AI help with patient retention?

AI can analyze patient data to identify trends and preferences, allowing practices to offer personalized services, reminders, and targeted follow-ups, which improve patient satisfaction and retention.

Is AI affordable for small dental practices?

Yes, as AI technology becomes more advanced, affordable solutions tailored to small and medium-sized dental practices are emerging, making AI integration accessible for practices of all sizes.

What are the long-term benefits of using AI in dental practices?

The long-term benefits of AI in dental practices include improved efficiency, better patient outcomes, cost savings, enhanced diagnostic accuracy, and the ability to offer more personalized, data-driven care.

Grow Your Dental Practice with Samera

Join the Samera Alliance buying group today for free to save money on your consumables and assets, increase your profits and grow your dental practice.

You’ll get access to exclusive discounts on the consumables, products and equipment you need to build and grow your dental practice. You’ll also get exclusive discounts from our Alliance Partners, covering everything from HR, IT and legal services to utilities, compliance and dental technology.

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More on Growing a Dental Practice

For more information on growing a dental practice, check out the articles and webinars in our Learning Centre, like our guide on How to Grow a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Invoice Finance for Pharmacists

As an integral component of the healthcare industry, pharmacists are responsible for ensuring that patients receive the appropriate medication. Running a pharmacy business, however, represents a formidable challenge, particularly when it pertains to cash flow management. A considerable number of pharmacists find themselves in the situation of having to wait for an extended period – sometimes weeks or even months – to receive payment from insurance providers or other clients. This delay in payment may cause a dearth of cash and negatively affect the ability of a business to pay suppliers, employees, and other expenses on schedule. The good news is that invoice financing is an excellent alternative for pharmacists who want to enhance their cash flow. This post aims to delve into the mechanics of invoice financing, as well as its advantages and how it can help pharmacists manage their cash flow more effectively.

Introduction to the challenges pharmacists face in managing cash flow

Pharmacists are an important part of the healthcare industry because they provide patients with essential medicines and healthcare products. Even though pharmacists play a crucial role, managing a pharmacy is difficult, and many find it difficult to maintain a healthy cash flow. Inventory management is one of their biggest challenges because they need to keep a steady supply of medicines and healthcare products to meet demand.

Additionally, insurance companies and other third-party payers frequently offer deferred payments, which severely disrupt cash flow. In addition, unexpected expenditures, such as the purchase of new technology, store maintenance, or the repair of equipment, can put a strain on finances.

Another obstacle pharmacists face when managing cash flow is seasonal fluctuations in demand. The demand for sunscreen, insect repellent, and other summer-related products rises during the summer months, whereas the demand for flu vaccines and related products rises during the winter months.

Pharmacists may face financial difficulties as a result of any one of these issues, but invoice financing is a viable option for boosting cash flow. Pharmacists can get the money they need to run their business by using invoice financing.

Action Plan

Pharmacists play a vital role in healthcare, yet managing a pharmacy poses significant cash flow challenges. Inventory management is key, alongside navigating deferred payments from insurance companies. Unexpected expenses and seasonal demand fluctuations further strain finances. Invoice financing emerges as a solution to bolster cash flow and sustain pharmacy operations effectively.

Click to read our article: 6 Reasons UK Pharmacies Should Outsource their Accounts

What is invoice financing and how does it work?

Companies can get a cash advance on unpaid invoices with invoice financing, a financial tool. Businesses can choose to receive an immediate cash injection rather than waiting for customers to pay their invoices. This will allow them to cover their expenses, manage their cash flow, and invest in growth opportunities without taking on additional debt.

Pharmacists can use invoice financing to effectively manage their cash flow and avoid cash flow gaps caused by late invoice payments from customers. By using receipt support, drug specialists can get to the assets important to cover overheads, buy stock, and put resources into promoting and development exercises.

Invoice financing is a simple process. A third-party financier licensed to advance them a percentage of the invoice value is available to a pharmacist once they have issued an invoice to a customer. Depending on the provider and the customer’s creditworthiness, the percentage of the invoice value that is advanced typically ranges from 70% to 90%.

The financier deducts their fees and transfers the remaining funds to the pharmacist when the customer pays the invoice. Pharmacists looking to improve cash flow and maintain a stable financial position can benefit from this procedure because it is a cost-effective and efficient solution. Pharmacists can gain access to the working capital they require to succeed and expand their businesses by capitalising on the value of their unpaid invoices.

Action Plan

Invoice financing offers pharmacists a swift solution to enhance financial stability. By leveraging unpaid invoices, they can improve cash flow, access funds without collateral, and customize solutions to their needs, potentially bolstering credit ratings through timely payments.

Benefits of invoice financing for pharmacists

Pharmacists may find that invoice financing is an excellent choice for bolstering one’s finances. It is a type of financing that lets businesses get money from unpaid invoices even before customers pay them.

From invoice financing, pharmacists can benefit in the following ways:

A stronger cash flow: Pharmacists have the ability to improve their cash flow by prompting the payment of any outstanding invoices. This is especially important for people whose invoices are being paid by insurance companies, as this can frequently cause lengthy delays.
Faster payment: With receipt support, pharmacists can get installment for their exceptional solicitations in a couple of days. They may feel less anxious about having to wait for payment to arrive before they can pay for their expenses as a result of this.
No insurance required: As an unsecured loan, invoice financing does not require pharmacists to pledge an asset as security. Pharmacists who lack the assets to secure a loan may greatly benefit from this.
Customizable: Invoice financing is adaptable and can be tailored to meet the specific needs of pharmacists, such as the amount of money they want to borrow and the repayment terms.
Boosted credit rating: Invoice financing can help pharmacists improve their credit by giving them a way to pay their bills on time. For pharmacists who have previously struggled with bill payments, this could be extremely helpful.

What Tools do you use for your Business?

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Who can qualify for invoice financing?

For pharmacists seeking to enhance their cash flow, invoice financing can be an outstanding choice. Nonetheless, not all merchants may meet the eligibility criteria for this kind of financing. Most frequently, invoice financing is offered to corporations that possess a substantial volume of invoices and a dependable customer base. Hence, pharmacists that have a consistent flow of invoices and customers may be entitled to this form of financing. Additionally, a lot of invoice financing companies mandate corporations to have operated for a specific period, which typically ranges from 6 months to a year.

When gauging eligibility, invoice financing companies also contemplate creditworthiness. Certain invoice financing enterprises may necessitate a minimum credit score to be eligible for their services. Nonetheless, other factors such as the company’s financial statement robustness and its payment record could be scrutinised by other invoice financing firms.

It’s worth noting, however, that the requirements for eligibility may change based on the invoice financing firm. Consequently, pharmacists must conduct extensive research on various financing companies to find one that is perfect for their needs and qualifications. By doing this, pharmacists can avail themselves to the advantages of invoice financing and advance their cash flow.

Action Plan

Invoice financing is typically available to businesses with a steady flow of invoices and a reliable customer base. Firms must often have operated for a specific period, ranging from 6 months to a year, and meet certain creditworthiness criteria. Requirements may vary among invoice financing companies, so pharmacists should research different firms to find the best fit for their needs and qualifications.

Click here to watch our webinar on raising finance to buy a pharmacy.

How to apply for invoice financing

To apply for invoice financing, you need to follow a simple application process. You will have to furnish your pharmacy’s name, address, and invoice details, which are intended to be financed. The invoice amount, due date, and the customer’s name must be included as well.

Furthermore, you are obligated to submit bank statements and tax returns to assess your creditworthiness, which is critical for the lender.

The lender will examine your application after collecting the necessary information before granting your loan request. Upon approval, the funds will be available to you within a few days.

When applying for invoice financing, it is critical to select a reputable lender who has a history of assisting pharmaceutical companies like yours in securing financing. To get the best deal, compare financing offers from various lenders. By implementing an effective financing strategy, you could boost your cash flow and expand your pharmacy business.

Action Plan

To apply for invoice financing, submit your pharmacy’s details and invoice information along with bank statements and tax returns. After the lender reviews your application, funds can be available within days. Choose a reputable lender experienced with pharmaceutical companies, compare offers, and implement an effective financing strategy to improve cash flow and grow your pharmacy business.

Understanding the cost of invoice financing

As a means of enhancing cash flow, invoice financing can work wonders, provided you have a clear comprehension of the costs connected with this particular financing option. Basically, when you opt for invoice financing, you are vending your due invoices to a lender in exchange for an advance sum of cash. The lender would then recover the sum owed on the invoice from your clients, and you would receive the rest of the payment (minus the fee).

The costs that come with invoice financing depend mainly on the lender and the terms of the agreement. In general, there are two different charges that are related to invoice financing- a discount fee and an interest rate fee.

The discount fee is the percentage of the invoice amount that the lender levies for providing the cash advance, and this varies from 1-5% of the invoice amount, depending on the lender and the creditworthiness of your clients.

The interest rate fee is the interest rate imposed on the cash advance and is generally computed on a monthly basis. This fee is different depending on the lender and ranges from 1-2% each month.

It is crucial to thoroughly examine the terms of the agreement with the lender and fathom all the charges related to the invoice financing. This will assist you in establishing if this method of financing is appropriate for your business and if the fees are reasonable enough to outweigh the advantages of enhanced cash flow.

Action Plan

Invoice financing typically involves two main charges: a discount fee (1-5% of the invoice amount) and an interest rate fee (1-2% per month), varying by lender and client creditworthiness. It’s essential to review these costs carefully to ensure they align with the benefits of improved cash flow for your business.

Click here to read our article on How to finance a healthcare business.

Tips for using invoice financing effectively

Invoice financing can be a very useful tool for pharmacists who need to increase their cash flow. However, just like with any financial product, its usefulness is determined by its efficiency.

To get the most out of invoice financing, consider the following:

Know what you need for cash flow: Understanding your cash requirements is essential before engaging in invoice financing. How much cash do you require to cover your day-to-day costs and how quickly do you need it? This is important information that will help you choose the best invoice financing option and ensure that you get the money you need when you need it.
Choose a trustworthy financier: Since there are a lot of companies that offer invoice financing, you need to find a partner who is reliable, honest, and trustworthy. Find a partner who provides excellent customer service, straightforward terms and conditions, and reasonable rates.
Take charge of your invoices: Being proactive with your billing is essential if you want to get the most out of invoice financing. Ensure that your invoices are accurate and sent out on time, and promptly follow up if payment is not received. The quicker your invoices are paid, the sooner you will be able to get the money you need.
Make prudent use of the funds: When you get money from invoice financing, you need to use it wisely. Prioritise your spending and make a clear plan for how the money will be used. Don’t put the money to waste on long-term or unnecessary investments that won’t pay off right away.

Pharmacists can use invoice financing to their advantage, increasing their cash flow and expanding their businesses, if they follow these guidelines.

We trust that after reading this, you have gained a more comprehensive comprehension of how pharmacists can expand their liquid assets with the help of invoice financing. With invoice financing, waiting for insurance companies or other third-party payers to settle the payment after 30, 60, or 90 days will no longer be a concern. This option allows for prompt compensation, granting pharmacists the ability to shift their focus towards enhancing their business and providing better service to their patients. Should you be struggling with financial constraints, invoice financing might just be the solution required to elevate the success of your pharmacy.

Action Plan

To optimize the benefits of invoice financing, pharmacists should first assess their cash flow requirements, and then select a reputable financier offering transparent terms and fair rates. Proactive management of invoices, including accuracy and timely billing, is crucial for swift payment processing. Finally, the judicious allocation of funds to essential expenses ensures optimal use of the financing. With these steps, pharmacists can leverage invoice financing effectively to improve cash flow and expand their businesses.

Click here to know more about funding options for pharmacists in the UK

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

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Financial Services

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

A Guide to Invoice Financing for Vets

Veterinarians, very much like some other business, need monetary adaptability to develop and succeed. Vets looking for a way to control their cash flow and get paid on time may want to consider invoice financing. A solution for financing your business that involves a third party agreeing to purchase your invoices in exchange for a fee is called invoice financing. This gives you immediate access to funds that you can use to pay bills, invest in your business, or expand your practice. We will discuss the ins and outs of invoice financing, how it works, and how veterinarians can benefit from it in this post. This guide will help you understand all the important aspects of invoice financing and how you can use it to achieve financial flexibility for your veterinary practice, whether you are just starting out or have been in business for years.

What is invoice financing?

Invoice financing is a financial arrangement for businesses where they can use their unpaid invoices as collateral to secure a loan. It is also known as accounts receivable financing, invoice factoring, or invoice discounting. In this arrangement, the lender (also known as the factor) provides a loan to the business based on the value of their outstanding invoices. The business can receive immediate cash flow by selling their unpaid invoices to the lender at a discount. The lender then collects the payment from the customer when the invoices are due, and the business repays the lender the amount borrowed plus a fee.

Invoice financing is particularly beneficial for businesses that have a long payment cycle or have customers who take a long time to pay their invoices. It provides a quick and easy way to access cash flow and helps businesses meet their immediate financial obligations, such as payroll, rent, and supplier payments. Moreover, it also helps businesses focus on their core operations, such as sales and production, instead of chasing payments from their customers.

Invoice financing is a popular financing option for many industries, including healthcare, where medical practices, clinics, and hospitals often have to wait for insurance reimbursements. Additionally, invoice financing can be particularly useful for veterinarians who are looking for financial flexibility to manage their cash flow and grow their practice. By using invoice financing, vets can focus on providing quality care to their patients without worrying about their financial bottom line.

Click here to read our article: Raising Finance for a Veterinary Clinic

How invoice financing works for veterans

Invoice financing is an adaptable monetary answer for veterans who own a business and need income. It works by letting veterans sell unpaid bills to a financing company, which gives them a cash advance. This loan is normally up to 90% of the complete worth of the invoices, and the remaining balance is paid to the veteran once the client covers the receipt.

The ability for veterans to obtain the funds they require without having to wait for their customers to pay is invoice financing’s greatest advantage. Veterans who are experiencing payment delays or a prolonged payment cycle may benefit most from this. In addition, invoice financing is a good option for veterans with low credit scores because financing companies tend to focus more on customers’ creditworthiness than veterans’ own.

In general, veterans who require financial flexibility and are seeking a quick and simple solution to their cash flow issues may find that invoice financing is an advantageous option.

Benefits of invoice financing for veterans

Veterans who own small businesses may benefit greatly from invoice financing. By preventing them from having to wait for payment from their customers, it can assist them in overcoming cash flow issues. People who are just starting out or run seasonal businesses that face cash flow fluctuations may benefit most from this.

Financial flexibility is one of invoice financing’s main advantages for veterans. It permits them to approach finances that they can use to put resources into their organisations, pays their workers, buys a stock, or cover any unforeseen costs. This can assist them with developing their business and making the most of new open doors without stressing over income issues.

Invoice financing has the additional benefit of assisting in the management of cash flow. Veterans can better manage their finances and avoid missed opportunities by receiving payment in advance. This can likewise assist with building more grounded associations with clients, as an entrepreneur can satisfy their commitments on time and make a positive standing in their industry.

In general, veterans who own small businesses may find invoice financing to be a useful financial instrument. They get the flexibility and control over the cash flow they need to expand and succeed in their industry from it.

Eligibility requirements for invoice financing

Invoice financing is a great option for small businesses, including veterinary practices, to get quick access to cash flow. However, there are certain eligibility requirements that must be met before applying for invoice financing.

Firstly, you need to have a business-to-business (B2B) model. This means that your veterinary practice should be dealing with other businesses instead of individual customers. As invoice financing is based on the invoices you issue to your clients, it is necessary for your clients to be other businesses.

Secondly, your veterinary practice must have a track record of invoicing and generating revenue for at least six months. This is important as invoice financing companies rely on your past invoicing history to determine your eligibility for financing.

Thirdly, your veterinary practice must have invoices that are due within 90 days. Invoice financing companies generally do not finance invoices that have a due date beyond 90 days.

Lastly, your veterinary practice must be free from any legal or tax issues. Invoice financing companies will conduct a background check on your business before approving your application.

In conclusion, eligibility requirements for invoice financing are straightforward and can be easily met by small businesses, including veterinary practices, that have a B2B model and a track record of generating revenue through invoicing.

Click here to read our article: 5 Reasons Why You Should Outsource your Veterinary Practice’s Accounts

Documents required for invoice financing

Lenders may require a number of documents from applicants seeking invoice financing. Because they assist the lender in determining the applicant’s risk and eligibility, these documents are essential to the invoice financing procedure.

Some of the documents that might be needed are as follows:

1. Invoices: The primary document upon which invoice financing is based is this. Moneylenders will require a duplicate of the receipt to check the sum and terms of installment.

2. Evidence of delivery: This document demonstrates that the customer received the goods or services. It could be a courier receipt or a signed delivery note.

3. Order for purchase: The customer’s order for the goods or services is shown on this document. It is significant because it demonstrates the customer’s acceptance of the sale’s terms and conditions.

4. Check of credit: Moneylenders might require a credit mind the client to survey their financial soundness and capacity to pay.

5. Expenses of the company: To assess the business’s financial health, lenders may require financial statements like balance sheets, profit and loss statements, and cash flow statements.

6. Documents needed to register a company: A certificate of incorporation or business license may be required by lenders as evidence of a company’s registration.

Giving these records in an ideal and precise way can assist with accelerating the invoice financing process and improve the probability of endorsement. It’s critical to work with a lender whose requirements are clear and who can walk you through the application process.

How to choose an invoice financing company

There are a few things to think about when selecting an invoice financing company. One of the most significant is the charge structure. You should check the company’s fees to make sure they are reasonable and that you know exactly what you will be paying for them.

Another significant component is the degree of client support given by the organisation. You want to go with a company that is easy to work with and responsive to your needs. Find a business with a dedicated account manager who will serve as your primary point of contact.

Taking into account the particulars of the supporting agreement is additionally significant. Ensure you comprehend the reimbursement plan and any punishments for late instalments. Additionally, you should inquire about any financing restrictions or limitations, such as a maximum or minimum amount that can be financed.

Last but not least, you should investigate the invoice financing companies you are considering and read customer feedback. Search for organisations that have a decent standing and positive surveys from different organisations in your industry.

You can choose an invoice financing company that meets your needs and gives you the financial flexibility you need to grow your veterinary practice by taking these factors into consideration.

Tips for using invoice financing wisely

Invoice financing is an incredible method for getting a money infusion into your business without hanging tight for installment from your clients. However, as with any form of financing, prudent use is essential.

To help you get the most out of your invoice financing, here are some pointers:

Before submitting an application, ensure that you are aware of the invoice financing’s terms and conditions. Check that the terms are favourable to your company and that you are aware of what you are getting into.
Only use invoice financing when absolutely necessary. Try not to depend on it for ordinary costs, as it can turn into an expensive propensity.
Ensure your clients are financially sound before you consent to receive funding. You will be responsible for repaying the money you borrowed if your client does not pay.
Compare rates and terms of various invoice financing options. Do not select the first business that comes to mind.
Keep your invoices up to date and accurate. This will assist with guaranteeing that your receipt funding application is endorsed rapidly and that you get the cash you really want when you really want it.

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Asset Finance for your Practice

Understanding Finance to Increase Profits

You can use invoice financing to your advantage and support your business’s growth and success if you follow these recommendations.

We hope that veterinarians looking for financial flexibility will find this comprehensive guide to invoice financing helpful. We are aware that financial management can be difficult, particularly for those working in the veterinary industry. We hope that this guide has given you a clear understanding of how invoice financing works and how it can benefit your business. Please don’t hesitate to contact us if you have any additional inquiries. I wish you and your veterinary practice every success!

Click here to read our article on how finance a healthcare business.

Frequently Asked Questions Invoice Financing for Vets

What is invoice financing?

Invoice financing is a financing solution that allows business owners to sell their outstanding invoices to a factoring company in exchange for immediate cash.

How does invoice financing work?

After a business owner sells their outstanding invoices to a factoring company, they receive an advance payment for a percentage of the total invoice amount. The factoring company then takes over collecting payment from the customer.

Is invoice financing only for large businesses?

No, invoice financing is a solution for businesses of all sizes, including small businesses and startups.

Do I need good credit to qualify for invoice financing?

No, invoice financing is based on the creditworthiness of your customers, not your own personal credit score.

How long does it take to get funding through invoice financing?

Invoice financing is a quick and easy financing solution. Once you submit your invoices, you can receive funding in as little as 24 hours.

What are the fees associated with invoice financing?

The fees associated with invoice financing vary depending on the factoring company and the terms of your agreement. However, most factoring companies charge a small percentage of the total invoice amount as a fee.

Can I choose which invoices to finance?

Yes, you can choose which invoices to finance. This allows you to maintain control over your cash flow and only finance the invoices that you need to.

Will my customers know that I am using invoice financing?

No, your customers will not know that you are using invoice financing. The factoring company will handle all communication and collection efforts on your behalf.

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Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

How to Create a Website for Dentists

Dentists can make websites themselves fairly easy using platforms like WordPress and Wix. These platforms make it fairly straightforward for anyone to build a simple website without any knowledge of coding. They’ll even make it easy for you to host the website on their servers without any real training or specialised knowledge.

But how do you make the website stand out? How do you make it rank highly in Google?

Keep Your Website Simple
Use Call to Actions
Using Images on a Dental Website
Make Your Dental Practice’s Website Fast
Local SEO and Dental Websites
Make it Mobile-friendly
Make Use Of SEO Techniques

Keep Your Website Simple

If you’re going to create your own website, it may be best to keep things simple at first.

Your homepage should take the most time to create since it is the first thing most visitors will see, it’s your first impression. Make sure you have your logo and branding, images of the practice and the team and links to all your most important pages. These will usually be your treatment pages and your fees page.

Try to keep the number of pages low at first – around a dozen to start off. Instead of a page for each treatment, have a page for all of your orthodontic services, another for all of your cosmetic services and another for all of your general treatments. Instead of a page for each team member, just have a page for the whole team.

Once you get more confident in your design and SEO abilities, create individual pages for each treatment and team member and see how highly you can rank them in Google.

The website also needs to be easily navigable. Keep the menus simple and clearly labeled. A good task is to show the website to a friend and ask them to find something specific. If it’s hard for them to find, it’s hard for patients to find. If it’s hard for patients to find, they will give up looking.

Action Plan

When designing your website, focus on simplicity. Prioritize your homepage with essential elements like your logo, practice/team images, and key page links. Initially, keep the number of pages low, grouping similar treatments and team members together. Ensure easy navigation with clear menus. Test usability by asking someone to find specific information. Simplifying your website enhances user experience and engagement.

Use Call to Actions

If your website could only have one element on it, it should be a call to action. In simple terms, the job of a website is to get customers and patients to click a certain button, fill in a certain form or phone a certain number.

Set up an online booking portal like Software of Excellence for your website as soon as you can and put a big, clear ‘book online’ button on each page.

Get your practice’s telephone number and email address onto every page as well. A good way to do this is to include them in the header or footer of your website so they automatically appear everywhere.

Next, you want to include a contact form on every page. Keep them simple – the more information you ask for, the fewer patients will send a contact form! Ask for their name, a way to contact them and their query. You can then set yourself a notification anytime it is filled in so you can contact the lead immediately.

Action Point

Ensure your website features prominent call-to-action buttons, such as “Book Online” for appointment scheduling. Display your practice’s contact information, including telephone number and email address, prominently on every page, typically in the header or footer. Additionally, include a simple contact form on each page to capture visitor inquiries efficiently. Simplifying the form fields encourages more submissions. Set up notifications to promptly respond to inquiries, optimizing lead conversion.

Using Images on a Dental Website

The next step is to make it visually appealing. Remember that speed is essential to a good website so keep the image size and resolution small. Don’t start adding huge 500Mb HD images to each page, you’ll only hamstring your speed. You can find free tools to shrink and compress images online so make sure they are only as big as they need to be. 300/600px on each side is enough for most screen sizes.

Get your best images of the team, the practice and the local area together and pepper them throughout the site. It’s fine to use stock images from websites like unsplash and shutterstock if you do not have any, in fact, some designers prefer it. However, you might run the risk of your website looking like many others – there’s only so many stock photos of dentists out there!

Action Points

Optimize image size and resolution for fast loading times, aiming for around 300/600px on each side. Incorporate high-quality images of your team, practice, and local area to personalize the site. Balance authentic imagery with stock photos to maintain uniqueness.

Make Your Dental Practice’s Website Fast

Speed has become the key to a great website. Google has been putting more and more emphasis on the speed of a website in recent years and it is now one of the key metrics they use to rank websites. In other words, the fast your website, the higher it will rank.

There are lots of ways to keep load times down and the website fast. We often find the worst culprits are images on the page. However, any widget can slow a website down so play around with different layouts and functionalities until you find the balance between user experience and speed.

Plugins like Lazy Loader can help with your website’s speed by prioritizing what images and videos are loaded in what order. Make sure you do regular speed checks on your website to ensure it doesn’t start slowing down and costing you SEO!

Action Points

Ensuring fast load times is crucial for website performance and SEO ranking. Prioritize optimization techniques such as image compression and lazy loading plugins to maintain speed without compromising user experience. Regular speed checks are essential to prevent slowdowns and maintain SEO effectiveness.

Check the speed of your website here.

Local SEO and Dental Websites

Creating a website for a dental practice is not quite the same as building a website for an e-commerce business that can ship products far and wide. You main customer base is going to be your local area and the surrounding regions. This is where your local SEO becomes important.

Google ‘dentist near me’ and you’ll see a selection of dental practices within about a mile or 2 of your location. That is local SEO at work.

Register your website on Google My Business, which allows a practice to be listed for free, with information such as opening times, directions, services and images. This is the directory Google uses to store your information and match it up to local searches like ‘dentist near me’.

You then want to find other local business directories online and get your practice registered on them. Independent online business directories like Yelp and local councils will let you list your business and boost your local SEO. Make sure your name, address, phone number and website are listed on as many local and national business directories as you can find.

You also want to make sure you pepper your location throughout the text on your website. If you’re a dentist in York, make sure you’ve got ‘dentist in York’, ‘York Dental Practice’ and other, similar variations mentioned in the text of your website.

Action Points

Local SEO is crucial for dental practices aiming to attract patients from their immediate vicinity. Registering your practice on Google My Business and other local business directories enhances visibility in local searches like “dentist near me.” Ensure consistent NAP (name, address, phone number) listings across directories to reinforce local SEO efforts. Integrate location-specific keywords throughout your website’s content to optimize for local searches and attract potential patients in your area.

Make it Mobile-friendly

Mobile internet usage now accounts for over 50% of all online activity. This has huge implications for the way your website needs to be designed. What looks great on a desktop might not (and probably won’t) look good on a mobile phone or a tablet. In fact, there’s a good chance it doesn’t even function properly if you haven’t tested it.

Test and preview your website on mobile. In fact, you should be building your website with a mobile-first attitude. Your links, buttons forms and multimedia all need to look and work just as well as they do on desktops. Most of your traffic is going to be coming from mobile phones and that is only going to increase.

Action Points

Optimizing your website for mobile is crucial as over 50% of online activity now occurs on mobile devices. Ensure seamless functionality and a great user experience on smartphones and tablets by testing and previewing your site on various devices. Prioritize mobile-first design by ensuring all elements like links, buttons, forms, and multimedia work effectively on mobile. With mobile traffic on the rise, optimizing your website for mobile usage is essential for engaging users and driving conversions.

What the Google Experience Update Means for Dentists

Marketing to Millennials for Dentists

Using Marketing to Increase Profits in your Dental Practice

Make Use Of SEO Techniques

Search Engine Optimisation (SEO) is one of the most important aspects of building a dental website that converts patients. Most people access your online content by using a search engine like Google. This means that you want your dental practice to feature highly in search results – higher than your competitors at least! Making good use of SEO techniques helps you to make this happen. These are aspects you need to effectively digitally market your practice. You need to:

Make sure that all online content is easy to read.
Think about the keywords that you use, include long-tail keywords, use keywords in titles and sub headings and use locations in your keywords.
Keep all of your online content fresh.
Include internal links and make sure external links are relevant and to reputable websites.

Action Points

To improve your dental website’s visibility and attract more patients, prioritize SEO techniques such as optimizing readability, incorporating relevant keywords, updating content regularly, and using internal and external linking effectively.

You can learn more about SEO for dental websites here.

If you want to see how we built our dental practice’s website, check out The Neem Tree website.

How to Create a Website for Dentists FAQ

Why is having a website important for a dental practice?

A website is essential for a dental practice to build credibility, attract new patients, provide important information, and offer online appointment scheduling. It helps improve visibility and patient engagement.

What are the key features a dental website should have?

A dental website should include the following key features to ensure it is functional, user-friendly, and effective in attracting and retaining patients:

Online Appointment Booking: Allow patients to easily schedule appointments through an integrated booking system.
Service Pages: Detailed descriptions of the dental services offered, such as cleanings, cosmetic dentistry, orthodontics, and more.
Contact Information: Clearly display the practice’s address, phone number, email, and hours of operation, with an embedded Google Maps location.
Patient Testimonials: Showcase reviews and testimonials from satisfied patients to build trust and credibility.
About Us Section: Provide information about the dental team, including staff bios and qualifications, to create a personal connection with potential patients.
Blog: Regularly updated content on dental health tips, FAQs, and news that can improve SEO and patient engagement.
Mobile-Friendly Design: Ensure the website is responsive and easily accessible on mobile devices.
Secure Patient Portal: Offer a secure, password-protected area where patients can access their records, treatment plans, and billing information.
SEO Optimization: Use search engine optimization (SEO) techniques, including relevant keywords, meta tags, and fast loading speeds, to improve search engine rankings.
Social Media Integration: Links to your practice’s social media profiles to encourage engagement and patient interaction.

These features help create a professional, patient-centric website that enhances the online presence and efficiency of your dental practice.

How can I create a website for my dental practice?

You can create a website by hiring a professional web designer or using a website builder platform. Ensure it’s optimized for SEO, mobile-friendly, and includes essential features like appointment scheduling and patient resources.

Should I hire a web designer or use a website builder for my dental website?

Hiring a professional web designer can give your website a customized, professional look, while a website builder offers an easier, more affordable option for smaller practices. The choice depends on your budget and design needs.

What is the cost of creating a dental website?

The cost varies depending on whether you hire a designer or use a website builder. Professional designers may charge between £1,000 and £5,000, while website builders can cost £10 to £50 per month.

How can SEO help my dental website attract more patients?

SEO (Search Engine Optimization) helps your dental website rank higher on search engines like Google, increasing visibility. Optimizing your website with relevant keywords, meta tags, and quality content can attract more potential patients.

What kind of content should I include on my dental website?

Your website should include detailed information about your services, staff bios, patient testimonials, FAQs, a blog with dental health tips, and clear contact information.

How do I make my dental website mobile-friendly?

To make your website mobile-friendly, use a responsive design that adapts to different screen sizes, ensure fast loading times, and simplify navigation for mobile users.

How can I offer online booking on my dental website?

You can integrate online booking software or plugins into your website that allow patients to schedule appointments, check availability, and receive confirmation instantly.

How can I use patient testimonials on my dental website?

Displaying patient testimonials on your website builds trust and credibility. Place testimonials on your homepage or service pages to showcase positive experiences and attract new patients.

Should my dental website have a blog?

Yes, having a blog can improve your SEO, provide valuable dental health information, and engage patients. Regularly posting content can position your practice as an authority in dental care.

What are the best practices for designing a dental website?

Best practices include using a clean and professional layout, making navigation simple, optimizing for SEO, ensuring mobile responsiveness, and providing easy access to contact details and online booking.

How do I secure my dental website?

Securing your website involves using SSL certificates, keeping software updated, and ensuring patient data is encrypted. This is crucial for protecting sensitive patient information and complying with regulations like GDPR.

How can social media integration benefit my dental website?

Integrating social media on your website allows patients to easily follow your practice, share content, and leave reviews, enhancing engagement and driving traffic back to your site.

Can I manage my dental website after it’s built?

Yes, with content management systems (CMS) like WordPress or Wix, you can easily update content, manage patient information, and keep your website current without needing extensive technical knowledge.

Our Expert Opinion

“Your website is your main weapon when it comes to getting patients (speaking as a marketer). Your website is one of those things that I will always say it’s worth paying more for. Ads, content, social media, that can all be done very effectively on the cheap. Your website cannot be done cheaply and it’s not something I’d recommend keeping in-house.

Pay a professional to make a really fast, well-built, effective website that ranks on Google. I promise it will be worth it. Keep in mind that there are a lot of developers out there who really aren’t that good and will charge through the nose. Get several quotes, get their testimonials and I can’t stress enough how important it is to get examples of other websites they’ve made first.

Make your website mobile-first, check it regularly and work as hard as you can on the SEO to get it to the top of Google.”

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

5 Reasons Why You Should Outsource your Veterinary Practice’s Accounts

An average day at a veterinary practice can turn out to be tedious and challenging. Having to practically do everything by oneself does not ease things too. If you are running a veterinary practice and are thinking about how you can unburden and focus more on your core job which is tending to pets, you need to identify tasks that you can have an outsourcing partner do for you. One important back-end operation that your veterinary practice can outsource is accounting. Having outsourced veterinary accounting support can help accelerate your practice growth and improve profitability.

Veterinarians must keep accurate records of each patient’s financial information as well as the animal’s medical history. In order to maintain a healthy cash flow, accounting must also be handled meticulously, which means transactions must be recorded and spending and income logs must be carefully monitored. Since finding a qualified veterinary bookkeeper and accountant is quite difficult, outsourcing your veterinary practice’s accounts to a seasoned firm will help in increasing accounting and bookkeeping efficiency.

Let us look at 5 reasons why you should consider outsourcing your veterinary practice’s accounts.

Reduce Business Complexity

It is possible that a part-time or internal accountant won’t be able to assist your practice with other duties like payroll or billing. Also, a team or individual with less experience in veterinary accounting might result in several inconsistencies in bookkeeping and accounting. This might have an impact on how taxes are filed, among other things. It can be challenging for veterinarians to handle because of the stress it can cause. Veterinarians can feel less stressed and concentrate more on their core duties by outsourcing to professionals.

You can be confident that your books are current and that you always have strong visibility into your cash flow when you opt to outsource your bookkeeping. You may get cash flow statements from your outsourced bookkeeper to better understand how much money you have on hand and what costs you have coming up. By doing this, you can be certain that your chemist always has enough operating cash to fulfil its responsibilities.

Action Plan

Outsourcing your veterinary practice’s bookkeeping alleviates the burden of managing various financial tasks, ensuring consistency and reducing stress for veterinarians while providing better cash flow visibility.

Better Prepared for Tax Season

Dealing with tax-related issues is quite difficult, and if the accountants are not experienced, they can lead to several issues, not to mention, errors in tax filing might result in huge fines. This means that bookkeeping gets neglected until tax season your books are always out of date and you never have full access to the financial data you need to proactively spot problems before they develop.

When you outsource your veterinary accounts, your outsourced bookkeeping service provider will effectively and precisely maintain your books up to date throughout the year. They will make sure that you have access to a qualified bookkeeper with the understanding of the veterinary sector to assist you with your books and all your accounting needs. Practices could also save money on hiring accountants, integrate with the HMRC’s Making Tax Digital plan, and receive greater value for their money on their information technology needs by offshoring tech support and upgrading their books to cloud-based accounting solutions.

Action Plan

Outsourcing veterinary bookkeeping ensures up-to-date records, reducing tax season errors and fines. With professionals managing accounts, proactive financial oversight is enabled. Cost savings, HMRC compliance, and IT improvements are also benefits of outsourcing.

Improved Business Scalability

It’s crucial to have a staff that can expand along with your company when choosing an outsourced accounting company to work with. Due to the fact that in-house and part-time bookkeepers typically have a limited capacity for development and the amount of new work they can take on, you will need to hire more staff to keep up with this expansion.

Teams that handle your books on an outsourced basis have additional personnel to grow with your company. They will be better equipped to offer you additional help if you are expanding your veterinarian practice into new areas or handling more transactions. They can even assist in monitoring the effectiveness of different practices. By opting to outsource your veterinary accounts, you may lessen your burden so that you can focus on pet health and make sure that your important financial information is in the hands of an expert.

Action Plan

Outsourcing veterinary bookkeeping ensures scalability, as external teams can adapt to business growth. Unlike in-house staff, outsourced providers have the capacity to handle increased workload and expansion into new areas. This allows veterinarians to focus on pet care while experts manage financial data efficiently.

Cost-Effectiveness with Automation

Costs associated with in-house accounting include hiring, training, allocating resources, and others. Also, the majority of these accounting duties are performed manually by accountants who may not be familiar with the specifics of the veterinary industry. That means the investment is high but the turnaround on returns is long. However, with the help of outsourced accounting, these expenses will be significantly reduced by outsourcing and it will enable substantial cost savings for these tasks.

Veterinarians can also avoid buying separate accounting software by outsourcing their accounting needs. All the accounting software required to perform pertinent tasks will be available at outsourced companies. Accounting software can simplify tasks and increase accuracy. Further, your outsourced bookkeeping team will advise you on how to link your front-end systems with your accounting software and how to connect your veterinary business with them. This would not only simplify the billing process but also aid to reduce mistakes. This will make it simple for you and your staff to send your bookkeeper copies of your invoices and receipts while you are on the move.

Action Plan

Outsourcing veterinary accounting saves costs by automating tasks and providing integrated software, streamlining processes for efficient financial management.

Extra-Accounting Support

Accounting does not always end with a perfect-matching balance sheet. Say for instance your taxes have been submitted on time, but nobody is investing the time to regularly analyse financial data like profit and loss statements. This implies that nobody is keeping an eye out for anomalies or possible issues, such as inventory costs that are excessive sales, falling revenue from particular services, or payroll expenses that are greater than advised percentages.

In addition to doing monthly or quarterly inspections of financial statements to check for these and other problems, your outsourced accounting staff has a wide range of knowledge and resources that your in-house tax adviser most likely does not. They can assist you with your payroll requirements as well. Due to the fact that the majority of outsourcing companies employ payroll compliance specialists, they may assist you with processing payroll for your employees and remitting payroll deductions to the CRA, ensuring that your pharmacy remains in compliance with all payroll laws.

Action Plan

Outsourced accounting provides extra support beyond basic bookkeeping, offering regular analysis of financial data to identify anomalies and potential issues, along with specialized payroll services to ensure compliance with payroll laws.

A Guide to Invoice Financing for Vets

How to protect your dental practice online

Raising Finance for a Veterinary Clinic

Conclusion

Being able to comprehend and accept an outsourcing-based business model is essential to owning and managing a profitable veterinary office in today’s cutthroat industry. It is becoming more critical for owners of veterinary practices to understand and analyse the cost-benefit relationship of outsourcing their veterinary accounts as running a practice grows ever more challenging.

Thankfully, there are ever more veterinary accounting outsourcing providers who cater to the requirements of veterinary clinics. The availability of alternatives and affordable pricing will benefit veterinarians looking to outsource to more credible partners. Most importantly, it makes practices more effective, improves accounting accuracy, and gives practitioners and their staff more time to concentrate on critical responsibilities like improving pet health and pet-parent experience.

Further Information on Accounts & Tax

Our team of specialist accountants and tax experts can help manage, process and structure your business’s finances. From management accounts and payroll & pensions to tax planning and cash flow management, we can take care of the full back-office function of your business.

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

Book Consultation

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

6 Reasons UK Pharmacies Should Outsource their Accounts

Pharma is known as an industry that is highly dynamic and constantly changing – something that has become more apparent since the pandemic. But in order to provide consumers with the best value on medications and to increase profit margins, a pharmacy needs to adopt strong accounting foundations to become a sustainable business venture. There is a lot more to pharmacy accounting than what meets the eye, including the need to plan for tax returns and the configuration of cost-saving measures for products. Your pharmacy can easily and quickly achieve long-term success and financial compliance with accurate accounting and bookkeeping.

In the pharmaceutical sector, where manufacturing costs make up a significant portion of the company’s overall expenditure, it is essential to build a solid foundation before tackling the numerous challenging aspects of pharmacy accounting. As a result, you can better manage your pharmacy, streamline everyday operations, strengthen controls, and maintain a proactive attitude in the complex pharmacy market of today.

In this blog, we go over 4 reasons why you need professional accounting services for your pharmacy in the UK and the long-term benefits it can bring to your business.

Business Incorporation (Self Employed Vs Limited Company)

Whether your pharmacy is a limited company or a sole trading entity can have a big effect on your tax liabilities as well as accounting practices.

Self-Employed: As a self-employed pharmacist, there are going to be tax liabilities on your earnings. Therefore, you must keep thorough records of any expenses you intend to claim back because many business-related costs might be subtracted from your earnings before taxes are computed. In comparison to other business structures, a self-employed trader is more closely related to their business, therefore the line between a sole trading pharmacist’s business liabilities and personal assets is very thin. While it is not possible to deduct personal costs from your income before determining your tax obligation, a self-employed pharmacist may be held personally responsible for the obligations of their company.

Limited Company: Pharmacists who opt to work as a limited business are able to safeguard their personal assets in contrast to self-employed arrangements. A limited corporation, which is a separate legal entity from its directors, has the advantage of business continuity. Your personal assets would not be impacted, for example, if the business was unable to pay its bills or was involved in expensive litigation. While directors of limited businesses have more flexibility in terms of the benefits, they may claim prior to corporation tax being calculated, self-employed pharmacists have the same ability to deduct business expenditures from their profits before tax is computed.

Action Plan

Professional accounting services are crucial for pharmacies in the UK, providing essential support in navigating tax liabilities, business incorporation, and financial compliance. Whether self-employed or operating as a limited company, pharmacies benefit from expert guidance to optimize their financial structures and ensure long-term success in a dynamic industry.

6-reasons-uk-pharmacies-should-outsource-their-accounts-1

Tax Liability and Compliance

Your pharmacy’s business type is directly related to the tax legislation you have to adhere to. In the case of a self-employed pharmacy, you are liable to pay an income tax on your earnings. Alternatively, if your pharmacy is incorporated as a limited company, your business will have to file under corporate taxation. Making sure your accounting system integrates with your tax filings is the first step in building a strong pharmacy accounting foundation.

Accounting records, such as balance sheets, trial balances, profit and loss accounts, and bank reconciliation statements, will have to be accurately kept by your pharmacy, At the end of each financial year, your pharmacy must file its accounts to Companies House. Corporate Tax must be paid to HMRC within the same time frame. The next stage is to begin reconciling the balance sheet after your tax returns have been reconciled to the books, which may be a very difficult process. Depending on the state of your records, this requires going over every single balance sheet account and reconciling. Typically, they will be prepared and submitted on your behalf by your CPA or outsourced accounting partner.

Action Point

Ensuring tax compliance is essential for pharmacies, with business type dictating tax obligations. Self-employed pharmacists face income tax liabilities, while limited companies must adhere to corporate taxation. Integrating accounting systems with tax filings is crucial, requiring accurate record-keeping and timely submission of accounts to Companies House. Additionally, balancing the balance sheet post-tax reconciliation is vital, often managed by CPAs or outsourced accounting partners for efficiency and accuracy.

6 reasons uk pharmacies should outsource their accounts 2

Save Money with Digitised Accounting

Having an in-house accounting team adds up to the mounting expenses of running a pharmacy. Now, with the UK government introducing the Making Tax Digital effort, all your accounting needs to be digital, software-driven, and cloud-backed. This move has put a greater imperative on businesses like pharmacies, dental practices, and vet clinics to digitise their books and integrate tax management with the rest of business processes through software.

But building this level of digital accounting infrastructure could turn to be a very tedious and costly task for a pharmacy. This is where outsourcing pharmacy accounting can be extremely beneficial for your pharmacy business. When you outsource your pharmacy accounts, the service provider takes the onus of making the necessary infrastructure changes in accordance with your business’s requirements. By outsourcing tech support and updating their books to cloud-based accounting platforms, pharmacies can unlock savings on hiring accountants and align with the HMRC’s Making Tax Digital strategy while also getting better value for their money on their information technology requirements.

Action Point

Digitized accounting offers pharmacies the opportunity to streamline operations and comply with the UK government’s Making Tax Digital initiative. However, building such infrastructure in-house can be costly and complex. Outsourcing pharmacy accounting can alleviate this burden, as service providers handle infrastructure changes and transition to cloud-based accounting platforms. By outsourcing tech support and embracing digital solutions, pharmacies can save on hiring accountants, align with HMRC regulations, and optimize IT investments, ensuring better value for money.

6 reasons uk pharmacies should outsource their accounts 3

Cash Flow and Cost Control

Pharmacies can manage prescription payments, payrolls, and inventory levels more effectively and gain a clear financial view with the help of a solid accounting infrastructure since a contemporary accounting system will also provide automatic financial reports. Pharmacy inventories typically range widely in size. The exact numbers should be checked on a monthly basis so that all the information may be gathered in one place before the quarterly reports. For pharmacists, this provides additional insights about potential patterns in their stock portfolio while also forecasting correctly on better drug inventory management and replenishment.

Although controlling cash flow is a major stumbling block when starting a new pharmacy, efficient accounting can assure to manage your pharmacy’s cash position as it expands. Until you establish a payment history with a supplier, it is possible that they won’t initially offer you favourable credit terms. Hence, it is critical to plan cash flows as much as possible to make sure the pharmacy is staying within its means. Accounting can also be helpful in this situation by regularly reviewing expenses to make sure you are not overpaying and looking for areas where you can actively decrease costs, leading to successful cash management.

Action Point

Efficient accounting enables pharmacies to enhance prescription payments, manage payrolls, and optimize inventory levels. With modern systems providing automatic financial reports, pharmacists gain insights into stock portfolios, aiding inventory management. Effective accounting practices help manage cash positions and establish favorable credit terms with suppliers. Regular expense reviews and cost-saving strategies ensure successful cash management as pharmacies expand.

6 reasons uk pharmacies should outsource their accounts 4

Ability to Scale with Business Growth

Having an outsourced accounting partner can help you easily scale your accounting plans while looking to start a new pharmacy. Having the flexibility to scale up or down rapidly is one of the key advantages of outsourcing accounting and finance. Pharmacies can find it difficult to manage accounts for various locations, particularly if their books are kept on site. This could slow down growth and end up costing your pharmacy a lot of money.

Accounting outsourcing firms provide a wealth of expertise and have the ability to unlock scalability with a wide variety of services and automation. Outsourced accounting and finance reduce the chance of human error, enables real-time data ingestion, helps with improved financial visibility, and enables higher workload bandwidth when the pharmacy encounters a bottleneck.

Action Plan

Outsourcing accounting facilitates scalable solutions for new pharmacies, allowing flexible adjustments as the business expands. With expertise and automation, outsourced firms reduce errors and offer real-time data access, enhancing financial visibility and workload capacity during growth phases.

6 reasons uk pharmacies should outsource their accounts 5

Automated Inventory and Supplier Management

For pharmacies, onboarding new suppliers is a troublesome and time-consuming procedure. Automation-driven accounting support can help your pharmacy with automating invoicing and order-to-cash procedures, notifying staff of drug expiration dates, tracking shipments, and pointing out delays or anomalies with supplier payments or stock delivery. This in turn enables you to prevent overstocking of inventory or, conversely, going out of stock.

By automating data ingestion, like ledgering in sales and payments to suppliers, accounting automation software helps your pharmacy cut labour expenses. Automation allows for the faster and less expensive processing of more records while also running automatic and timely audits of your books. Your pharmacy can benefit from accounting automation by streamlining compliance procedures, automating tasks, improving reporting, and keeping an eye on compliance risks. This will lead to better outcomes through better business risk insight, better risk forecasting, and better prioritization of tasks.

Action Plan

Automated accounting systems simplify inventory and supplier management for pharmacies, reducing manual tasks and errors. By automating invoicing, order processing, and tracking, pharmacies prevent overstocking and stockouts while ensuring timely payments to suppliers. This improves efficiency, reduces labor costs, and enables faster processing of transactions and audits, enhancing compliance, risk management, and decision-making for better business outcomes.

6 reasons uk pharmacies should outsource their accounts 6

Related Articles

Conclusion

The importance of effective accounting for pharmacies cannot be overstated. When it comes to dealing with your pharmacy business’s tax accountability and structure, it is important to gain expert assistance given the acute degree of regulation around the pharmaceutical sector and the complexity of UK tax legislation.

With a seasoned pharmaceutical accounting partner or tax advisor by your side, you can be confident that your pharmacy is complying with all current HMRC rules. Also, by using specialised CPAs, you can plan your pharmacy’s taxes pre-emptively and make sure that any decisions you make in the future regarding your business or employment align with your tax liability. With the right accounting support, UK pharmacists can handle their accounting needs, tax obligations, and company operations in an efficient and effective manner.

Further Information on Accounts & Tax

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

Book Consultation

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Raising Finance to Buy a Pharmacy

In this webinar, we take a look at what you need to know about raising finance to buy your pharmacy.

Click here to read our blog on how to finance a healthcare business.

Invoice Finance for Pharmacists

6 Reasons UK Pharmacies Should Outsource their Accounts

Raising Finance for a Pharmacy

Business Loans for Healthcare Businesses

Book a consult

Financial Services

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

How to make a successful NHS to Private transition

In this free webinar, hosted with Patient Plan Direct, we discuss why the appetite for exploring the transition to private dentistry has never been as prevalent and what it takes to manage a successful conversion.

Moving away from the NHS to private dentistry is a big decision and one that requires detailed analysis and planning. Whether you’re looking to make a gradual step to private dentistry or leave NHS dentistry for good, we cover the steps Patient Plan Direct take to support a practice in achieving such an objective and why offering a dental plan is a vital component.

Click here to read our articles Samera.

Selling a Dental Practice to a Corporate – 5 Mistakes to Avoid

Selling Your Dental Practice: 7 Essential Things To Consider

Dental Practice Retirement & Transition Planning

Join the Samera Alliance Buying Group

The Samera Alliance is our growing network of dentists, practices and leading industry suppliers, designed to help you save money, grow your profits and build a better dental business.

Join today for free to be a part of our dental buying group, which gives you access to exclusive discounts and offers on the consumables, equipment and products you need to run a successful dental business.

You’ll also get better rates and terms for a wide range of services like HR, IT, utilities, insurance, legal services and much more!

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Grow Your Dental Practice with Samera

Join the Samera Alliance buying group today for free to save money on your consumables and assets, increase your profits and grow your dental practice.

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More on Growing a Dental Practice

For more information on growing a dental practice, check out the articles and webinars in our Learning Centre, like our guide on How to Grow a Dental Practice.

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Switching Your Payment Plan Provider

In this free webinar, hosted with Patient Plan Direct, we discuss how switching your plan provider can significantly save your practice money without worrying about any patient drop-off thanks to the new ‘Simple Switch’ process.

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Grow Your Dental Practice with Samera

Join the Samera Alliance buying group today for free to save money on your consumables and assets, increase your profits and grow your dental practice.

Join for free. Save money. Grow your dental practice.

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Samera Alliance

More on Growing a Dental Practice

For more information on growing a dental practice, check out the articles and webinars in our Learning Centre, like our guide on How to Grow a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Gootkit Malware Update

In this video, Uros takes a look at Gootkit Malware and how it can affect your business.

New Ransomware Targeting Dentists

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Check out our other articles, webinars and podcasts in the Samera Learning Centre

Get Started: Cyber Security for Healthcare

Cyber security is an essential part of keeping your patients, data and business protected online.

With Samera Cyber Security, you get the tools you need, the know-how to use them and digital copies of all your data. This three-pronged approach means you can keep your business safe and your data safe.

Contact us today to find out more about how our cyber security training, digital protection products and back-up contingencies can help you.

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New Ransomware Targeting Dentists

In this quick update, we take a look at a new ransomware which is specifically targeting dentists.

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Click here to read our articles Samera Learning Centre.

Get Started: Cyber Security for Healthcare

Cyber security is an essential part of keeping your patients, data and business protected online.

Contact us today to find out more about how our cyber security training, digital protection products and back-up contingencies can help you.

Book a consult

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How to protect your dental practice online

In this webinar, Arun and Uros discuss the different threats facing your dental practice online, and what you can do about it.

Check out our other articles, webinars and podcasts in the Samera Learning Centre

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Get Started: Cyber Security for Healthcare

Cyber security is an essential part of keeping your patients, data and business protected online.

Contact us today to find out more about how our cyber security training, digital protection products and back-up contingencies can help you.

Book a consult

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How to Ensure Your Start-up Dental Practice Takes off in a Year

In this webinar, I’ll take you through the key stages you need to get right when you start a dental practice, and how to do it.

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Starting a Dental Practice: Get Started

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

Our Dental Practice Start-up Programme is a hands-on consultancy service designed to take you through your whole journey to becoming a dental practice owner. Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help start your dream practice.

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Dental practice start-up

Learn More: Starting a Dental Practice

For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

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Refinancing and Restructuring Debt

In this webinar, Arun, Nigel and Dan take you through what you need to know about refinancing and restructuring your debts and finance.

Most dental practices have debts and loan obligations and some struggle to meet them. Yet, there are ways to overcome these challenges and thrive financially. Refinancing and restructuring debts can really help dental clinic owners manage their finances, but you need to understand how it works and where to begin. Here, we’ll see how refinancing and restructuring debts can benefit your clinic, the steps to start the process, and what you need to know. We’ll also share some tips to help you achieve financial stability and success.

Understanding the Challenges Faced by Dental Practices

Dental clinics face significant financial challenges due to tough competition, rising costs, and evolving industry standards. Keeping up with changing NHS regulations and the shift towards private dental care requires investments in equipment, technology, and staff training.

On top of this, most dental practice owners need to borrow money to buy or set up their dental practice in the first place.

Moreover, clinics can struggle to retain existing patients and attract new ones amidst fierce competition, necessitating expensive marketing strategies and maintaining patient satisfaction. The high operational costs, including rent, bills, insurance, and staff salaries, further strain clinic finances, compounded by the need for continuous training and adherence to hygiene standards.

How to Assess Your Current Financial Situation

Before tackling debt refinancing or restructuring, it’s crucial to get a clear picture of your dental practice’s financial health. This is the foundation for making informed decisions about managing your debt.

Gather Your Financial Documents: Start by collecting key financial documents like balance sheets, income statements, and cash flow statements. These will show you your recent performance and give you a snapshot of your practice’s financial health.
Analyse Your Financial Strengths and Weaknesses: Review these documents carefully to identify areas where your practice is doing well and areas that need improvement. Look for trends or patterns that might affect your debt management strategy.
Financial Ratios: Measuring Your Practice’s Health: Financial ratios like the debt-to-equity ratio, current ratio, and debt service coverage ratio can tell you a lot about your practice’s financial health. These ratios measure factors like your ability to meet debt obligations, cover short-term liabilities, and manage overall debt levels.
Cash Flow Management: Keeping Track of Inflows and Outflows: Understanding your cash flow allows you to proactively manage incoming and outgoing funds. This helps ensure you have enough cash available to cover expenses and debt payments. You will also be able to more easily identify areas you can save money, and where you may need to spend a little more.
Get Expert Help: Consider consulting a financial advisor or accountant like Samera with experience in the dental industry. They can help you interpret your financial data, identify areas for improvement, and make informed decisions about debt restructuring and refinancing.
Benefits of Understanding Your Finances: By getting a thorough understanding of your practice’s financial situation, you’ll be well-equipped to make smart decisions about debt management. This paves the way for financial success and the long-term stability of your dental practice.

Click here to read our article on 11 Top tips to manage your cash flow in a crisis

Debt Restructuring vs. Refinancing: Understanding Your Options

When it comes to managing dental practice debt, you have two main options: restructuring and refinancing. Here’s a breakdown of each strategy:

Debt Restructuring:

Think of it as a negotiation: Debt restructuring involves working directly with your existing lenders to modify the terms of your current loans. This could involve extending repayment periods, reducing interest rates, or even forgiving a portion of the debt in exchange for a lump sum payment.
Benefits: Restructuring can significantly reduce your monthly debt payments, improving cash flow and freeing up resources for other needs. It can also simplify your debt by consolidating multiple loans into a single one.
Considerations: Restructuring may not always be an option, depending on your lender and your financial situation. It’s important to negotiate effectively and have a clear understanding of your desired outcome.

Debt Refinancing:

Taking out a new loan to pay off old ones: Debt refinancing involves securing a new loan with more favorable terms than your existing debt. This new loan is then used to pay off your existing ones, resulting in potentially lower interest rates, longer repayment periods, or both.
Benefits: Similar to restructuring, refinancing can free up cash flow and simplify your debt management. However, refinancing often comes with additional fees associated with the new loan.
Considerations: Qualifying for a new loan may require good creditworthiness. Carefully compare interest rates and fees associated with refinancing to ensure it’s truly beneficial.

Choosing the Right Option:

The best approach for your dental practice depends on your specific financial situation and goals. Consider factors like the interest rates on your existing loans, your creditworthiness, and your desired monthly payment amount. Consulting a financial advisor experienced in the dental industry can help you assess your options and choose the strategy that best suits your needs.

The Potential Impact on Cash Flow and Profitability

When thinking about refinancing and restructuring debt, it’s important to understand how these actions can affect your income and profitability, making sure they support the long-term success of your practice.

Refinancing debt can directly affect your income by lowering your monthly payments through better terms like lower interest rates or longer repayment periods. This frees up money that can be reinvested back into your business.

On the other hand, debt restructuring involves changing your existing obligations to create a more sustainable financial setup. This might mean combining loans, renegotiating terms, or extending repayment schedules to better manage your finances and reduce the risk of default.

It’s essential to evaluate how these changes might impact your profitability. By reducing interest costs through refinancing and restructuring, you can directly improve your profitability. Having more cash on hand from these strategies allows you to invest in growing your practice, and marketing efforts, and attracting more patients, ultimately leading to increased profitability over time.

Dental practice owners should carefully consider how these changes could affect their income and profits, seeking advice from industry experts and financial advisors to make informed decisions and implement effective financial strategies. By making smart choices and managing finances proactively, dental practices can achieve their full potential for financial success and steady growth.

Important Considerations and Potential Risks

When renegotiating and restructuring debt for dental practices, it’s crucial to carefully consider potential risks and be fully aware of the implications. While these methods can help ease financial burdens and improve cash flow, they require careful planning and understanding.

Understanding how these changes can affect your credit rating is essential. Altering debt arrangements can impact credit scores, affecting your ability to borrow in the future and conduct financial transactions. Consulting with financial advisors or credit experts can help minimize any negative effects.

It’s also important to look at the long-term financial consequences. While restructuring may offer immediate relief, it’s essential to analyze the overall costs, interest rates, and repayment terms of any new agreements.

Variable interest rates come with inherent risks, so it’s crucial to assess your risk tolerance and ability to handle potential fluctuations.

Managing relationships with existing creditors delicately is imperative. Debt restructuring may strain these relationships and be seen as a sign of instability. Open and transparent communication with creditors is essential to maintain understanding.

Compliance with legal and regulatory obligations is a must. This highlights the need for legal and financial expertise to navigate complexities effectively.

In summary, while debt renegotiation and restructuring can be beneficial for dental practices, thorough assessment, expert guidance, and proactive communication are essential for confidently navigating these strategies and fostering sustainable growth.

The Benefits of Refinancing and Restructuring Debt

Refinancing and restructuring debt offer significant opportunities for dental clinics to attain financial stability and success. One major benefit is the potential to secure lower interest rates through refinancing, which reduces monthly payments and overall interest expenses. Extending repayment periods can also ease immediate financial pressures, allowing clinics to invest in necessary upgrades and marketing efforts, ultimately boosting long-term profitability.

Debt restructuring complements refinancing by renegotiating existing agreements for improved repayment terms, such as lower monthly payments or extended durations. Consolidating multiple loans into one simplifies financial management and reduces the risk of missed payments or late fees, providing clarity on debt obligations.

Furthermore, these financial strategies contribute to enhancing the clinic’s credit score, bolstering financial credibility and facilitating access to future credit with favorable terms.

In summary, refinancing and restructuring debt enables dental clinics to enhance their financial well-being, streamline operations, and promote long-term growth and prosperity.

Steps to Take When Considering Debt Restructuring

Managing debt through restructuring is a critical aspect of financial management that can lead to long-term success. However, it needs thoughtful consideration and strategic planning. Here are steps to navigate debt restructuring effectively:

Evaluate your financial situation comprehensively, including outstanding loans, expenses, income, and cash flow.
Define clear goals for restructuring, whether it’s to lower payments, reduce interest rates, or extend repayment terms.
Explore available options such as debt consolidation, refinancing, or negotiation with creditors, understanding the pros and cons of each.
Seek guidance from financial advisors or debt restructuring experts specialized in dental practices to make informed decisions.
Develop a detailed restructuring plan encompassing financial projections, timelines, and contingency measures.
Maintain open communication with creditors, providing necessary documentation and negotiating terms aligned with your goals.
Implement the restructuring plan diligently, making necessary arrangements and monitoring progress closely.

By following these steps and seeking professional advice, dental practices can effectively manage debt, unlock financial success, and secure a stable future. It’s essential to recognize the power of managing debt to pave the way for improved financial well-being.

Steps to Consider When Refinancing Equipment and Other Purchases

Consider these steps when financing equipment and other purchases to ensure clarity and potential savings:

Prioritize understanding the varied rates associated with financing options available to you.
Seek detailed explanations of the rates and comprehend the monthly payment obligations.
Explore the possibility of refinancing existing loans, especially if you’re not bound by terms, as low interest rates persist. For newer practices, after 1-2 years, refinancing could yield monthly savings.
Take proactive measures to manage costly short-term debts, such as credit card debt. Consider leveraging equity in your practice or home at potentially lower costs, offering substantial savings in the long run.

Managing debt can be tough, especially for dental practices, but with the right strategies and knowledge, regaining control of your finances is possible. By exploring refinancing options and restructuring your debt, you can lower interest rates, improve cash flow, and ultimately achieve long-term financial stability. Remember, every dental practice is unique, so consider consulting with financial experts to determine the best approach for your specific situation.

Did You Know?

Dental Practice Operating Costs: Overheads range from 60% to 65% of revenue, mainly due to staff salaries, supplies, and office expenses. [ADA, 2021]

COVID-19 Impact: 76% of dental practices saw reduced patient visits post-pandemic, stressing financial health. [ADA Health Policy Institute, 2020]

Equipment Financing Rates: Interest rates as low as 4% for qualified borrowers, highlighting the need for competitive financing. [Bank of America Practice Solutions, 2023]

Business Loans for Healthcare Businesses

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Financial Services

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Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Dentist and Dental Associate Expenses Guide

In this complete guide, we’ll explain everything you need to know about tax relief as a dentist, including what it is, how it works, and the different types of help available. We’ll also share expert tips and tricks to help you get your expenses back and make the most of your tax relief options.

Understanding the Importance of Tax Relief for Dentists

If you’re a dentist or dental business owner in the UK, it’s crucial to know about tax relief as it can help you save money and improve your tax strategy. Tax relief means getting deductions and allowances from HM Revenue and Customs (HMRC) to lower your overall tax bill.

One big reason tax relief matters for dental business owners is that it allows you to get money back for expenses related to running your business. This includes things like buying equipment, paying for professional services, and even training your staff. By claiming these expenses as tax deductions, you can reduce your taxable income, pay less in taxes and become more profitable.

Tax relief can also create opportunities for investment and growth in your dental practice. For instance, certain expenses like upgrading your dental equipment or expanding your clinic may qualify for tax relief. This means you can get back a portion of the money you spent through tax deductions, which lets you reinvest in your business without shouldering the entire financial burden.

Furthermore, understanding tax relief will help you navigate complex tax rules and ensure you follow HMRC guidelines. By staying informed about the available tax reliefs and allowances designed specifically for dentists and dental business owners, you can maximize your savings while minimizing the risk of potential penalties or audits.

In a nutshell, tax relief is incredibly important for dental entrepreneurs in the UK. It offers many benefits, such as getting money back for various business expenses, supporting growth and investment, and ensuring compliance with tax rules. By learning about the ins and outs of tax relief and seeking professional guidance when needed, you can navigate the tax landscape like a pro and enhance your financial situation as a dental business owner.

Click here for our article and podcast episode on reducing your tax bill as a dentist.

Action points:

Learn about the different types of tax relief available to dental business owners in the UK. You can do this by visiting the HMRC website or speaking with a tax advisor.
Identify all of the business expenses that you may be eligible to claim tax relief on. This includes things like equipment purchases, professional fees, and staff training.
Keep accurate records of all of your business expenses. This will make it easier to file your tax return and claim tax relief on eligible expenses.

Click here to learn more about Tax Planning for Dentist

Common Tax Relief Options Available for Dental Professionals in the UK

If you are employed by or run a dental business in the UK, knowing about the various tax relief options available to you is really important for making your finances better. By taking advantage of these helpful opportunities, you can actually lower the amount of taxes you have to pay and increase your profits. In this section, we’ll look at some common tax relief options that dental professionals can use in the UK.

Capital Allowances: Dental practices often need to spend a lot on equipment and tools. The good news is you can claim capital allowances for these assets, which means you can subtract a part of their cost from your taxable profits. This can save you a lot of money in taxes and help you recover some of your initial investment.
Research and Development (R&D) Relief: If your dental practice is involved in innovative research activities or develops new techniques, you might qualify for R&D relief. This relief lets you claim extra deductions or even get a tax credit for eligible R&D expenses. It’s important to keep detailed records of your research projects and consult a tax professional to make sure you follow the specific rules set by HM Revenue and Customs (HMRC).
Business Expenses: It’s crucial to carefully track and record your business expenses because you can deduct them from your taxable income. Common deductible expenses for dental professionals include things like rent, utilities, staff salaries, professional fees, marketing costs, and insurance payments. Remember to keep receipts and proof to support your claims.
Pension Contributions: Making contributions to a pension plan helps you save for retirement and provides tax relief. Dental entrepreneurs can benefit from tax relief on pension contributions up to certain limits, reducing their overall tax liability while securing their financial future.
Click here to learn more about Pensions and Payroll for Dentists.
Annual Investment Allowance (AIA): The AIA allows dental entrepreneurs to claim a generous deduction for qualifying capital expenditures, such as renovations, building improvements, or equipment purchases. The current AIA limit is £1 million, offering significant opportunities for tax relief on eligible investments.
Employee Benefits: Providing employee benefits like healthcare, dental insurance, and training not only boosts staff morale but also offers tax advantages. Some benefits may be exempt from National Insurance contributions or qualify for tax relief, reducing your overall business taxes.

Remember, tax rules and relief options can be complex and subject to changes in the future, so it’s essential to consult with a qualified tax advisor or accountant who specializes in the dental industry. They can guide you through the intricacies of managing your taxes, ensuring compliance, and maximizing your tax relief opportunities. By staying informed and proactive, you can claim expenses like a pro and enhance the financial performance of your dental business.

Click here to read more about R&D Tax Relief for Dentists.

Action points:

Review your business expenses to identify any potential tax deductions. Common deductible expenses for dental professionals include rent, utilities, staff salaries, professional fees, marketing costs, and insurance payments.
Consider setting up a pension plan and making contributions. Pension contributions can help you save for retirement and provide tax relief.
Review your employee benefits to identify any that may be exempt from National Insurance contributions or qualify for tax relief. Providing employee benefits can boost staff morale and reduce your overall business taxes.
Consult with a qualified tax advisor or accountant who specializes in the dental industry like Samera. They can help you to claim all of the tax relief that you are entitled to, and to ensure that you are following all of the relevant HMRC guidelines.

Did You Know?

Dental Practice Expenses: Dentists in the UK can claim tax relief on allowable business expenses. These expenses can include rent, utilities, staff salaries, and other costs associated with running a dental practice.
Source: HM Revenue & Customs (HMRC)

Capital Allowances: Dentists can claim capital allowances on dental equipment and fixtures, such as chairs, X-ray machines, and dental instruments. These allowances allow for the deduction of the cost of these assets over time.
Source: HMRC – Capital allowances

Research and Development Tax Credits: Dentists involved in research and development activities can benefit from tax credits to incentivize innovation. This can help reduce the financial burden of investing in new treatments or technologies.
Source: HMRC – Research and Development (R&D) tax relief

Mileage and Travel Expenses: Dentists can claim tax relief for travel expenses related to their profession, such as attending conferences, visiting patients at different locations, or traveling to training courses.
Source: HMRC – Travel and subsistence expenses for employees

Student Loan Repayments: Many dentists in the UK may have student loans from their education. The repayment thresholds and rates are linked to income, providing some tax relief by ensuring that repayments are manageable.
Source: Student Loan Repayment – GOV.UK

National Insurance Contributions (NICs): Dentists may benefit from reduced NICs under the Class 4 NICs scheme, which is based on their income from self-employment.
Source: HMRC – National Insurance for self-employed people

Pension Contributions: Dentists can receive tax relief on their pension contributions. Contributions to a registered pension scheme are eligible for tax relief, making it an attractive way to save for retirement.
Source: HMRC – Pension Tax Relief

Childcare Vouchers and Tax-Free Childcare: Dentists with children may benefit from tax relief schemes that help cover the cost of childcare. These include childcare vouchers and tax-free childcare accounts.
Source: Childcare Choices – GOV.UK

Identifying Eligible Expenses for Tax Relief in Dental Practices

When it comes to running a dental practice in the UK, knowing which expenses qualify for tax relief is crucial for saving money on your taxes. Understanding which costs can be claimed can help you get back a significant portion of your business expenses and reduce your overall tax bill.

To start, it’s important to know that eligible expenses in dental practices can vary depending on the nature of your business and the specific services you provide. However, there are some common expenses that are often eligible for tax relief:

Dental equipment and tools: Any expenses incurred for buying, repairing, or maintaining dental equipment and tools are usually eligible for tax relief. This includes items like dental chairs, X-ray machines, dental drills, and sterilization equipment.
Lab fees: Payments made to dental labs for services like crowns, dentures, and orthodontic devices can be claimed as eligible expenses. Keep track of these payments to ensure accurate deductions.
Staff salaries and training: Salaries and wages paid to your dental team, including hygienists, dental nurses, receptionists, and practice managers, qualify for tax relief. Additionally, the costs associated with training your staff can be claimed as an expense.
Facility rent and utilities: If you operate your dental practice from a rented location, the rent you pay can be claimed as an eligible expense. Other utility bills like electricity, water, and heating can also be included.
Professional fees and insurance: Fees paid to professional bodies, regulatory fees, and insurance premiums designed for your dental practice can be claimed for tax relief. Examples include membership fees to dental associations or malpractice insurance costs.
Marketing and advertising: Expenses related to promoting and advertising your dental practice, such as website development, online advertising, printed materials, and signage, can be claimed as eligible expenses.

We have listed below common key expenses you can claim for in your self assessment tax return as a dentist.

Travel for business purposes at 45p/mile, and this includes travel to any courses or visiting accountants etc. We would suggest keeping a diary of business travel through the year so that you don’t have to do all of this at once at the year end. You cannot claim mileage to a regular place of work but can claim for travel to other dental practices where this is irregular
Alternatively, you may put the cost of your car through your business, along with the costs of repairs, MOTs, servicing and fuel receipts. However, we would be required to remove the non-business usage proportion of these costs. For example, if you estimate that you have used your vehicle for 20% business use and 80% private use, then we would disallow 80% of these costs. The 20% that has been claimed may still be more than the alternative option of claiming mileage at 45p/mile.
Read more about buying a car through a limited company.
Any other business travel costs such as trains/taxis etc.
Training and Course costs that are to ‘update pre-existing knowledge’, such as annual update courses etc. Course costs that enhance your technical knowledge cannot be claimed as a business expense. You have to tread carefully here as we have seen clients get into trouble with HMRC on this aspect.
Subscriptions to the BDA, GDC etc.
Professional indemnity insurance
Legal advice relating to business matters
Cleaning/laundry costs
Printing, postage and stationery for business purposes
Any dental materials purchased
Accountancy costs!
Any website or marketing costs you might incur
A proportion of your telephone bills relating to business use
A proportion of your home bills due to having an office at home to administer your business and put accounts records together (the HMRC flat rate is £4/week but this may be more depending on evidence provided)
Loupes or other equipment that you will use for the purpose of your business
Cost of study texts that you previously purchased as you will refer to these for the purpose of your business
In addition, your business could ‘buy’ from you the cost of your personal laptop and printer that you use to administer the business if you have these

The above list isn’t ‘exhaustive’ so please feel free to ask if there is an expense that you have paid and are unsure whether you can claim. There is no additional fee for asking about these.

Remember, maintaining proper records is essential when claiming tax relief. Keep detailed records of all your business expenses, including receipts, invoices, and bank statements, to support your claims.

To ensure you’re maximizing your tax relief, it’s advisable to consult with a qualified accountant or tax advisor who specializes in dental practices. They can help you navigate the complexities of tax regulations, identify additional eligible expenses, and ensure that your claims are accurate and compliant.

By identifying and claiming eligible expenses for tax relief in your dental practice, you can significantly reduce your tax burden and allocate more resources to providing quality dental care and growing your business.

Watch out for our webinar on tax-saving strategies for dentists.

Action points:

Review your business expenses to identify any potential tax deductions. The list of common eligible expenses provided in the paragraph is a good starting point, but you may be able to claim other expenses as well.
Maintain detailed and organised records of all business-related expenses, including equipment, staff salaries, training, rent, utilities, professional fees, marketing, travel, and any other operational costs.

Step-by-Step Guide to Claiming Back Expenses

Getting money back for your dental business expenses is a crucial part of managing your finances properly. You can make sure you make the most of your tax relief opportunities and get your expenses back like a pro by following these steps:

Step 1: Keep Good Records Start by keeping detailed records of all your business expenses. This means keeping invoices, receipts, and any other documents that show what you’ve spent money on. This will help you see a clear picture of your expenses and make it easier to claim them.
Step 2: Learn About Eligible Expenses Find out more about the expenses that can be claimed for tax relief. As a dental business owner, these might include things like equipment purchases, dental supplies, lab fees, professional membership fees, utility bills, insurance payments, and even certain travel expenses. Talk to a tax expert or check HMRC guidelines to make sure you’re claiming the right expenses.
Step 3: Keep Personal and Business Expenses Separate To claim expenses accurately, it’s important to keep your personal and business expenses separate. This means having separate bank accounts and credit cards for your business. This way, you can easily identify and track your business expenses, making the claiming process less complicated.
Step 4: Categorize Your Expenses Organize your expenses into specific categories, like office supplies, professional fees, or equipment purchases. This organization will make the claiming process smoother and provide a clear breakdown of your expenses for tax purposes.
Step 5: Consult a tax professional like Samera Dental Accountants to ensure you’re making the most of your tax relief opportunities and claiming expenses correctly. We can provide expert guidance, review your records, and help identify any additional deductions or relief options tailored to your dental business.
Step 6: Submit your claim once you’ve gathered all the necessary documentation and consulted with a tax professional, it’s time to submit your claim. This can usually be done through self-assessment tax forms or other relevant forms required by HMRC. Make sure you submit your claim within the specified deadlines to avoid any penalties or delays.

By following this step-by-step guide, you can navigate the process of claiming expenses for your dental business like an expert. Remember, maintaining proper records, identifying eligible expenses, and seeking professional advice are essential to maximize your tax relief and improve your financial management.

Click here for help on Making Tax Digital for Dentists.

Action points:

Keep detailed records of all of your business expenses. This includes things like invoices, receipts, and any other documents that show what you’ve spent money on.
Learn about the expenses that can be claimed for tax relief. You can do this by talking to a tax expert or checking HMRC guidelines.
Keep your personal and business expenses separate. This means having separate bank accounts and credit cards for your business.
Categorize your expenses into specific categories. This will make the claiming process smoother and provide a clear breakdown of your expenses for tax purposes.
Consult with a tax professional. They can help you to identify all of the eligible expenses that you can claim, and to ensure that your claims are accurate and compliant.
Submit your claim within the specified deadlines.

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Tips for Keeping Accurate Records and Receipts for Tax Purposes

When you’re a dental business owner in the UK, it’s vital to keep good records and receipts to get your expenses back and make the most of tax relief. This not only helps you follow tax rules but also allows you to take full advantage of deductions and credits that you’re eligible for.

First, set up a system to organize and store your records. You can do this digitally or with physical files, depending on your preference. You can use accounting software or small business apps to make the process easier and reduce the risk of losing important records.

Regularly practice the habit of keeping all receipts related to business expenses. This includes receipts for things like equipment purchases, office supplies, professional memberships, continuing education courses, and any other expenses directly related to running your dental practice. Even seemingly small expenses can add up and lead to significant tax savings.

In addition to receipts, maintain clear and detailed records of your income and expenses. You can do this by using bank statements, invoices, and financial reports. Keep track of any mileage or travel expenses incurred for business purposes, as these can also be tax-deductible.

It’s important to keep personal and business expenses separate to avoid confusion or potential issues during tax time. Having a dedicated business bank account and credit card can help streamline this process and provide a clear distinction between personal and professional finances.

Consider consulting with a tax professional or accountant who specializes in dental businesses. They can offer guidance on tax regulations, ensure accurate record-keeping, and help you identify additional deductions or credits that may apply to your specific situation.

By maintaining accurate records and receipts, you’ll not only simplify the tax filing process but also maximize your tax relief as a dental business owner. Remember, every eligible expense counts, so stay organized and claim your expenses like a pro.

Action points:

Set up a system for organizing and storing your records. This could be a digital system, such as using accounting software or small business apps, or a physical system, such as using folders and filing cabinets.
Regularly practice the habit of keeping all receipts related to business expenses. This includes receipts for things like equipment purchases, office supplies, professional memberships, continuing education courses, and any other expenses directly related to running your dental practice.
Maintain clear and detailed records of your income and expenses. You can do this by using bank statements, invoices, and financial reports. Keep track of any mileage or travel expenses incurred for business purposes, as these can also be tax-deductible.
Keep personal and business expenses separate. This means having a dedicated business bank account and credit card.
Consult with a tax professional or accountant who specializes in dental businesses. They can offer guidance on tax regulations, ensure accurate record-keeping, and help you identify additional deductions or credits that may apply to your specific situation.

Maximizing Tax Relief Through Capital Allowances and Depreciation

Increasing tax relief through capital allowances and depreciation is an important strategy for dental business owners in the UK. By understanding and using these methods, you can effectively lower your tax bill and keep more of your hard-earned money in your pocket.

Capital allowances refer to tax deductions that can be claimed on the cost of certain assets used in your dental practice. These assets include equipment, machinery, furniture, and even certain building improvements. Instead of deducting the full cost of these assets in the year of purchase, capital allowances allow you to claim a portion of the cost over several years, providing a significant tax benefit.

To maximize your capital allowances, it’s crucial to maintain detailed records of your purchases and their associated costs. This includes invoices, receipts, and any supporting documents that prove the expense is eligible for tax relief. By keeping accurate records, you can ensure that you are claiming the maximum allowable deductions and avoiding any potential issues with HM Revenue and Customs.

Depreciation, on the other hand, refers to the gradual decrease in the value of assets over time. While depreciation is not directly deductible for tax purposes in the UK, it is still an important consideration when assessing the value of your assets and calculating their capital allowances. Understanding the depreciation rates applicable to different assets can help you determine the most advantageous timing for claiming tax relief.

Tax regulations and rules regarding capital allowances and depreciation can be complex, and they are subject to future changes. Therefore, it is highly recommended to consult with a qualified accountant or tax advisor who specializes in dental business taxation. They can provide expert guidance tailored to your specific circumstances, ensuring that you are maximizing your tax relief while remaining compliant with the relevant regulations.

By effectively using capital allowances and depreciation, dental entrepreneurs in the UK can significantly reduce their tax liabilities and allocate more resources to growing their practices. Take the time to educate yourself about these strategies, seek professional advice, and confidently claim your expenses like a pro.

Action point:

Learn about the different types of capital allowances that are available to dental businesses in the UK. You can do this by visiting the HMRC website or speaking with a tax advisor.
Keep accurate records of all of your business assets and their associated costs. This includes invoices, receipts, and any supporting documents that prove the asset is eligible for tax relief.
Understand the depreciation rates applicable to your business assets. This will help you determine the most advantageous timing for claiming tax relief.
Consult with a qualified accountant or tax advisor who specializes in dental business taxation. They can provide expert guidance on how to maximize your capital allowances and depreciation deductions while remaining compliant with the relevant regulations.

Exploring Potential Tax Relief Schemes Specific to the Dental Industry

When it comes to getting tax relief for your dental business in the UK, it’s important to look into special programs designed for dental professionals. The government has introduced various tax relief opportunities that can greatly benefit dentists and help reduce their tax bills.

One such program is the Annual Investment Allowance (AIA). With this program, dental business owners can claim tax relief on qualifying capital expenses like equipment purchases, renovations, and practice improvements. The AIA lets you subtract the full cost of these investments from your taxable profits, up to a certain limit, which can boost your cash flow significantly.

Dental professionals can also take advantage of the Research and Development (R&D) tax relief scheme. Many people mistakenly believe that R&D relief is only for scientific or high-tech industries. However, R&D activities in the dental field, such as developing innovative dental treatments, improving dental materials, or implementing advanced imaging technologies, can also qualify for this relief. By claiming R&D tax relief, you can get tax credits or deductions for the expenses incurred during these research and development activities, further reducing your tax rate.

Another tax relief scheme that dental business owners should explore is Capital Allowances. This scheme allows you to claim tax relief on the purchase or renovation of buildings, as well as fixtures and fittings within the premises. Dental practices often incur significant expenses on equipment, furniture, and dental chairs, which are typically eligible for capital allowances. By properly assessing and categorizing these assets, you can claim tax relief on their cost over time, leading to substantial savings for your business.

Finally, the Enhanced Capital Allowances (ECAs) scheme should not be overlooked. ECAs specifically apply to energy-efficient investments, such as energy-saving lighting systems, air conditioning systems, and renewable energy installations. By investing in eco-friendly technologies, dental practices can not only reduce their environmental impact but also benefit from accelerated tax relief through ECAs.

In summary, by exploring and taking advantage of tax relief schemes tailored to the dental industry, you can significantly reduce your tax liabilities and improve your financial position. Be sure to consult with a qualified tax expert or accountant who specializes in dental practices to ensure you are maximizing your tax relief opportunities and staying compliant with the latest regulations.

Action point:

Learn about the different tax relief programs available to dental business owners in the UK. This includes the Annual Investment Allowance (AIA), Research and Development (R&D) tax relief scheme, Capital Allowances, and Enhanced Capital Allowances (ECAs).
Assess your business expenses to identify any that may qualify for tax relief under these schemes.
Keep accurate records of all of your business expenses and assets. This will help you to claim the maximum allowable deductions and avoid any potential issues with HM Revenue and Customs.
Consult with a qualified tax expert or accountant who specializes in dental practices. They can provide expert guidance on how to maximize your tax relief opportunities while remaining compliant with the relevant regulations.

Overcoming Common Challenges and Pitfalls when Claiming Tax Relief

Claiming tax relief can be a complicated process, especially for dental business owners in the UK. However, by being aware of common challenges and pitfalls, you can navigate the process with ease and maximize your tax savings.

One common challenge is maintaining accurate and organized records of your business expenses. To ensure you can claim tax relief on eligible expenses, it’s essential to keep precise records, including receipts, invoices, and supporting documents. Implementing a robust accounting system and regularly reviewing and categorizing your expenses can help you stay on top of your records.

Another challenge is understanding the specific tax rules and regulations associated with dental businesses. Tax rules can vary depending on the nature of your business, such as whether you are a sole proprietor, a partnership, or a limited company. Consulting with a qualified accountant who specializes in dental businesses can provide you with expert advice tailored to your specific situation and help you navigate any complexities.

It’s also important to be aware of potential pitfalls when claiming tax relief. One common pitfall is incorrectly categorizing expenses or claiming ineligible expenses. This can result in penalties or even an audit from HM Revenue and Customs. Taking the time to understand the specific tax rules and seeking professional guidance can help you avoid such pitfalls and ensure you are claiming tax relief correctly.

Furthermore, staying up to date with changes in tax regulations and rules is crucial. Tax regulations are subject to regular updates, and staying informed about any changes can help you take advantage of new opportunities for tax relief and avoid potential pitfalls. Subscribing to newsletters or attending relevant courses or webinars can provide you with the latest information and insights.

In conclusion, overcoming common challenges and pitfalls while claiming tax relief requires diligence, organization, and seeking professional advice. By keeping accurate records, understanding the specific tax rules for dental businesses, avoiding common pitfalls, and staying up to date with changes in tax regulations, you can claim tax relief like a pro and maximize your savings as a dental business owner in the UK.

Challenges and how to overcome them:

Challenge: Maintaining accurate and organized records of business expenses
Action: Implement a robust accounting system and regularly review and categorize expenses.

Challenge: Understanding the specific tax rules and regulations associated with dental businesses
Action: Consult with a qualified accountant who specializes in dental businesses.

Challenge: Avoiding potential pitfalls when claiming tax relief
Action: Take the time to understand the specific tax rules and seek professional guidance.

Challenge: Staying up to date with changes in tax regulations and rules
Action: Subscribe to newsletters or attend relevant courses or webinars.

As a dentist, dealing with taxes can be overwhelming, but with the tips and strategies outlined here, you can claim your expenses like a pro. By taking advantage of tax relief opportunities, you can increase your savings and ensure that you are keeping more of your hard-earned money.

Be sure to consult with a tax professional like Samera to ensure you are following all the rules and making the most of available deductions. With this guide, you’ll be well-equipped to navigate the tax landscape and enhance your financial success as a dental entrepreneur in the UK.

Our Expert Opinion

“There are so many business expenses that can be claimed for when trading as a dentist. But the key is to identify what is business and what is personal to ensure you don’t fall foul of HMRC’s requirements. Use this guide as a starting point and then seek expert help to make the right claims.”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Expenses for Dentists FAQs

What are common deductible expenses for dental associates?

Common deductible expenses for dental associates include costs related to dental equipment and tools, professional memberships, and insurance. Additionally, you can claim expenses for continuing professional development (CPD) courses, dental lab fees, marketing and advertising, travel and vehicle expenses, home office usage, and utility bills if applicable. Legal and professional fees, office supplies, software, and pension contributions are also typically deductible. Keeping accurate records is essential for claiming these expenses.

Can I claim tax relief on dental equipment and tools?

Yes, dental associates can claim tax relief on dental equipment and tools used for their practice. This includes items like dental chairs, X-ray machines, and other necessary tools. These expenses are considered capital allowances, allowing you to deduct the cost from your taxable income over time, thereby reducing your overall tax liability.

What is capital allowance, and how does it work for dental professionals?

Capital allowance is a form of tax relief that allows dental professionals to deduct the cost of certain business assets, like dental equipment and tools, from their taxable income. Instead of deducting the entire cost in one year, the deduction is spread out over several years based on the asset’s depreciation. This helps reduce your overall tax liability by recognizing the gradual wear and tear of the equipment.

Are continuing professional development (CPD) courses tax-deductible?

Yes, continuing professional development (CPD) courses are tax-deductible for dental associates. The costs associated with maintaining and improving your professional skills through CPD are considered allowable expenses, which can reduce your taxable income

How do I claim for work-related travel expenses?

To claim work-related travel expenses as a dental associate, you need to keep detailed records of your travel, including dates, destinations, purposes, and costs. You can claim expenses for business-related trips, such as visits to different practices or professional meetings, but not for daily commutes. You may claim either the actual cost (fuel, maintenance) or use the HMRC-approved mileage rates.

Can I deduct the cost of dental lab fees?

Yes, dental lab fees are tax-deductible for dental associates. These fees, which cover the costs of items like crowns, dentures, and other lab-produced materials, can be claimed as business expenses, reducing your taxable income.

What is the Annual Investment Allowance (AIA)?

The Annual Investment Allowance (AIA) allows dental associates to deduct the full value of qualifying business assets, like dental equipment, from their taxable profits in the year of purchase, up to a certain limit. This allowance can significantly reduce your tax bill by allowing you to claim immediate relief on items like dental chairs, X-ray machines, and computers.

Is dental practice software an allowable expense?

Yes, dental practice software is an allowable expense for tax purposes. The costs associated with purchasing or subscribing to software used for managing your dental practice, such as patient management systems or accounting software, can be deducted from your taxable income.

Are professional memberships and insurance deductible?

Yes, professional memberships and insurance costs are deductible for dental associates. Membership fees for organizations like the General Dental Council (GDC) and indemnity insurance premiums are considered necessary business expenses and can be claimed to reduce your taxable income.

Can I claim home office expenses if I work from home?

Yes, you can claim home office expenses if you work from home as a dental associate. This includes a portion of your household bills, such as utilities, rent, or mortgage interest, based on the amount of space and time you use your home for business purposes.

How should I keep records of my business expenses?

To keep records of your business expenses as a dental associate, maintain detailed documentation of all transactions, including receipts, invoices, and bank statements. Use accounting software or spreadsheets to track these expenses regularly. Categorize expenses clearly, such as equipment, travel, and professional fees, and retain these records for at least six years to comply with tax regulations.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult

Dental Accounts & tax

Dental Accounts & Tax: Further Information

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Financial Crisis Tips for Dentists

The costs of living and of running a dental practice are soaring. Whereas the pandemic and subsequent lockdowns caused a huge drop in income, this new financial crisis is causing a huge rise in expenses.

The resources below have been created and collected together to help mitigate the effects of the current financial crisis on dentists and dental practices.

If you want to discuss the crisis and how your business can survive it, contact us today or book a free consultation with one of the team.

Latest Updates

14th October: Managing Cash Flow in your Healthcare Business

Why is managing cash flow so important?

Companies require cash to maintain competitiveness and fuel future growth strategies. If a company runs out of cash it will experience financial distress or even failure. This is not something you want to occur.

Some key indicators that managing cash flow needs to be reviewed include:

Underperformance against a business plan;
Increased creditor days and creditor pressure;
HMRC penalties and arrears;
Increased scrutiny from key stakeholders such as lenders or funders;
Limited cash reserves or working capital headroom;
Limited visibility on current working capital performance and forecast cash flows.

How can you overcome a cash flow problem?

Samera can help clients to improve their working capital, optimise their cash flow and minimise the amount tied up in operations. Our team can:

identify cash flow requirements to increase business resilience;
manage how quickly cash is paid to suppliers and collected from customers;
source debt solutions to stabilise a company’s position;
release working capital to maximise liquidity;
place greater focus on managing cash;
manage future risk by providing an early warning for supply chain payment problems;
implement cash flow forecasting models, processes and tools for ongoing monitoring; and
identify opportunities to “unlock” cash from a company’s balance sheet, often a hidden source of capital.

How do you find urgent or additional funding for my company?

We understand that organisations often require extra funding which is often driven by growth or acquisitions. Samera can help structure funding or source short term or long-term debt solutions.

The Samera Finance team are well versed in helping urgent funding if required.

What are the benefits of improved cash flow management?

Improved operational performance;
improved strategic decision making and business management;
improved relationship with creditors; and
a strong cash culture.
A healthier business environment

13th October: Restructuring and Refinancing (Webinar)

In this webinar, Arun, Nigel and Dan take you through what you need to know about refinancing and restructuring your debts and finance.

If you want to find out more about how we can help with refinancing or restructuring your loan terms, book a free consultation with our team today.

You can also sign up to our Financial Crisis Solutions for Dentists course. Spaces are limited, so if you are interested you can book your space on the link below.

11th October: Cash flow will save your business.

When the proverbial s*** hits the fan, it will be Cash flow that saves your business

It’s at times like these that having a cash flow forecast for your business is key. Being able to predict your cash position after all your planned cash inflows and outflows is essential if you are going to be able to ride out this financial rollercoaster.

Rising interest rates, of course mean higher cash payments, whilst rising costs across the board, with unpredictable income can be a recipe for a bit of a train crash. So, with my financial hat on, the first thing to do when managing your cash flow is the following:

Understand and add up all the costs that are likely to hit your practice on a month-on-month basis. This means forecasting what will be going out, from energy, to materials, to staff costs (and rises), to tax payments. Getting a grip on this is the first essential step.
Predicting your income is next, again on a month-on-month basis. Now this may prove to be more difficult as no-one knows what the future will hold. But in my view, it would be prudent to use historic figures as a starting point but then perhaps be a little negative and state the income will be say 10% lower month on month.
Once we have the predicted outflows and inflows, the next step is to then work out what your monthly cash position will be using a cash flow forecast template. Starting with your opening cash balance, the forecast then uses the inflows and outflows you have determined in the steps above. If you identify a cash shortfall, in a certain period, this will be the trigger for you to either seek to raise additional finance, or either change the income or the costs in your business, so you don’t need to raise the funds in the first place. In this tricky financial environment, it will be your ability to keep the cash flow positive that will ensure you get through this challenging period.

You can see an example of a cash flow forecast here.

Useful?

If you feel this is, then our upcoming Financial Crisis Solutions for Dentists event series of webinars in November is for you.

Spaces are limited, so if you are interested you can book your space on the link below.

5th July: How to save money, tax and time in your dental practice in 2022 (Webinar)

In this webinar with the BDA, Arun talks about the different ways you can organise your finances to save time, money and tax for your dental business.

1st July: Diversification is fundamental

This tip is pretty simple, don’t have all your eggs in one basket.

So many businesses failed during COVID 19 as many owners whole lives were invested in their one and only business. When COVID 19 hit, and stay at home orders were implemented, many businesses closed forever.

Whether it is business, or investments, it is essential NOT to have all your eggs in one basket. Diversify your business interests, diversify your savings, diversify the shares you own, diversify the assets you hold.

If you don’t diversify, you run the risk of losing everything. In this current cost of living crisis you may feel keeping everything in cash is the best strategy, however, this is not a good idea as inflations runs at around 9-10%, so in a year’s time, the buying power of your cash would have dropped by this same amount, so the key has to be able to find asset classes that can return inflation beating returns. Not necessarily easy, but, keeping all your portfolio in cash is a sure way to lose money.

You may also argue that you only know one thing, say dentistry, and have no time or interest to know about the other important asset classes, but if you are serious about taking charge of your financial independence, make the time, it could be the best investment you make.

When one asset class rises in value, another may fall, but over time, through the power of compounding and patience, your asset values will hopefully rise.

Of course, some investments may go sour, but hopefully there will be those that will skyrocket too.

Remember, once you make an investment, you don’t have to hold it forever, you may make a gain, and then decide to sell, so it’s also important on a very regular basis to rebalance your portfolio, whether your asset base is £1000 or £1m – but always ensure you have a diversified portfolio.

Choose asset classes that don’t move in tandem. For instance, you may own a dental practice, but then decide to invest in energy stocks too. These two asset classes don’t generally move in tandem, the more you can ensure that asset classes don’t move in the tandem the better job you are doing spreading your risk and diversifying your portfolio.

30th June: Save Money and Become Financially Independent

My personal financial goal has always been to become financially independent. Being able to do what I want, when I want.

Financial independence is not about how much money you actually earn, in fact it is how much you save. My dad came from India with £3 to the UK in the 1960’s. He wasn’t a big earner throughout his whole life working in the civil service, but he was a great saver for his working life.

He retired in his 60’s and is now well into this 90’s with a very modest pension, but the hard work had been carried out already as he was a prolific saver. He drove an old car, and only indulged in his hobby of travel as he grew older. By being religious about saving, he achieved his goal of financial independence very early on by not moving the goalposts of his lifestyle desires. His desires were and continue to be pretty simple. He cracked the secret of how to become financially independent.

In my view, it’s imperative to raise one’s humility and build a culture of saving in your household. Building wealth has little to do with your income or investments returns, and lots to do with your savings rate. Past a certain level of income, what you actually need is just what sits below your ego.

By saving and being flexible, you can wait for good opportunities to arise in your career and your investments. The ability to do those things when most others can’t is one of the few things that will set you apart in a world where intelligence is no longer a sustainable advantage.

Learn to become a successful saver, don’t follow the crowd, and bet on yourself.

29th June: Being Financially Smart – Get Wealthy And Stay Wealthy

I sit in a privileged position, as our firm advises clients who earn anything between £50,000 per annum to over £2m per year in income.

Whilst some clients maybe very high earners, making over £2m per year, their expenditure and lifestyle quite often bleeds them dry. Not smart in my opinion!

The key to being financially smart is getting wealthy but then actually staying wealthy. Why do so many lottery winners end up penniless after a few years? What about Premiership footballers earning £100,000 per week? Again, we can count many who earnt well but blew it all with poor financial advice and decision making.

In my view, staying wealthy is not about making good decisions all the time, it’s about consistently not screwing up. The key to staying wealthy is a combination of frugality and paranoia.

We can cite many success stories, but if we look closely, those who do best become financially unbreakable. By coming financially unbreakable, they will be in the game for the long term and benefit for the power of compounding to work wonders. Everyone cites Warren Buffet as a marvellous investor, and no doubt he is, but you miss a key point if you attach all of his success to investing acumen.

The real key to his success is that he’s been a phenomenal investor for three quarters of a century. Had he started investing in his 30s and retired in his 60s, few people would have ever heard of him. Through the power of compound interest and smart decision making over a very long investment period has made him the multi billionaire he is today.

Rather than be a rich dentist who blows it all, or a footballer that loses it all, the key has to be able to stay in the game long enough to get the returns you desire. This means having a plan, but also have a plan for the plan not going to plan – which it will invariably do!

Be optimistic about the future (even in these changing times), but paranoid about what will prevent you from getting to the future is vital.

Want to know more?

28th June: Save Tax With An Electric Car

At present, it is extremely tax efficient to get your company to purchase a new electric car for your personal use, instead of buying it yourself out of your after-tax income.

Not only is the cost of the car a fully tax-deductible expense for the company, the director and the company only have to pay a tiny amount of Income Tax and National Insurance on the benefit in kind.

This makes electric cars one of the most tax efficient ways to take money out of your company for your personal benefit.

Electric vehicles also come with lots of other financial benefits and incentives.

For example, certain low-emission vehicles with an RRP of less than £32,000 qualify for a Government grant of up to £1,500.

You do not have to claim the grant, the dealer deducts it from the price.

The grants are available until 31st March 2023. For more information: https://www.gov.uk/plug-in-car-van-grants

Other benefits and incentives include:

No road tax
In Scotland, interest-free loans to help buyers
Exemption from London’s congestion charge (until 25th December 2025)

Although buying electric cars is extremely tax efficient, this does not necessarily mean buying one makes overall financial sense. For example, the correct question could be: Is it more cost effective overall for a company owner to buy a second-hand petrol or diesel car personally if the price tag is much lower than for a brand new electric car?

We don’t know the answer to that question. However, what we can say is that, if you are planning on buying an electric car anyway, putting it through the company makes a lot of sense from a tax saving perspective.

Let’s take a closer look at some of the tax benefits.

100% Enhanced Capital Allowances

When your company buys a new electric car it can claim ‘enhanced capital allowances’ – a type of first-year allowance that allows tax relief to be claimed on the whole cost of the car in the year of purchase.

So if your company pays £30,000 for an electric car it can claim Corporation Tax relief of £5,700 (£30,000 x 19%).

Note the car has to be new: enhanced capital allowances cannot be claimed on second-hand cars.

This 100% first year allowance is available until 31st March 2025. Cars bought after this date will only qualify for the more stingy writing down allowances, typically 18% per year.

First year allowances on zero emission goods vehicles have also been extended until 31st March 2025 (although these will also qualify for the super-deduction or the annual investment allowance anyway).

Benefit in Kind Charges

As with other company cars, the director has to pay Income Tax on the benefit in kind and the company has to pay National Insurance.

However, the taxable percentage is extremely low at present, just 2%, and this rate will remain in place until at least 2024/25.

Let’s say our brand new electric car that cost £30,000 has a list price of £35,000. The list price is usually higher for various reasons, including the fact that the P11D value is based on the original list price before deducting the plug-in grant.

The benefit in kind charge will be £700 this year (£35,000 x 2%) and for the next two years.

This means the company will pay National Insurance of just £105 (£700 x 15.05%), £85 net of Corporation Tax relief at the current rate of 19%.

Leasing Electric Cars

Many individuals and businesses prefer to lease their cars.

Many electric cars can be leased for between £100 and £300 per month.

The monthly payments you see advertised may be somewhat misleading because there may also be a significant initial rental payment at the start of the lease. This could be up to nine times the ongoing monthly payment.

If your company leases an electric car the monthly payments are a fully tax-deductible expense. There is no restriction, as there is for cars with CO2 emissions above 50 g/km.

Note, with leasing, the company does not claim the 100% first- year allowance, just the lease payments.

Thinking about trading as a company or getting an electric car?

Then get in touch with us today or book yourself in on the Samera Money Boot Camp this Saturday to get more money and tax saving ideas.

27th June: Run A Company To Save Tax

If you are running any kind of business through a company, it generally makes sense to put as many expenses through the company as you can. There are several potential benefits, including:

Corporation Tax relief
VAT recovery if you can be VAT registered
The expense does not need to be paid out of your own after-tax income

Where all three of these benefits apply, it truly is a ‘win win win’, and the potential savings are phenomenal.

Whilst almost all dentists cannot be VAT registered, the simple example below details the tax savings to be had trading as a company.

Example

Ravi is the owner and director of Dental Practice Ltd, he is a higher rate taxpayer, having already taken a salary of £11,908 plus dividends of £50,000 out of the company this tax year.

Ravi now wants to buy a new computer. He will use it at home, but he will use it exclusively for business purposes. He’s giving his old computer to the kids on condition they don’t touch the new one.

The new computer will cost £2,500 plus VAT at 20%, a total of £3,000. If Ravi wants to make this purchase personally, he will need to take a further dividend of £4,528 out of the company so that, after paying Income Tax at 33.75%, or £1,528, he will be left with the net £3,000 he needs. So, in effect, the total cost is £4,528.

On the other hand, if the company buys the computer, if it was a VAT registered company the first thing it would do is recover £500 in VAT (but he is a dentist so this cannot be done), therefore the net cost is £3000, on which it can claim the 130% super-deduction. The company will thus obtain Corporation Tax relief of £741 (£3000 x 130% x 19%) meaning the net, after tax, cost of the computer is now just £2,259.

A cost of £2259, instead of a cost of £4528, that’s a huge saving of £2269.

As we can see, by far the largest part of this saving is the Income Tax Ravi has avoided by getting the company to buy the computer. This means that, while the other savings are important, it is the simple fact that the company has borne the cost that produces the greatest benefit.

Ravi’s position is fairly typical for a small company owner, but the amount of Income Tax avoided by getting the company to pay will vary from one person to another,

At this stage you may be tempted to think it might be a good idea to put absolutely everything through the company, but that’s not always the best thing to do.

In Ravi’s case, there was no benefit in kind charge because he fell within the exemption for home office equipment. The Corporation Tax relief available was also enhanced by the super-deduction. This is only available on qualifying purchases of new plant and machinery made by 31st March 2023:

Thinking about trading as a company?

17th June: Protect, Save And Grow During A Cost Of Living Crisis

16th June: A Meagre 0.25% Rise In Interest Rates! Too Little Too Late!

16th June: Interest Rates Are Rising, Don’t Have Short Term Expensive Debt

Previous Updates

Managing Your Cash Flow In A Crisis (Webinar)

In this webinar, filmed during the first lockdown, Arun discusses tough decisions every business needs to make in a crisis to manage their cash flow.

Financial Tactics During A Cash Flow Crisis (Webinar)

In this webinar, filmed during the first lockdown, Arun discusses vital financial tactics that you need to be taking to manage your cash flow in a crisis.

Tax Saving Strategies For Dentists (Webinar)

In this webinar we will discuss tax saving strategies for your practice, simple and complex tax planning opportunities.

10 Money Saving Tips For Dentists (Webinar)

In this webinar, we discuss ways in which to save money in your dental practice, from utility bills to dental equipment and consumables.

If you are spending too much on your bills and want to master how to not run out of cash whilst growing your business, listen in for our money saving tips.

How Can Dentists Reduce Their Tax Legitimately? (Podcast)

In this episode of the Dental Business Guide podcast, Arun and George discuss several ways dentists can legitimately reduce their tax bills.

Listen to the podcast here.

11 Top Tips To Manage Your Cash Flow In A Crisis

In times of financial instability, small businesses are usually one of the earliest and hardest hit. There are many issues that can arise from global uncertainty, but amongst the most problematic are disruptions to your cash flow.

A cash flow crisis can be caused by any number of factors. Disruptions to supply lines, a reluctant customer base or increased expenses.

With a cash flow crisis looming for many small businesses, these top tips should help mitigate some of the risks and help manage the cash flow in your business.

Read the article in full here.

Top 10 Tips To Help You Cut Small Business Expenses

To help keep your profits up, you need to be able control your expenditures effectively and cut a few corners to help you save that extra pound here and there to decrease your overall expenditure. Here are ten ways to cut small business expenses.

Read the article in full here.

11 Vital Financial Tips For Associate Dentists

In this article and episode of the Dental Business Podcast, Arun takes a look at 11 ways dental associates can save and grow their money.

Read the article and listen to the episode here.

Join the Samera Alliance Buying Group

The Samera Alliance is our growing network of dentists, practices and leading industry suppliers, designed to help you save money, grow your profits and build a better dental business.

You’ll also get better rates and terms for a wide range of services like HR, IT, utilities, insurance, legal services and much more!

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Surviving a Financial Crisis

Our healthcare business consultants are experts at helping medical health providers and their businesses survive a financial crisis. We can help with cash flow management, raising finance and optimising your accounts and tax structure.

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

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For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

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How to keep your dental practice protected online

Businesses rely more and more heavily on digital data storage with each year. Whether this be automated online tax software, in-house financial data or your clients’ records, it is likely that your most valuable and sensitive information is being stored digitally.

Storing and processing data digitally has so many benefits, but it also comes with many new threats that paper records do not face.

Digital records are at risk of being stolen, destroyed, or manipulated in ways that paper records never were. In fact, with the right tools, your digital records are in many ways MORE at risk of being corrupted or stolen than paper records.

This is why it is so important to have a cyber security strategy in your business.

Without the right training, software, and contingency plans, your business records and your patient or client data are at risk.

Is Your Dental Practice In Danger From A Cyber Attack?

The short answer is – yes.

Every business is at risk from cyber threats. However, patient-facing medical businesses like yours are prime targets for cybercriminals.

Not only do you hold your own financial data, but you also hold valuable patient records on your servers. These records can often be top-priority targets for cybercriminals for various reasons, such as identity theft and even corporate blackmail.

Because of this, dental practices like yours represent a jackpot to hackers and cybercriminals.

One of the biggest threats you face will be viruses known collectively as malware, such as ransomware. Ransomware is a malicious virus which automatically encrypts your data and makes it impossible to access unless you pay the criminal(s) a ransom.

With our cyber threat training, antivirus software and regular backups of your entire data, we can make sure yours and your patient’s information isn’t held hostage or stolen by criminals.

Do you have a cyber security strategy already implemented in your business?
Are your team trained in how to recognise, respond to and solve cyber threats?
Do you use endpoint protection, full disk encryption and dynamic threat defence?
Do you have regular, secure backups for all of your financial and patient data?

If you answered ‘no’ to ANY of these questions, your practice is at risk.

You need a human firewall made up of your team, the right antiviral software, and you also need a safe and easily accessible backup strategy for your business to make sure that you are protected if anything should ever go wrong.

Gootkit Malware Update

Cyber Security Threats for Dental Practices

10 Essential Cyber Security Steps for Dentists

How to Protect Your Dental Practice Online

Even the biggest companies and institutions fall victim to cybercriminals. Think about the NHS cyber attack in 2017 and the chaos it caused. Even global corporations like Yahoo have their security breached and their data stolen.

The human firewall

Unfortunately, it’s not just external factors that put your sensitive data at risk. Human error is one of the biggest factors in data loss.

Every business needs to train their employees to protect the business and its clients from attack. With the right training on how to identify, prevent and respond to cyber threats, your staff become the first line of defence in your business – a human firewall.

However, they may not spot everything, they may be faced with a problem they haven’t been trained to solve, or they may simply make a mistake.

Whatever the reason, there may well come a time when your business is successfully attacked, despite your best efforts.

When this happens, the second line of defence steps in – our antivirus software.

Antivirus software

The antivirus software we use is more than just the standard software that comes with every new laptop or desktop computer.

We use a 3-pronged approach to keep your data and digital records safe:

Endpoint protection (a pro-active antivirus software which not only blocks incoming attacks, but seeks out and destroys any existing or hidden malicious software)
Full disk encryption (this is the process of obscuring your most sensitive data by rewriting it in a specific code, to which only those you designate will have access)
Dynamic threat defence (an anti-virus software which recognises any suspicious software and isolates it to be analysed – meaning you are protected even from brand-new malware that isn’t recognised as malicious yet).

Combined, these 3 defences can help ensure your business is as protected online as it can be.

But what happens if your first 2 lines of defence are breached?

Backing up your data

If something happens to your data, whether it be destroyed or stolen, our backup service can ensure you can recover and access the lost information.

Our backups only take a matter of hours at most and are run on a daily basis. This means that if anything happens to your data today, you can recover it as it was on the last backup that morning.

Aside from providing the proper software to protect your practice from the frontlines, including the training to use it, we also keep your data backed up and protected on secure cloud servers.

Our server creates regular and secure copies of your servers to make sure you also have access to the most recent copies of your data, information and records.

From financial data, personal information and your patient records, we make sure you do not face needless downtime and even legal issues while trying to recover data or fight cybercriminals.

With our safe, virtual, cloud-based copies of your servers, you can simply flip a switch and recover your latest daily backup easily, quickly and safely.

Action Points

Implement a comprehensive cyber security strategy for your dental practice.
Train your team on how to recognize, respond to, and resolve cyber threats effectively.
Invest in advanced antivirus software, including endpoint protection, full disk encryption, and dynamic threat defense, to protect your data from malware and cybercriminals.
Ensure regular, secure backups of all your financial and patient data to recover quickly in case of data loss or cyber-attacks.

How to keep your dental practice protected online FAQ

Why is online protection important for a dental practice?

Online protection is crucial for a dental practice to safeguard patient data, maintain trust, comply with legal requirements like GDPR, and prevent cyberattacks that could disrupt operations.

What are the main cybersecurity risks for dental practices?

Common risks include data breaches, ransomware attacks, phishing scams, and malware, all of which can compromise patient information and the practice’s financial and operational integrity.

How can dental practices protect patient data online?

Dental practices can protect patient data by using encryption, secure passwords, firewalls, two-factor authentication, and regularly updating software to guard against vulnerabilities.

What is GDPR and how does it affect dental practices?

GDPR (General Data Protection Regulation) is a legal framework that requires dental practices to protect personal data, ensuring patient privacy and giving individuals control over their information.

What steps can a dental practice take to prevent a data breach?

To prevent data breaches, dental practices should implement strong password policies, regularly update software, use encryption, train staff on cybersecurity best practices, and conduct regular security audits.

What should dental practices do if they experience a cyberattack?

In the event of a cyberattack, dental practices should immediately contain the breach, inform relevant authorities (such as the ICO in the UK), notify affected patients, and work with cybersecurity professionals to resolve the issue.

How can dental practices ensure secure online communications with patients?

Dental practices should use encrypted communication platforms, secure email services, and patient portals that meet privacy standards to ensure that sensitive patient information is shared securely.

What software can help protect a dental practice online?

Anti-virus software, firewalls, encrypted email platforms, and cybersecurity monitoring tools can help protect a dental practice by detecting and preventing cyber threats in real-time.

How often should dental practices update their cybersecurity measures?

Cybersecurity measures should be reviewed and updated regularly, at least annually, or whenever new threats emerge. This includes updating software, reviewing security protocols, and providing staff with regular training.

Why is staff training important for online security in dental practices?

Staff are often the first line of defence against cyber threats. Regular training helps them recognise phishing attempts, use secure passwords, and follow protocols to prevent accidental data breaches.

What role does encryption play in protecting dental practice data?

Encryption ensures that any data, whether stored or transmitted, is secure and unreadable to unauthorized parties. It’s essential for protecting patient records and financial information.

Can dental practices outsource their cybersecurity needs?

Yes, dental practices can outsource their cybersecurity to specialized IT firms, which offer services like monitoring, data protection, and incident response to ensure the practice remains secure.

How does two-factor authentication enhance security for dental practices?

Two-factor authentication (2FA) adds an extra layer of security by requiring not just a password but also a second verification step (like a code sent to a phone), making it harder for hackers to gain access.

What legal obligations do dental practices have for online security?

Dental practices are legally required to protect patient data under laws like GDPR. This includes implementing appropriate cybersecurity measures and reporting any data breaches to authorities within 72 hours.

How can I ensure my dental practice’s website is secure?

Ensure your dental practice’s website uses SSL certificates (HTTPS), regularly updates security software, and is hosted on a secure server to protect patient information and prevent cyberattacks.

Get Started: Cyber Security for Healthcare

Cyber security is an essential part of keeping your patients, data and business protected online.

Contact us today to find out more about how our cyber security training, digital protection products and back-up contingencies can help you.

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Essential ingredients for a successful squat private dental practice

In this talk from the 2022 BDIA Showcase, Smita Mehra discusses the essential ingredients for a successful private dental start-up practice.

How to Manage Your Dental Practice Accounts

Maximising your Dental Practice’s EBITDA

How to set up and maintain compliance in your dental practice

Starting a Dental Practice: Get Started

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

Book a consult

Dental practice start-up

Learn More: Starting a Dental Practice

For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How to save money, tax and time in your dental practice

In this webinar with the BDA, Arun talks about the different ways you can organise your finances to save time, money and tax for your dental business.

Tax Saving Strategies for Dentists

Maximising your Dental Practice’s EBITDA

Dentist and Dental Associate Expenses Guide

In this talk, given at the 2022 BDIA Dental Showcase, Arun talks about how to save money, tax and time in your dental practice.

You can find more articles, webinars and podcasts in the Samera Learning Centre

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult

Dental Accounts & tax

Dental Accounts & Tax: Further Information

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Cosmetic Surgeon Commercial Finance

If you need to raise a business loan for your cosmetic surgery business, our in-house commercial finance brokers can help source the best deal and terms to suit your needs. Our team is all former bankers who specialize in the UK’s healthcare lending sector.

Whether you need to raise commercial finance to start, buy, run or grow your cosmetic surgery, we are perfectly placed to help you.

What does a cosmetic surgeon practice need to finance?

When you decide to start or buy your own cosmetic surgery, it is almost certain that you’ll need to obtain a business loan at some point. You may be able to fund the initial commercial mortgage for your new business premises with your own savings, or perhaps with the help of friends and family.

However, you’ll also need to fund the equipment, the staff, and any debts, the list is almost endless.

This list is just some of the things you may need to raise finances to afford as a cosmetic surgeon:

Acquisition finance for buying cosmetic surgery
Starting a cosmetic surgery
Commercial mortgage
Asset finance for equipment and consumables
Staff wages and consultancy fees
Insurance, legal and HR
Accounts and tax
IT and cyber security

Luckily, there are funding options for cosmetic surgeons out there and we know how to find them. Whether you’re looking to raise your first loan, change the terms of your commercial finance or refinance a business loan, our specialist finance brokers can help.

Click here to find out more about our commercial finance services.

Funding options for cosmetic surgeons

Acquisition finance for cosmetic surgeons

When you buy an existing cosmetic surgery clinic, you’ll most likely need to raise a commercial business loan to afford it. This is known as acquisition finance.

How much a cosmetic or plastic surgery business will cost depends on a number of factors. Simply put, the better the business is doing, the more it will cost.

Some cosmetic surgeries will also come with a freehold or leasehold, which will naturally increase the cost of the business.

Click here to find out more about acquisition finance.

Start-up finance for cosmetic surgeons

If you cannot find an existing plastic or cosmetic surgery that you want to buy, or if you want to start your own dream surgery from scratch, you’ll most likely need some form of commercial finance to start it.

You will need to purchase everything you need to run the business, from the premises, the equipment and hiring staff.

There are a whole range of funding options available to start-ups. Most high street banks will lend commercial business loans, as will many alternative lenders.

You will also most likely need to raise asset finance to be able to afford all of the equipment and consumables you’ll need to run a cosmetic surgery.

Most businesses do not turn a profit for the first 2 or 3 years so you may also need to raise working capital through a commercial loan to be able to afford staffing costs and pay off debts – among many other things!

financing-options-for-cosmetic-surgeon-1

Commercial mortgages for plastic surgeons

Just like buying a residential house, only the lucky few will be able to afford paying for their business premises with their own money.

For everyone else, you’ll need to borrow a commercial mortgage if you want to purchase the premises for your cosmetic or plastic surgery, and not just rent the property.

Contact us to find out more

Refinancing and Restructuring Debt

A Guide to Commercial Mortgages

A Guide to Acquisition Finance

How much you can borrow will depend on a wide range of factors; again, just like buying a residential house.

We were finalists in the 2021 NACFB Commercial Mortgage Brokers of the Year Awards. Our in-house finance brokers are experts in finding the right commercial mortgage for your healthcare business.

financing-options-for-cosmetic-surgeon-3

Click here to find out more about commercial mortgages.

Asset Finance for cosmetic surgeons

Whether you are setting up a new cosmetic surgery, buying an existing one that needs new equipment or growing your current surgery, asset finance may be the best option for you.

To start, run and grow a great cosmetic surgery, you’ll need a whole host of different consumables, products and equipment. From medical products and equipment like botox, anaesthetic, x-rays, PPE and surgical implements to more generic business items like IT equipment, CCTV and uniforms, the costs are going to stack up.

Paying for new equipment in one lump sum can have a real impact on your cash flow and working capital. Instead, you can spread the cost over a number of months by borrowing asset finance.

You can also look into refinancing your asset purchases by renegotiating your loan terms on your existing assets.

Leasing vs hire purchase

Asset finance is usually split into two forms, leasing and hire-purchase. Leasing asset finance, as the name suggests, is when you lease the asset, paying on a monthly basis. The payments are usually fixed, allowing you to know exactly how much you’re paying in a month and factor that into your cash flow.

You will not own the asset and it will not appear on your balance sheet. Leasing an asset can be a great option for equipment that you will not be using for long or has a short lifespan.

Hire-purchase finance differs from leasing in that at the end of the repayment schedule, you will own the asset. Again as the name suggests, you first hire the asset before finally purchasing it. You will need to put down a deposit for the asset.

Hire-purchase is a better finance option for assets which you expect to use often and have a long lifespan.

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Working capital loans for plastic surgeons.

Working capital is the money your business uses in its day-to-day operations. In the early months and possibly years of your practice, you will most likely need some form of working capital loan to cover the costs of running your business.

You may also need to raise working capital finance if your cash flow takes a big hit, possibly through an unexpected expense or emergency.

Working capital loans are not used to fund large purchases or expand a business, they are simply used to cover short-term costs that cannot be met with existing working capital. The loans are expected to be paid in the short or medium term.

Click here to find out more about asset finance.

Growing a cosmetic or plastic surgery.

Whether you want to expand your current surgery by adding new rooms, buying new equipment or purchasing another business to create a group, you will most likely need some form of growth finance.

Growth finance is usually paid back over the medium to long term and how much you can borrow will often depend on your profit history.

financing-options-for-cosmetic-surgeon-4

How Samera can help raise finance for your cosmetic surgery business

Our in-house commercial finance brokers are experts at sourcing the right finance solutions for the UK’s healthcare businesses. Our brokers are all former bankers, with decades of experience and a huge network in the UK’s healthcare lending sector.

Not only do we know who to approach, we know exactly what they’re looking for. This means we know how to get your application right and give yourself the best chance of having your loan application approved.

Action Plan

Explore Acquisition Finance: Consider commercial loans for acquiring an existing cosmetic surgery clinic, focusing on businesses that align with your vision and have a solid performance record.
Seek Start-up Finance: Look into commercial loans and asset financing options for new cosmetic surgeons wanting to start from scratch, ensuring you have the necessary funds for premises, equipment, and staffing.
Consider Commercial Mortgages: If planning to purchase property for your practice, explore commercial mortgage options to find the right financial solution for your business premises.
Utilize Asset Finance: For acquiring necessary medical and business equipment, asset finance can help spread costs and manage cash flow effectively, with options for both leasing and hire-purchase.
Secure Working Capital Loans: To support day-to-day operations and cover short-term expenses, consider working capital loans, especially during the initial years of establishing your practice.
Plan for Growth Finance: For expansion plans, such as adding new services or acquiring other practices, investigate growth finance options based on your profit history and long-term goals.
Leverage Expertise: Partner with experienced commercial finance brokers, like Samera, who specialize in healthcare business financing to enhance your loan application success and identify the best financing solutions.

financing-options-for-cosmetic-surgeon-5

Click here to find out more about why you need a commercial finance broker.

Cosmetic Surgeon Commercial Finance FAQ

What is cosmetic surgeon commercial finance?

Cosmetic surgeon commercial finance is a tailored financial solution that helps cosmetic surgeons fund their practices. It can be used for purchasing medical equipment, expanding clinics, or managing day-to-day cash flow. These financing options, including business loans and equipment leasing, are specifically designed to meet the needs of cosmetic surgery practices, allowing surgeons to grow their businesses without upfront costs. Commercial finance makes it easier for cosmetic surgeons to invest in their practice, improve services, and stay competitive in the industry.

How can cosmetic surgeons secure commercial financing?

Cosmetic surgeons can secure commercial financing by following a few key steps:

Assess Financing Needs: Determine the amount of funding required, whether for equipment purchases, clinic expansion, or working capital.
Prepare Financial Documents: Gather necessary documents such as financial statements, business plans, tax returns, and cash flow projections to present to potential lenders.
Research Lenders: Look for lenders or financial institutions that specialize in healthcare or cosmetic surgery financing to find the best loan options.
Choose the Right Financing Option: Select from options like business loans, equipment financing, leasing, or working capital loans based on your specific needs.
Submit a Strong Application: Ensure your loan application is complete and highlights your clinic’s financial stability and growth potential.
Work with Financial Experts: Consult with a financial advisor or broker who specializes in healthcare finance to find the most suitable financing and improve approval chances.

What financing options are available for cosmetic surgery practices?

Cosmetic surgery practices have several financing options available, including:

Business Loans: Traditional loans offered by banks or financial institutions to cover expenses such as clinic expansion, renovations, or working capital.
Equipment Financing: Loans or leasing options designed specifically for purchasing or upgrading medical equipment, allowing surgeons to acquire technology without large upfront costs.
Asset Financing: Secured loans where equipment or other assets are used as collateral to obtain funding.
Working Capital Loans: Short-term loans aimed at covering daily operational costs, such as payroll, utilities, and supplies.
Practice Acquisition Loans: Specialized loans for cosmetic surgeons looking to buy an existing practice or expand by acquiring another clinic.
Lines of Credit: Flexible financing that provides ongoing access to funds, helping cover unexpected expenses or manage cash flow.
Lease Financing: Options for leasing property, medical equipment, or office space, which can be an alternative to purchasing outright.

Each of these options is tailored to help cosmetic surgery practices grow and maintain financial stability.

Can cosmetic surgeons get commercial loans with bad credit?

Yes, cosmetic surgeons can get commercial loans even with bad credit, although it may be more challenging. Lenders often look at credit scores, but there are several ways to secure financing:

Specialized Lenders: Some lenders specialize in working with healthcare professionals, including those with lower credit scores, and may offer flexible loan terms.
Collateral-Based Loans: Offering assets such as equipment or property as collateral can increase your chances of getting approved despite bad credit.
Higher Interest Rates: While loans are still available, they may come with higher interest rates and stricter repayment terms to mitigate the lender’s risk.
Co-Signers or Partnerships: Partnering with someone who has good credit or finding a co-signer can improve loan approval chances.
Alternative Financing: Options like merchant cash advances or revenue-based financing may be available for surgeons with lower credit, although these usually come with higher costs.

Improving your credit score or working with a financial advisor can also help secure better loan terms over time.

What are the benefits of using commercial finance for a cosmetic surgery clinic?

Using commercial finance for a cosmetic surgery clinic offers several key benefits:

Access to Capital: Commercial finance provides the necessary funds to invest in new equipment, expand the clinic, or cover operational expenses without depleting cash reserves.
Business Growth: It enables cosmetic surgeons to grow their practice by financing clinic renovations, opening new locations, or acquiring another practice.
Cash Flow Management: Financing options like working capital loans or lines of credit help manage cash flow, ensuring you can cover daily expenses such as payroll, utilities, and supplies.
Tax Advantages: Some financing options, such as equipment leasing, may offer tax benefits, as lease payments can often be written off as business expenses.
Flexibility: With various loan options available, cosmetic surgeons can choose financing tailored to their specific needs, whether it’s for short-term operational costs or long-term investments.
Preserving Ownership: Unlike equity financing, commercial loans allow surgeons to retain full ownership of their practice while still securing the funds they need for growth and improvement.

Overall, commercial finance supports the growth and stability of a cosmetic surgery clinic without requiring large upfront costs.

How do I apply for commercial finance as a cosmetic surgeon?

To apply for commercial finance as a cosmetic surgeon, follow these steps:

Evaluate Your Financial Needs: Determine the specific purpose of the loan, such as purchasing equipment, expanding your clinic, or covering operational costs, and calculate the required funding.
Gather Required Documents: Prepare essential documentation, including:
- Financial statements (income, cash flow, and balance sheets)
- Tax returns (business and personal)
- Business plan and growth projections
- Any existing debt or liability information
Research Lenders: Look for banks, financial institutions, or specialized healthcare lenders that offer commercial loans tailored to cosmetic surgeons or medical professionals.
Choose the Right Financing Option: Select the type of loan that suits your needs, such as business loans, equipment financing, or working capital loans.
Submit Your Loan Application: Complete the loan application with all necessary details, ensuring accuracy and transparency regarding your business finances and goals.
Work with a Financial Advisor: Consider consulting a financial advisor or broker who specializes in healthcare finance to guide you through the application process and improve your chances of approval.
Wait for Approval: Once submitted, the lender will review your application. Depending on the lender and complexity of the loan, approval can take from a few days to several weeks.
Receive Funding: After approval, you’ll receive the funds and can begin using them for the intended purpose, whether it’s growing your practice or managing cash flow.

Proper preparation and choosing the right lender are key to successfully securing commercial finance.

What types of equipment can be financed for a cosmetic surgery practice?

Cosmetic surgery practices can finance a wide range of specialized medical equipment, including:

Laser Systems: Devices for skin resurfacing, hair removal, and other aesthetic treatments.
Surgical Instruments: High-quality tools for cosmetic procedures such as liposuction, rhinoplasty, and facelifts.
Imaging Equipment: Machines like ultrasound devices or 3D imaging systems used for pre-surgical consultations and planning.
Anesthesia Equipment: Essential for ensuring patient safety and comfort during procedures.
Patient Monitoring Systems: Vital for tracking patient health metrics during and after surgery.
Operating Room Equipment: Items like surgical tables, lighting systems, and sterilization units that are crucial for any cosmetic surgery clinic.
Injectable Devices: Systems used for Botox, dermal fillers, or other minimally invasive procedures.
Recovery Room Equipment: Items like hospital beds, recliners, or monitoring systems for patient recovery post-surgery.
Body Contouring Machines: Non-invasive equipment for fat reduction, cellulite treatment, and skin tightening.
Office Technology: Patient management software, billing systems, and other IT infrastructure for running the clinic smoothly.

Financing these items can help spread out the costs and make it more affordable to equip a cosmetic surgery practice with the latest technology.

How long does it take to get approval for cosmetic surgeon commercial finance?

The approval process for cosmetic surgeon commercial finance typically takes anywhere from a few days to several weeks, depending on several factors:

Lender Type: Traditional banks may take longer (2-4 weeks) due to more stringent checks, while specialized healthcare lenders or alternative lenders can often approve loans in a few days.
Loan Complexity: Larger, more complex loans, such as those for purchasing property or significant equipment investments, may take longer to process compared to smaller working capital loans.
Documentation: Having all necessary documentation (financial statements, business plans, tax returns) prepared and accurate can speed up the process.
Credit Profile: If your credit score and financial history are strong, the approval process may be faster. Applicants with lower credit scores or financial complexities may experience delays.
Lender Requirements: Some lenders may require additional information or collateral, extending the time it takes to approve the loan.

On average, expect the process to take 1 to 3 weeks for most cosmetic surgery commercial finance applications.

Can I finance the expansion of my cosmetic surgery clinic?

Yes, you can finance the expansion of your cosmetic surgery clinic through various commercial financing options. These financing solutions can help cover the costs of:

Clinic Renovations: Updating or refurbishing your current facility to improve patient experience and accommodate new services.
Opening Additional Locations: Funding the purchase or lease of new clinic spaces to expand your geographic reach.
New Equipment Purchases: Acquiring advanced medical equipment to offer more cosmetic procedures.
Hiring More Staff: Covering recruitment and salary costs for additional surgeons, nurses, or administrative staff as your clinic grows.
Marketing and Advertising: Financing promotional activities to attract more clients and increase brand visibility.

To finance your clinic expansion, options like business loans, lines of credit, and equipment financing are available. Working with a lender experienced in healthcare financing can help you choose the best solution for your expansion plans.

What are the interest rates for commercial finance in the cosmetic surgery industry?

Interest rates for commercial finance in the cosmetic surgery industry can vary widely based on several factors, including the lender, loan type, borrower’s creditworthiness, and the loan’s terms. Generally, rates can range from 4% to 15% or higher, depending on the following:

Credit Score: Higher credit scores typically secure lower interest rates, while borrowers with lower scores may face higher rates.
Loan Type:
- Traditional Business Loans: These often have interest rates between 4% and 10%, especially when secured by collateral.
- Equipment Financing: Rates for equipment loans usually range from 5% to 12%.
- Lines of Credit: These flexible financing options tend to have rates from 6% to 15%, depending on usage and repayment terms.
Lender Type:
- Banks usually offer more competitive rates but have stricter qualification requirements.
- Alternative or Online Lenders might offer quicker approvals but with higher interest rates, typically between 8% and 20%.
Loan Term: Short-term loans usually have higher interest rates but lower total costs, while long-term loans may offer lower rates but higher overall interest costs.

Shopping around and comparing lender options can help you secure the most favourable rates for your cosmetic surgery practice’s financial needs.

Is asset financing available for cosmetic surgeons?

Yes, asset financing is available for cosmetic surgeons and is a common way to fund large purchases for a practice. Asset financing allows cosmetic surgeons to secure loans by using high-value assets, such as medical equipment, property, or vehicles, as collateral. This type of financing offers several advantages:

Equipment Purchases: Cosmetic surgeons can finance essential medical equipment, like laser systems, body contouring devices, or surgical tools, without needing large upfront capital.
Lower Interest Rates: Since the loan is secured by the asset itself, lenders typically offer lower interest rates compared to unsecured loans.
Flexible Repayment Terms: Asset financing often comes with flexible repayment terms that match the lifespan of the equipment or asset being financed.
Preserve Cash Flow: Instead of making a large purchase, surgeons can spread the cost over time, preserving working capital for other operational needs.
Tax Benefits: In some cases, asset financing may offer tax advantages, as interest payments and depreciation can be deducted as business expenses.

Asset financing is an effective way for cosmetic surgery practices to grow while keeping cash reserves intact.

Can I refinance my existing business loan as a cosmetic surgeon?

Yes, you can refinance your existing business loan as a cosmetic surgeon. Refinancing allows you to replace your current loan with a new one, often with better terms or lower interest rates. Here are the key benefits and considerations for refinancing:

Lower Interest Rates: Refinancing can help reduce your interest rate, leading to lower monthly payments and reduced overall costs.
Improved Cash Flow: By lowering your payments or extending the loan term, refinancing can free up cash flow for other expenses, such as equipment purchases or clinic expansion.
Consolidate Debt: If you have multiple loans, refinancing can consolidate them into one, simplifying your payments and possibly lowering your interest rate.
Better Loan Terms: You may be able to negotiate more favorable terms, such as fixed interest rates or extended repayment periods.
Access to Additional Funds: Refinancing may allow you to borrow more if your business has grown or your financial situation has improved.
To refinance, you’ll typically need:
- Current loan details
- Financial statements
- Credit score review
It’s important to compare offers from different lenders to ensure the refinancing terms truly benefit your cosmetic surgery practice.

What factors do lenders consider for cosmetic surgery commercial loans?

When evaluating a cosmetic surgery commercial loan application, lenders consider several key factors to determine your eligibility and the loan terms:

Credit Score: Your personal and business credit scores play a significant role in assessing your reliability as a borrower. Higher credit scores often lead to better loan terms, while lower scores may result in higher interest rates or require collateral.
Business Financials: Lenders review financial statements, such as income statements, balance sheets, and cash flow projections, to assess the financial health and profitability of your practice.
Loan Purpose: Lenders will want to know how the loan will be used, whether for purchasing equipment, expanding your clinic, or managing cash flow. A clear, strategic plan increases your approval chances.
Revenue History: A consistent revenue history demonstrates that your practice is stable and capable of repaying the loan. Lenders typically look for established, profitable businesses.
Debt-to-Income Ratio: Lenders analyze how much debt your practice currently carries relative to its income. A lower debt-to-income ratio indicates that you can manage additional debt.
Collateral: Offering collateral, such as equipment or property, can improve your chances of securing a loan and may result in lower interest rates, as it reduces the lender’s risk.
Experience and Reputation: Your experience as a cosmetic surgeon and the reputation of your practice may be considered. A well-established practice with strong growth potential is more likely to receive favorable terms.
Business Plan: A strong, detailed business plan outlining your practice’s goals, growth strategies, and how the loan will be used can increase lender confidence.

These factors help lenders assess the risk and decide the loan amount, interest rate, and repayment terms for cosmetic surgery commercial loans.

Can I lease cosmetic surgery equipment instead of buying it?

Yes, you can lease cosmetic surgery equipment instead of buying it. Leasing equipment offers several advantages, especially for cosmetic surgeons looking to preserve cash flow or access the latest technology without the large upfront cost of purchasing. Here’s how leasing works and its key benefits:

Benefits of Leasing Cosmetic Surgery Equipment:

Lower Upfront Costs: Leasing requires minimal initial investment, allowing you to acquire high-end equipment like lasers or imaging systems without a large down payment.
Access to Advanced Technology: Leases often include options to upgrade equipment, so you can stay current with the latest technology without being stuck with outdated machines.
Tax Benefits: In many cases, lease payments are considered operational expenses and may be tax-deductible, reducing the overall cost of the lease.
Preserve Cash Flow: Leasing helps maintain cash reserves, allowing you to allocate funds toward other business needs, such as marketing or clinic expansion.
Flexible Terms: Leasing agreements offer flexible payment plans and lease durations, giving you the ability to customize terms based on your practice’s financial situation.
Option to Buy: Many leases come with the option to purchase the equipment at the end of the term, providing flexibility if you decide to keep the equipment long-term.
Commonly Leased Equipment in Cosmetic Surgery:
- Laser systems for skin resurfacing and hair removal
- Imaging devices for pre-surgical consultations
- Anesthesia machines for surgical procedures
- Body contouring equipment for non-invasive treatments
  
  Leasing is a flexible and cost-effective option, allowing cosmetic surgery practices to access the equipment they need to offer cutting-edge treatments without a significant capital outlay.

How does commercial finance improve cash flow for cosmetic surgery practices?

Commercial finance can significantly improve cash flow for cosmetic surgery practices by providing flexible funding solutions that help manage operational expenses, invest in growth, and maintain liquidity. Here’s how:

Cover Operational Costs: Commercial finance, such as working capital loans or lines of credit, can be used to cover day-to-day expenses like payroll, utilities, supplies, and rent. This ensures the practice runs smoothly, even during slow periods.
Preserve Cash Reserves: Instead of using cash reserves for large expenses like new equipment or renovations, commercial loans allow practices to spread out payments over time. This helps preserve cash for other business needs or emergencies.
Invest in Growth Without Depleting Funds: Financing allows practices to expand, hire new staff, or open additional locations without straining cash flow. Cosmetic surgeons can finance these initiatives and repay the loan over time as the business grows.
Smooth Out Cash Flow Gaps: Cosmetic surgery practices often experience seasonal fluctuations in revenue. Commercial finance can fill these cash flow gaps, ensuring that the practice has consistent funds available throughout the year.
Upgrade Equipment: Financing or leasing options for new equipment enable practices to offer the latest treatments without the need for a large upfront investment. The revenue generated from new services can help cover loan payments while improving cash flow.

By providing access to funds without draining working capital, commercial finance helps cosmetic surgery practices maintain financial stability and support long-term growth.

Business Loans for Healthcare Businesses

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Building a CQC compliant dental practice

The Care Quality Commission (CQC)
What are the regulated activities for dentists?
How does the CQC check performance?
What are the 5 CQC standards?
Registration and Planning.
Policies and Procedures
Safeguarding and care
Premises and Equipment
Maintaining Compliance

As a dental practice owner, it’s important to know what these rules are and how to stick to them in your practice. In this article, we’ll help you figure out how to make your dental clinic CQC-friendly. We’ll talk about everything from getting started to keeping things in line with the rules as you go along.

Legally, in England, any dental professional and their practice must be registered for any registered activity which is going to be carried out. Buying or setting up a dental practice means that these registrations have to be in place, before any treatments are started.

Starting your practice with CQC rules in mind not only makes sure everyone stays accountable and focused on patient safety but also helps avoid problems and legal issues down the road. When dental clinics make CQC compliance a priority from the beginning, they set themselves up for success, making patients happy and their reputation strong.

You can find more information on the CQC website here.

In this webinar, we take you through what you need to know to make sure your dental practice is CQC compliant.

The Care Quality Commission (CQC)

The Care Quality Commission (CQC) is an independent regulator of health care and social care in England. The CQC monitors and inspects providers and provides reports and rankings, so that people can see which providers obtain the best results.

What are the regulated activities for dentists?

The CQC provides full details of activities for which registration is necessary on its website. These activities include:

Surgical procedures.
Diagnostic and screening procedures.
Treatment of disease, disorder or injury.

From the list of activities provided, it’s up to a practice owner to determine which are relevant. Once registration is complete, it’s important to understand how the CQC will monitor the performance of the dental practice on an on-going basis. I cannot emphasise this enough. Performance and care have to be high quality in order to ensure good CQC reports. These reports can have a direct effect on patient numbers and on the profits of the business.

How does the CQC check performance?

Investing in a dental practice is a big step. It’s important to eliminate as much risk as possible. One risk is that patient numbers could decline. The best way to stop this from happening is to provide an excellent standard of treatment and care.

The CQC reports on the standard of care in dental surgeries. Therefore, it’s important to understand what has to be done to prove the standard of care in the practice that is being purchased.

The CQC gathers information from different sources including:

Service users.
Service providers.
Local organisations.
Service stakeholders.
NHS England.
General Dental Council.

The CQC also carries out inspections. Prior to inspection, it asks for information which can include:

Current statement of purpose for the practice.
Accreditation or good practice programme membership details.
Staff names, roles and hours worked.
Details of complaints received.

Once a request for information has been received, a practice only has five days in which to respond. This is one reason why it’s so important to adopt good record keeping practices once a purchased or new practice is up and running.

Did You Know?

Annual Provider Information Collection (PIC): Did you know that dental practices must submit an annual Provider Information Collection (PIC) to the CQC? This information helps the CQC monitor the quality of care between inspections. [Source: CQC – Provider Information Collection]
Inspection Ratings: Did you know that after a CQC inspection, dental practices are rated as Outstanding, Good, Requires Improvement, or Inadequate? These ratings are made publicly available to help patients choose their dental care providers [Source: Birdie]
Fit and Proper Person Requirement (FPPR): Did you know that CQC regulations require that all directors and senior managers of dental practices must meet the Fit and Proper Person Requirement (FPPR)? This ensures they are suitable and competent to run a care service. [Source: CQC – FPPR]
Training and Development: Did you know that continuous professional development (CPD) is a requirement for dental practitioners as part of CQC compliance? This ensures dental staff remain competent and up-to-date with the latest practices. [Source: CQC Training and Development]

What are the 5 CQC standards?

Did you know that the CQC assesses dental practices based on five Key Lines of Enquiry (KLOEs)? These include whether services are Safe, Effective, Caring, Responsive, and Well-led. Let’s look at each question:

Is it safe?

This question looks at whether the service is keeping patients and service users safe from harm or being treated badly. It checks things like keeping places clean, managing risks, giving out medicines safely, and making sure buildings are secure. They also check if staff are trained well and follow rules to keep everyone safe.

Is it effective?

Here, the focus is on whether care helps people get better, stay healthy, and keep living well. They look at whether treatments and therapies work well, if they’re right for the person, and if they follow what’s known to be good practice.

Is it caring?

This question checks if the service treats people with kindness, respect, and dignity. They look at how staff act, communicate, and if they give care that’s centered around the person. They also check if the service helps people feel good emotionally and mentally.

Is it responsive to people’s needs?

This question sees if the service is good at adapting to what people need and want. They look at if it’s easy for people to get help when they need it, if care is given at the right time, and if support is given that fits with each person’s situation and background.

Is it well-led?

This checks if the people in charge of the service are doing a good job. They look at how the service is managed, if staff are led well, and if the organization has a good way of doing things. They also see if there’s good leadership that encourages learning and making things better. And they check if people who use the service, their families, and staff are involved in making decisions.

These questions help the CQC to inspect and rate health and social care services.

Registration and Planning.

Dentists in the UK must register with the Care Quality Commission (CQC) to operate. This ensures they meet the fundamental quality standards required.

Here’s how to get started and plan for CQC compliance:

Choosing the Right Legal Structure:

The first step involves deciding how you want to structure your practice legally. Here are the common options:

Sole Trader: This is the simplest structure, where you own and operate the practice independently. However, you take on full financial responsibility.
Partnership: Partnering with other dentists allows you to share responsibilities, profits, and some of the financial risks.
Limited Company: This structure offers more protection for your personal assets from business liabilities, but comes with additional regulations.

Registering with the Care Quality Commission (CQC):

CQC registration is mandatory for all dental practices in the UK. The process involves submitting information about your practice, including:

The types of dental services you offer
Your practice location
The names and qualifications of your staff

Upon successful registration, you’ll receive a unique CQC number, signifying your official recognition and compliance.

Appointing a Registered Manager:

The CQC requires every dental practice to have a designated Registered Manager. This individual plays a critical role in ensuring the smooth daily operations of the practice and adherence to CQC regulations. Responsibilities include:

Overseeing day-to-day operations
Acting as the primary contact for the CQC
Leading the practice towards continual improvement to maintain compliance during inspections

Understanding the CQC’s Five Key Questions:

The CQC focuses on five key areas to assess the quality of your dental practice:

Safety: Do you have robust policies and procedures in place to ensure patient safety?
Effectiveness: Are your treatments and services effective in delivering positive outcomes for patients?
Caring Attitude: Do your staff treat patients with compassion, dignity, and respect?
Responsiveness: Are you receptive to patient feedback and willing to adapt your services accordingly?
Leadership: Does your Registered Manager provide clear and effective leadership to maintain high standards?

By carefully going through these stages, your dental practice can start off on the right track with CQC rules, giving patients confidence in the care they’ll receive.

Action points:

Research legal structures and register with the CQC (gather practice details beforehand).
Designate a qualified individual to oversee operations, compliance, and CQC communication.
Review CQC standards, self-assess your practice, and implement improvements to ensure compliance.

Policies and Procedures

Crafting policies and training staff are key to following Care Quality Commission (CQC) rules in a dental clinic. Here’s how to do it:

Building Important Policies:

Infection Control: This policy spells out how to stop infections from spreading in the clinic. It covers stuff like washing hands, sterilizing tools, using protective gear, and dealing with biohazardous waste. Following these rules keeps everyone safe and reduces the chance of infections. Studies have shown that infection prevention and control (IPC) is a common area where dental practices fall short during inspections. This highlights the importance of robust hygiene protocols.
Safeguarding: These policies make sure vulnerable patients stay safe from harm or abuse. They lay down steps for spotting signs of trouble, reporting it, and helping those affected. Having safeguarding policies means the clinic is ready to handle tough situations and meets legal requirements.
Waste Management: Good waste policies ensure that all clinical waste, sharps, and dangerous materials are disposed of safely. They explain how to sort, store, move, and get rid of waste following the rules. Proper waste management keeps the environment clean, cuts health risks, and keeps the clinic hygienic.
Complaints Handling: These policies set out how to deal with patient complaints or worries. They show how to collect complaints, look into them, and sort them out fairly and quickly. Handling complaints well shows the clinic listens to patients, learns, and takes responsibility seriously.

Training the Team:

Training Staff: It’s crucial to make sure everyone in the clinic understands and sticks to the policies. Regularly train all staff (dentists, receptionists, etc.) on these rules.
What to Cover: Training sessions should explain each policy, why it’s important, and how to follow it for patient safety and to meet the rules.
Who Gets Trained: Everyone in the team, from dentists to receptionists, needs to get trained.
Regular Updates: Keep training sessions going, especially for new employees, to keep everyone in the loop with the latest policies. Update training sessions with the latest regulations and protocols regularly.
Interactive Learning: Using different methods like acting out scenarios or sharing real cases helps staff really get how to use the policies in the real world.

By setting up solid policies and making sure everyone’s trained on them, the dental clinic stays in line with CQC standards, keeps patients safe, and gives top-notch care. Keeping policies updated and training ongoing helps the clinic stay on top of changes in rules and tech, keeping care at its best.

Action points:

Create comprehensive policies covering infection control, safeguarding, waste management, and complaint handling. Ensure your policies address areas commonly cited in CQC inspections, like infection prevention.
Regularly train all staff (dentists, receptionists, etc.) on your established policies. Training sessions should explain the “why” behind each policy and how it’s implemented practically.
Regularly update your policies and training programs. Incorporate the latest regulations, protocols, and interactive learning methods like scenario-based training to keep your team informed and adaptable.

Safeguarding and care

Ensuring patients are safe and well looked after is essential to staying CQC compliant. Let’s explore how to do this simply:

Identifying Dangers:

It’s essential to perform regular risk assessments to get a clear picture of any potential issues and to identify and solve them. This involves checking how clean everything is and procedures for ensuring cleanliness, if equipment is safe and working correctly, if there’s anything that could harm patients and how to put procedures in place to guarantee safety.

Reporting Issues:

It’s essential to quickly record and address any problems that occur in the clinic, like accidents or near-misses. Staff should be able to recognise and report these incidents and be aware of who they need to report incidents to. Documenting all issues helps understand why it happened and prevents it from occurring again.

Protecting Vulnerable Patients:

You need to ensure patients who might be at risk, like older people or those with disabilities, are kept safe from harm. Everyone should be able to recognise signs of trouble and know what to do if they suspect something isn’t right. Establishing a welcoming and secure space where patients feel comfortable discussing any concerns they have is crucial.

Patients should understand what’s happening with their treatment, potential risks, and the choices available to them. Staff should use plain language to explain things like diagnoses, treatments, and costs. Patients should be fully informed about their treatment and agree to it without feeling pressured. By having robust procedures for identifying risks, reporting incidents, protecting vulnerable patients, and communicating clearly with patients, dental clinics ensure everyone feels safe and well cared for.

These practices not only improve patient satisfaction but also demonstrate that the clinic is adhering to regulations and values honesty and compassion. Keeping up with training and making improvements when necessary is vital to continue providing the best care.

Action point:

Create a calendar for monthly reviews of key procedures (infection control, waste management) and quarterly analysis of patient feedback. Regularly evaluate potential hazards for patients, staff, and the clinic (cleanliness, equipment safety).
Ensure staff recognizes and reports incidents (accidents, near misses) using designated reporting systems. Investigate reported issues to understand root causes and prevent future occurrences.
Train staff to identify signs of neglect or abuse in vulnerable patients (elderly, disabled). Foster a welcoming environment where patients feel comfortable voicing concerns.

Premises and Equipment

Ensuring the dental clinic sticks to CQC rules regarding the building and tools is important to keep everyone safe and well. Let’s explore how to do this in a unique way:

Getting the Space Right:

The clinic layout should be accessible and easy for everyone to use, even those with mobility problems. This means having ramps, handrails, and enough space for people to move around comfortably. It also means providing accessible parking spaces and doors.

According to CQC rules, the clinic must of course be kept clean to prevent germs from spreading. The layout should make it simple to keep things clean, with designated areas for handwashing, sterilising tools, and separating clean and dirty items. Surfaces should be smooth and easy to clean, and measures should be in place to prevent the spread of germs.

Safety is paramount! The layout should make it easy for patients to move around safely, with clear pathways and good lighting. There should be secure storage areas for hazardous materials, like chemicals, and clear exit signs in case of emergencies. Additionally, emergency equipment such as fire extinguishers and first aid kits should be readily available.

Looking After the Equipment:

All equipment used for treatments must be in good working order and safe to use. Regular checks should be conducted to ensure they are not damaged or worn out. There should be a schedule for regularly inspecting and cleaning each tool. It’s important to record when each tool was last checked. The inspections should verify that the tools are set up correctly, all safety features are functional, and they comply with regulations.

If a tool is found to be unsafe, it should be repaired or replaced immediately. By ensuring the clinic layout is accessible, clean, and safe, and by maintaining the tools properly, dental clinics can create a welcoming and secure environment for patients while adhering to regulations. The CQC conducts two main types of inspections: announced comprehensive inspections and unannounced focused inspections. These inspections assess the practice’s adherence to CQC regulations.

Action points:

Create a dedicated quality assurance calendar with: Monthly reviews of key procedures (infection control, waste management, etc.) as well as a Quarterly analysis of patient feedback (surveys, complaints).
Conduct an accessibility audit to ensure the clinic layout meets CQC regulations for ramps, handrails, designated accessible parking, and clear signage for all patients.
Develop a preventative maintenance schedule for all equipment, outlining regular inspection and cleaning procedures. This schedule should be documented and adhered to ensure all tools are functioning properly and safely.

Maintaining Compliance

Keeping up with rules in a CQC-approved dental clinic is a never-ending job that needs care and effort. Here’s how to do it uniquely and simply:

Why Keeping Watch Matters:

You need to keep an eye on your procedures and assessments, analyse how things are done, and assess any issues or complaints regularly. Checking regularly helps identify any areas in which you may not be following the rules or where things could be safer. Hearing what patients say about their experiences and any problems helps fix things faster too. By staying alert, you can stop problems before they happen, improve how you care for patients, and keep following the rules.

Training Staff and Keeping Rules Updated:

Making sure all team members know what to do and that they understand the rules is paramount. You need to run regular training sessions to remind everyone about the rules, fill in any gaps in what they know, and tell them about any changes to the rules. When rules change, everyone must be made aware clearly and make sure they understand what to do.

Getting Ready for CQC Inspections:

CQC will conduct regular check-ups to ensure your compliance is maintained. You must keep records of your procedures, any issues that have arisen and how they were handled. Performing mock inspections helps will help keep your employees on their toes. Make sure you review CQC feedback, address identified issues, and implement necessary changes.

By always checking training staff well, and getting ready for inspections, dental clinics show they’re serious about giving great care and following the rules. Doing these things helps make sure patients are safe and happy and that the clinic keeps doing well.

Action points:

Implement a Continuous Monitoring System: Schedule monthly reviews of key procedures (infection control, waste management, etc.). Schedule quarterly analysis of patient feedback (surveys, complaints).
Commit to Ongoing Staff Education: Develop an annual training plan for all staff members. Include mandatory modules on CQC regulations and best practices. Schedule refresher training sessions every 6 months to address knowledge gaps and communicate any regulation updates.
Prepare for and Respond to CQC Inspections: Maintain a comprehensive electronic documentation system for: Standard operating procedures (SOPs) for all clinical practices and documented incident reports with clear records of corrective actions taken. Conduct mock CQC inspections annually. Use these simulations to identify areas needing improvement and ensure staff are prepared for a real inspection. Actively review CQC feedback reports within two weeks of receiving them. Develop and implement a clear action plan to address any identified issues and ensure ongoing compliance.

By having effective systems in place to identify risks, report issues, and ensure patient safety, as well as by communicating clearly and obtaining consent from patients, clinics create a welcoming environment where patients feel comfortable. Keeping a close watch on operations, training staff thoroughly, and preparing for inspections helps clinics maintain high standards and keep patients satisfied.

Numerous organizations offer compliance support specifically for dental practices. These resources can help dentists navigate the CQC framework. For more help with following CQC rules, dental clinics can find lots of useful resources like guides on the CQC website, handbooks, and support from professional groups, local health authorities, online training, and talking with other dentists in groups or online forums.

Join the Samera Alliance Buying Group

The Samera Alliance is our growing network of dentists, practices and leading industry suppliers, designed to help you save money, grow your profits and build a better dental business.

You’ll also get better rates and terms for a wide range of services like HR, IT, utilities, insurance, legal services and much more!

Find out more

Further information on Starting a Dental Practice

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

Our Dental Practice Start-up Programme is a hands-on consultancy service designed to take you through your whole journey to becoming a dental practice owner. Contact us today for all the advice, support and expertise you’ll ever need to start a dental practice.

START-UP PROGRAMME

For more information please check out the articles and webinars in the start a dental practice section of our Learning Center, like our guide on How to Start a Dental Practice in 13 Steps.

For all our previous articles, webinars and video updates, subscribe to our YouTube channel and follow us on Facebook and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

How to Manage Your Dental Practice Accounts

In this webinar, we discuss how we can help you manage your financial and tax affairs if you are a practice owner. We cover how to organise your accountancy and tax affairs whilst minimising your tax liability, as well as Making Tax Digital.

Click here to read our article on Dentist and Dental Associate Expenses Guide

Accounts and Tax for Dental Associates Explained

Maximising your Dental Practice’s EBITDA

How Should a Dental Practice Organise its Finances

You can find more articles, webinars and podcasts in the Samera Learning Centre

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult

Dental Accounts & tax

Dental Accounts & Tax: Further Information

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Tax Saving Strategies for Dentists

In this webinar we will discuss tax saving strategies for your practice, simple and complex tax planning opportunities.

Tax Saving Strategies Webinar

Tax Saving Tips For Dentists

The last few tax years saw many new changes in tax legislation. Planning ahead is more important than ever to ensure you work within the rules to not miss out on a tax saving opportunity. Tax for dentists is a complex area that requires specialist tax knowledge about dentistry. Our team has this specialist tax knowledge.

Action Point

Optimize tax benefits by strategically claiming capital allowances. If claiming full capital allowances would result in losing personal allowances due to high profits, elect to claim a reduced amount. This preserves personal allowances and carries forward unclaimed allowances to future years.

Click here to read our article about financial tips for dentists.

Selective Capital Allowances Planning

Even though you may have spent money on capital items in a tax year, there is no requirement to claim capital allowances at all.

This matters when your circumstances in a tax year mean that if you claimed all of the capital allowances you are eligible for, you would lose your personal allowance.

E.g. Dentist ABC has profits of £100k and losses of £50k brought forward which can be used to reduce the taxable profits.

They also spent £50k on capital items in the year, upon which capital allowances can be claimed. However, an election can be made to reduce the claim to £38.5k instead, leaving £11.5k as the taxable profits. (I.e. £100k -£50k -£38.5k = £11.5k).

By restricting the amount of capital allowances claimed you can still make use of your personal allowances (Which is £11,500 in 2017/18) and carry forward the unclaimed capital allowances into the next year instead of losing them.

Action Point

Strategically plan capital allowances to optimize personal allowance benefits. Consider electing to claim less than the total available to carry forward unclaimed allowances, maintaining personal allowance eligibility.

Dividend Allowance

With the new rates of dividends that came in on the 6th April 2021, dividend income is now taxed at 7.5%, 32.5% and 38.1%, depending on whether your total income (including the dividend itself) puts you into the basic rate, higher rate or top rate bracket.

Along with the new rates the Chancellor has now given every UK taxpayer a new £2,000 tax-free “dividend allowance” which means the first £2,000 of dividend income is tax-free. To minimise your tax position, it is possible to allocate some shares to a spouse who doesn’t have dividend income to make sure this dividend allowance isn’t lost. This must be done carefully and within the accepted boundaries to be acceptable to HMRC.

Action Point

Maximize tax efficiency by using the £2,000 tax-free dividend allowance. Allocate shares to a spouse with no dividend income to fully utilize this allowance. Ensure compliance with HMRC guidelines for share allocation.

Contact us to find out more

Gift Aid

Remember to record all the charity donations you’ve made. These reduce your taxable income.

If you’re a higher rate taxpayer, you can personally claim back tax.

Example: You donate £100 to charity, they claim Gift Aid to make your donation £125. You pay 40% tax so you can personally claim back £25.00 (£125 x 20%).

Care needs to be taken here though. It can sometimes cost you tax. If you’re close to the personal allowance, this could be the case. Speak to a dental accountant to check what tax you are due back!

Action Point
Maximize tax benefits by recording all charitable donations for tax reduction. Higher-rate taxpayers can reclaim tax on Gift Aid donations. Consult a dental accountant to optimize tax returns and avoid potential costs.

Pension Contributions

When paying into your pension, you receive tax relief on any contributions that you make. This is at the highest rate of income tax that you pay, provided that the total gross pension contributions paid into your pension scheme, by you and anyone else don’t exceed the lower of your annual earnings and the annual allowance.

This could mean that, if you’re a higher rate taxpayer, £10,000 worth of contributions could get you £4,000 tax relief. Meaning you’re receiving at least a £10,000 benefit for only £6,000.

Action Points

Maximize tax relief on pension contributions, especially for higher rate taxpayers, ensuring contributions do not exceed the lower of annual earnings or the annual allowance for optimum benefits.

Limited Company Research & Development

Are you doing something that has never been done before, in advance of current technologies and sciences? This could be something as simple as a website or an app.

Millions worth of tax relief is missed by SME’s, due to people not knowing about this extremely generous tax relief for qualifying expenditure.

For each £10,000 spent on R&D, you could receive £22,500 worth of corporation tax relief. That means that the expense only really cost you just over half of what you spent at £5,500.

The tax rules surrounding this are very complex and therefore require a professional dental accountant to ensure the expenses qualify.

Action Point

Leverage R&D tax relief for innovative projects, potentially receiving £22,500 in corporation tax relief for every £10,000 spent, effectively reducing the cost to £5,500. Seek professional advice to ensure eligibility and maximize benefits.

Click here to find out how Samera can help with R&D tax relief.

Cash In On Self-Employment Profits Taxed Twice

Again, another relief people know little about.

If your self-employment year-end differs from 5th April, it’s very likely you’ve paid tax twice on your overlap profits and therefore with a little planning, you can get this back!

Many sole traders and businesses have a tax relief just waiting to be used and can ‘cash it in’ at any time they choose.

Utilise Your Tax-Free Personal Savings Allowance

Do you have a credit balance Director’s loan account (amount owing to you from your Ltd company)?

If so, you could be missing out on utilising your tax-free personal savings allowance.

Invest Wisely

There are huge tax breaks for investments in EIS / SEIS and VCT’s. To say they are generous is a huge understatement.

For example, you could invest £10,000 into an SEIS and get £5,000 immediate tax relief. What’s more, due to loss relief, even if your investment folds, your actual loss will only be £2,750. You can even carry back to the previous year.

Contact us to find out more

Dentist and Dental Associate Expenses Guide

How to save money, tax and time in your dental practice

A Guide to Inheritance Tax

In addition, every individual has a £20,000 ISA allowance available each year, which is income and capital gains tax free, so if you are not utilising this tax saving wrapper, you should really consider this.

Again, the tax legislation surrounding these different investment schemes are complex and the level of relief depends on the individual person so you should ensure you obtain independent tax advice before proceeding.

Claim All The Allowances You Are Eligible For

Whether it is claiming for use of home as an office, or laundry allowance every little helps and working with a Dental Accountant means they will be able to maximise the items you can claim for.

Tax for dentists is a complicated subject which requires knowledge and expertise.

The above is just a taste of some of the top tips, however, we strongly recommend you seek professional advice on any of the subjects detailed above.

Action Point

Review overlap profits for potential tax relief if your self-employment year-end differs from April 5th.
Utilize your tax-free personal savings allowance, especially if you have a credit balance in your Director’s loan account.
Consider investing in EIS/SEIS and VCTs for significant tax breaks and loss relief.
Maximize your £20,000 ISA allowance annually for income and capital gains tax benefits.
Claim all eligible allowances, including use of home as an office or laundry expenses, to reduce taxable income.
Consult with a professional dental accountant to navigate complex tax rules and maximize your tax-saving opportunities.

Our Expert Opinion

“I have had fewer hot meals than the amount of times dentists have asked me to save tax. The truth is the options available to save tax legitimately are limited. Long gone are the days of some questionable tax planning, however, there are reliefs and planning opportunities that are well with the law. Don’t get swayed by someone they can save you tax, instead focus on the basics right to save tax, this means accounting for everything, getting organised and ensuring you have the right tax structures set up for you.”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Tax Saving Strategies for Dentists FAQs

What are the most effective tax-saving strategies for dentists?

The most effective tax-saving strategies for dentists include incorporating your practice to benefit from lower corporate tax rates, maximizing capital allowances on dental equipment, making pension contributions for tax relief, and strategically timing expenses and income to optimize tax outcomes. Additionally, leveraging tax-efficient investments, income splitting with family members, and claiming all allowable business expenses can significantly reduce your tax liability.

How can incorporating my practice reduce my tax burden?

Incorporating your dental practice can reduce your tax burden by allowing you to pay corporation tax on profits, which is often lower than personal income tax rates. You can also take advantage of paying yourself a combination of salary and dividends, which can be more tax-efficient than drawing all income as a sole trader. Additionally, incorporation provides opportunities for tax planning, such as pension contributions and other allowable expenses, further minimizing tax liability.

What deductions are often overlooked by dental professionals?

Commonly overlooked deductions by dental professionals include costs related to continuing education, professional memberships, and subscriptions to industry journals. Additionally, expenses for home office use, travel between practices, marketing, and certain insurance premiums may be missed. Deductions for uniforms, protective clothing, and even some meals while traveling for work are also often not fully utilized. Ensuring these expenses are properly recorded and claimed can lead to significant tax savings.

How do pension contributions contribute to tax savings?

Pension contributions reduce your taxable income, allowing you to pay less tax. Contributions to a registered pension scheme are eligible for tax relief, meaning the amount you contribute is deducted from your income before tax is calculated. For higher-rate taxpayers, this can result in significant savings, as contributions are taxed at your highest marginal rate. Additionally, pension growth is tax-free, providing long-term benefits for retirement planning.

What role does tax-efficient investment play in reducing taxes?

Tax-efficient investments play a crucial role in reducing taxes by allowing you to grow your wealth while minimizing tax liabilities. Investments in ISAs (Individual Savings Accounts) or pensions, for instance, offer tax-free growth on returns. Additionally, schemes like the Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) provide tax reliefs on investments in qualifying companies, reducing your taxable income or deferring capital gains tax. These strategies help in long-term financial planning while optimizing tax savings.

How can I leverage capital allowances for dental equipment?

You can leverage capital allowances for dental equipment by claiming deductions on the cost of assets used in your practice. The Annual Investment Allowance (AIA) allows you to deduct the full cost of qualifying equipment from your taxable profits in the year of purchase, up to a certain limit. If your expenditure exceeds the AIA limit, you can claim writing-down allowances to spread the tax relief over several years. This strategy helps reduce your overall tax liability.

What are the benefits of income splitting in a dental practice?

Income splitting in a dental practice involves distributing income between family members, such as a spouse or children, who are involved in the business. By paying family members a reasonable salary for their work, you can reduce the overall tax burden, as the income is taxed at their lower tax rates rather than your higher rate. This strategy can lead to significant tax savings, especially if the family members are in lower tax brackets.

How can I maximize tax reliefs on business expenses?

To maximize tax reliefs on business expenses, ensure you claim all allowable deductions, such as dental supplies, equipment, and professional fees. Keep detailed records and receipts for every expense. Regularly review your expenditures to identify additional deductible items like training costs, travel, and office supplies. Consider using accounting software to track and categorize expenses efficiently. Consulting with a tax advisor can also help you identify less obvious deductions and optimize your tax relief strategy.

What is the impact of charitable donations on my tax liability?

Charitable donations can reduce your tax liability by allowing you to claim tax relief on qualifying donations. In the UK, donations made under the Gift Aid scheme enable charities to reclaim 25% of the donation amount from HMRC, and higher-rate taxpayers can claim additional relief, reducing their taxable income. This strategy not only supports charitable causes but also provides a tax-efficient way to lower your overall tax bill.

How does timing purchases and expenses affect tax savings?

Timing purchases and expenses strategically can significantly impact tax savings by allowing you to maximize deductions in the current tax year. For instance, making large purchases or paying for services before the end of the tax year can reduce taxable income, lowering your tax bill. Conversely, delaying income or deferring expenses to the following year can help manage cash flow and prevent pushing your income into a higher tax bracket. This careful timing ensures you optimize your tax position.

What are the tax benefits of using a home office for dental practice tasks?

Using a home office for dental practice tasks can offer several tax benefits. You can claim a portion of your household expenses, such as utilities, rent, mortgage interest, and internet costs, based on the space used for business and the time spent working from home. This deduction reduces your taxable income, leading to lower tax liability. It’s important to maintain accurate records and ensure that the space is used exclusively for business purposes to qualify for these tax benefits.

How can loss relief be utilized to offset future profits?

Loss relief can be utilized to offset future profits by carrying forward trading losses to reduce taxable income in subsequent years. This strategy lowers your tax liability in profitable years by using past losses to offset gains. Additionally, you may be able to carry back losses to previous years or set them against other forms of income, depending on specific tax rules. This approach helps stabilize your practice’s tax obligations over time, especially during periods of fluctuating income.

What are the implications of tax planning on my retirement?

Tax planning has significant implications for your retirement by helping to optimize savings and minimize tax liabilities. Effective strategies include contributing to tax-advantaged pension schemes, like SIPPs or employer pensions, which offer tax relief on contributions and tax-free growth. Proper planning can also ensure that withdrawals during retirement are tax-efficient, helping to preserve more of your wealth. Additionally, managing investments through ISAs or similar tax-efficient vehicles can enhance your financial security in retirement.

How can I use employee benefits to reduce overall tax costs?

You can reduce overall tax costs by offering tax-efficient employee benefits such as salary sacrifice schemes, employer pension contributions, and health insurance. These benefits often come with tax advantages, like reduced National Insurance contributions for both the employer and employee. Additionally, offering non-cash benefits instead of cash bonuses can be more tax-efficient, lowering the practice’s taxable income while providing valuable incentives to employees.

What are the advantages of tax-efficient estate planning?

Tax-efficient estate planning helps minimize the tax burden on your heirs and ensures that more of your wealth is passed on to your beneficiaries. Advantages include reducing inheritance tax through gifting, using trusts to control asset distribution, and leveraging tax-free allowances and reliefs. It also allows for more strategic management of assets, ensuring that your estate is distributed according to your wishes while minimizing potential tax liabilities.

How do I ensure compliance while maximizing tax savings?

To ensure compliance while maximizing tax savings, keep accurate and detailed financial records, stay updated on relevant tax laws, and claim all allowable deductions and reliefs. Regularly review your tax strategies with a professional accountant who understands your industry. Ensure that your tax planning strategies are within legal guidelines to avoid penalties. Use reputable accounting software to track expenses and income accurately, and conduct regular audits to verify compliance with tax regulations.

What strategies can I use to manage tax payments throughout the year?

To manage tax payments throughout the year, consider the following strategies:

Budget for Taxes: Set aside funds regularly based on estimated tax liabilities.
Use Payment on Account: Spread tax payments evenly throughout the year.
Optimize Cash Flow: Time income and expenses to align with tax deadlines.
Automate Payments: Schedule payments to avoid late fees and penalties.
Regular Tax Reviews: Monitor your financial situation quarterly to adjust for any changes.

How can I prepare for changes in tax legislation affecting dentists?

To prepare for changes in tax legislation affecting dentists, consider the following strategies:

Stay Informed on Legislative Changes:
- Subscribe to Updates: Regularly follow updates from HMRC, professional dental associations, and financial news sources to stay aware of new tax laws and regulations.
- Attend Workshops and Seminars: Participate in industry-specific seminars and webinars that focus on recent and upcoming tax changes.
Consult with a Tax Professional:
- Engage an Accountant: Work with an accountant or tax advisor who specializes in dental practices to understand how legislative changes specifically impact your business.
- Regular Reviews: Schedule periodic consultations to review your tax strategy and ensure it aligns with current laws.
Adjust Financial Planning and Strategies:
- Reevaluate Tax Strategies: Modify your existing tax strategies to take advantage of new deductions, credits, or allowances introduced by the changes.
- Optimize Expense Timing: Plan the timing of significant purchases or expenses to maximize tax benefits under the new legislation.
Enhance Record-Keeping Practices:
- Maintain Detailed Records: Keep comprehensive and organized financial records to ensure compliance and make it easier to implement changes.
- Use Accounting Software: Utilize up-to-date accounting software that can adapt to new tax rules and help automate compliance tasks.
Implement Flexible Business Structures:
- Review Business Structure: Assess whether your current business structure (e.g., sole proprietorship, limited company) remains the most tax-efficient under the new laws.
- Consider Incorporation Benefits: If beneficial, consider incorporating your practice to take advantage of potential tax savings offered to corporations.
Adjust Retirement and Investment Plans:
- Pension Contributions: Reevaluate your pension contributions to ensure you are maximizing tax relief opportunities.
- Tax-Efficient Investments: Explore new tax-efficient investment options that may become available or more advantageous under the revised legislation.
Prepare for Increased Compliance Requirements:
- Understand New Obligations: Identify any additional compliance requirements introduced by the tax changes and implement necessary processes to meet them.
- Training and Education: Ensure that you and your staff are knowledgeable about new compliance procedures through training sessions.
Develop a Contingency Plan:
- Financial Buffer: Create a financial buffer to manage potential increases in tax liabilities or unexpected compliance costs.
- Scenario Planning: Conduct scenario planning to anticipate various outcomes based on different legislative changes and prepare appropriate responses.
Leverage Professional Networks:
- Join Professional Groups: Engage with dental and business networks to share insights and strategies for adapting to tax changes.
- Advocate for Your Interests: Participate in advocacy efforts through professional associations to influence favorable tax policies.
Regularly Review and Update Your Tax Strategy:
- Annual Assessments: Conduct annual assessments of your tax strategy to ensure it remains effective and compliant with the latest laws.
- Adapt to Feedback: Use feedback from your accountant and financial performance data to continuously refine your approach

What are the benefits of working with a tax advisor specialized in dental practices?

Working with a tax advisor specialized in dental practices offers several benefits, including expert knowledge of industry-specific tax deductions and credits, personalized tax planning strategies, and ensuring compliance with ever-changing tax regulations. They can help you maximize tax savings, manage cash flow more effectively, and provide guidance on complex tax issues like incorporation, capital allowances, and pension contributions. Their expertise can lead to significant financial savings and peace of mind, allowing you to focus on running your practice.

How can I optimize cash flow while implementing tax-saving strategies?

To optimize cash flow while implementing tax-saving strategies, focus on timing your expenses and income to align with tax deadlines, which helps manage liquidity. Utilize capital allowances and claim all allowable deductions to reduce tax liabilities and retain more cash in the practice. Consider spreading tax payments throughout the year with payment on account, and regularly review your financial situation to adjust strategies as needed. Collaborate with a tax advisor to balance cash flow needs with effective tax planning.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

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Dental Accounts & tax

Dental Accounts & Tax: Further Information

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Money Saving Tips for Dentists

Running a dental practice is not easy, and it can be expensive. You have to pay for things like equipment, supplies, staff, and rent, which can eat into your profits. But there are ways to save money without compromising patient care. In this article, we will share some tips to help you save money in your dental practice. You can negotiate with suppliers, reduce waste, and make your operations more efficient to cut costs.

When it comes to saving money, dentists walk a tightrope. This is because any minuscule changes you make to your dental practice can have the opposite effect and could hurt your business instead of helping.

With a dental business it is very hard to cut overheads, such as property costs, employee salaries and administrative services. These are things you need to spend on to maintain your dental practice and keep patients coming through the door. That’s what makes saving money on these things very tricky.

As a dentist, you are always committed to your patient’s health and wellbeing. However, as a business owner, you need to earn the necessary profits to sustain and grow your practice. Samera helps dentists all over the UK find the right balance in the inflationary environment we now live in.

In a time where inflation and interest rates are rising, much like many other expenses, shopping around for better deals on everything you need in your practice is a necessity.

However, Samera cuts this need entirely by automatically finding you the best value options from the leading brands in the industry through the Samera Dental Buying Group. Get in touch with Team Samera to see how we can help you save money today, but in the meantime have a read of our tips below.

Click here to read more about how to cut expenses in a small business.

By following these tips, you can run a successful practice while keeping more money for yourself. Whether you have a small practice or a large dental group, keep reading to learn how to save money and improve your profits.

Top Money-Saving Tips for Your Dental Practice – Webinar

First of all, watch this free webinar in which Arun discusses ways in which you can save money in your dental practice, from utility bills to dental equipment and consumables.

Introduction: The importance of saving money in your dental practice

Running a successful dental practice means taking good care of your patients and managing your money well. We know that providing excellent dental care requires investing in equipment, supplies, and staff. But it’s also important to find ways to save money without compromising the quality of service.

By using smart strategies to save money, you can make your practice more profitable, streamline operations, and ensure long-term success. In this blog post, we will give you valuable tips to help you save money in your dental practice. We’ll talk about optimising your supply chain and using cost-effective technology, among other things.

Saving money in your dental practice not only helps your finances but also allows you to invest in things like training your team or improving your practice’s infrastructure. So, let’s get started and learn the best money-saving tips to make your dental practice thrive while keeping your finances in order.

Action Point

Optimize your dental practice’s finances by negotiating for better supply prices, embracing cost-effective technology, and streamlining operations to boost profitability without compromising care quality.

Evaluate your expenses

Identify areas where you can cut costs

To run a successful dental practice, it’s important to manage your finances wisely. One way to increase your profits is by looking at your expenses and finding areas where you can spend less money. This will help you use your resources more effectively.

First, go through your budget and examine each expense. Look at things like supplies, equipment, utilities, and employee salaries. See if there are any costs that seem too high or unnecessary. For example, you might discover that you’re spending too much on certain supplies or paying for services you don’t really need.

Next, think about alternatives or ways to save money for each expense. Can you negotiate better deals with your suppliers? Are there cheaper options for equipment maintenance or repairs? Can you find ways to use less energy and lower your utility bills? These are all things you can consider.

Another area to focus on is your staff’s schedule. By making sure your employees work efficiently and optimising their hours, you can potentially reduce labour costs without compromising patient care. Think about implementing flexible schedules, training your staff to do different tasks, or outsourcing some administrative work.

You can also use technology to make your operations more efficient and save money. Digital record-keeping, online appointment scheduling, and automated reminders can help you cut administrative costs and work more efficiently.

Remember, reducing costs doesn’t mean you have to compromise on quality or the experience you provide to your patients. It’s about finding smarter ways to use your resources without sacrificing the level of care you give. By regularly reviewing your expenses and making strategic changes, you can save money and improve the financial health of your dental practice.

Action Point

To boost your dental practice’s financial health, thoroughly review expenses and identify savings opportunities without compromising care quality. Consider negotiating better supply deals, optimizing staff schedules, and utilizing technology for efficiency. Regular financial evaluations and strategic adjustments can lead to significant savings and enhance profitability.

Negotiate with suppliers

Tips for getting better deals on dental supplies

Negotiating with suppliers is important for your dental practice’s finances. Getting better deals on dental supplies can lower your costs and increase profits. Here are some tips to help you negotiate and get the best deals:

Research prices: Before negotiating, know the market prices for the supplies you need. Compare different suppliers’ prices, quality, and reputation. This knowledge will help you during negotiations.

Build relationships: Having good relationships with suppliers can help you get better deals. Communicate with them regularly, give feedback, and show you’re a loyal customer. Suppliers are more likely to negotiate and offer better prices when they value your partnership.

Bundle purchases: Combine your orders and buy multiple supplies from the same supplier. This gives you more negotiating power. With larger orders, you can ask for bulk discounts, free shipping, or extended payment terms. Suppliers often appreciate long-term, high-volume customers and may give you better deals.

Be ready to walk away: Negotiations involve give-and-take. If the terms don’t meet your goals, be prepared to walk away. This shows you’re serious about getting the best value. It may make suppliers reconsider their offers.

Consider other suppliers: Don’t limit yourself to one supplier. Research and contact multiple suppliers to find better deals. Competition among suppliers works in your favour, as they may offer lower prices or additional benefits to win your business.

Remember, negotiating isn’t about demanding lower prices aggressively. It’s about finding solutions that benefit both parties. By following these tips, you can improve your negotiation skills and save money on dental supplies for your practice.

Action Point

Consider group purchasing organisations (GPOs)

Exploring the benefits and savings of joining a buying group

When running a dental practice, saving money is important. One way to do that is by joining a group purchasing organisation (GPO).

A GPO negotiates discounts with suppliers for its members, like dental practices. By pooling together the buying power of its members, a GPO can secure big discounts on dental supplies and equipment.

Joining a GPO can save you a lot of money. As a member, you get access to the discounted rates they negotiated, which helps you stretch your budget. This means you can spend more on other important things for your practice.

GPOs also offer a wide range of products from different suppliers, so you have more options at competitive prices. This is especially helpful when buying expensive equipment or specialised materials because the savings from the GPO can be significant.

Another benefit of joining a GPO is that it saves you time negotiating with suppliers. Instead of contacting suppliers one by one, the GPO handles the negotiations for you. This frees up your time to focus on providing good care to your patients.

Not all GPOs are the same, so it’s important to research and compare your options. Look at things like the range of suppliers they work with, the size of their network, and their reputation in the dental industry.

Joining a GPO can be a smart move for your dental practice. It gives you access to cost savings, a variety of products, and makes purchasing easier. By considering the benefits and savings of joining a GPO, you can make informed decisions that will help your dental practice financially.

Action Point

For better deals on dental supplies, research prices, build relationships with suppliers, bundle purchases, be willing to walk away, and consider multiple suppliers.

Embrace technology

How implementing digital solutions can save you money in the long run

Using technology can be a game-changer for your dental practice. It helps make things easier, saves time, and can even save you money in the long run.

One area where technology can help is in managing your patients. With a cloud-based practice management software, you can store patient records, appointments, and billing information digitally. This means you don’t have to print as much paperwork or spend money on storage. It also saves you time because you don’t have to manually enter data. Plus, these systems can send automated reminders and help with scheduling, which reduces missed appointments and cancellations.

Another way technology saves money is with digital imaging equipment. Traditional X-ray films are expensive and take up space. But digital X-ray systems give you instant, high-quality images without the need for film. You don’t have to buy film or deal with developing and disposing of it. Although the initial cost of digital equipment may seem high, you’ll save money in the long run by not having to buy film or maintain it.

Using telehealth solutions can also help you save money. You can do remote consultations and give advice through video calls or telemedicine software. This means patients don’t have to travel, which saves them money. It also reduces your overhead costs.

Technology can also help with marketing. Having a good website and active social media profiles can attract new patients and strengthen relationships with existing ones. You can also do digital marketing campaigns like targeted emails or online ads to reach your desired audience without spending a lot on advertising.

In conclusion, technology has many benefits for your dental practice, including saving money. By using digital solutions for patient management, investing in digital imaging, embracing telehealth, and using digital marketing, you can improve your practice, take better care of your patients, and increase your profits.

Action Point

Implement digital solutions like practice management software, digital imaging, telehealth, and digital marketing to streamline operations, reduce costs, and improve patient care, ultimately saving money for your dental practice.

Train your staff

Investing in education and training to improve efficiency and reduce expenses

Investing in education and training for your dental staff is important for improving your practice’s efficiency and reducing expenses. When your staff is well-trained, they perform their tasks better and create a positive experience for patients. This can lead to more patients staying with your practice and referring others.

Provide opportunities for ongoing education and training to expand your staff’s knowledge and skills. They can attend conferences, participate in webinars, or take specialised courses. When they stay updated on industry trends, techniques, and technologies, they can provide the best care to your patients.

Training shouldn’t only focus on clinical skills but also administrative tasks. Efficient scheduling, billing, and record-keeping processes can make your practice more productive and profitable. Training your staff on practice management systems or hiring experts to teach them can streamline these processes, reduce mistakes, and save time and resources.

A well-trained team can handle emergencies and unexpected situations effectively, reducing the need for expensive external help. By giving your staff the right knowledge and skills, they can confidently and efficiently handle different scenarios, saving your practice time and money.

Investing in your staff’s professional development can also boost their morale and job satisfaction. This leads to lower turnover rates, as happy employees tend to stay longer. Keeping experienced staff members saves you recruitment and training costs and ensures consistent care for your patients.

Remember, education and training should be ongoing. Encourage your staff to continuously seek learning opportunities and ways to improve. By investing in their growth, you are investing in the success and financial stability of your dental practice.

Action Point

Invest in your dental staff’s education and training to improve practice efficiency and reduce expenses. This not only enhances patient care but also boosts staff morale, leading to lower turnover and recruitment costs, ultimately saving money for the practice.

Click here to read more about building a dental team.

Maintain your equipment

Tips for proper maintenance and avoiding costly repairs or replacements

Taking care of your dental equipment is important for your practice’s smooth operation and saving money. Neglecting equipment maintenance can lead to expensive repairs or replacements. Here are some simple tips to keep your dental equipment in good condition:

Follow the manufacturer’s guidelines: Read and understand the maintenance instructions provided by the manufacturer for each piece of equipment. Clean, lubricate, and calibrate them regularly as recommended.

Create a maintenance schedule: Make a schedule to keep track of when each equipment needs attention. This can include daily, weekly, monthly, or yearly tasks depending on the equipment. Following a schedule helps prevent issues and catch problems early.

Train your staff: Make sure your staff knows how to use and maintain the equipment correctly. Teach them to recognize warning signs of equipment problems. Encourage them to report any issues promptly.

Use quality tools and materials: Invest in good-quality tools and materials for your practice. Cheaper alternatives may save money at first, but they wear out quickly and need frequent replacements. Durable equipment lasts longer and saves money in the long run.

Regular inspections: Check your equipment regularly for signs of wear, tear, or possible problems. Early detection helps prevent major repairs.

Consider professional servicing: Along with regular maintenance, schedule professional servicing for your equipment. Professionals can inspect, clean, and optimise the performance of your dental equipment.

By following these tips and prioritising equipment maintenance, you can avoid expensive repairs or replacements. Your dental practice will operate smoothly and efficiently, saving you money. Remember, prevention is better than cure when it comes to your dental equipment!

Action Point

Maintain your dental equipment regularly to prevent costly repairs or replacements, ensuring your practice operates efficiently. Follow the manufacturer’s guidelines, create a maintenance schedule, train staff, use quality materials, perform regular inspections, and consider professional servicing. Prioritizing equipment maintenance saves money and keeps your practice running smoothly.

Explore financing options

Understanding dental practice loans and other financial resources to help manage expenses

As a dental practice owner, it’s important to manage your expenses well to succeed and make a profit. One way to do this is by exploring different financing options available to dental practitioners.

Dental practice loans are designed specifically for dental professionals like you. They provide funds to cover expenses such as buying equipment, renovating your office, upgrading technology, or even acquiring a practice. With a dental practice loan, you can manage your cash flow and invest in the growth of your practice.

When considering a dental practice loan, research different lenders and compare their terms and interest rates. Look for lenders who specialise in dental practice financing, as they understand the industry better and can offer solutions that suit your needs.

Another option is equipment leasing. Leasing dental equipment helps you save your working capital while still getting access to the latest technology and equipment you need for your practice. Leasing spreads out the cost over time, making it more affordable and manageable for your cash flow.

Besides these financing options, look into other sources of financial assistance. Some dental associations and organisations offer grants or scholarships for dental professionals. These can help with expenses or fund continuing education. Also, there may be government programs or incentives to support dental practices, so stay informed about any financial resources that can benefit your practice.

By exploring these financing options, you can manage your expenses and ensure the financial stability of your dental practice. Carefully evaluate each option, consider your long-term goals, and consult with financial professionals who specialise in dental practice management to make informed decisions for your business’s financial health.

Action Points

Explore financing options for your dental practice, including specialized loans and equipment leasing, to manage expenses and invest in growth. Research lenders, compare terms, and consider additional financial resources like grants or government programs. Consult with financial professionals to make informed decisions for your practice’s financial health.

Please click here to read our guide to financing a dental practice.

Review your insurance policies

Ensuring you have the right coverage at the best rates

It’s important to review your insurance policies to manage the financial health of your dental practice. Dental practices have unique risks and liabilities that require special coverage, so it’s crucial to make sure you have the right policies in place to protect your practice and patients.

Start by looking at your current insurance coverage. Check your general liability insurance, malpractice insurance, property insurance, and workers’ compensation insurance, among others. Understand what risks are covered and what may be missing by reviewing the terms, limits, and exclusions of each policy.

Get quotes from different insurance providers or brokers for the same coverage. Comparing rates from multiple insurers helps you find the best rates without compromising on the coverage you need. Ask about any discounts or customised packages available for dental practices.

As you review your insurance policies, consider any changes in your practice’s operations or services. If you’ve added new procedures, expanded your office space, or hired more staff, you may need to adjust your insurance coverage. Keeping your policies up to date ensures you have enough protection.

Consider working with an insurance professional who specialises in dental practices. They can provide valuable advice on the specific risks and coverage options for your industry. Their expertise helps you understand complex policy terms and make sure you have adequate protection at the best rates.

Remember, insurance is an investment in the long-term financial stability of your dental practice. Regularly reviewing your policies and getting the right coverage at the best rates helps protect your practice from unexpected events and can save you a lot of money.

Action Point

Review your dental practice’s insurance policies regularly to ensure you have comprehensive coverage tailored to your unique needs. Compare quotes, adjust policies for any changes in operations, and consult with specialists. Proper insurance safeguards your practice’s financial health.

Financing Your First Dental Practice

Understanding Finance to Increase Profits

Do You Know the 3 Main Ways to Raise Finance?

House brands vs name brands

House brands are a great alternative for some more expensive name brand products. If you do your research correctly, most types of dental consumables have the same, if not very similar, ingredients and often most are manufactured by the same companies. The biggest difference is the price point. However, this is not the case with all house brands, the cheapest brand is not always the least expensive.

Branded	Price	Own Brand	Price
4% 1:100,000 2.2ML LATEX-FREE	£26.75	BARTINEST 1:100,000 2.2ML ANAESTHETIC	£22.96
ALCOHOL FREE JUMBO WIPES REFILL	£8.50	UNODENT ALCOHOL-FREE WIPES	£2.86
BRUSH REFILL REGULAR ASSORTED	£30.24	MICRO APPLICATOR BRUSH REGULAR – MIXED	£4.40
UNIVERSAL SPRAY (NO NOZZLE)	£23.00	UNOLUBE UNIVERSAL SPRAY	£4.27
Aspirator Cleaner	£28.99	AUTORINSE DAILY ASPIRATOR CLEANER	£12.64

Sometimes the price of some things you need matches the hefty price attached to it. Buying cheaper branded items when it comes to non-critical items such as disposable barriers and cotton rolls is a good way to save money. Those products will make very little difference to you or your patients. However, when it comes to anything that is a bit more valuable and you are debating it over, it’s worth weighing up the pros and cons. Does the price justify the usage of the product? When it comes to anything that will aid you in diagnosing, treating or restoring, save yourself the trouble and opt for a more reliable brand to buy from.

If you join a dental buying group you can still purchase these more expensive items at an exclusive, more competitive price – just for being part of the group!

Loyalty rewards

Get rewarded for your business!

Many companies offer rewards or loyalty programs, so pay attention to what is out there for you to benefit from. Company representatives often know all the tricks, so sometimes it’s worth talking to them so they can teach you how to order more effectively. Sometimes you can take advantage of special programmes and free products or loyalty awards that many distributors offer.

Keep in mind that none of this will happen automatically, you will need to take the time to find how to get the most out of what is available.

Action Point

Maximize savings by utilizing loyalty rewards and programs offered by suppliers. Engage with company representatives to learn effective ordering strategies and take advantage of special offers, free products, or loyalty awards. A proactive effort is required to benefit from these opportunities.

Understanding the dangers of ‘false economy’

The truth is, the steps you take in starting to save money can actually become an expensive venture. A great example of this is that perhaps it is a lot cheaper for you to have an automatic answering machine for your calls, rather than employing a full-time receptionist. However, if you consider patient experience, your reception is often the first point of contact with your business.

In other words, a good receptionist with excellent customer service skills is worth every penny you invest in them, even though they may not be the cheapest option.

This is very similar to dental equipment. While buying cheaper consumables that have similar ingredients and manufacturers may be worth buying, looking at the cheapest price of dental equipment may not tell the same story.

We hope our blog post about saving money in your dental practice was useful to you. Running a dental practice can be costly, but there are ways to save money without sacrificing care quality. By following the tips we mentioned, like talking to suppliers, managing your inventory well, and getting the most from your insurance reimbursements, you can save a lot of money and make your practice more profitable. Remember, every pound you save can be used to improve your practice or provide better care to your patients.

Action Point
Recognize the importance of value over cost. Opting for cheaper alternatives, like an automated answering service, may save money initially but can negatively impact patient experience. Similarly, while inexpensive dental consumables might seem appealing, investing in quality equipment ensures better service and long-term savings. Prioritize investments that enhance patient satisfaction and practice efficiency.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Money Saving Tips for Dentists FAQs

How can I reduce overhead costs in my dental practice?

To reduce overhead costs in your dental practice, consider optimizing staff schedules to match patient demand, negotiating better rates with suppliers, and adopting energy-efficient practices to lower utility bills. Regularly review and renegotiate service contracts, such as for waste disposal or equipment maintenance. Implement technology to streamline operations and reduce administrative burdens, such as using digital record-keeping and automated appointment reminders. Additionally, consider outsourcing non-core functions like accounting or IT to specialized providers who can offer cost savings.

What are the best ways to save on dental supplies?

To save on dental supplies, consider buying in bulk to take advantage of discounts and negotiating prices with suppliers. Regularly review inventory to avoid overordering, and explore generic or alternative brands that offer similar quality at a lower cost. Joining a buying group or cooperative can also provide access to better deals. Additionally, implementing an efficient inventory management system can help track usage and reduce waste, ensuring that you only order what you need.

How does optimizing tax planning lead to cost savings?

Optimizing tax planning leads to cost savings by ensuring you take full advantage of available deductions, credits, and allowances, which directly reduce your taxable income and overall tax liability. Effective tax planning also involves timing expenses and income strategically to minimize tax impacts, such as accelerating expenses or deferring income. Additionally, incorporating tax-efficient investment strategies and retirement contributions can further reduce tax burdens, freeing up more cash flow for your practice.

How can technology help in reducing operational costs?

Technology helps reduce operational costs in a dental practice by streamlining administrative tasks, automating appointment scheduling, and managing patient records digitally, which reduces paperwork and staffing needs. Implementing cloud-based practice management software can enhance efficiency and improve patient communication. Additionally, digital marketing tools can reduce advertising costs, and telehealth solutions can expand services without significant overhead. Overall, technology can lead to significant savings by optimizing workflows and reducing manual labor.

What strategies can I use to negotiate better deals with suppliers?

To negotiate better deals with suppliers, start by researching market prices and gathering quotes from multiple suppliers to use as leverage. Build strong relationships with suppliers and negotiate for volume discounts or long-term contracts, which can secure better rates. Be open to exploring alternative suppliers or products that offer similar quality at lower prices. Regularly review contracts to renegotiate terms and ensure they remain competitive. Also, consider joining a buying group to increase purchasing power.

How often should I review insurance policies for potential savings?

You should review your insurance policies annually to ensure you are getting the best coverage at the most competitive rates. Additionally, review your policies whenever there are significant changes in your practice, such as expanding services or increasing staff. Regular reviews help identify unnecessary coverage or areas where you can reduce premiums by adjusting deductibles or shopping around for better deals.

What are effective ways to manage and reduce inventory costs?

Effective ways to manage and reduce inventory costs include implementing an inventory management system to track stock levels accurately and avoid overordering. Regularly review inventory to identify slow-moving items and adjust orders accordingly. Negotiate better terms with suppliers, and consider bulk purchasing for discounts. Streamline ordering processes by setting up reorder points for essential items, and conduct periodic audits to ensure accurate records. Reducing waste through proper storage and handling can also help minimize costs.

How can I minimize energy costs in my practice?

To minimize energy costs in your dental practice, switch to energy-efficient lighting, such as LED bulbs, and install motion sensors to reduce unnecessary lighting use. Upgrade to energy-efficient appliances and HVAC systems, and ensure regular maintenance to keep them running efficiently. Implement energy-saving practices, like shutting down equipment when not in use and using programmable thermostats. Insulating your practice and using natural light can also reduce heating and cooling costs.

What are some alternative revenue streams for dental practices?

Alternative revenue streams for dental practices include offering cosmetic dental services like teeth whitening and veneers, providing orthodontic treatments such as Invisalign, and expanding into preventive care products like customized mouthguards. Practices can also explore selling dental hygiene products directly to patients, offering specialized services like sleep apnea treatment, or providing educational workshops and seminars. Implementing telehealth consultations for follow-ups and expanding into niche markets, such as geriatric or pediatric dentistry, can also generate additional income.

How can regular financial audits help in identifying cost-saving opportunities?

Regular financial audits help identify cost-saving opportunities by thoroughly examining your practice’s financial records, revealing inefficiencies, and highlighting areas where expenses can be reduced. Audits can uncover unnecessary spending, missed tax deductions, and opportunities for better financial management. They also ensure that your financial practices align with your budget and goals, allowing you to make informed decisions to improve profitability and reduce waste.

What role does staff efficiency play in cost reduction?

Staff efficiency plays a crucial role in cost reduction by ensuring that resources are used effectively, reducing waste, and improving productivity. Efficient staff can complete tasks more quickly and accurately, leading to fewer errors, less overtime, and better use of materials. By optimizing workflows and providing proper training, a practice can lower operational costs, improve patient care, and increase overall profitability.

How can I save money on marketing and advertising?

To save money on marketing and advertising, focus on low-cost, high-impact strategies like leveraging social media platforms, engaging with your community through local events, and encouraging word-of-mouth referrals. Optimize your online presence with SEO to attract more organic traffic. Use targeted online ads to reach specific audiences, and track their performance to ensure you’re getting a good return on investment. Additionally, consider partnering with local businesses for cross-promotions to widen your reach without significant expense.

What are the benefits of outsourcing non-core activities?

Outsourcing non-core activities, such as payroll, IT support, and accounting, allows dental practices to focus on their primary services while benefiting from specialized expertise. It can reduce operational costs by eliminating the need for full-time in-house staff and lowering overhead expenses. Outsourcing also improves efficiency, as experts handle tasks more quickly and accurately, and helps ensure compliance with regulatory requirements. This approach frees up time and resources, allowing the practice to invest in patient care and growth.

How can I reduce waste in my dental practice?

To reduce waste in your dental practice, implement a robust inventory management system to avoid overordering and ensure the efficient use of supplies. Opt for digital records to minimize paper waste and use reusable or eco-friendly materials where possible, such as sterilizable instruments instead of disposable ones. Educate staff on best practices for reducing waste, such as proper portioning of materials and recycling. Regularly audit waste disposal processes to identify further areas for improvement and cost savings.

What financing options can help in managing expenses more effectively?

To manage expenses more effectively, consider various financing options such as business loans for significant investments like equipment or practice expansion, and lines of credit for managing cash flow fluctuations. Leasing equipment can also spread out costs, preserving cash reserves. Additionally, vendor financing or supplier payment plans can help in managing inventory costs. For smaller, ongoing expenses, using business credit cards with rewards can provide short-term funding while offering benefits like cash back.

How can I implement energy-efficient practices to lower costs?

To implement energy-efficient practices and lower costs in your dental practice, switch to LED lighting, install programmable thermostats, and regularly maintain HVAC systems to ensure they run efficiently. Consider upgrading to energy-efficient appliances and equipment, and encourage staff to turn off lights and devices when not in use. Additionally, using natural light and insulating the building can reduce heating and cooling costs. Implementing these practices not only lowers energy bills but also reduces the practice’s environmental footprint.

What are the benefits of bulk purchasing supplies?

Bulk purchasing supplies offers several benefits, including significant cost savings due to volume discounts and reduced shipping costs. It also helps ensure that your practice has a consistent supply of essential materials, minimizing the risk of running out during critical times. Bulk buying can streamline ordering processes, reduce administrative tasks, and provide better negotiation leverage with suppliers. Additionally, having supplies on hand can increase efficiency and allow your practice to maintain steady operations without frequent interruptions.

How can telehealth services reduce costs in a dental practice?

Telehealth services can reduce costs in a dental practice by minimizing the need for in-person visits, thereby lowering overhead costs such as utilities, staffing, and equipment use. It also allows for efficient patient triage, reducing chair time for non-urgent cases and enabling better scheduling. Telehealth can enhance patient engagement and follow-up care, leading to fewer cancellations and no-shows, which helps maintain steady revenue without additional costs.

What are the advantages of regularly updating and maintaining equipment?

Regularly updating and maintaining dental equipment offers several advantages, including improved efficiency, reduced downtime, and lower repair costs. Well-maintained equipment operates more reliably, enhancing patient care and preventing costly breakdowns. Up-to-date equipment also ensures compliance with the latest industry standards and can provide better performance, leading to higher patient satisfaction. Additionally, modern equipment can be more energy-efficient, contributing to cost savings over time.

How can I use financial software to track and reduce expenses?

You can use financial software to track and reduce expenses by automating expense tracking, categorizing costs, and generating real-time financial reports. This helps you identify areas of overspending, optimize budgeting, and monitor cash flow more effectively. Software features like expense forecasting, automated bill payments, and integrations with bank accounts streamline financial management, allowing for better decision-making and cost control. Additionally, setting up alerts for unusual spending patterns can help prevent unnecessary expenses.

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Dental Practice Finance: Further Information

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Maximising your Dental Practice’s EBITDA

In this webinar Arun discusses how to maximise your dental practice value through growing your practice EBITDA before you sell.

EBITDA means Earnings Before Interest, Taxes, Depreciation, and Amortization. It shows how well a company is doing financially by looking at earnings from main operations, making it vital for understanding true profitability.

For dental practices, EBITDA is especially crucial. It shows how profitable the practice is, affects its valuation, and attracts potential investors. A higher EBITDA can make a dental practice more valuable when selling or seeking investors. It also provides the money needed for growth, like adding new services or opening more locations.

In this article, we will share practical tips for dental practice owners to increase their EBITDA. By improving how your practice operates, you can boost profitability, raise its value, and draw in investment.

Understanding Your Practice’s Financial Health

While EBITDA is a key measure for understanding a dental practice’s financial health, it’s also important to look at other financial metrics to get the full picture. Metrics like revenue, expenses, and profit margin work alongside EBITDA to give you more detailed insights.

Doing a Thorough Financial Check

Regularly checking your finances is essential for keeping your practice in good shape. This means looking at income statements, balance sheets, and cash flow statements. These documents provide a full view of your practice’s financial situation. Using financial software or getting help from an accountant can make this task easier and more accurate.

Spotting Strengths and Weaknesses

Looking closely at your financial data helps you see which services are making the most money and which operations are cost-effective. It also shows where you need to improve. Knowing your strengths and weaknesses lets you make smart decisions to boost overall performance and profitability.

The Current Sales Market

The current dental market is highly active, with more buyers than sellers. Demand for dental practices is strong, making it a seller’s market. Many buyers are registered, but the supply of practices available for sale remains low.

Medium to large groups continue to acquire both private and NHS practices, though they are becoming more selective about their purchases. Many dentists are eager to buy their first practice, but since the pandemic, an increasing number of younger dentists are opting to start their own practices instead. The rise in dental startups and private squats reflects this trend, though success varies.

The multiples buyers pay for practices range widely, from five to nine times EBITDA, depending on factors like location and practice type. Prime locations in cities like London, Birmingham, and Manchester tend to attract higher valuations if the practices are profitable. Meanwhile, rural or less accessible areas often see lower multiples. The market remains busy, with banks continuing to favour lending to dental practices.

Examples of EBITDA Calculations

The profit and loss (P&L) account tracks how money flows over time—whether monthly, quarterly, annually, or even daily, as done for traders in financial markets. It determines taxable income by calculating revenue minus expenses to determine profit.

EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) is derived from the P&L, making it a key metric when assessing a business’s value. A higher EBITDA typically leads to a higher valuation, so maintaining a strong P&L is crucial if you plan to sell.

The balance sheet, in contrast, offers a snapshot of a business’s assets and liabilities at a specific point in time. Ideally, your assets—such as goodwill and cash—grow while liabilities decrease, leading to a stronger net worth.

The cash flow statement, another key financial document, tracks cash movement in and out of the business. While it doesn’t include non-cash items like depreciation, it’s essential for understanding liquidity, especially during crises like COVID-19, when businesses had to manage cash flow carefully to stay afloat.

An example of EBITDA calculation would involve reviewing the P&L for a dental practice over multiple years. For instance, income from services in 2021 totalled £489,000, including private fees. The practice’s costs—ranging from materials to staff expenses—are deducted, leading to a gross profit figure. Further operational costs like rent, repairs, and marketing are then subtracted.

The resulting EBITDA figure is calculated before accounting for interest, taxes, depreciation, and amortization. In this example, the practice’s average EBITDA over two years was £183,000. Adjusted EBITDA is often used to present a more favourable financial picture by excluding certain costs, a common practice when valuing businesses for sale.

Did You Know?

Benchmarking Tool: Dental practices often use EBITDA as a benchmark to compare their financial performance against industry standards or competitors. This helps in identifying areas of improvement. (Source)
Lease Adjustments: For dental practices that lease their facilities, the treatment of lease payments can impact EBITDA. Practices may adjust EBITDA to reflect lease payments if these are significant. (Source)
Origin of EBITDA: The term EBITDA is credited to John C. Malone, the former president and CEO of Tele-Communications, in the 1970s. It became a popular measurement of a company’s cash flow in the 1980s. (Source)

Impact of Revenue and Costs on EBITDA

When calculating EBITDA, various factors must be considered, especially when transitioning from a principal-run practice to one managed by associates. For instance, if you plan to buy a practice and hire associates, you must account for their salaries—potentially around £215,000 in this example.

However, some costs, like materials or legal fees, might be reduced, so these adjustments are important when estimating the true earnings. Sellers aim to present the highest possible EBITDA, while buyers assess whether costs are understated and should be higher, which would lower EBITDA.

In this example, the EBITDA figure is £66,000. Valuation multiples for practices generally range from six to nine times EBITDA, depending on market conditions, location, and practice type. This variation can lead to valuations between £400,000 and £600,000. When reviewing financials, buyers should ask if overheads are well-controlled, if patient numbers are sufficient, and whether the services are priced correctly.

EBITDA is influenced by both revenue and costs. Revenue depends on three key factors: the fees charged, the number of transactions, and how often services are provided (e.g., routine check-ups). On the cost side, the goal is to minimize expenses while maximizing revenue—easier said than done.

For example, if a practice with £200,000 annual revenue and £70,000 in overheads reduces costs by 10%, the profit would rise from £60,000 to £74,000, boosting EBITDA by £23,000. Alternatively, increasing efficiency by 10% or raising fees by 10% without losing patients could also significantly increase profits.

In summary, there are multiple strategies—cutting costs, improving efficiency, raising fees, or a combination—that can increase profitability and ultimately boost EBITDA. Each approach comes with trade-offs, but all aim to enhance the business’s financial health and valuation.

Strategies to Improve EBITDA

To improve EBITDA, one strategy is to simultaneously cut costs and increase fees. For example, if you reduce expenses by 10% and increase fees by 10%, your profit could rise significantly. In this scenario, cutting costs by £14,000 and raising fees by £20,000 would boost profits by 57%, resulting in £94,000 compared to the previous £60,000. Even small adjustments, like a 2-5% cost reduction or fee increase, can expand profit margins, ultimately enhancing your business’s value.

To illustrate, if your original profit was £60,000 and your business was valued at six times EBITDA, it would be worth £360,000. But by cutting costs and increasing fees, the profit could increase by £34,000, raising the business’s value to £564,000—an additional £200,000. In high-demand areas where valuation multiples reach eight times EBITDA, this value could rise from £480,000 to £752,000, a difference of nearly £300,000, which could greatly impact your retirement funds.

The key to improving EBITDA lies in cutting costs and boosting revenue, which can be achieved through efficiency, pricing adjustments, and increasing the frequency of transactions. Comparing your performance against industry benchmarks is helpful, but focusing on keeping costs at the lower end and profits at the higher end of the range is the goal. Consider what costs you can reduce and how you can refine your pricing strategy to achieve better profitability and a higher business valuation.

Revenue Enhancement Strategies

Patient Acquisition and Retention Strategies

To grow your dental practice, it’s important to get new patients and keep the ones you have happy. Use digital marketing, local ads, and ask current patients for referrals. Build good relationships with your patients, offer loyalty programs, and always provide top-notch care to keep them coming back.

Expanding Treatment Offerings

Think about adding new services that patients want and that follow current trends. Check how profitable these services are and if they fit well with what your practice already offers. New treatments can bring in more patients and boost your income.

Implementing Effective Pricing Strategies

Getting your prices right is key to success. Do a fee analysis to make sure your prices are competitive. Consider value-based pricing and explain to patients why your services are worth the cost. This helps them see the value in what you offer.

Leveraging Dental Insurance and Patient Financing

Make the most of insurance reimbursements and offer flexible payment options to make your services easier for patients to afford. This can lead to happier patients and more people accepting treatments.

Increasing Treatment Acceptance Rates

Helping patients understand their treatment needs, listening to their concerns, and building trust is crucial. Good communication can make patients feel more comfortable and more likely to agree to the treatments you recommend.

Cost Management and Efficiency

Streamlining Daily Operations

To make your dental practice run more smoothly, start by improving everyday tasks. Make appointment scheduling easier, improve the flow of patients, and simplify admin work. This saves time and reduces stress for both staff and patients.

Managing Inventory

Good inventory management is key to keeping dental supply costs in check. Use smart purchasing strategies and cut down on waste. This helps keep costs low and ensures you always have the supplies you need.

Negotiating with Suppliers

Save money by negotiating better prices and terms with your dental suppliers. Building good relationships and buying in bulk can lead to big savings.

Managing Staff Costs

Make sure you have the right number of staff without overstaffing. Check wages to make sure they are fair but sustainable. Focus on keeping good employees and measuring productivity to get the best from your team.

Cutting Overhead Costs

Find ways to reduce overhead costs like utilities, rent, equipment, and marketing. Small savings in these areas can add up to big cost reductions over time.

Enhancing Practice Productivity

Optimising Appointment Scheduling

To make the most of your practice’s chair time, improve how you schedule appointments. Use strategies to cut down on patient wait times and make better use of your appointment slots. This helps you see more patients and keeps your practice running smoothly.

Improving Patient Flow

Examine the patient journey closely to find any delays or problem areas. By spotting these issues, you can put solutions in place to make the patient experience smoother and more efficient.

Using Technology for Better Efficiency

Make the most of technology to streamline your practice. Tools like dental software, electronic health records, and automation can help you work more efficiently and cut down on manual tasks.

Staff Training and Development

Regular staff training is key to improving skills and productivity. Keep your team’s training up to date with the latest techniques and best practices to ensure they perform at their best.

Measuring and Tracking Key Performance Indicators (KPIs)

Find the right KPIs for your dental practice and use them to track how well you’re doing. Monitoring these indicators helps you make smart, data-driven decisions to boost efficiency.

Financial Planning and Forecasting

Creating Accurate Budgets and Forecasts

Setting up budgets and forecasts is key to keeping your dental practice financially healthy. They help you plan for the future and stay in control of your money. By making accurate budgets and forecasts, you can manage your resources better and make smarter decisions.

Managing Cash Flow Effectively

Good cash flow management keeps your practice running smoothly. Use techniques like handling accounts receivable well, keeping expenses under control, and looking into financing options. This way, you’ll always have the cash needed for day-to-day expenses and any unexpected costs.

Identifying Growth Opportunities

Analyse market trends and your practice’s performance to spot areas for growth. Understanding where opportunities lie helps you make smart choices to expand and improve your practice.

Developing a Strategic Financial Plan

Build a long-term financial plan that matches your practice’s goals. This plan should show how you’ll achieve financial stability and growth, helping you stay on track and make wise investments.

Tax Optimization Strategies

Understanding Tax Implications

It’s important to know how taxes affect your dental practice to keep your finances in order. Common tax deductions and credits for dental practices include costs for equipment, supplies, and staff. Knowing these can help you save money and keep your practice financially sound.

Tax-Saving Opportunities and Deductions

You can use various strategies to lower your tax bill. Contributing to a retirement plan can provide significant tax benefits. Depreciating your equipment over time can also lead to big savings. Plus, tracking all your business expenses ensures you claim every possible deduction.

Working with a Qualified Tax Advisor

Getting help from a qualified tax advisor is crucial for making the most of your tax savings and avoiding risks. A professional can give you tailored advice to ensure you maximise your savings and steer clear of costly errors.

To boost your EBITDA, work on improving appointment scheduling, streamlining patient flow, managing costs well, and using technology effectively. Keep an eye on your finances regularly and make adjustments as needed.

Book a call with us to find out how we can help grow your EBITDA and get the best price when you sell.

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Maximising your Dental Practice’s EBITDA FAQ

What is EBITDA in a dental practice?

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in a dental practice is a financial metric that measures the practice’s operational profitability. It focuses on the earnings generated from the core business activities before accounting for expenses like interest on loans, taxes, depreciation of assets, and amortization of intangible assets. By excluding these non-operational factors, EBITDA gives a clearer picture of how well the practice is performing financially, making it a key metric for evaluating business value, securing investments, or preparing for a sale.

Why is EBITDA important for a dental practice?

EBITDA is important for a dental practice because it provides a clear view of the practice’s operational profitability, focusing on its ability to generate earnings from core activities without the impact of non-operational expenses like interest, taxes, or depreciation. This metric helps:

Assess Financial Health: EBITDA shows how efficiently the practice is managing costs and generating profits.
Attract Investors: Investors often use EBITDA to evaluate the profitability and potential value of the practice.
Prepare for a Sale: When selling a dental practice, a higher EBITDA often leads to a better valuation and selling price.
Benchmark Performance: It allows comparison with other practices by focusing on earnings from operations alone, without external factors.

Overall, EBITDA is a key indicator of financial success and growth potential in a dental practice.

How can I increase my dental practice’s EBITDA?

You can increase EBITDA by optimizing costs, improving patient retention, increasing service offerings, managing staff efficiently, and focusing on marketing strategies to attract more patients.

What are the key factors affecting EBITDA in a dental practice?

Several key factors affect EBITDA in a dental practice, including:

Revenue Generation: The total income from services like exams, cleanings, cosmetic procedures, and other treatments directly impacts EBITDA. The more services provided, the higher the revenue.
Patient Acquisition and Retention: Consistently attracting new patients and maintaining loyal ones leads to steady revenue growth, positively influencing EBITDA.
Operational Costs: Expenses such as rent, utilities, supplies, and equipment affect profitability. Efficiently managing these costs helps maximize EBITDA.
Staffing Efficiency: The cost of staff wages, overtime, and scheduling plays a significant role. Efficient staff management reduces unnecessary labor costs, improving EBITDA.
Overhead Management: Keeping overhead costs, such as marketing, insurance, and administrative expenses, in check boosts profitability and contributes to higher EBITDA.

By optimizing these factors, a dental practice can significantly improve its EBITDA and overall financial health.

How does patient retention impact a dental practice’s EBITDA?

High patient retention leads to consistent revenue, reducing marketing and acquisition costs, which improves profitability and thus increases EBITDA.

Can controlling operational costs improve EBITDA?

Yes, managing operational costs such as staff wages, rent, utilities, and supplies helps maximize profitability, directly improving EBITDA.

What role does staff efficiency play in maximizing EBITDA?

Efficiently managed staff can reduce overtime costs, improve productivity, and enhance patient experience, all of which contribute to increased revenue and higher EBITDA.

How does offering additional services impact EBITDA in a dental practice?

Expanding services, such as cosmetic dentistry or orthodontics, can increase revenue streams, boost patient satisfaction, and improve EBITDA by maximizing the value generated per patient visit.

How can marketing strategies improve my dental practice’s EBITDA?

Effective marketing strategies can significantly improve your dental practice’s EBITDA by boosting revenue through patient acquisition and retention. Here’s how:

Attract New Patients: Targeted marketing campaigns, such as Google Ads, social media promotions, or SEO optimization, can increase your practice’s visibility and bring in new patients, leading to higher revenue.
Increase Patient Retention: Marketing efforts, like email newsletters or loyalty programs, help keep existing patients engaged and encourage them to return for regular treatments, which creates consistent revenue.
Promote High-Margin Services: Highlighting lucrative services like cosmetic dentistry, orthodontics, or implants in your marketing can attract patients to higher-margin treatments, directly boosting EBITDA.
Improve Online Presence: A strong online presence with a well-designed website and active social media profiles can enhance patient trust, attract more bookings, and increase overall business.
Referral Programs: Implementing referral incentives encourages existing patients to recommend your practice, expanding your patient base without significant marketing costs.

By increasing patient flow and promoting profitable services, marketing strategies can directly increase your practice’s revenue, leading to a stronger EBITDA.

What operational changes can I make to boost EBITDA?

Operational changes like renegotiating supplier contracts, optimizing staff scheduling, and reducing waste can cut costs, improve efficiency, and increase your dental practice’s EBITDA.

Can technology improve my dental practice’s EBITDA?

Yes, implementing practice management software, online booking systems, and patient management tools can streamline operations, reduce administrative costs, and enhance patient experience, ultimately boosting EBITDA.

How does EBITDA affect the value of my dental practice?

A higher EBITDA increases the overall valuation of your dental practice, making it more attractive to potential buyers or investors.

Can outsourcing help improve EBITDA?

Outsourcing tasks such as billing, marketing, or payroll can reduce operational costs and improve focus on patient care, positively impacting EBITDA.

Should I focus on cutting costs or increasing revenue to improve EBITDA?

A balanced approach is best. Cutting unnecessary costs while focusing on increasing revenue through service expansion and marketing will lead to sustainable growth in EBITDA.

How often should I review my dental practice’s EBITDA?

EBITDA should be reviewed quarterly to track financial performance, make informed business decisions, and implement strategies to improve profitability and overall business value.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

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Dental Accounts & Tax: Further Information

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Cyber Security Threats for Dental Practices

There is no denying that cyber hacking happens daily, and dentists should not think that they are an exemption. Healthcare services including dental practices are prime targets for hackers. In fact, small businesses containing health information are targeted quite often.

Data breaches are a major threat to healthcare providers, especially dentists; they are becoming targets for cybercriminals more and more frequently. Health organizations make up roughly 33% of all data security breaches across all industries. It has been shown, however, that a majority of personal health information data breaches has been a result of human error from healthcare employees.

Please click here to read our 10 essential cybersecurity steps for dentists to find out how to protect your dental practice online.

Common Cyber Security Threats

In this webinar, Arun and George take a look at the different cyber security threats facing dental practices, cyber security strategies for dentists and how to respond when your practice is attacked online.

Why are Dental Practices at Risk From Cybersecurity Threats?

Dental practices are becoming hot targets for these cyber criminals because dental offices hold vast amounts of personal data. Not only confidential personal information of your patients such as birthdates, addresses and full names, but also hundreds, if not thousands, of instances of banking information. Hackers also like to target the smaller healthcare businesses because they believe small businesses do not have the resources for sophisticated security measures and they will, therefore, be easier targets.

The threat of this confidential information being stolen is great and dental practice owners must address this concern as soon as they possibly can before a theft occurs and creates a legal nightmare for your business.

You must ensure that your dental practice has the proper IT solutions and cybersecurity procedures in place to adhere to the relevant guidance and regulations.

Action Point

Implement robust IT solutions and cybersecurity measures to protect patient data and comply with regulations.

cybersecurity-threats-facing-dental-practice-1

The Need for Cybersecurity in Your Dental Practice

The biggest mistake many dental practices are making is that they believe cyber criminals are not a threat to their small dental practices. However,

The increase of cyber criminals targeting healthcare businesses leaves your dental practice at risk. This is evident through the following statistics:

The healthcare industry accounts for 43% of all data security breaches
47% of all cyber security attacks target small businesses like independent private dental practices
Since September 2009, almost 21,000,000 health records have been compromised

Many hackers target smaller practices because they assume small businesses do not have the necessary security software of firewalls in place to protect it in place. Unfortunately, in many instances they are right.

Your dental practice is a wealth of patient data which means it is necessary for you to take the proper cybersecurity precautions to make sure that you are adhering to the proper regulations and your patient’s data do not fall into the wrong hands.

Action Point

Implement cybersecurity precautions to protect patient data and adhere to regulations, safeguarding against the high risk of cyber attacks targeting healthcare businesses.

cybersecurity-threats-facing-dental-practice-2

Contact us to find out more

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Moving Forward Digitally

Within the last couple years, dental practices have taken a major step in digitising their entire business and using the internet to centralise patient data and improve patient care.

Storing patient information in the cloud has its benefits:

Accessible any time from any location
Automatic backup
Patient data can easily and securely share between different practices

If proper precautions are not taken, dental practices are very vulnerable to security threats and data breaches.

When these breaches happen, confidential patient data can be sold on the DarkWeb resulting in fraud, identity theft and possibly blackmail and other criminal activities. Hackers can also hack your systems and access your own personal company data. Believe us, nothing good will ever come from that. Extortion, blackmail…. It is not pretty.

Action Point

Implement robust cybersecurity measures for cloud-stored patient data to prevent breaches and protect against fraud, identity theft, and other cyber threats.

cybersecurity-threats-facing-dental-practice-3

You can learn more about patient data and recording keeping on the BDA website here.

Consequences

If your dental practice gets hacked in any way, the consequences for your dental practice will not only cost you time and money but also potential lawsuits from patients, loss of important data that may not be able to get recovered and brand and reputation damage.

At the end of the day, it is you who will be on the line for any potential data breaches.

cybersecurity-threats-facing-dental-practice-4

Implement Security Features

Every dental practice should have a policy in place safeguarding patient information and all staff members should be educated about how to comply with the office policy.

We advise a strict internet and computer policy that not only educated your employees when a breach does occur but also deters any mishaps from occurring. This policy enforced should include prohibiting staff members from checking personal email accounts or visiting any internet websites that are not work related.

When accessing any office data remotely, any employees at your dental practice should only use trusted Wi-Fi hot spots and never used shared computers or unsecure Wi-Fi spots. Any smartphones or tablets you have in your practice should be password protected to prevent access to patient information in case that device is lost or stolen.

Antivirus software should be installed on every computer in your practice and left kept updated and checked regularly. In addition, it is also important for dentists to make sure that all operating systems, hardware, software, and firewalls are up to date, secure and strong and that wireless networks are shielded from public view. All hard copies of documents with patient information should be shredded as soon as they are no longer of any use to your practice.

To avoid any type of security breaches there are a few IT solutions you need to implement and ensure are in place to prevent any security breaches as soon as they occur. Here are a few:

Set up VPN (virtual private network)
Install anti-virus software for all your devices in your practice
Automate the encryption of your production
Backup hard drives with appropriate security hardware
Always keep your web browsers, software and operating systems updated
Encrypt data transmitted to anywhere outside the practice

Action Point

Implement strict internet and computer use policies, educate staff, ensure secure remote access, password-protect devices, maintain updated antivirus software, and encrypt and back up data for comprehensive cybersecurity in your dental practice.

cybersecurity-threats-facing-dental-practice-5

Mitigating Security Risks

Unfortunately, data has shown that even when you have the necessary security measures in place, human error is commonly the sole cause of data breaches. This means that the actions of healthcare employees are unintentionally the cause of three times as many breaches as external attacks on your dental practice.

Without adequate training, your employees could unintentionally be putting your entire practice at risk. This is why, after you have put all the necessary security measures in place, your next priority should be to train your employees to mitigate any security risks.

Here are a few tips for this:

Avoid disclosing private information over the phone or email. Instead, you should use encrypted communication methods such as encrypted email to protect sensitive patient or employee data
Set user permission for different roles
Educate and train staff of latest cyber threats and your latest technological updates
Choose strong passwords and do not use the same password for everything
Outline a response plan so the team knows what to do immediately in the event of an attack
Discourage joining public or unsecured Wi-Fi networks
Restrict access to personal email accounts and any non-work-related websites
Require password for any devices you use at the practice, in case it gets lost or stolen

If a security breach in your office does occur, it is absolutely imperative that if a breach in your office does occur, you need to take the appropriate action immediately. This includes determining how the breach occurred to begin with and the extent of the breach. You need to be careful who you initially contact when something like this occurs.

Action Point

Prioritize employee cybersecurity training, use encrypted communication, set user permissions, educate on cyber threats, choose strong passwords, outline a response plan, restrict access to unsecured networks and non-work sites, and password-protect devices to mitigate security risks in dental practices.

Samera helps you stay fully compliant with any security regulations. Our specialists ensure that your dental practice software is always updated, and your data is encrypted with password protection and able to be transferred securely.

cybersecurity-threats-facing-dental-practice-6

Cyber Security Threats for Dental Practices FAQ

What are the main cybersecurity threats for dental practices?

Dental practices face various cybersecurity threats, including ransomware, phishing attacks, data breaches, malware, and insider threats, all of which can compromise sensitive patient data.

Why are dental practices targeted by cybercriminals?

Dental practices are targeted by cybercriminals because they store valuable and sensitive data, such as personal identification, medical histories, and financial information. This data is highly sought after by hackers for identity theft, blackmail, and ransomware attacks. Additionally, many dental practices may have weaker cybersecurity defenses compared to larger organizations, making them easier targets for cyberattacks.

How can dental practices prevent ransomware attacks?

Dental practices can prevent ransomware attacks by implementing several key cybersecurity measures:

Regularly Update Software: Ensure that all systems, including dental practice management software, are up to date with the latest security patches to fix vulnerabilities.
Use Strong Passwords: Enforce the use of complex passwords and multi-factor authentication (MFA) to prevent unauthorized access.
Install Firewalls and Antivirus Software: Use robust firewalls and antivirus solutions to detect and block ransomware before it can infect the system.
Data Backup: Regularly back up important data and store it offline or in the cloud. This ensures quick recovery in case of an attack.
Staff Training: Educate staff on recognising phishing emails, suspicious links, and other social engineering tactics that could introduce ransomware into the system.
Restrict Access: Limit access to sensitive data and systems to only authorized personnel, reducing the risk of insider threats or accidental infections.

By following these steps, dental practices can reduce their vulnerability to ransomware attacks and protect patient data.

How can dental practices prevent ransomware attacks?

Dental practices can prevent ransomware attacks by taking several proactive cybersecurity measures:

Keep Software Updated: Regularly update all software, including dental management systems, to patch vulnerabilities that cybercriminals could exploit.
Use Strong Passwords and Multi-Factor Authentication (MFA): Ensure that staff use strong, unique passwords and enable MFA for an added layer of security.
Install Firewalls and Antivirus Programs: Use reliable firewalls and antivirus software to detect and block ransomware threats before they can infiltrate your system.
Regular Data Backups: Perform regular backups of patient and practice data, storing them securely offline or in the cloud, to ensure quick recovery after an attack.
Train Staff on Phishing Prevention: Educate your team to recognize phishing emails, suspicious links, and other forms of social engineering that often lead to ransomware infections.
Limit User Access: Restrict access to sensitive systems and data only to authorized personnel, reducing the risk of internal or accidental infections.

Implementing these best practices helps dental practices reduce the risk of ransomware attacks and keep patient data safe.

What is phishing, and how does it affect dental practices?

Phishing is a type of cyberattack where attackers pose as legitimate entities to trick individuals into revealing sensitive information, such as passwords, credit card numbers, or access credentials. This is usually done through deceptive emails, messages, or websites.

How Phishing Affects Dental Practices:
Data Breaches: If staff fall for a phishing scam, it can lead to unauthorised access to patient records, compromising sensitive personal and medical data.
Financial Loss: Phishing attacks can result in fraudulent transactions or theft of financial information, leading to direct financial losses for the practice.
Ransomware Infections: Phishing emails often carry malicious attachments or links that can install ransomware, locking dental practice systems until a ransom is paid.
Reputation Damage: A data breach or ransomware attack can damage the trust patients have in the dental practice, harming its reputation and potentially leading to patient loss.
Legal and Regulatory Penalties: A phishing-induced data breach may result in non-compliance with privacy regulations like GDPR, leading to fines and legal consequences.

By training staff to recognize phishing attempts and implementing security measures, dental practices can protect themselves from phishing attacks.

How do data breaches impact dental practices?

Data breaches can have severe and far-reaching impacts on dental practices, affecting them in several ways:

Patient Data Exposure: Sensitive patient information, such as personal details, medical records, and financial data, can be exposed or stolen, leading to identity theft or misuse of medical records.
Financial Loss: Dental practices may face direct financial losses from legal fees, fines, and costs to repair the breach. They may also lose revenue if operations are disrupted during or after the breach.
Reputation Damage: A data breach can significantly harm the practice’s reputation, eroding patient trust. Patients may choose to switch to other practices due to concerns over the security of their personal information.
Legal and Regulatory Penalties: Non-compliance with data protection laws like GDPR or HIPAA (for U.S. practices) can result in hefty fines and legal consequences if a breach occurs and patient privacy is compromised.
Operational Disruption: Data breaches often lead to downtime as IT systems are shut down to contain the breach, disrupting daily operations and leading to lost productivity and appointments.

By implementing robust cybersecurity measures and regularly training staff, dental practices can reduce the risk of data breaches and protect their patients and business.

What steps can dental practices take to protect patient data?

Dental practices can take several steps to protect patient data and ensure compliance with data protection regulations like GDPR. Here’s how:

Use Encryption: Encrypt all sensitive patient data, both in storage and during transmission, to prevent unauthorized access.
Strong Passwords and Multi-Factor Authentication (MFA): Implement strong password policies and use MFA for access to sensitive systems, ensuring an additional layer of security.
Regular Data Backups: Schedule frequent backups of patient data, storing them securely offline or in the cloud, to ensure recovery in case of a breach or system failure.
Secure Networks: Use firewalls, antivirus software, and secure Wi-Fi networks to protect against external cyberattacks and unauthorized access.
Limit Access to Data: Restrict access to patient data to only authorized personnel, ensuring that not all staff have access to sensitive information unless necessary.
Staff Training: Provide regular training to staff on cybersecurity best practices, including recognizing phishing scams and using secure communication methods.
Monitor for Unusual Activity: Implement monitoring systems to detect and alert you of any unusual access or suspicious activities that could indicate a potential breach.
Secure Communication Tools: Use encrypted communication platforms and patient portals for sharing sensitive information with patients securely.

By following these steps, dental practices can significantly reduce the risk of data breaches and protect patient data effectively.

How can dental practices defend against malware?

Defend against malware by installing and updating antivirus software, avoiding suspicious downloads, using secure networks, and regularly scanning systems for vulnerabilities.

What should dental practices do in the event of a cyberattack?

In the event of a cyberattack, dental practices should take immediate action to mitigate the damage and protect patient data. Here’s what to do:

Isolate Affected Systems: Disconnect compromised computers and networks from the internet to contain the attack and prevent it from spreading to other systems.
Notify IT Professionals: Contact your IT support team or cybersecurity experts to assess the situation, contain the breach, and begin the recovery process.
Report the Breach: If sensitive patient data is compromised, notify relevant authorities such as the Information Commissioner’s Office (ICO) in the UK or HIPAA in the U.S. within the required time frame (e.g., 72 hours for GDPR).
Inform Patients: If patient data is involved, inform affected patients about the breach, its potential impact, and the steps being taken to protect their information.
Assess the Damage: Work with your IT team to determine the extent of the damage and whether any data has been lost, stolen, or encrypted (as in a ransomware attack).
Restore Data from Backups: Use recent, secure backups to restore affected systems and data if needed, ensuring that the backup itself was not compromised.
Strengthen Security Measures: Review and improve your cybersecurity protocols, such as updating software, changing passwords, and implementing stricter access controls to prevent future attacks.
Document the Incident: Keep detailed records of the cyberattack, the steps taken to address it, and any communications with authorities and patients for legal and regulatory purposes.

By responding quickly and following these steps, dental practices can reduce the impact of a cyberattack and protect patient trust.

How does insider threat affect dental practices?

An insider threat involves staff members, either intentionally or accidentally, exposing sensitive data. It can be minimized through staff training, strict access controls, and monitoring systems.

Why is cybersecurity important for dental practices?

Cybersecurity is essential for dental practices to protect patient data, maintain trust, comply with legal regulations like GDPR, and prevent costly disruptions caused by cyberattacks.

How can dental practices secure online communications with patients?

Use encrypted communication platforms, secure email services, and patient portals to ensure that all online communications involving sensitive patient data are protected.

What are the consequences of ignoring cybersecurity threats in a dental practice?

Ignoring cybersecurity threats in a dental practice can lead to several serious consequences:

Data Breaches: Failing to address cybersecurity risks can result in the exposure of sensitive patient information, such as personal details, medical histories, and financial data, leading to identity theft or misuse.
Financial Losses: Cyberattacks can lead to direct financial costs, including fines for non-compliance with regulations like GDPR or HIPAA, legal fees, and the expense of recovering from a breach.
Reputation Damage: Patients trust dental practices to protect their personal information. A data breach or cyberattack can erode that trust, damaging the practice’s reputation and potentially causing patients to leave.
Operational Disruptions: Cyberattacks like ransomware can disrupt operations by shutting down access to essential systems, leading to lost revenue and productivity while the issue is resolved.
Legal and Regulatory Penalties: Dental practices are legally required to protect patient data. Ignoring cybersecurity threats can result in non-compliance with privacy laws, leading to hefty fines and legal consequences.
Patient Loss: Breaches can cause patients to lose confidence in the practice’s ability to secure their data, leading to a decline in patient retention and fewer new patient referrals.

By addressing cybersecurity threats proactively, dental practices can avoid these consequences and ensure the safety of their patients’ data and their own business operations.

How can dental practices train staff to avoid cybersecurity threats?

Regular staff training is key. Teach employees how to identify phishing emails, create secure passwords, follow data protection protocols, and avoid suspicious links or downloads.

What is the role of encryption in protecting dental practice data?

Encryption ensures that sensitive patient data is unreadable to unauthorized users, both when stored and during transmission, providing a critical layer of protection against data breaches.

What legal obligations do dental practices have regarding cybersecurity?

Dental practices are legally required to protect patient data under regulations like GDPR. This includes implementing adequate cybersecurity measures and reporting data breaches within 72 hours.

Get Started: Cyber Security for Healthcare

Cyber security is an essential part of keeping your patients, data and business protected online.

Contact us today to find out more about how our cyber security training, digital protection products and back-up contingencies can help you.

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Buying a Car Through Your Limited Company: 4 Things You Need to Know

When your company buys a piece of equipment or a business car, you can deduct part, or all, of the cost from your business’s taxable profits.

How much of the cost of the purchase you can deduct from your profit is dependent on several factors. The main points to consider are how you finance the purchase, how you use the vehicle and how environmentally friendly the vehicle is.

Buying a car with a limited company, can be a great way to save on your tax bill. However, it is essential that you understand everything involved before you do.

These are 4 important points you need to know about purchasing a vehicle through a limited company.

How have you financed the purchase?

How you pay for the new business car will affect the tax rate you have to pay on it.

If your company takes out a loan to purchase the vehicle, or it is purchased on hire-purchase, you will only be able to deduct the interest payments as a business expense. You will not be able to deduct the loan itself as a business expense.

If you lease a vehicle for use by the company, but you do not buy it outright, you will be able to claim the monthly payments as a business expense.

Other maintenance costs involved with owning a business car, such as insurance, can be claimed as business expenses for Corporation Tax.

Action Points

Determine the financing method for the business car (loan, hire-purchase, or lease).
Calculate and deduct interest payments from a loan or hire-purchase as a business expense.
Understand that the principal amount of the loan or hire purchase cannot be deducted as a business expense.
If leasing, prepare to claim the entire monthly lease payments as a business expense.
Keep records of all maintenance costs like insurance, as these can be claimed as business expenses for Corporation Tax.

Will the vehicle be used for purely business purposes?

If your car is used solely for business-related purposes, you will be allowed to claim VAT back on the purchase.

If your company vehicle is used for personal purposes outside of the business, this is considered a Benefit-In-Kind (BIK). A benefit-in-kind is anything HMRC considers to be a benefit or a perk on top of your salary. Your business will be taxed on benefits-in-kind.

To reclaim the VAT on your company car you will need to be able to prove to HMRC that the vehicle is not and cannot be used by you or your employees for personal reasons. For example, do you have a company car that is always kept on stand-by at the dental practice for use by the business? That can be considered an exemption.

HMRC does not consider your normal commute to and from work to be a business use, so you will not be able to claim VAT on your vehicle if it is primarily used for commuting.

You can also claim back VAT on vehicles which are used as part of your employee’s routine duties. For instance, vehicles used for teaching people how to drive, taxis and vehicles which are primarily loaned in self-drive schemes.

Action Points

Assess the vehicle’s usage to ensure it’s strictly for business purposes.
Document and maintain proof that the vehicle is not used for personal reasons, to qualify for VAT reclaim.
Be aware that personal use of the vehicle, including commuting, makes it subject to Benefit-In-Kind tax.
Ensure the vehicle is designated for business-only activities, possibly keeping it on-site to reinforce this.
Keep detailed records of the vehicle’s use in employee routine duties to support VAT claims on such usage.

Is your company vehicle environmentally-friendly?

How much tax you pay on your company vehicle is also dependent on the CO2 emissions it produces and the date on which you bought it. This applies to both the tax rate of any benefits-in-kind and the capital allowances you can claim on the cost of buying the vehicle.

You can find out more about the difference between different emissions and dates of purchase, and how they affect the capital allowance rate you pay on the .gov.uk website.

For the most part, the more CO2 emissions produced by your company car, the more tax you will have to pay.

However, it is important to remember that the criteria also change according to how old your car is. The newer your car is, the greener it will need to be if you want to claim back on tax.

Action Point

Evaluate the CO2 emissions of your company vehicle to understand the potential tax implications.
Consider the vehicle’s purchase date, as newer cars require lower emissions to qualify for tax benefits.
Explore First-Year Allowances for vehicles that meet eco-friendly standards to deduct 100% of the purchase cost.
Determine if your vehicle qualifies for the Main Rate pool to claim 18% against taxable profits.
Assess if your vehicle falls into the Special Rate band, allowing a 6% claim, aimed at discouraging the purchase of high-emission vehicles.

For instance, this is a table from the Government’s page on business cars:

Cars bought from April 2021

Description of car	What you can claim
New and unused, CO2 emissions are 0g/km (or car is electric)	First year allowances
New and unused, CO2 emissions are between 1g/km and 50g/km	Main rate allowances
Second hand, CO2 emissions are between 1g/km and 50g/km (or car is electric)	Main rate allowances
New or second hand, CO2 emissions are above 50g/km	Special rate allowances

Compare this with the rates for cars bought between April 2009 and April 2013:

Cars bought between April 2009 and April 2013

Description of car	What you can claim
New and unused, CO2 emissions are 110g/km or less (or car is electric)	First year allowances
New and unused, CO2 emissions are between 110g/km and 160g/km	Main rate allowances
Second hand, CO2 emissions are 160g/km or less (or car is electric)	Main rate allowances
New or second hand, CO2 emissions above 160g/km	Special rate allowances

Vehicles which meet the criteria for First-Year Allowances can have 100% of their cost of purchase deducted from the business’s taxable profits. This is intended to encourage British businesses to go green and purchase environmentally-friendly assets.

The Main Rate pool allows you to claim 18% of the cost of the purchase against your taxable profit.

The Special Rate band allows you to claim just 6% of the cost of the purchase. This is intended to discourage British businesses from buying environmentally-unfriendly assets.

You can calculate the tax band for your company car, according to its CO2 emissions, fuel consumption and date of purchase on the gov.uk website.

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How much tax do you need to pay on the fuel for your business car?

If your company owns a business car, you may be required to pay tax on the fuel required.

Again, how much tax you pay on the fuel will depend on the CO2 emissions and whether it is used for private or solely for business purposes.

If your business car is only used for business purposes then you will need to be able to prove this to HMRC. This is one of the reasons why it is so important to keep detailed records like submitted travel expenses and mileage reports. You can use these to show HMRC that all of the consumed fuel was used for business purposes, and not personal use.

If you cannot prove this, or you have indeed used the car (and thus the fuel) for personal reasons, this will be considered a benefit-in-kind. Therefore, you will need to pay tax on the benefit-in-kind fuel usage.

If you can show HMRC that the vehicle has not been used for anything other than company business, you will not need to pay any additional benefit-in-kind tax. You will also be able to reclaim the full VAT amount on the fuel.

You will also not have to pay VAT on the fuel usage if the vehicle is used in certain other circumstances. For instance, cars used for business journeys such as those that are part of the employee’s normal routines like a tradesperson travelling to appointments (this does not include your normal commute to work), or one of your associates travelling to a temporary place of work.

Action Points

Assess the CO2 emissions and usage of the business car to determine fuel tax liability.
Maintain detailed records, including travel expenses and mileage reports, to substantiate business-only use of fuel.
Be prepared to provide HMRC with evidence that the fuel was exclusively used for business purposes to avoid benefit-in-kind tax.
Reclaim full VAT on fuel for vehicles proven to be used solely for business activities.
Understand the specific circumstances under which VAT on fuel usage is not applicable, such as business journeys excluding regular commutes.

You can find out more about exemptions for tax payments on fuel on the gov.uk website.

Should you buy a business car via your dental practice?

So, are you better off purchasing a business car through your limited company or privately?

Let’s take a look at an example:

Harry is a dental practice owner who owns a limited company who wants to buy a business car at around £40,000.

Buying the car himself:

Harry can declare a £40,000 dividend from his limited company and use that to purchase a car. Harry has to pay 32.5% as a higher-rate taxpayer. This comes out to £13,000 in income tax he has to pay.

Buying the car via a limited company:

Harry could instead buy the care via his limited company. Since there is no dividend declared, there’s no added income tax. Harry’s capital allowances will also allow him to claim back £7,600 in corporation tax. In the current tax year, the benefits-in-kind tax rate is only 1%, meaning the tax on them will be minimal.

This means that Harry is better off to the tune of £20,600 by purchasing his business car through his limited company.

Action Points

Evaluate the financial benefits of purchasing the car through your dental practice’s limited company versus personal purchase.
Consider the tax implications of declaring a £40,000 dividend for personal purchase and the resulting 32.5% income tax.
Explore the option of purchasing the car directly through the limited company to avoid dividend tax and capitalize on capital allowances.
Calculate potential corporation tax savings and the minimal benefits-in-kind tax rate when purchasing through the company.
Assess the overall financial advantage, in Harry’s case, a saving of £20,600, by opting for a company purchase.

Our Expert Opinion

“Buying car through your business is a complex thing. So get the right advice specific to your business and car needs. Do this wrong and you could pay much more tax than needed!”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Reviewed By:

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Buying a Car Through Your Limited Company FAQs

Can a limited company purchase a car?

Yes, a limited company can purchase a car, which can then be used for business purposes. The car becomes an asset of the company, and the company can benefit from tax deductions, such as capital allowances, for the vehicle. However, there are tax implications, particularly if the car is also used for personal purposes, which could trigger a Benefit-in-Kind (BIK) tax for the employee or director using the car.

What are the tax benefits of buying a car through a limited company?

Buying a car through a limited company offers several tax benefits. The company can claim capital allowances, which reduce taxable profits. If the car is used solely for business purposes, VAT on the purchase may be reclaimable. Additionally, running costs like insurance and maintenance can be deducted as business expenses however, if the car is also used personally, a Benefit-in-Kind (BIK) tax applies, which may offset some of these benefits.

How is company car tax calculated?

Company car tax is calculated based on the car’s value (known as the P11D value), its CO2 emissions, and your income tax rate. The P11D value includes the car’s list price, VAT, and any optional extras. A percentage rate is then applied based on the car’s CO2 emissions, which determines the taxable benefit amount. This benefit is added to your income, and you pay tax on it according to your tax bracket.

What is the Benefit-in-Kind (BIK) tax, and how does it apply?

Benefit-in-Kind (BIK) tax applies when a company car is available for personal use by an employee or director. It is calculated based on the car’s P11D value (list price, VAT, and extras) and its CO2 emissions. A percentage rate, determined by the emissions, is applied to this value to calculate the taxable benefit, which is then added to the employee’s income, and they pay tax on it according to their income tax rate.

Can I claim VAT on a company car purchase?

You can claim VAT on a company car purchase only if the car is used exclusively for business purposes, without any private use, including commuting. If there is any private use, you cannot reclaim the VAT on the purchase. However, you may still be able to claim VAT on some of the car’s running costs, depending on the level of business versus private use.

Are there any restrictions on using a company car for personal use?

Yes, there are restrictions on using a company car for personal use. If a company car is used for personal purposes, including commuting, it triggers a Benefit-in-Kind (BIK) tax for the user. This tax is calculated based on the car’s value and CO2 emissions, and the user must pay income tax on this benefit. The company must also report this usage to HMRC and may face additional tax liabilities.

What are the implications of leasing a car through a limited company?

Leasing a car through a limited company can offer tax advantages, such as deducting lease payments as a business expense and reclaiming VAT if the car is used exclusively for business. However, if the car is also used personally, a Benefit-in-Kind (BIK) tax will apply. Leasing might also avoid the large upfront costs associated with purchasing a car. Additionally, the lease may include maintenance, which can simplify budgeting for the company.

How does mileage reimbursement work for company cars?

Mileage reimbursement for company cars involves the company reimbursing employees for business-related travel at a set rate per mile. The reimbursement rate is determined by HMRC and is intended to cover fuel and other running costs. If the reimbursement is within the HMRC-approved rates, it is tax-free. If it exceeds the approved rate, the excess amount may be subject to tax as additional income.

Is it more tax-efficient to buy or lease a car through a company?

Whether it’s more tax-efficient to buy or lease a car through a company depends on factors like the car’s value, CO2 emissions, and how it’s used. Leasing can be more flexible with lower upfront costs and potentially more favorable tax treatment if the car is low-emission. However, buying may offer benefits like capital allowances. The best option varies based on specific business needs and tax implications, so it’s advisable to consult a tax professional.

How do electric vehicles impact company car tax?

Electric vehicles (EVs) can significantly reduce company car tax due to their lower CO2 emissions. They attract a lower Benefit-in-Kind (BIK) tax rate compared to traditional petrol or diesel vehicles. For example, fully electric cars can have a BIK rate as low as 2%, making them a tax-efficient option. Additionally, businesses can claim enhanced capital allowances for electric vehicles, further reducing taxable profits.

What expenses can be claimed for a company car?

For a company car, you can claim expenses such as fuel, maintenance, insurance, road tax, repairs, and depreciation through capital allowances. If the car is used for business purposes, these costs are deductible from the company’s taxable income. However, if the car is also used for personal purposes, the Benefit-in-Kind (BIK) tax may apply to the user.

Are there specific rules for high-emission vehicles?

Yes, there are specific rules for high-emission vehicles. These vehicles typically attract higher Benefit-in-Kind (BIK) tax rates due to their higher CO2 emissions. The percentage applied to the car’s P11D value increases with emissions, leading to a higher taxable benefit. Additionally, high-emission vehicles may have lower capital allowance rates, meaning less immediate tax relief for the company.

What is the difference between pool cars and company cars?

The main difference between pool cars and company cars lies in their usage. Pool cars are shared among employees, used strictly for business purposes, and kept at the company premises when not in use. Because they’re not available for personal use, they don’t attract Benefit-in-Kind (BIK) tax. Company cars, however, are assigned to specific employees and can be used for both business and personal use, which may trigger BIK tax for the user.

Can I sell a company car and what are the tax implications?

Yes, you can sell a company car, but there are tax implications. When you sell the car, any profit or loss compared to its book value will affect your company’s taxable income. If you sell the car for more than its written-down value, you may need to pay Corporation Tax on the gain. Conversely, if you sell it for less, you might be able to claim a tax relief.

How does capital allowance work for company cars?

Capital allowances allow a company to deduct the cost of a car over time from its taxable profits. The rate and amount you can claim depend on the car’s CO2 emissions. Lower-emission vehicles generally qualify for higher allowances, such as the first-year allowance, while higher-emission cars may only qualify for the writing-down allowance at a lower rate. This helps reduce the company’s taxable income gradually as the car depreciates.

Can I claim insurance costs for a company car?

Yes, you can claim insurance costs for a company car as a business expense. These costs are deductible from the company’s taxable income, helping to reduce the overall tax liability. The insurance must be for a vehicle used for business purposes, and if the car is also used for personal purposes, it may be subject to Benefit-in-Kind (BIK) tax.

What records should be kept for company cars?

For company cars, you should keep records of:

Purchase details, including invoices and financing documents.
Running costs like fuel, maintenance, insurance, and repairs.
Mileage logs distinguishing between business and personal use.
VAT records if applicable.
Records of any Benefit-in-Kind (BIK) tax calculations.
Details of any capital allowances claimed.
Documentation of the car’s sale, including sale price and proceeds

How does employee salary sacrifice affect company car tax?

Employee salary sacrifice affects company car tax by reducing the employee’s gross salary in exchange for a non-cash benefit, such as a company car. The employee’s taxable income is reduced, potentially lowering their income tax and National Insurance contributions. However, the Benefit-in-Kind (BIK) tax for the company car still applies, based on the car’s value and CO2 emissions. The salary sacrifice scheme can be tax-efficient, especially with low-emission vehicles.

Can a director use a company car?

Yes, a director can use a company car. However, if the car is available for personal use, it will trigger a Benefit-in-Kind (BIK) tax, which the director must pay based on the car’s value and CO2 emissions. The company can claim related expenses, such as insurance and maintenance, as business deductions, but personal use must be accounted for in the tax calculations.

What are the penalties for incorrect company car tax reporting?

Incorrect company car tax reporting can result in penalties from HMRC, including fines and interest on any unpaid taxes. If errors are found to be deliberate, penalties can be severe, potentially up to 100% of the underpaid tax. Even accidental mistakes can lead to fines, so it’s crucial to keep accurate records and ensure all tax liabilities are correctly reported.

Further Information on Accounts & Tax

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A Guide to Corporation Tax

Most companies will generally pay corporation tax on both their income as well as their capital gains tax.

For the financial year beginning on 1^st April 2021, all companies (except for those in the oil and gas sector) will pay the same flat rate of 19% corporation tax. This rate will also continue into the financial year of 2022.

In 2023, the corporation tax rate will increase to 25% which was announced during March 2021.

You must pay Corporation Tax on profits form doing business as:

A limited company
A club, co-operative, or any unincorporated association
Any foreign company with a UK office or branch

Profits you pay Corporation Tax on

Taxable profits for Corporation Tax include the money your company makes from:

Investments
Doing business (trading profits)
Selling assets for a profit

Calculating Your Company’s Effective Tax Rate

From April 2023 corporation tax will not only get increased, but it will also become a bit more complicated. There will be two official corporation tax rates:

Small profits rate: 19%
Main rate 25%

Companies with taxable profits of £50,000 or less will continue to pay 19% tax on all their profits. Companies with taxable profits of more than £250,000 will pay 25% tax on all their profits.

If profits are between £50,000 or £250,000 a ‘marginal relief’ calculation will be made. The practice effect of this is that there will effective be three different corporation tax rates:

First £50,000: 19%

Between £50,000 and £250,000: 26.5%

Over £250,000: 25%

Multiple Companies

There are many company owners who think about setting up a second company which is separate from their existing business. Often there are a few commercial reasons for using more than one company including:

Reducing risk and limiting liability
Involve different shareholders
Enable a stand-alone sale of each business

With corporation tax increasing in the near future, it is possible for multiple companies with one owner, enjoying up to £50,0000 of profit taxed at 19%. However, in order to achieve this the companies must not be associated companies.

Contact us to find out more

Accounts and Tax for Dental Associates Explained

How to save money, tax and time in your dental practice

Tax Saving Strategies for Dentists

Associated Company Rules

When the new corporation tax rates come into operation within the next couple of years, to prevent people artificially spreading their business activities across multiple companies, the £50,000 lower limit and £250,000 upper limit will be divided up if there are any associated companies.

A company will only be associated with another company if:

One company controls the other company
Both are under the control of the same person / people

Family Members and Business Partners

When deciding who controls a company, your associates interests are treated as your own if there is substantial commercial interdependence between the companies.

Business associates include:

Your spouse or civil partner
Close relatives
Legal business partners

Trading Companies vs Investment Companies

A trading company is essentially a company that is involved in regular business activities such as a company that sells goods online or a catering company or a firm. Common types of non-trading companies include those that hold substantial investments in financial securities or property or earn substantial royalty income.

Corporation Tax

If your company is mainly engaged in non-trading activities, in 2021 it will be paying corporation tax at the same rate as most other companies (19%). However, when the new corporation tax rates come into effect, a lot of these investment companies will have to pay the main rate of corporation tax which will be a rate of 25% on all their profits.

This is because any company classed as a close investment holding company (CIC) will not be able to benefit from the small profits rate of 19%. The company will be forced to pay corporation tax at the main rate on all profits.

Companies that mainly derive their profits from renting properties to unconnected third parties (not to family members, etc) are excluded from the CIC provisions. Hence, the majority of property investment companies will be allowed to enjoy the small profits rate.

If a company has too many non-trading activities (including most property investment and property letting) it may lose its trading status for capital gains tax purposes. This will result in the loss of two important CGT reliefs:

Business Asset Disposal Relief
Holdover Relief

Business Asset Disposal Relief

Business Asset Disposal Relief allows you to pay capital gains tax at just 10% (instead of 20%) when you sell your company.

Holdover Relief allows you to give shares in the business to your children, common-law unmarried partner, or other individuals and postpone CGT. You do not need Holdover Relief to transfer shares to your spouse because such transfers are always exempt.

A company will only lose its trading status for CGT purposes if it has ‘substantial’ non-trading activities. Unfortunately to HMRC ‘substantial’ usually means as little as 20% of various measures such as:

Expenses
Assets
Profits
Turnover
Directors’ and employees’ time

HMRC may attempt to apply the 20% rule to any of the above measures.

Inheritance Tax Shares in trading companies usually qualify for business property relief. This means they can be passed on free from inheritance tax. However, if the company holds investments (including any rental properties), this could result in the loss of business property relief.

The qualification criteria are more generous than for CGT purposes and a company generally only loses its trading status for inheritance tax purposes if it is either wholly or mainly involved in investment related activities. To be on the safe side you will want to ensure that the company’s qualifying activities exceed 50% of each of the measures listed above (e.g. turnover, time, profits etc).

Companies registered as Tax Shelters Corporation tax is often a lot lower than the income tax and national insurance paid by sole traders and partnerships. Companies don’t always pay less tax than self-employed business owners but, as profits increase, the tax savings also naturally increase.

A business owner will therefore potentially have a lot more after-tax profit left to reinvest. Companies are normally most powerful as tax shelters when profits are reinvested. Most company owners need to extract money for their own personal use. At this point additional tax may be payable. The income tax payable on dividends reduces the tax benefits of using a company in many cases.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Frequently Asked Questions Corporation Tax

What is Corporation Tax, and who is required to pay it?

Corporation Tax is a tax that companies and organizations must pay on their profits. In the UK, any company operating as a limited company, including dental practices, is required to pay Corporation Tax on taxable profits. This includes profits from trading, investments, and the sale of assets. The amount owed depends on the company’s income, allowable expenses, and applicable tax reliefs. Ensuring accurate and timely filing is essential to avoid penalties from HMRC.

How is Corporation Tax calculated for dental practices?

Corporation Tax for dental practices is calculated based on taxable profits, which include income from dental services, investments, and the sale of assets. To determine the tax owed, subtract allowable business expenses, capital allowances, and any reliefs (such as R&D credits) from total income. The remaining profit is taxed at the current Corporation Tax rate. It’s important for dental practices to accurately track income and expenses to ensure correct calculations and timely payments to HMRC.

What are the key deadlines for Corporation Tax payments?

Corporation Tax deadlines include filing your company’s tax return with HMRC within 12 months after your accounting period ends. However, payment of Corporation Tax is due 9 months and 1 day after the end of your accounting period. Late payments or filings can result in penalties and interest charges. It’s essential to stay organized and ensure timely submissions to avoid additional costs.

Can I reduce Corporation Tax through allowable expenses?

Yes, you can reduce Corporation Tax through allowable expenses. These are costs that are essential for running your dental practice, such as salaries, rent, dental supplies, and professional fees. By deducting these expenses from your total income, you reduce your taxable profit, leading to a lower Corporation Tax bill. It’s important to keep accurate records and ensure that all expenses claimed are legitimate and comply with HMRC rules.

How do capital allowances impact Corporation Tax?

Capital allowances allow businesses, including dental practices, to deduct the cost of certain assets like dental equipment from their taxable profits, reducing their Corporation Tax bill. These allowances are applied to assets like machinery, vehicles, and office equipment. By claiming capital allowances, businesses can offset the purchase cost over several years or all at once (depending on the type), lowering the taxable income and, in turn, the Corporation Tax owed.

What is the difference between Corporation Tax and income tax for business owners?

Corporation Tax is paid by limited companies on their profits, while income tax is paid by individuals on their personal earnings. For business owners, Corporation Tax applies to the profits made by the company, and income tax applies to any salary or dividends they take from the business. The rates and rules for both taxes differ, with Corporation Tax often being lower than higher-rate income tax, offering potential tax savings for business owners who structure their income efficiently.

Are dividends subject to Corporation Tax?

Dividends themselves are not subject to Corporation Tax, as they are paid out of the company’s post-tax profits. This means the company pays Corporation Tax on its profits before distributing dividends to shareholders. However, when shareholders receive dividends, they may be liable to pay personal income tax on those dividends, depending on their tax bracket and the amount received. This setup allows for potential tax efficiencies when compared to taking a salary.

How can dental practices optimize their tax structure for Corporation Tax savings?

Dental practices can optimize their tax structure for Corporation Tax savings by claiming all allowable expenses, including dental supplies and staff salaries, and utilizing capital allowances for equipment purchases. Incorporating the practice can also provide tax benefits by allowing owners to take dividends instead of a full salary, which may be taxed at a lower rate. Strategic tax planning, such as pension contributions and taking advantage of R&D tax credits, further reduces taxable profits, leading to significant savings.

What happens if I miss the Corporation Tax deadline?

If you miss the Corporation Tax deadline, HMRC will impose penalties and interest charges. The initial fine for late filing starts at £100, with increasing penalties if further delays occur. Interest will also accrue on any unpaid tax. Continued non-compliance can lead to more severe financial penalties, so it’s crucial to meet deadlines or contact HMRC if you’re unable to pay on time.

How does the Annual Investment Allowance affect Corporation Tax?

The Annual Investment Allowance (AIA) allows dental practices and businesses to deduct the full cost of qualifying equipment, like dental chairs or machinery, from their taxable profits in the year of purchase. This reduces the amount of Corporation Tax owed by lowering taxable income. The AIA has an annual cap, so planning purchases to fall within the allowance can maximize tax savings and improve cash flow.

Can losses be carried forward to reduce Corporation Tax?

Yes, losses can be carried forward to reduce Corporation Tax in future years. If a dental practice incurs trading losses, those losses can be applied to offset future taxable profits, reducing the amount of Corporation Tax owed in subsequent periods. This helps businesses manage cash flow and tax liabilities more effectively by spreading out the impact of losses over time. Accurate record-keeping and timely filing are essential to utilize this benefit.

How can incorporating a dental practice reduce overall tax liability?

Incorporating a dental practice can reduce overall tax liability by allowing the practice to pay Corporation Tax on profits, which is often lower than personal income tax rates. Owners can also take dividends, which are taxed at a lower rate than salaries, resulting in further tax savings. Additionally, incorporation offers opportunities to claim more expenses, capitalize on tax reliefs like pension contributions, and structure income more efficiently, leading to significant reductions in taxable income.

What are the rates of Corporation Tax for small vs. large businesses?

As of 2023, the standard UK Corporation Tax rate is 25% for businesses with profits above £250,000. For small businesses with profits below £50,000, the rate is 19%. A tapered rate applies for profits between £50,000 and £250,000, where companies pay a marginal rate. These rates affect how businesses, including dental practices, calculate their tax liabilities, and proper tax planning can help optimize the amount owed.

What financial records must be kept for Corporation Tax compliance?

Income and expense records: All business transactions, such as sales invoices and purchase receipts.

Payroll records: Documentation of staff wages and benefits.
Asset records: Details of equipment and property purchased for the business.
Bank statements: Evidence of business account transactions.
VAT records: If applicable, keep VAT returns and related documents.
These records should be retained for at least six years for HMRC auditing purposes

How do pension contributions affect Corporation Tax for a company?

Pension contributions made by a company reduce its taxable profits, leading to lower Corporation Tax. Contributions to employee pensions are treated as allowable business expenses and can be deducted from the company’s income before Corporation Tax is calculated. This provides both a tax-efficient way to support employees and a method for the business to reduce its overall tax liability. Contributions to the directors’ pensions can also be structured for tax efficiency.

What is the role of R&D tax credits in reducing Corporation Tax?

R&D (Research and Development) tax credits allow companies, including dental practices, to claim relief on expenses related to innovation and development. Qualifying R&D activities can result in a reduction of Corporation Tax by either lowering taxable profits or providing a payable credit for loss-making companies. This tax incentive encourages businesses to invest in improving processes, developing new treatments, or innovating equipment, potentially leading to significant tax savings.

How do I calculate taxable profits for Corporation Tax?

To calculate taxable profits for Corporation Tax, start by determining your company’s total income, including revenue from services, investments, and asset sales. Next, subtract allowable expenses, such as salaries, rent, dental supplies, and other operating costs. You can also deduct capital allowances for equipment purchases and any applicable reliefs like R&D tax credits. The remaining amount is your taxable profit, which is then subject to the appropriate Corporation Tax rate.

What qualifies as allowable expenses for Corporation Tax deductions?

Allowable expenses for Corporation Tax deductions include costs necessary for running a business, such as salaries, rent, utilities, office supplies, dental equipment, and marketing expenses. Other qualifying expenses include professional fees, insurance premiums, training costs, and travel expenses for business purposes. Capital allowances can also be claimed on equipment and machinery. However, non-business expenses, like personal costs or entertainment, are not deductible.

What are the common pitfalls in Corporation Tax filing and how to avoid them?

Common pitfalls in Corporation Tax filing include miscalculating taxable profits, failing to claim all allowable expenses, and missing important deadlines, which can lead to penalties. Other issues involve inaccurate record-keeping, not accounting for capital allowances, and misunderstanding tax reliefs like R&D credits. To avoid these, ensure thorough record maintenance, use accounting software to track income and expenses, and work with a tax advisor to stay compliant and maximize tax savings.

How can a tax advisor help reduce Corporation Tax for a dental practice?

A tax advisor can help reduce Corporation Tax for a dental practice by identifying all eligible deductions, such as allowable expenses and capital allowances. They can also ensure the practice claims available tax reliefs, such as R&D tax credits, and optimize the business structure for tax efficiency. Additionally, a tax advisor can provide strategic planning around pension contributions, dividends, and other financial decisions to minimize the overall tax burden while staying compliant with HMRC regulations.

Further Information on Accounts & Tax

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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A Guide to Capital Gains Tax

Capital Gains Tax is a tax on the profit when you sell an asset that’s increased in value. It is the financial gain or profit you make that is taxed, not the amount of money you receive altogether.

Some assets are tax-free. If all your gains in a year are under your tax-free allowance, you do not have to pay Capital Gains Tax.

Capital Gains Tax Rates

There are two main rates of capital gains tax. These are:

10% Basic rate taxpayers
20% Higher rate taxpayers

With gains arising from disposals of residential properties, the 18 and 28% rates still apply. If you are entitled to Business Asset Disposal Relief, the tax rate is set at 10%.

If you’re entitled to Business Asset Disposal Relief (previously called Entrepreneurs Relief) the tax rate is 10%. This relief is generally only available when you sell a business. Unfortunately, the old 18% and 28% rates still apply to gains arising on disposals of residential property. They also continue to apply to “carried interest”, typically profits made by hedge fund managers and private equity managers. The 10% and 20% rates mainly benefit:

Those disposing of commercial property (except where a business owner disposes of his trading premises and Business Asset Disposal Relief is available)
Stock market investors (although many investors’ gains are tax free thanks to the £12,300 annual CGT exemption or by investing via an ISA or SIPP)
Property investors who use a company to invest in property, when the company itself is sold or wound up
Owners of trading companies who do not qualify for Business Asset Disposal Relief

Basic Rate Band

If you are a basic rate taxpayer, you can pay 10% or 18% capital gains tax on some or all your taxable capital gains. The 18% rate applies to residential property and the 10% rate applies to most other assets.

The basic-rate band is £37,700 this year (2021) so you can have up to £37,500 of capital gains taxed at these lower rates. It is important to note, the basic rate band will be £37,700 until the end of the 2025/26 tax year. You can only benefit from these lower CGT rates if your taxable income (for example your salary, rental income, or dividend income) does not use up your basic-rate band.

The Annual Capital Gains Tax Exemption

The annual exemption is £12,300. In other words, capital gains of up to £12,300 can be realised tax free during the current tax year. The exemption is fixed at £12,300 until the end of 2025/26 as part of the Government’s Big Freeze. Before the current freeze the CGT exemption had been increased by less than inflation for several years and, coupled with reductions in the basic rate band, means the Government has been increasing the CGT haul without increasing tax rates. Where possible, you should consider using this exemption before the end of the tax year on 5 April 2022. After that date, this year’s exemption is lost completely. It is essentially a case of ‘use it or lose it’.

Further Annual Exemption Benefits Couples enjoy one capital gains tax exemption each so they can have £24,600 of tax-free capital gains per year. Minor children also have their own annual exemption. The estate of a deceased person has its own annual exemption in the tax year of the death and the following two tax years. Trusts also have their own annual exemption equal to half of the annual exemption available to individuals (i.e., £6,150). However, this amount must be sub-divided amongst all of the trusts set up by the same settlor.

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Bed and Breakfasting

The old practice known as bed and breakfasting is no longer possible in its simplest form (selling assets, usually quoted shares, and buying them back the next day in order to utilise the annual exemption). However, there are still a number of ways in which the annual exemption can be used such as:

Wait 31 days before buying the shares back. This strategy will not appeal to those who wish to remain fully invested.
Bed and Spouse. Despite its name, this strategy can be used by all couples (married or not). One partner sells the shares and the other one makes an equivalent purchase. (For married couples and civil partners, the repurchase must be made on the open market – a direct sale from one spouse or partner to the other will not have the desired effect.)
Bed and ISA – sell the shares to use your annual exemption and buy them back through an ISA.

Spreading Asset Sales

Property investors who want to sell more than one property should consider spreading their sales over more than one tax year, where possible, to use more than one year’s worth of CGT exemption. This will save a couple up to £6,888 per year in capital gains tax (£12,300 x 2 x 28%). Main Residence Relief Principal private residence (PPR) relief protects your main residence from capital gains tax. For disposals taking place from 6 April 2020 onwards it covers the period during which the property was your main residence and the last 9 months before selling (previously 18 months). Any property which has been your main residence and has been rented out at some point used to qualify for private lettings relief of up to £40,000 per person.

However, for disposals taking place from 6 April 2020 onwards private letting relief is restricted to periods where the owner is in ‘shared occupancy’ with a tenant. In other words, it is now restricted to periods when you are renting out part of your home while it is still your main residence.

Main Residence Relief

Principal private residence (PPR) relief protects your main residence from capital gains tax. For disposals taking place from 6 April 2020 onwards it covers the period during which the property was your main residence and the last 9 months before selling (previously 18 months). Any property which has been your main residence and has been rented out at some point used to qualify for private lettings relief of up to £40,000 per person. However, for disposals taking place from 6 April 2020 onwards private letting relief is restricted to periods where the owner is in ‘shared occupancy’ with a tenant. In other words, it is now restricted to periods when you are renting out part of your home while it is still your main residence.

Commercial Property Capital Gains

The main changes in recent times include:

A reduction from 28% to 20% in the CGT rate applying to commercial property sales (18% to 10% where some of your basic-rate band is not used up by your income).
CGT on non-resident capital gains. Until recently non-residents did not pay CGT when they sold commercial property located in the UK, for example offices, shops, warehouses and agricultural land. Commercial property gains that arise after 6 April 2019 are now subject to tax. Tax will only be payable on any increase in value from this date. They must file a non-resident capital gains tax return and pay the tax within 30 days of the sale.

Capital Losses

Capital losses are automatically set off against capital gains arising in the same tax year. Any surplus losses are carried forward to set off against future gains (but only to the extent that future gains exceed the annual exemption, so the annual exemption will not be wasted).

Generally speaking, capital losses may not be carried back to earlier tax years. The capital loss rules have a couple of important practical implications:

Losses must be realised by 5 April 2022 in order to be set off against 2021/22 capital gains.
If the losses you realise during the current tax year take your capital gains below the level of the annual exemption (£12,300), some of the annual exemption is wasted.

The timing of the disposal of assets standing at a loss should therefore be considered carefully.

Business Asset Disposal Relief

Business Asset Disposal relief was previously known as Entrepreneurs Relief. It allows each individual to have capital gains for a lifetime of £1million taxed at just 10%. In the March 2020 budget, the lifetime limit was drastically reduced from £10 million to £1 million which is what the current rate is set at.

As the lifetime limit is now a lot less generous than it used to be, it may now be necessary for you to spread assets among various family members to save CGT.

Who Qualifies for This Relief?

This relief is made to benefit owners of trading businesses which are essentially regular businesses.

A business will lose its trading status when it owns significant investments including any rental properties. If you are a property investor or simply own a few properties, the taxman does not treat you as a trading business owner, they will treat you only as a business owner.

Two types of property that can qualify for Business Asset Disposal Relief are:

The trading premises of your own business, for example, a retail unit owned by a sole trader.

Business Asset Disposal Relief can also be claimed when your partnership or company uses a property that you own personally. However, it is important to note that there are restrictions that apply.

Furnished holiday lets (in certain circumstances) Company owners are entitled to Business Asset Disposal Relief when they sell their shares.

The main qualifying criteria are the following:

The company must be a ‘trading’ company
The company must be your company. Generally, this means you must own at least 5% of said company
You must be an employee of the company

Each of these rules must be satisfied for at least two years before the company is wound up or sold. Each of the rules must be satisfied for at least two years before the company has ceased trading. The disposal of the company should then take place within three years after trading has stopped. This time period used to be one year instead of two years. The new two-year rule applies for disposals taking place after 6^th April 2019.

Investors Relief

This relief provides a 10% capital gains tax rate for investors in unlisted trading companies, providing they hold onto their shares for at least three years. Investors Relief only applies to gains on newly issued ordinary shares in unlisted companies. Buying shares from existing owners does not qualify. There is no minimum percentage shareholding. The relief is subject to a lifetime cap of £10 million of capital gains (unlike the £1 million cap now applying to Business Asset Disposal Relief). The investor generally cannot be an employee or officer of the company, and neither can any connected person (e.g., close family members).

However, the investor can become an unpaid director if he was not involved or connected with the company before investing. He can also become an employee 180 days after investing, providing there was no reasonable prospect of becoming an employee at the time the investment was made.

Contact us to find out more

Tax Saving Strategies for Dentists

A Guide to Corporation Tax

A Guide to Inheritance Tax

Non-Residents

Quite a few years ago it was possible to leave the UK for a short period of time and avoid capital gains tax on any assets sold while non-resident.

The rules have now changed so that you have to remain a non-resident for at least five complete tax years in order to avoid any capital gains tax. Under the current anti-avoidance rules, to attempt to avoid capital gains tax your period of non-residence must last for more than five years.

This may mean you have to leave the UK for more than five years or you may have the option for less than five years, depending on whether ‘split-year treatment’ is available and whether you are treated as non-UK resident under the terms of a double tax agreement.

Over the last couple of years now, non-residents have had to pay CGT on some of their gains from UK residential property. Only the part of the gain arising after 5^th April 2015 is subject to tax.

Recent Changes

Non-residents are also subject to capital gains tax on UK commercial property from 6^th April 2019.

It is also important to note, where a non-resident sells shares in a company that derives at least 75% of its value from a UK property, the sale will now be subject to UK capital gains tax. The individual should own around 25% or more of the company.

Only gains arising after 5 April 2019 are subject to tax.

Reporting Capital Gains

You will need to report capital gains arising during the year on your tax return if:

Your total sale proceeds for capital disposals made during the year exceed four times the annual exemption or,
You have any capital gains tax liability.

If you sell a property and the gain is completely covered by the principal private residence exemption (e.g., the sale of your main home), it does not have to be reported on your tax return.

It is also very important to report capital disposals that give rise to an overall capital loss for the tax year, so that you can carry the loss forward to future years.

CGT Payments – Residential Property

Normally capital gains tax has to be paid by 31 January after the end of the tax year. From 6 April 2020, UK residents who sell residential property must make a pre-payment of capital gains tax (payment on account). This payment, along with the submission of a return, must be made within 30 days of the property’s sale.

Company Capital Gains

Indexation relief on capital gains made by companies has been frozen with effect from 31 December 2017.

This means that the relief available on disposals from 1 January 2018 onwards will be limited to the increase in the Retail Prices Index up to December 2017.

This is a major blow to property investors who hold investment properties inside a company and business owners who hold their premises inside a company.

Indexation relief has protected companies from paying corporation tax on any rise in a property’s value which is simply down to inflation.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Further Information on Accounts & Tax

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

Book Consultation

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Financing a Day Care Nursery

Parents are busier than ever, and childcare has become a necessity for many working parents, this has seen a growth in the need for more daycare nurseries in the UK.

As you would imagine daycare nurseries are very highly regulated as they are responsible for the well-being of the children that attend. All nurseries in England are regulated by Ofsted (The Office for Standards in Education). They are expected to adhere to all the rules and regulations set out by Ofsted and they will also undertake inspections to make sure that a satisfactory level of care is being given and that appropriate records of the children’s developments are being kept.

Staffing will be one of the biggest costs to the business, the increases in national living wage have had an impact on the sector. Staff will also be one of the biggest assets and making sure they stay with the company will be important for future business growth.

Having a clear plan for training, promotion, retention, and recruitment will help the nursery maintain the correct number of staff needed to operate a successful nursery.

The government scheme that offers 30 hours of free childcare has impacted the sector and as many nurseries believe that the funds they receive from the government for these hours are not enough to cover their costs, this means that having an income split biased to private income is important to the overall business performance.

Finance for Day Care Owners

We believe that all aspiring daycare and nursery owners should have access to all the necessary information, finance options and support they need in order to successfully open and start their business.

You are one of many in the UK who would like to start their own day nursery. It has slowly become a very popular business venture, as a report by the Department of Education shows that there were 24,00 group-based early years providers in 2019 alone. This figure equates to 8,600 voluntary nurseries and 14,700 private nurseries. This report also states that daycares are in high demand.

We will guide you through the process of starting a successful day care centre. Your next steps will include:

Purchasing a property
Refurbishment funding
Specialist regulations
Equity purchase
Tax funding
Mortgages

Your Business Plan

There are many things you need to consider before you can even start planning your daycare business. If you are ready to enter the sector and make your business as successful as it can be, you need to begin with creating an in-depth, accurate, realistic business plan.

A Business plan is a road map for your business, it will help plan a strategy for marketing, and recruitment and set priorities. The plan is important for existing and start-up businesses and if the business requires finance, lenders will want to see a business plan which sets out the businesses goals, the experience of the management team, and a cash-flow forecast setting out the profitability of the business over the next 2-3 years.

Contact us to find out more

A daycare’s business plan must take into account the unique features that are included in operating in the childcare sector. New entrants should have a clear understanding of the market, the vision for your business and the regulatory environment in which you will be operating. It is very easy to get misled by assumptions based on limited experiences and headlines within a limited division of the sector.

Your business plan will aid you in getting the necessary financing you will need to begin your business and it will also help you stay on track, remain within your budget and, most importantly, it will secure all that important funding.

It is definitely worth spending time on a long, in-depth business plan – a few pages of notes will not suffice. Your business plan needs to prove that you have thought through every single aspect, every angle, and every cost of what will come with starting your daycare business.

Click here for more information on creating a business plan.

Here are a few things you need to consider while you are constructing your business plan:

Local environment

A day-care nursery’s business plan should take local demand into account. or be evidently prepared with a strategy to disrupt it. This could include offering services or incentives that your competition doesn’t, such as payment plans or offers that are strong enough to attract local parents who aren’t fully prepared to pay privately.

Fees and extra charges

Not only will you have to carefully plan what you will be charging your clients, but also what your costs to set up will be first. They are both as important as each other. These details, which you may think are minor irrelevant aspects of your business you can decide later, are what is really important. It will show your lender that you are a candidate who is well prepared and ready for a loan.

You need to explore whether the parents will be willing to pay for nappies or would be paying for food, if so, how much? Small details like this that will essentially outline how much income you will receive will set you apart from lenders.

Finance and funding

Based on your needs as a business you need to consider what kind of financing you will need. You may want to consider private-equity funding. Investors are getting increasingly keen on the childcare sector as a strong long-term prospect. There are multiple sources of finance that will be available to you.

Future planning

Consider the size of your location and the feasibility of scaling and expansion. It is important to bear in mind that most regulators set minimum requirements for space per child which may limit your growth.

Government subsidies

Government grants are playing a greater role in childcare now than ever before however, they do vary from area to area. It is worth it for you to research what could be available to you.

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Market Research

The day care and nursery sector is a very unique commercial environment, one that has many rules in place before you can even set up and one that can change very quickly as latest trends in provision take off. Not only is the success of your daycare business highly dependent on how you cater to both parental and children’s needs but is also highly dependent on whether your daycare business must meet the specific needs of its catchment area. Here are a few places to start:

Other businesses in the area

You need to download a list of all local registered providers from the relevant regulator. These are Ofsted in England, the Care Inspectorate in Wales, your local authority in Ireland and the Care Inspectorate in Scotland.

Local Needs, Demand and Demographics

Opening a daycare in an area where you have a lot of competition means that it is likely that you may struggle to get your business off the ground. Depending on how affluent the local area is will reflect the needs and expectations of your future clients. Looking at parenting groups on social media will give you an insight into what local parents are looking for.

Business structure

Most nurseries in the UK operate as limited companies.

If the nursery owns the trading/operating business and the freehold then they may decide to own these two entities in separate limited companies. This is normally referred to as Opco/Propco by lenders and they will tie in both businesses by way of security for any lending that they undertake to the nursery.

Here are a few matters that you need to be aware of before you enter the childcare sector:

Liability

Liability is important when deciding any business structure. Incorporation is usually the route most business owners take to minimise any personal risks. However, it is still important to have Directors and Officers cover, as this will enable you to still incur some liabilities.

Franchising Options

You may want to include in your business plan whether franchising will be an option for you. There are many nursery franchises available currently in the UK, which can be a great option for new entrants in the market. However, franchising your current established day care business can be a cost-effective way to build your business.

Unincorporated associations

If you choose to remain unincorporated it is important to ensure that your trustees and officers are protected by an appropriate insurance policy.

Charity Status

There is also an option for your daycare business to be a charitable nursery therefore, if you are considering this option you also need to consider the structure you would like to adopt.

Click here for more information on accounts, tax and structuring a business.

Location

Here are a few factors concerning the location of your site that will aid in your nursery’s chances of being successful:

Contact us to find out more

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Local area

Access to outdoor space is an integral part of your daycare business. If the space you are looking at does not have its own grounds you need to be realistic about the walking distance to local playgrounds and parks.

Potential hazards

In this childcare industry providing a safe environment is paramount and should be always kept as a priority. Are there multiple floors? Are your staircases child-friendly?

Road Safety and Convenience

You need to understand that parents will be evaluating all these different aspects of your business. Examine the nearby street crossings and the amount of nearby parking available. What are the transport links like nearby?

Relationships

Build a strong relationship with the local authority, most areas will have a service/need that they are lacking and if you can offer these services, they will hopefully refer parents to your business. Having good contacts with the schools closest to the nursery will help with attracting new children and ultimately help with the business’s occupancy levels.

Valuation

If you choose to buy your premises, ensure that you have your premises properly valued to help avoid being under-insured.

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Raising Finance for Daycare Nurseries

How do lenders view the premises within the Daycare Nursery sector?
If the nursery is based in a converted residential property then generally the loan to value (LTV) will be around the 65% mark, however, is based within a purpose-built/limited alternative use property then 55% LTV would be more realistic.

Loan to values (LTV) – these can be based on the bricks and mortar valuation of the freehold or the business trading valuation, lenders will normally decide which matrix that they would want to use, the valuation of the freehold/business will need to be undertaken by an independent valuer.
Loans are normally termed over 10-15 years. Some banks will allow you to make lump sum repayments with no charge which can help reduce the term and allow you to repay the loan earlier if that fits within your business model.

The most common ownership structure for a nursery will be as a limited company, this is partly due to tax. A limited company owner must pay corporation and dividend tax, whereas a sole trader will have to pay tax on all business profits. Your accountant will advise you on the most suitable ownership vehicle for your business.

Click here to read our guide on A Guide to Acquisition Finance

Security

Security – banks will take security for lending in this sector, normally a 1^st legal charge over the nursery freehold, limited company debenture (legal charge over the companies’ assets) and a personal guarantee. In the case of Opco/Propco lending, the banks will normally cross-guarantee the operating and property company to tie in both the property asset and the trading income.

Finance for Daycare Nurseries with Samera

So how can we at Samera help you achieve your goal of owning a Day Care Nursery? Firstly, we have 30 years collective experience within the banking sector and for the last 10 years specialising within the healthcare sector.
Samera Finance can help with an initial assessment, deal structure, and business plans and help negotiate a competitive interest rate for your acquisition financing. We have contacts in all the major banks who have experience with this type of lending to ensure that you get the correct deal, especially with respect to the fees and interest rates. Deal with the wrong lender and they may not give you the favourable rates that healthcare professionals benefit from.

We will obtain for you several offers of finance enabling you to select the deal that suits your own circumstances we will guide you through the lending process and be the point of contact for the lender when they are unable to talk to you while you are working. This enables you to carry on working and if we need to talk through any points with you, we are available in the early evening to do so.

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Click here to learn more about How to finance a healthcare business.

Financing a Day Care Nursery FAQ

What is daycare financing?

Daycare financing helps childcare providers secure funds for startup costs, business expansion, purchasing equipment, and managing operational expenses.

What types of loans are available for daycare businesses?

Daycare businesses have access to several types of loans to meet their financial needs:

Business Loans: General loans that provide funds for day-to-day operations, facility improvements, or expansion.
Equipment Financing: Loans specifically for purchasing or upgrading daycare equipment, such as playgrounds, furniture, or educational tools.
Working Capital Loans: Short-term loans designed to cover operational expenses like payroll, rent, and utilities, especially during slow periods.
SBA Loans: Government-backed loans (in the U.S.) that offer low-interest rates and favourable terms for small businesses, including daycare centres.
Lines of Credit: A flexible financing option that allows daycare owners to borrow funds as needed, helping manage cash flow and covering unexpected expenses.

These financing options help daycare businesses grow, operate smoothly, and invest in their future.

Can I get a loan to start a daycare business?

Yes, startup loans and SBA loans are available to help cover the costs of launching a daycare, including licensing, property leases, and hiring staff.

How does daycare financing help grow my childcare business?

Daycare financing helps grow your childcare business by providing the necessary funds to:

Expand Facilities: You can use financing to add more classrooms, upgrade playgrounds, or open new locations to accommodate more children.
Purchase Equipment: Financing allows you to invest in educational tools, furniture, and technology, enhancing the quality of care and attracting more families.
Hire Additional Staff: With daycare financing, you can hire qualified staff to maintain proper child-to-staff ratios, improving service and allowing for growth.
Marketing and Advertising: Use financing to invest in marketing campaigns, boost your online presence, and attract new families to your daycare center.
Improve Cash Flow: Working capital loans or lines of credit help manage cash flow, ensuring that operational expenses like payroll and utilities are covered, especially during slower seasons.

Overall, daycare financing enables you to invest in key areas that drive growth and improve the quality of care at your childcare center.

How can I apply for daycare financing?

To apply for daycare financing, follow these steps:

Assess Your Financing Needs: Determine the amount of funding you need and the purpose, whether it’s for expanding facilities, purchasing equipment, or managing cash flow.
Prepare Required Documents: Gather necessary documents such as:
Financial statements (profit and loss, balance sheets)
Business plan outlining your daycare’s growth strategy
Personal and business tax returns
Cash flow projections
Research Lenders: Look for lenders that specialize in daycare or small business financing. Compare interest rates, terms, and loan amounts.
Submit Your Application: Fill out the lender’s application form, either online or in person, providing all necessary financial documentation.
Review and Approval: Once submitted, the lender will assess your creditworthiness, financial stability, and business viability. Approval can take from 24 to 72 hours depending on the lender.
Receive Funds: Upon approval, the funds are typically disbursed quickly, allowing you to invest in your daycare’s growth.

Proper preparation and choosing the right lender can streamline the application process and improve your chances of getting daycare financing.

How quickly can I get approved for daycare financing?

Many lenders approve daycare financing within 24 to 72 hours, depending on the loan type and completeness of your application.

Can I get daycare financing with bad credit?

Yes, some lenders offer daycare financing to individuals with bad credit, but these loans may come with higher interest rates or require collateral.

What are the interest rates for daycare financing?

Interest rates for daycare financing typically range from 5% to 15%, depending on your credit score, loan type, and the lender’s terms.

Can daycare financing be used to purchase equipment?

Yes, daycare financing can cover the cost of playground equipment, educational tools, furniture, and security systems to enhance your childcare facility.

How is daycare financing different from traditional business loans?

Daycare financing is designed specifically for the childcare industry, offering flexible terms that account for the unique expenses and revenue cycles of daycare centers.

Are government loans available for daycare centers?

Yes, government-backed loans like SBA loans are available, offering lower interest rates and favorable terms for daycare centers and small businesses.

How much can I borrow with daycare financing?

Daycare financing amounts vary but typically range from £5,000 to £500,000, depending on your business needs and financial situation.

What can I use daycare financing for?

Daycare financing can be used for a variety of purposes to support and grow your childcare business, including:

Facility Renovations: Upgrade or expand your daycare center to accommodate more children or improve the space for safety and comfort.
Equipment Purchases: Buy essential equipment such as playgrounds, educational tools, furniture, and security systems.
Staff Hiring: Use funds to hire qualified staff, ensuring proper child-to-staff ratios and improving the quality of care.
Marketing and Advertising: Invest in marketing campaigns, build your online presence, and attract new families to your daycare.
Licensing and Regulatory Fees: Cover the costs of necessary licenses, certifications, and permits to ensure your daycare complies with local regulations.
Operational Expenses: Manage day-to-day costs like payroll, rent, utilities, and supplies to maintain smooth business operations.
Technology Upgrades: Invest in technology like management software or online booking systems to streamline administrative tasks.

Daycare financing is flexible and can be tailored to meet various needs for both short-term and long-term growth.

Can daycare financing help manage cash flow?

Yes, working capital loans and lines of credit can help manage cash flow, covering expenses like payroll, rent, and utilities during low enrollment periods.

Do I need a business plan to apply for daycare financing?

Yes, most lenders require a business plan outlining your daycare’s financials and growth strategy to evaluate your loan application.

Business Loans for Healthcare Businesses

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Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

A Guide to Inheritance Tax

The inheritance tax nil rate band has been frozen at its current level of £325,000 since 6th April 2009. The nil rate band is the amount of your estate that is exempt from inheritance tax.

It will remain at its current level of £325,000 until 5th April 2026 – a 17-year freeze! However, since 6th April 2017, a new additional nil rate band has been available for the ‘family home’.

Click here to read our guide on income tax and National Insurance.

Generally speaking, effective inheritance tax planning should be carried out on a long-term basis. However, it is worth remembering the following points, which should be considered on an annual basis.

Annual exemption

The first £3,000 of gifts made by any individual during each tax year is completely exempt for inheritance tax. In addition to this, if the previous year’s annual exemption was not fully utilised, it can be carried forward into the following (current) tax year.

This means, in one tax year you are able to have up to £6000 of gifts that will be exempt from any tax only if you have not made any gifts during the previous tax year.

This exemption is specific to a per person basis, so married couples can also make gifts of £3,000 each.

Small Gifts Exemption

Gifts of up to £250 per tax year made to any one individual are also exempt from any inheritance tax and do not count towards the annual exemption. These types of small gifts are an exemption for you as you can make as many of these gifts as you like to different people.

However, the annual exemption cannot be used for further gifts to the same recipient in the same tax year.

Habitual Gifts Out of Income

Habitual gifts out of income are an exemption from inheritance tax, in order for these gifts to be classed as ‘habitual’, they need to be made consistently for a number of years. Which is why it is important to remember to keep these up every tax year.

The Family Home

An additional nil rate band is available for the ‘family home’ for any deaths occurring after 6 April 2017. This exemption is only available on a property which has been the deceased residence at some point during their life. If the deceased has passed while owning more than one or multiple qualifying properties, the personal electives can elect which property this exemption should apply to.

The exemption is only applied once the property is passed. This is usually done to a direct descendant of the deceased and in this case, any stepchildren, foster children or adopted children are all accorded the same status as one another for this sole purpose.

Similar to the £325,000 nil rate band, any unused proportion of the exemption will pass to the deceased’s partner or spouse.

When a person downsizes or ceases to own a home after 8 July 2015, the residence nil rate band is available to them as well as assets of an equivalent value, up to the value of the additional nil-rate band, are passed to direct descendants.

The residence nil-rate band that was introduced in 2017/18 and increased from £100,000 to its current value to £175,000. This level is set to remain until 5 April 2026.

Click here to read more about inheritance tax.

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Inheritance Tax: Example

Margaret divorced her husband many years before her death in June 2021.

She leaves her estate, worth £600,000, to her daughter.

Margaret’s estate includes her former home, which is worth £250,000 at the time of her death. The residence nil rate band available for 2021/22 exempts £175,000 of the value of Margaret’s former home. This reduces her taxable estate to £425,000 before deduction of her main nil rate band of £325,000, which reduces it to £100,000.

The IHT payable on Margaret’s estate at 40% is thus £40,000. The residence nil rate band is withdrawn from estates worth in excess of £2 million (this threshold is also frozen until 5th April 2026).

This withdrawal is at the rate of £1 for every £2 by which the estate exceeds £2 million. Any mortgages or other loans secured over a property will have to be taken into account when allocating the exemption. For example, where the deceased held a property worth £250,000 which was subject to a mortgage of £180,000, the exemption will be limited to just £70,000.

A Guide to Inheritance Tax FAQ

What is inheritance tax in the UK?

Inheritance tax in the UK is a tax on the estate of someone who has passed away. The estate includes assets such as property, money, and personal possessions. The tax is applied to the portion of the estate that exceeds the tax-free threshold, which is currently £325,000. Anything above this amount may be taxed at a rate of 40%. However, there are exemptions and reliefs available, such as passing assets to a spouse or civil partner, which can reduce or eliminate the tax liability.

How much is the inheritance tax rate in the UK?

The inheritance tax rate in the UK is 40% on the value of an estate that exceeds the tax-free threshold, which is currently set at £325,000. However, if 10% or more of the estate is left to charity, the rate can be reduced to 36%. Additionally, some exemptions and allowances, such as the residence nil-rate band, can further reduce the taxable amount.

Who pays inheritance tax on an estate?

Inheritance tax on an estate is typically paid by the executor of the will or the administrator if there is no will. The tax is paid using funds from the estate before assets are distributed to the beneficiaries. Beneficiaries usually do not pay inheritance tax directly, unless they receive certain types of gifts or trusts that may have specific tax implications. If the tax isn’t paid on time, interest may be charged on the amount owed.

What is the current inheritance tax threshold?

The current inheritance tax threshold in the UK is £325,000. This is known as the nil-rate band, meaning no inheritance tax is due on estates valued up to this amount. Any part of the estate exceeding this threshold is typically taxed at a rate of 40%. However, the threshold can be increased with the residence nil-rate band, allowing an additional £175,000 if the deceased passes their home to direct descendants, such as children or grandchildren.

Can you avoid paying inheritance tax legally?

Yes, there are several legal ways to reduce or avoid paying inheritance tax in the UK:

Gifting Assets: You can give away assets during your lifetime. Gifts made more than 7 years before your death are typically exempt from inheritance tax under the “7-year rule.”
Spouse or Civil Partner Exemption: Anything left to your spouse or civil partner is exempt from inheritance tax.
Charitable Donations: Gifts to charities are inheritance tax-free, and if you leave 10% or more of your estate to charity, the tax rate on the remaining estate can be reduced from 40% to 36%.
Trusts: Placing assets in a trust can reduce the inheritance tax liability by removing them from your estate.
Residence Nil-Rate Band: Passing your home to children or grandchildren can increase your tax-free threshold by an additional £175,000.
Life Insurance: A life insurance policy can be set up to cover the inheritance tax liability, ensuring that beneficiaries don’t have to sell assets to pay the tax.

Effective estate planning with these methods can significantly reduce or eliminate the inheritance tax burden.

Are there any exemptions from inheritance tax?

Yes, several exemptions from inheritance tax exist in the UK, including:

Spouse or Civil Partner Exemption: Any assets passed to a surviving spouse or civil partner are exempt from inheritance tax, regardless of the estate’s value.
Charitable Donations: Gifts left to registered charities are exempt from inheritance tax. Additionally, if 10% or more of your estate is donated to charity, the inheritance tax rate on the remaining estate is reduced to 36%.
Annual Gift Exemptions: Each year, you can give away up to £3,000 in gifts without it being counted towards inheritance tax. Unused allowances can be carried forward for one year.
Small Gifts Exemption: Gifts of up to £250 per person per year are exempt, provided the recipient hasn’t benefited from your £3,000 annual allowance.
Gifts Between 7 Years of Death: Gifts made more than 7 years before death are typically exempt under the “7-year rule.”
Residence Nil-Rate Band: An additional £175,000 tax-free allowance is available if you pass your home to direct descendants like children or grandchildren.

These exemptions can significantly reduce or eliminate inheritance tax liability.

What is the 7-year rule for inheritance tax on gifts?

The 7-year rule for inheritance tax in the UK applies to gifts you make during your lifetime. According to this rule, if you gift assets and survive for 7 years after making the gift, the gift will be exempt from inheritance tax.

If you pass away within 7 years of making the gift, the gift may still be subject to inheritance tax. However, the tax rate can decrease on a sliding scale, known as taper relief, depending on how many years have passed since the gift was made:

Less than 3 years: 40% (full inheritance tax rate)
3 to 4 years: 32%
4 to 5 years: 24%
5 to 6 years: 16%
6 to 7 years: 8%
After 7 years: 0% (no inheritance tax)

This rule allows you to reduce inheritance tax by gifting assets early in life.

How does the residence nil-rate band affect inheritance tax?

The residence nil-rate band (RNRB) is an additional tax-free allowance that can reduce inheritance tax when you pass your home to direct descendants, such as children or grandchildren. It works alongside the standard inheritance tax threshold and can significantly increase the amount of your estate that is exempt from tax.

Key Points:
- Additional Allowance: As of now, the RNRB provides an extra £175,000 on top of the standard inheritance tax threshold of £325,000. This means your estate could potentially pass on up to £500,000 tax-free, if the home is included.
- Married Couples and Civil Partners: If you’re married or in a civil partnership, any unused allowance can be transferred to your partner, allowing a combined tax-free threshold of up to £1 million.
- Eligibility: The RNRB applies only if you leave your primary residence to direct descendants (children, stepchildren, grandchildren, etc.). It doesn’t apply if you leave your home to other relatives or friends.
- Estates Over £2 Million: For estates valued over £2 million, the RNRB is reduced by £1 for every £2 over the threshold. This is known as the tapering effect, which can eventually eliminate the RNRB for very large estates.

The residence nil-rate band can help reduce or even eliminate inheritance tax on the value of your home when passed to your heirs.

Do gifts reduce inheritance tax liability?

Yes, gifts can reduce inheritance tax liability if structured correctly. Several rules and exemptions apply to gifts that can help minimize the amount of inheritance tax due:

Key Ways Gifts Reduce Inheritance Tax:
- The 7-Year Rule: Gifts made more than 7 years before your death are exempt from inheritance tax. If you survive for 7 years after making the gift, it will not count towards the value of your estate.
- Annual Exemptions: You can give away up to £3,000 per tax year without it being counted towards inheritance tax. If unused, this allowance can be carried over for one year, allowing up to £6,000 in tax-free gifts.
- Small Gifts Exemption: You can give gifts of up to £250 to any number of individuals each tax year, as long as these gifts don’t exceed £250 per recipient.
- Gifts for Weddings or Civil Partnerships: Gifts to a child for their wedding or civil partnership are exempt up to £5,000; for a grandchild or great-grandchild, the limit is £2,500, and for others, it’s £1,000.
- Regular Gifts from Income: If you can prove that you regularly give gifts from your surplus income and it doesn’t reduce your standard of living, these gifts may be exempt from inheritance tax. This is called “normal expenditure out of income.”
- Charitable Donations: Any gifts left to charity are completely free from inheritance tax. Additionally, leaving 10% or more of your estate to charity can reduce the overall inheritance tax rate from 40% to 36%.

Using these gift exemptions effectively can help reduce the overall size of your taxable estate, lowering or even eliminating the inheritance tax liability.

How do trusts help with inheritance tax planning?

Trusts are a valuable tool for inheritance tax planning because they allow individuals to control how their assets are distributed while potentially reducing the amount of inheritance tax (IHT) due. Here’s how trusts can help with inheritance tax planning:

Life Interest Trusts:
- These trusts allow a beneficiary (often a spouse) to benefit from income generated by the trust during their lifetime, while the assets themselves are passed to other beneficiaries (like children) after their death. The trust can provide for a spouse while reducing the taxable value of the estate for IHT purposes.
Removing Assets from the Estate:
- When you place assets in a trust, they are no longer considered part of your estate for inheritance tax purposes, provided you survive for 7 years after transferring the assets. This can significantly reduce the value of your taxable estate.
Controlling Asset Distribution:
- Trusts allow you to set specific conditions on how and when beneficiaries receive the assets. This helps protect wealth for future generations and ensures assets are not taxed multiple times as they pass from one generation to the next.
Potential IHT Relief on Business Assets:
- Certain types of trusts, such as business property relief trusts, allow business assets to be transferred while reducing or eliminating inheritance tax liability, particularly if the assets qualify for business relief or agricultural relief.
Gifting with Trusts:
- Trusts can facilitate tax-efficient gifting. For example, bare trusts allow gifts to minors, and provided the donor survives for 7 years, the assets in the trust won’t be subject to IHT.
Protection from the 40% IHT Rate:
- Trusts like discretionary trusts allow assets to be held for future beneficiaries without giving them direct access. While discretionary trusts may have their own tax rules, they can offer greater protection and flexibility compared to leaving assets directly, which are taxed at 40%.
Avoiding Double Taxation:
- Trusts can help avoid double taxation. For example, instead of passing assets directly to children (who may also be liable for IHT later), assets can be placed in a generation-skipping trust, which can reduce IHT when passed on to grandchildren.
  
  By using trusts, individuals can manage their estate more effectively, potentially minimizing inheritance tax liabilities and ensuring assets are distributed according to their wishes. Trusts should be set up with professional advice to ensure they are structured in compliance with tax laws and estate planning goals.

Do pensions count towards inheritance tax?

In most cases, pensions do not count towards inheritance tax (IHT) in the UK. Here’s a breakdown:

Defined Contribution Pensions:
- Not subject to IHT.
- If you die before age 75, beneficiaries inherit tax-free.
- If you die after age 75, beneficiaries pay income tax on withdrawals.
Defined Benefit Pensions:
- Typically, it is not part of your estate for IHT. Survivor pensions are also IHT-exempt.
Lifetime Annuities:
- Usually die with you unless death benefits are included, which may also be exempt from IHT.
Drawdown Pensions:
- Remaining funds are not subject to IHT; withdrawals after age 75 are taxed as income.
Exception:
- Moving pension funds out deliberately to avoid IHT could bring them back into your estate for tax purposes.

In summary, pensions are generally exempt from IHT, making them a tax-efficient way to pass on wealth. Proper planning ensures beneficiaries receive them with minimal tax implications.

Can life insurance cover inheritance tax costs?

Yes, life insurance can be used to cover inheritance tax (IHT) costs. A life insurance policy can be structured to provide your beneficiaries with funds to pay the inheritance tax due on your estate, ensuring they don’t have to sell assets to cover the tax bill.

How it works:

Whole-of-Life Policy: A whole-of-life insurance policy can be taken out, which guarantees a payout upon death, providing funds to cover IHT costs.
Writing the Policy in Trust: For the payout to be exempt from IHT, the life insurance policy should be written in trust. This ensures that the payout does not form part of your taxable estate and goes directly to your beneficiaries or an executor to pay the IHT.
Covering Tax Liabilities: The insurance payout can match the estimated IHT liability, allowing your beneficiaries to cover the tax without selling property or other assets.

Benefits:
Liquidity: Provides immediate funds to pay IHT, avoiding delays or forced asset sales.
Exempt from IHT: When written in trust, the payout is not subject to inheritance tax.
Peace of Mind: Ensures your estate passes to your beneficiaries without financial burden.

In summary, life insurance is a practical solution to cover inheritance tax costs, ensuring your assets are passed on as intended without the risk of liquidation.

What is taper relief for inheritance tax on gifts?

Taper relief reduces the amount of inheritance tax (IHT) on gifts made between 3 and 7 years before your death. It applies to gifts that exceed the £325,000 inheritance tax threshold and are subject to tax if you pass away within 7 years of making the gift. The longer you live after making the gift, the lower the tax rate on that gift.

Taper Relief Breakdown:

Less than 3 years: 40% (full inheritance tax rate)
3 to 4 years: 32%
4 to 5 years: 24%
5 to 6 years: 16%
6 to 7 years: 8%
After 7 years: 0% (no inheritance tax)

Key Points:
Taper relief only reduces the tax on the gift, not the value of the gift itself.
It applies only if the total value of gifts in the 7 years before death exceeds the IHT threshold.

In summary, taper relief can significantly reduce the tax on large gifts, making gifting an effective estate planning tool if done early.

When does inheritance tax need to be paid?

Inheritance tax (IHT) needs to be paid by the end of the sixth month after the person’s death. If not paid by this deadline, interest will be charged on the amount owed.

Key Points:

Deadline: IHT must be settled within 6 months of the individual’s death.
Who Pays: The executor or administrator of the estate is responsible for ensuring the tax is paid.
Payment in Instalments: If the estate includes assets like property, the tax can be paid in instalments over 10 years, although interest will still accrue on unpaid amounts.
Advance Payments: Some tax can be paid before the final valuation of the estate is complete to reduce interest charges.

Paying IHT on time is crucial to avoid additional interest costs.

How can I plan effectively to reduce inheritance tax on my estate?

To effectively reduce inheritance tax (IHT) on your estate, consider these strategies:

Business Property Relief (BPR):
- Invest in qualifying businesses to potentially reduce the IHT on those assets by up to 100%.
Utilize Gift Allowances:
- Use your annual gift allowance of £3,000 per year (or £6,000 if you didn’t use the previous year’s allowance) to reduce the size of your estate.
  - Give small gifts of up to £250 per person, which are exempt from IHT.
Make Gifts Early:
- Gifts made more than 7 years before your death are IHT-free, so consider gifting assets early to take advantage of the 7-year rule.
Use Trusts:
- Place assets in trusts to reduce the value of your estate for IHT purposes. Trusts allow you to pass wealth to beneficiaries while controlling how and when they receive it.
Maximize Exemptions:
- Leave assets to a spouse or civil partner, as they are exempt from IHT. Additionally, leave assets to charity to avoid IHT and reduce the tax rate to 36% if 10% or more of your estate is donated.
Residence Nil-Rate Band:
- Pass your home to direct descendants (children or grandchildren) to benefit from the additional £175,000 residence nil-rate band, increasing your tax-free threshold to £500,000 (or £1 million for couples).
Take Out Life Insurance:
- A life insurance policy, written in trust, can cover the IHT liability, ensuring your beneficiaries do not have to sell assets to pay the tax.
Pensions:
- Keep funds in your pension, as pensions are usually exempt from IHT and can be passed on to beneficiaries tax-efficiently.

Effective planning with professional advice ensures that your estate is structured to minimize IHT and preserve wealth for your beneficiaries.

Further Information on Accounts & Tax

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

Book Consultation

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Dental Practice Startup FAQs

In this webinar, Arun and Jyoti answer 20 of the most commonly asked questions for dental startups.

Starting a Dental Practice: Get Started

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

Book a consult

Dental practice start-up

Learn More: Starting a Dental Practice

For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

7 Fatal Mistakes to Avoid When Starting a Dental Practice

In this webinar, Arun takes you through 7 of the most fatal mistakes we see new dental practices making all the time.

If you’re starting a dental practice, make sure you DON’T DO anything on this list.

Should I Buy Leasehold or Freehold?

How to Start a Dental Practice

Five Traits of Failed Dental Start Ups

Listen to the episode as a podcast

Starting a Dental Practice: Get Started

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

Book a consult

Dental practice start-up

Learn More: Starting a Dental Practice

For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Email marketing for dentists

By now, most businesses have made the transfer to online communications. However, healthcare is one sector that is often still going through the process of learning how to communicate online. Patients will obviously eventually need to meet their dentist face-to-face, but their search for the right dentist starts online.

Email marketing is a highly effective digital marketing strategy, no matter what type of business you are. It is a very powerful tool that any business in any field and of any scale can use to acquire, engage and retain clientele. You need to understand, however, that there is an art to email marketing. With everyone being able to unsubscribe with the touch of a button, you need to find the fine line between marketing interesting, informative and insightful and bombarding and hassling your clientele.

Email marketing helps you connect with your audience to promote your brand and increase traffic to your dental practice. You can actually do a lot of things with emails. Not only are they a great way to market your business, they are also a great way to sell products and drive traffic to your website and clients to your actual practice.

Click here to read more about content writing for dentists.

Most people also try to fix their problems at home or attempt to avoid them and doing that also starts online. This is where quality content comes in. Your content needs to be good quality so that when you start your email marketing campaigns, your patients have good content to read when your emails direct them there.

Email marketing for dentists helps practitioners to:

Provide quality and helpful content
Engage existing and potential patients
Increase revenue
Prove personalised experiences
Advertise discounts, deals and promotions
Increase brand awareness

Click here to read more about marketing a dental practice.

Does email marketing work?

While email marketing has a lot of competition in the marketing department, it is undoubtedly a marketing method that still works, while still being very cost effective. Companies that utilise email, and do it well, can reap the benefits that come from that market technique.

Sending mass emails to your marketing list can increase your brand awareness, keep existing patients engaged, help retain patients and promote your special offers.

Action Plan

Email marketing is a powerful tool for dental practices to engage with patients, provide quality content, increase revenue, and promote brand awareness in a cost-effective manner, leveraging the online platform to reach and retain clientele effectively.

Contact us to find out more

Should You Use Social Media in a Dental Practice?

How to use Video to Effectively Market your Dental Practice

5 Free Ways to Grow a Dental Practice

4 types of marketing emails

We have outlined the main four types of popular email marketing campaigns and how you can use them effectively to help your business grow:

Email newsletters

One of the most popular and common forms of email marketing are regular email newsletters. As a dental practice, you can use an email newsletter to provide your patients with helpful knowledge and updates.

It is important to add value to all your patients’ inboxes.

To do this, you must create engaging content, including new blogs, how-tos and announcements of new services or deals and prices.

Send a few articles, blogs or videos out in a newsletter once a month. Maybe include a promotion or two. Behind-the-scenes stories of your team and the practice will also help build a relationship with your patients.

Acquisition Emails

Acquisition emails can help your dental practice acquire more patients by reaching out to those who have opted to receive your emails but have not yet converted into consistent patients.

By creating attractive offers, discounts and deals, as well as informative content, you can show all those in your email list that perhaps have missed their routine checkups or have been avoiding the dentist. Or, perhaps simply showing those who are unsure of which local dentist they should go to, the value of becoming an active patient at your dental practice.

Acquisition emails are a great way to move all potential leads through the conversion funnel a lot faster and grow your patient base as well as drive additional revenue and target users who have expressed some interest at some point in what your practice has to offer.

Promotional Emails

Promotional emails are one of the greatest ways to drive new signups, sales and new service offerings for your dental practice. Promotional emails include offers that both entice and encourage your target clients to buy a new service. Use promotional emails to reward engaged subscribers with exclusive email only offers, drive new products you are selling or any new services you are offering. Cosmetic procedures that are hot and trending, such as Invisalign, are always procedures that many potential patients are always on the fence about. Therefore, offering promotions on services like this helps entice those patients into buying into that service.

Action Points

Email newsletters: Provide valuable content to engage patients and keep them informed about updates and services.
Acquisition emails: Offer deals and discounts to encourage potential patients to schedule appointments and become active patients.
Promotional emails: Drive signups and sales by offering exclusive deals on services like cosmetic procedures.
Retention emails: Maintain relationships with existing patients through personalized messages and loyalty rewards to encourage repeat visits.

Benefits of email marketing for dentists

Email marketing is a powerful tool that can be used to engage, acquire and retain patients for your dental practice. By implementing a successful email marketing campaign, your dental practice can benefit greatly. It is important to select the correct email marketing campaign to achieve your goals with this type of marketing.

Build brand awareness

Before you email your patient list, take some time to design your email template. You need to make sure your emails are consistent in style, reflect your brand and look professional. A poorly formatted, plain email may be worse than no email at all.

Include your brand colours and logo, make your email reflect the design and look of your website. Create a consistent brand and get it out there via email.

Drive traffic to your website

Remember, when your target audience finds your email content interesting or valuable, they are a lot more likely to share it, forward it on or click on your links (make sure to always include your social media links and share buttons).

By emailing a blog, or even just a section of it, and encouraging audiences to click the link, you drive more traffic to your website. You can also increase your social media following and engagement by encouraging them to share and link them on your profiles.

Click here to read more about creating a website for dentists.

Build a relationship

As your business is a dental practice, it often means that interactions with your patients can be very limited in the sense that they will only ever see you for scheduled visits. However, this does not mean that you can’t build impactful and lasting relationships with these patients outside of these appointments.

Keep in touch

Being a dental practice, is it quite easy to overlook the importance of keeping in touch with your patients when at best, you will only ever see them every 6-12 months. However, with the use of email marketing, you can fill the void in between those routine visits and build trust and relationships with your patients.

In doing so, you are providing a bigger service than simply taking care of their teeth every appointment. Depending on your email campaign, you can provide patients with various helpful tricks tips, and information that is useful to them, which will make them want to stay subscribed to you. Email marketing will help you create a community of patients.

Action Points

Build brand awareness: Design professional and branded emails to ensure consistency and professionalism, which helps in establishing your practice’s identity and recognition among patients.
Drive traffic to your website: Share valuable content in your emails and encourage recipients to click on links to visit your website, which boosts traffic and engagement.
Build relationships: Email marketing allows you to stay connected with patients even between appointments, fostering relationships and enhancing patient loyalty.

Top tips on email marketing for dentists and dental practices.

Building a subscriber list

The only way to make full use of email marketing is to have a subscriber list. You need to build a list of contacts that you can start sending emails to.

Create a simple contact form on your homepage, called something like ‘Sign up to our newsletter’, or ‘Special offers’. Keep the form as simple as possible, all you need is a name and an email address. You will get more sign-ups that way.

Include requests to sign up for marketing emails in your communication with new and existing patients. Add these to your email marketing list as well.

Maintain relationships with current patients

Now you have your patients emails, you are able to contact your patients and you are given an opportunity to build their trust. You need to prove that you are using their contact information to send them useful and insightful emails, not useless junk or constant emails bombarding them. To keep the patients you already have, you need to keep in frequent contact with them while establishing a regular and personal connection with them.

It is an absolute game changer for your dental business if you begin to reach out to your customers and provide them with the relevant information they need before they even realise they need it.

While it is imperative to make a routine for when your marketing emails go out to your patients, you need to make sure that you are not overwhelming your subscribers with too many emails. That’s when you will start to lose your following!

Keep your newsletters monthly, keep your promotions spaced out, don’t make yourself blend in with the other emails.

Targeted and personalised emails

The content of your emails are what matters the most. The way you choose to personalise them will help you build relationships with your existing and potential patients. Segmented emails work the best, so your emails appeal to both types of patients. This ensures that each patient on your subscribers list receives content that is both relevant and useful to them.

A great example of this is age-appropriate content. This may not mean what you think it means. For example, patients over the age of 50 are less likely to be interested in receiving information about braces like Invsalign. They may be more interested in reading about how their gums change over time and your services on dental implants.

Offering content to your patients of all ages will make each patient feel as if you as a business cares about all of them individually and you are working to build on that relationship and trust.

Sloppy or irrelevant content can have an adverse effect as this will push your patients to unsubscribe. If they are subscribed to your email listing, it needs to be because you are providing them with something of value to them. The last thing you want is for your emails to be marked as spam.

Personalising your emails is a must. Feeling valued is what you want your patients to feel when they receive your emails. Your goal is to make your patients feel like they matter. Your second goal is for your emails to help build your name and dental practice as a brand. Make sure your content reflects you as a business.

Personalising your emails can consist of small things such as addressing each contact by their name instead of the vague ‘sir/madam’, sending birthday messages with offers or seasonal offers. This can be done quite simply in all mass email platforms once you link it to your contact lists.

You can even create automated emails to specific categories of patients. For instance, you could send information on children’s dentistry automatically to only patients with children. You could also send information on gum disease and dental care to all patients who have seen the hygienist.

All these can make an immense difference to how your patients feel about your practice and also how they view their dentist (as many are terrified).

What is the most important about the content of your emails and all other content that you post, is your tone. It is important that you convey the appropriate tone that reflects your practice while you are addressing your patients. These details are what can leave a lasting impression on your patients.

Click here to listen to our podcast episode about marketing to millennials.

Contact us to find out more

Keep patients up to date

Your emails can often consist of special events, offers or discounts you are offering at your practice. This is the main reason why many of your patients will be interested in your emails. Lets face it, dental work is not cheap and everyone loves a good discount!

Providing updates on anything new happening in your practice, such as new equipment, new services or any new staff, anything to get your patients attention and keep your patients informed. Newsletters are a great way of doing this.

Let patients know about life events in the team as well. This creates a sense of community and will bring you closer to your patients. Birthdays, engagements, weddings, these are all great little additions to liven up an existing newsletter.

Educate your patients

You can use your email marketing to educate your subscribers. This can be through concisely worded emails or short descriptions with links to blogs and articles on your website. Linking your blog and website content can also be personalised to specific patients and you can align them to blog posts that are most relevant to them.

For instance, send that blog you wrote on top tips for looking after your braces to all your orthodontic patients.

Think about what questions you get asked a lot in the practice. What problems do you keep seeing in oral health? What are the little tips and tricks you know about brushing and flossing that patients probably don’t? Tell them about it!

Optimise for all devices

No matter what sector your business is, you need to be up-to-date with how you promote your services online. This includes ensuring that your email marketing campaign is optimised for mobile devices. Over half of emails that are sent are opened on mobile phones, therefore, it would make sense (and be in your best interest) to have the emails you send optimised for people that are accessing their emails from either a smartphone or tablet.

The recipients are more likely to open and actually read the content of the email if the email is formatted in the right way for them to view it.

While doing this, there are a few things to consider. Be sure to understand that the screen sizes are different. A laptop screen and a smartphone have very different screen sizes which is what you need to consider. You need to make sure that the content of your emails are clear and visible and not cut off around the screen.

Include Call-to-actions (CTAs)

With any content that you write, at some point you need to encourage a call-to-action. A call-to-action (CTA) is simply a button like ‘call now’ or ‘further information’. Calls-to-action are a great way to create a relationship with your audience and get them to take an action you want.

They are also a great way of pushing traffic to your website.

The point of your email marketing campaigns are to get your subscribers to come to you in some way to get you more business. This is why calls to action are so important. It allows your message to be read, then it gives your clients a way to come to you and create some form of contact. In essence, it is a technique that can make your patients become more responsive and engaged with your practice.

Calls-to-actions can be a very useful technique helping customers along the purchase process and it can also be helpful in attracting new patients to your practice.

Having a CTA, like a referral system, in place alongside the emails that you send will be helpful in monitoring how well the emails are doing and how effectively they are working.

Monitor progress

There are various ways to monitor and track the progress of your email campaigns. These powerful analytics are able to track how many of your patients are actually opening your emails and clicking through the links.

Monitoring the progress of your email marketing allows you to make any necessary tweaks and changes if they are necessary. This ensures that you are getting the most that you can from using email marketing for marketing your dental practice.

There are some great ways to measure the effectiveness of your newsletter. You need to analyse whether your content helps build a relationship with your patients and subscribers, increases retention and engagement and strengthens patient loyalty.

Does your content (like blogs and videos) get shared or liked on social media? Does your engagement on social media or your website traffic see a noticeable uptick after sending out a newsletter? Are recipients opening the email and clicking the link within?

Action Point

Build a subscriber list: Create simple sign-up forms on your website and encourage patients to subscribe to your newsletters or special offers.
Maintain relationships with current patients: Send useful and insightful emails to build trust and keep patients engaged, but avoid overwhelming them with too many emails.
Targeted and personalized emails: Segment your email list and personalize content to appeal to different patient demographics, ensuring relevance and usefulness.
Keep patients up to date: Share updates about your practice, special events, offers, and any new services to keep patients informed and engaged.
Educate your patients: Use email marketing to provide valuable information and tips on oral health care, linking to relevant blog posts or articles on your website.
Optimize for all devices: Ensure your emails are optimized for mobile devices to accommodate the increasing number of users accessing emails on smartphones and tablets.
Include Call-to-actions (CTAs): Encourage patient engagement and interaction with clear CTAs, such as ‘call now’ or ‘learn more’, to drive traffic to your website or encourage bookings.
Monitor progress: Track the effectiveness of your email campaigns through analytics to measure open rates, click-through rates, and engagement, making necessary adjustments to improve performance.

You can check out our articles here samera learning centre.

Email marketing for dentists FAQ

What is email marketing for dentists?

Email marketing for dentists is a targeted communication strategy that involves sending emails to current and prospective patients to promote dental services, share educational content, offer promotions, and maintain regular engagement. It helps dental practices build stronger relationships with patients, improve retention, remind them of appointments, and encourage them to take advantage of special offers or new services. Email marketing also serves as an effective tool for increasing patient loyalty and attracting new patients by keeping the practice top-of-mind.

Why is email marketing important for dental practices?

Email marketing helps build relationships with patients, improve retention, promote services, and increase appointments. It’s a cost-effective way to stay connected and enhance patient loyalty.

How can email marketing attract more patients to my dental practice?

By sending regular newsletters, promotions, and educational content, you can engage current patients and attract new ones by showcasing your expertise and encouraging referrals.

What types of emails should dental practices send?

Dental practices can send various types of emails to engage patients and improve retention. Here are some effective options:

Appointment Reminders: Automated reminders to help patients remember their upcoming dental appointments.
Newsletters: Regular updates that include dental health tips, practice news, and information about new services or technology.
Promotional Emails: Offers, discounts, or special promotions to encourage patients to book treatments or refer friends and family.
Post-Treatment Follow-Ups: Emails to check in with patients after a procedure and ensure their recovery is going smoothly.
Educational Emails: Content that provides insights into oral health, preventive care tips, and information on specific dental treatments.
Birthday or Holiday Greetings: Personalized messages that build rapport and strengthen patient relationships.

Sending these types of emails helps keep patients engaged, improves communication, and encourages repeat visits.

How often should I send emails to my patients?

It’s best to send emails once or twice a month. This keeps patients engaged without overwhelming their inbox. Special promotions or important updates can be sent more frequently.

How can email marketing increase patient retention?

By sending personalized content, appointment reminders, and follow-ups, email marketing keeps your practice top-of-mind and encourages regular visits, boosting patient retention.

Can I automate email marketing for my dental practice?

Yes, automation tools can help you send scheduled emails like appointment reminders, birthday greetings, and follow-up emails, saving time while maintaining patient engagement.

What are some email marketing best practices for dentists?

Best practices include personalizing emails, using engaging subject lines, including a clear call to action, optimizing for mobile devices, and ensuring compliance with data protection regulations.

How can I build an email list for my dental practice?

You can build an email list by collecting patient emails during registration, offering incentives like discounts for signing up, and adding email opt-ins to your website and social media.

How can I track the success of my email marketing campaigns?

Use email marketing tools to track open rates, click-through rates, and conversion rates. These metrics help you understand which emails are effective and improve future campaigns.

How can I personalize email marketing for my dental patients?

You can personalize emails by addressing patients by name, sending birthday messages, offering personalized treatment reminders, and recommending services based on patient history.

What regulations should I follow when sending marketing emails?

Ensure your emails comply with GDPR (UK/EU) or CAN-SPAM (US) regulations by obtaining patient consent, including an easy opt-out option, and protecting patient data.

Can email marketing improve appointment bookings?

Yes, email marketing can boost appointment bookings by sending reminders, offering promotions, and including easy-to-click links for online scheduling.

How can I avoid my emails being marked as spam?

To avoid spam filters, use a professional email marketing platform, include a recognizable sender name, avoid excessive use of promotional language, and always provide an easy opt-out option.

Should my dental practice offer promotions through email marketing?

Yes, offering exclusive promotions or discounts via email can incentivize patients to book appointments, increasing engagement and practice revenue.

Our Expert Opinion

“We don’t use email marketing as much for the Neem Tree Dental Practices as we do for Samera. However, whenever we have a special offer or important news we always rely on emails. We also often send emails out at Christmas, Eid and Diwali to our patients just to wish them the best and keep us in their minds.

We also use email marketing whenever we have an special offer like the Invisalign open days we sometimes hold. They’ve always worked well and Front of House + Emails usually = patients through the door.

Just make sure you have all your GDPR ducks in a row and don’t send emails out to your entire database – only those who have given the green light for you to contact them!”

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

A Guide to Income Tax and National Insurance

Income Tax

The 2021/2022 tax year begins 6 April 2021 and ends 5 April 2022 and the following will explain how most individuals will have to pay their income tax:

0% on the first £12,570 (personal allowance)
20% on the next £37,700 (basic-rate band)
40% above £50,270 (Higher-rate threshold)

Basic-rate taxpayer explained

Arun earns a salary of £30,000. This is how his income for 2021/2022 can be calculated:

0% on first 12,570 = £0
20% on the next £17,430 = £3,486
Total income tax bill = £3,486

Higher-rate taxpayer explained

Arun is a sole trader and had profits of £60,000. This is how his income tax for 2021/22 can be calculated:

0% on first £12,570 = £0

20% on next £37,700 = £7,540

40% on final £9,730 = £3,892

Total income tax bill = £11,432

Read our top 10 tax-saving tips here.

Marriage Allowance

Marriage tax allowance allows you to transfer £1,260 of your personal allowance (this is the same amount you can earn tax-free each tax year) to your spouse or civil partner if they earn more than you. It is free to apply for Marriage Allowance. This can reduce your tax bill by £252 every tax year.

In order to benefit from this allowance as a couple, you need to earn less than your partner and have an income of less than £12,570. Your partner’s income has to range between £12,502 and £50,270 for you to be eligible.

You are able to backdate your claim to include any tax year since 5 April 2017 that you were eligible for Marriage Allowance.

In order to register for Marriage Allowance register at: www.gov.uk/marriageallowance

Different incomes and their tax levels

Income between £100,000 and £125,140

If your income exceeds the £100,00, your personal income tax allowance is gradually taken away from you. The more you earn, the less you get for your personal allowance. It is reduced by £1 for every £2 you earn above £100,000. This means that if your income exceeds £125,140 this year, you will have no personal allowance at all.

It is reduced by £1 every £2 you earn after £100,000.

If you are earning over £100,00 this tax will really take its toll on you.

Paying 60% tax

If you are earning a high income of £100,00 or more, the effect is that anyone earning this or higher will face a hefty marginal income tax rate of 60%.

Income over £150,000

Once your income rises above £150,000, you will have to start paying income tax at 45% on most types of your income. This is also known as the additional rate of tax.

You can find out more about how to reduce your tax here.

What income is taxed?

The above tax rates apply to most types on income including:

Salaries
Pensions
Self-employment profits
Rental profits
Sole traders and partnerships

Many types of income are also subject to national insurance, whereas some types of income are subject to different income tax rates.

Contact us to find out more

Dividends

Many individuals receive dividends from stock market companies or from their own private companies. You may get dividend payments if you own shares in a company. You can earn some of your dividend income tax free each year.

You do not have to pay tax on any dividend income that falls within your personal allowance. This is the amount of income you earn per tax year that is tax free.

You do not have to pay tax on dividends from share in an ISA or any dividends received from a pension. You also get a dividend allowance each year.

You only pay tax on any dividend income above the dividend allowance.

For dividends that are taxable, the tax rates on those dividends are usually lower than other types of income. This is due to the fact that dividends are paid out after companies’ after-tax profits. This essentially means that dividend income is taxed twice.

Dividend tax credits have been abolished since 2016. Therefore, it is no longer necessary to gross up your dividends to calculate your tax. It is now a lot simpler, as all tax calculations now work with cash dividends.

Although that is great news, it also comes with some bad news: new tax rates for cash dividends have been introduced. These new rates are 7.5% higher than the previous ones. However, due to the ‘dividend allowance’, the first £2,000 dividend income you receive is completely tax free. Regardless of income, all taxpayers can benefit from this allowance.

For those receiving dividends, these following tax rates apply:

Basic-rate taxpayers: 7.5%
Higher-rate taxpayers: 32.5%
Additional-rate taxpayers: 38.1%

These rates will always be subject to the highest possible tax rate as dividends are always treated as the top slice of your income.

Click here to read our blog on 10 tax saving tips for vets.

How dividend allowance works

The dividend allowance is available for anyone (regardless of income) who has dividend income. The dividend allowance means that you will not have to pay tax on the first £5,000 of the dividend income. The dividend allowance is not given as an additional standalone tax-free amount of £2,000.

Instead, it usually uses up some of your basic-rate band of higher-rate band. Dividends aren’t treated as sole income; they are treated as the top addition to your income and is, therefore, taxed at your highest marginal rate. The dividend allowance exempts the bottom £2,000 of that income from tax.

This means that if you have dividend income taxed at both x7.5% and 32.5%, the allowance will exempt some of the income taxed at 7.5%.

The recent changes in dividend tax rates includes an increase that was designed to extract more tax from those company owners who take most of their income as dividends. The main beneficiaries are higher-rate taxpayers and additional-rate taxpayers who receive relatively small amounts of income which is usually accumulated from stock market investments.

Changes in tax laws over the years has meant that if your investments were not stored and sheltered in a pension, an ISA or a capital trust you would have had to pay 25% or 30.6% tax on all dividend income. However, at present, you can receive £2,000 tax free.

Action Points

Review your dividend income to determine if it falls within the £2,000 dividend allowance for tax-free treatment.
Understand that the dividend allowance consumes part of your basic or higher-rate tax band, rather than acting as a separate tax-free amount.
Assess how your dividends are taxed, considering they are added on top of your other income and taxed at your highest marginal rate.
If applicable, identify portions of your dividend income that may be taxed at different rates (e.g., 7.5% and 32.5%) and apply the allowance to minimize tax liability.
Stay informed about recent changes in dividend tax rates, especially if you are a company owner who receives significant income through dividends.
Consider financial planning strategies such as investing in pensions, ISAs, or capital trusts to shelter dividend income from higher tax rates.

Income tax examples

Example 1:

In 2021/22 Brendan has a pension income of £49,270 and dividend income of £6,000.

The first £12,570 of his pension is covered by his personal allowance and the next £36,700 is taxed at 20%.

This leaves him with £1,000 of basic-rate band remaining.

£2,000 of his dividend income is tax free. The first £1,000 uses up what’s left of his basic-rate band (preventing him from paying 7.5% tax), leaving £1,000 of dividend allowance to use in the higher-rate band (preventing him from paying 32.5% tax).

The final £4,000 of dividend income is taxed at the 32.5% higher rate. 10

Example 2:

In 2021/22 Julia has £60,000 of rental income and £3,000 of dividend income. Her rental income uses up her personal allowance and basic-rate band and some of it is taxed at the 40% higher rate.

The first £2,000 of her dividend income is covered by the dividend allowance, leaving £1,000 subject to tax at the 32.5% higher rate.

The dividend allowance does not use up her basic-rate band because none of her dividends fall into the basic-rate band.

Example 3:

In 2021/22 Leon has a £130,000 salary and £50,000 dividend. With this much income his personal allowance is completely withdrawn.

The first £2,000 of his dividend income is covered by the dividend allowance, leaving £18,000 taxed at the 32.5% higher rate. Along with his salary this takes Leon up to the £150,000 additional rate threshold.

The final £30,000 of his dividend income is taxed at 38.1%.

Note, Leon has dividend income taxed at both the higher rate and additional rate. The dividend allowance reduces the amount of his dividend income taxed at the 32.5% higher rate.

Example 4:

In 2021/22 Martin has a £100,000 salary, £50,000 of rental income and £50,000 of dividend income. With this much income his personal allowance is completely withdrawn.

His salary and rental income take him up to the £150,000 additional rate threshold. The first £2,000 of his dividend income is covered by the dividend allowance, leaving £48,000 taxed at the 38.1% additional rate. The dividend allowance reduces the amount of his dividend income taxed at the additional rate.

UK tax on foreign dividends

Buying into shares worldwide is very common these days, particularly within US companies. This impacts your dividend income as these foreign dividends are often subject to withholding tax.

Usually, the overseas company will deduct tax before actually paying you the dividend. It also works in your favour that the UK has double tax treaties with many countries overseas that reduces the amount of payable foreign tax, this is usually between 10% and 15%.

The dividend withholding tax rate in the US is normally 30% but due to the double tax agreement between the UK and US, the amount of withholding tax can now be reduced to 15%. This can be done by completing form W-8BEN, issued by the US Internal Revenue Service (IRS). In many cases, mostly with online investment, stockbrokers will handle these forms for you on your behalf to ensure a smooth process for you.

This double tax agreement also provides a specific exemption for pension schemes. This means that US dividends can be received tax-free if the shares are held inside a pension scheme. If your overseas shares are held outside a pension scheme (e.g., SIPP) or an ISA, your income from your overseas dividends will be subject to UK income tax. The double tax agreement does not recognise ISAs. ISA investors will still be subject to the 15% withholding tax.

You may be able to claim Foreign Tax Credit Relief when you submit your tax return. This allows the overseas tax paid to be deducted from the owed amount of UK tax. However, the amount deducted cannot exceed the UK tax payable on the income.

Contact us to find out more

A Guide to Corporation Tax

A Guide to Inheritance Tax

Accounts and Tax for Dental Associates Explained

Interest Income

Personal Savings Allowance

Your Personal Savings Allowance is provided at a 0% tax rate for up to £1,000 of your interest income if you are a basic-rate taxpayer and up to £500 if you are a higher-rate taxpayer. The more you earn, the more your personal saving allowance decreases. Additional rate taxpayers do not receive this allowance.

The amount of income that falls within your savings allowance will still count towards your basic-rate or higher-rate limit and can, therefore, affect the level of savings allowance you are entitled to and the rate of tax payable on any savings income you receive in excess of this allowance.

The starting rate band

There is a 0% starting rate for up to £5,000 of interest income. However, in most cases only those who are on low incomes can use it. You are only able to benefit from this 0% starting rate this tax year if your non-savings income is less than £17,570 (this is £12,570 personal allowance + £5,000 starting rate band). Normally, your non-savings income will include your salary and pensions, but it does not include your dividends.

Many of you reading this probably won’t be able to use the 0% starting rate this is due to you having more than £17,570 of non-savings income. However, there may be another option for you. If you are unable to benefit from starting rate band, you may be able to benefit from the Personal Saving Allowance.

Future income tax changes

Rishi Sunak has promised that after the devasting affects of the pandemic, our government is not going to raise the rates of income tax, national insurance, or VAT. This means that most income tax thresholds and allowances will be frozen until 5^th April 2026. This includes:

– Personal allowance £12,570

– Income tax higher rate

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Income Tax and National Insurance FAQs

What is income tax?

Income tax is a tax levied by the government on an individual’s earnings, including wages, salaries, and other forms of income. The amount of income tax you pay depends on your total income for the year and is calculated based on specific tax bands and rates. In the UK, income tax is deducted at source through the PAYE (Pay As You Earn) system for employees, or it is paid directly by self-employed individuals through Self Assessment.

How is income tax calculated in the UK?

Income tax in the UK is calculated based on your total income within a tax year, after deducting any personal allowances. Your income is taxed in bands, with different rates applying to each band. The rates increase progressively, meaning higher income portions are taxed at higher rates. The main bands are the basic rate, higher rate, and additional rate. Your employer usually deducts income tax through PAYE, or you pay it directly if self-employed.

What are the current income tax rates and thresholds?

Income tax rates and thresholds in the UK vary depending on your income. For the 2023/24 tax year:

Personal Allowance: Up to £12,570 (tax-free)
Basic Rate: 20% on income from £12,571 to £50,270
Higher Rate: 40% on income from £50,271 to £125,140
Additional Rate: 45% on income above £125,140

What is National Insurance (NI)?

National Insurance (NI) is a tax in the UK that funds state benefits, including the NHS, state pensions, and unemployment benefits. Employees, employers, and the self-employed pay NI contributions based on their earnings. Different classes of NI apply depending on your employment status, and contributions determine eligibility for certain benefits, such as the state pension.

How does National Insurance differ from income tax?

National Insurance (NI) and income tax are both taxes on earnings in the UK, but they serve different purposes. NI funds state benefits like the NHS and state pensions, while income tax funds general government spending. NI contributions are based on earnings and are paid by employees, employers, and the self-employed. Income tax is calculated on total income and applies at progressive rates depending on income levels. NI contributions also affect eligibility for certain benefits, unlike income tax.

When do you start paying National Insurance?

You start paying National Insurance (NI) when you reach the age of 16 and earn above the minimum earnings threshold. For the 2023/24 tax year, this threshold is £242 per week for employees and £12,570 annually for the self-employed. Contributions are made through your pay if you’re employed or via Self-assessment if you’re self-employed.

What are the different classes of National Insurance?

There are several classes of National Insurance (NI):

Class 1: Paid by employees and employers based on earnings.
Class 1A/1B: Paid by employers on employee benefits.
Class 2: A flat rate paid by self-employed individuals earning above a certain threshold.
Class 3: Voluntary contributions to fill gaps in NI records.
Class 4: Paid by self-employed individuals based on profits.

How can I check my income tax and National Insurance contributions?

You can check your income tax and National Insurance contributions through your personal tax account on the HMRC website. This account lets you view your tax payments, and contributions history, and update your details. You can also see how much tax you’ve paid and what you owe, and request refunds if applicable.

Can I claim relief on income tax?

Yes, you can claim income tax relief in the UK through various allowances and deductions. Common forms of relief include Personal Allowance, Marriage Allowance, and pension contributions. Charitable donations, job-related expenses, and investment-related reliefs like the Enterprise Investment Scheme (EIS) can also reduce your tax liability. To claim these, you may need to submit a self-assessment tax return or inform HMRC directly.

What happens if I don’t pay National Insurance?

If you don’t pay National Insurance (NI) when required, you may face penalties, interest on unpaid contributions, and loss of eligibility for certain state benefits like the state pension and maternity allowance. HMRC may also take enforcement action to recover unpaid amounts. Keeping up with NI payments is crucial to avoid these consequences.

How does self-employment affect income tax and National Insurance?

Self-employment affects income tax and National Insurance (NI) by requiring you to pay both through the Self Assessment process. You pay income tax on your profits after deducting allowable business expenses. For NI, you’ll pay Class 2 contributions if your profits exceed a certain threshold, and Class 4 contributions based on a percentage of your profits. You must keep accurate records and submit an annual tax return to HMRC.

What is PAYE, and how does it relate to income tax?

PAYE (Pay As You Earn) is a system used by HMRC to collect income tax and National Insurance directly from your wages or pension. Your employer deducts these amounts from your salary before you get paid and sends them to HMRC on your behalf. This ensures that you pay the correct tax throughout the year based on your income, reducing the need for additional payments or refunds at the end of the tax year.

How do pension contributions affect income tax?

Pension contributions can reduce your taxable income, thereby lowering the amount of income tax you pay. Contributions are often made before tax is applied (through salary sacrifice) or eligible for tax relief if paid directly into a personal pension. This means you effectively get back the tax you would have paid on that portion of your income, depending on your tax rate

What is a tax code, and how does it work?

A tax code is a series of numbers and letters used by HMRC to determine how much income tax should be deducted from your pay or pension. It reflects your tax-free allowance and any adjustments for other income, benefits, or tax underpayments. The most common tax code is 1257L, indicating that you’re entitled to the standard tax-free Personal Allowance. Your employer uses this code to calculate the tax to deduct under the PAYE system.

How are bonuses taxed in the UK?

In the UK, bonuses are taxed as part of your income, meaning they are subject to the same income tax and National Insurance contributions as your regular salary. The bonus is added to your salary for the tax year and taxed according to your income tax band. Depending on your tax code and income, your bonus could push you into a higher tax bracket, resulting in a higher tax rate on the bonus amount.

What should I do if I overpay income tax?

If you overpay income tax in the UK, you can request a refund from HMRC. This can be done by completing a self-assessment tax return or by using HMRC’s online service. HMRC will review your case and, if an overpayment is confirmed, they will issue a refund either through your bank account or by check.

Can I claim back National Insurance contributions?

In most cases, you cannot claim back National Insurance contributions, as they are used to fund state benefits like the NHS and state pensions. However, if you overpay due to an administrative error or if you paid NI while earning below the threshold, you can apply for a refund. You would need to contact HMRC to review your contributions and process any refund due.

How do tax-free allowances work?

Tax-free allowances in the UK reduce the amount of your income that is subject to tax. The most common is the Personal Allowance, which allows you to earn a certain amount each year (currently £12,570) tax-free. Other allowances include the Marriage Allowance, which lets one spouse transfer part of their unused allowance to the other, and the Dividend Allowance, which is tax-free income from dividends up to a certain limit.

What is a P60 and how is it used?

A P60 is an end-of-year tax document provided by your employer that summarizes your total earnings and the tax and National Insurance contributions you’ve paid during the tax year. It’s essential for confirming your income and tax payments, and it can be used to claim tax refunds, apply for tax credits, or verify your tax records. You should keep your P60 for at least 22 months after the end of the tax year.

What is the impact of tax bands on my earnings?

Tax bands in the UK determine the rate at which your income is taxed. As your income increases, portions of it fall into different bands with progressively higher tax rates. The basic rate (20%) applies to income up to £50,270, the higher rate (40%) to income between £50,271 and £125,140, and the additional rate (45%) to income above £125,140. These bands impact your overall tax liability, with higher earners paying more tax on their income.

Further Information on Accounts & Tax

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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How to Start a Dental Practice

In this hour-long webinar, Arun and Jyoti discuss the essential things you need to know to start a successful, profitable private practice.

How to Ensure Your Start-up Dental Practice Takes off in a Year

Dental Practice Startup FAQs

How to Start a Dental Practice in 13 Steps

Starting a Dental Practice: Get Started

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

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Dental practice start-up

Learn More: Starting a Dental Practice

For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How to Automate Your Finances with Xero and Hubdoc

In this webinar, Nathan takes you through the software that Samera use for all of our clients to automate their financial function and streamline their accounts.

Xero vs Sage: A Samera Review

Xero: A samera Review

Sage: A samera Review

Further Information on Accounts & Tax

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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Should I Buy Leasehold or Freehold?

In these episodes of the Dental Business Guide podcast, we take a look at the differences between leasehold and freehold properties and which one is better for a dental practice.

You can listen to all of the the Dental Business Guide podcast episodes here.

I often get the question should I get a leasehold or a freehold for a new start up practice? Whilst getting a freehold is something that many want, it’s not always the best premises to get.

Choosing how you own the place where you run your dental practice is a really important decision. There are two main ways people usually own property: leasehold and freehold. Each has its own good and not-so-good parts. The choice you make depends on your situation. In this guide, we’ll look into the differences between leasehold and freehold, their pros and cons, and what you should think about before making a final decision. Whether you’re just starting out or planning to move your practice, this guide will help you find the best way to own your dental space.

Understanding the difference between leasehold and freehold

When starting your dental practice, a big decision is whether to get a leasehold or freehold property. It’s crucial to understand the difference between these options to make a smart choice that aligns with your long-term goals and finances.

Let’s break down the terms. A leasehold property is like renting—you pay the owner to use the space for a set time. With a freehold property, you own both the land and building, giving you full control without dealing with a landlord.

Both options have their pros and cons. Leasehold properties often have lower upfront costs, which is great for new practices or those with limited funds. They also offer flexibility for moving or expanding. However, lease agreements come with restrictions, and you may face challenges when the lease ends.

On the other hand, owning a freehold property provides stability and potential value growth. You have full control to make changes and avoid ongoing rent payments. But the initial investment is high, and selling a freehold property can be more complicated than ending a lease.

Ultimately, the choice depends on your unique situation, finances, and long-term goals. To make a successful decision for your practice, carefully consider the pros and cons of each option and seek professional advice.

Click here to read our article on Should I Start or Buy a Dental Practice?

Pros and cons of leasehold for dental practices

When setting up or moving a dental practice, a crucial decision is whether to go for a leasehold or freehold property. Before you decide, it’s important to carefully weigh the pros and cons of each option.

Let’s look at the perks of leasing a dental practice building. One major advantage is the flexibility it offers. Leasing lets you choose a location that suits your needs, whether it’s in a busy commercial area or a quieter suburban spot. Leases also usually have shorter terms, making it easier to move or adjust to changing business needs.

Another plus is the lower initial costs linked with leasehold properties. Leasing generally requires a smaller upfront investment compared to buying a freehold property, making it especially beneficial for new dental practices or those with limited finances.

However, there are some drawbacks to leasehold properties that you should be aware of. The possibility of regular rent increases is a significant downside. Since leases often have set terms, landlords might raise the rent at the end of each term, impacting your profitability. You might also face restrictions on making changes to the property, as these alterations would need the landlord’s approval.

Moreover, leasehold properties come with the inherent risk of lease termination or renewal. If the landlord decides not to renew the lease or sell the property while you’re still there, you could encounter challenges based on your lease terms. Such situations have the potential to disrupt your dental practice, forcing you to relocate, which can be both time-consuming and costly.

In the end, whether you choose a leasehold or freehold for your dental practice depends on your specific circumstances and long-term goals. Analyzing your finances, growth expectations, and desired level of control over the property is crucial. Seeking advice from professionals like realtors, attorneys, and accountants can provide valuable insights and help you make an informed decision that aligns with your practice’s needs and aspirations.

Check out our podcast on How to set up or buy a dental practice

Flexibility in location and premises

When starting your dental practice, a big decision is whether to go for a leasehold or freehold property. This choice affects where you can set up and how you can use the space.

Location is the fundamental point when doing a start-up. If a freehold is available, ask yourself, why is it available in the first place? Is it because the current owner cannot rent it out, as it’s not in a great position or location? Or is it in a bad state of repair that needs much work to make it habitable?

Of course, a freehold in a strong location usually features a higher price tag, but sometimes you can get a good deal, but it’s rare, even in these times.

Leasehold properties offer flexibility in choosing a location. You can pick a spot that’s convenient for your patients, whether it’s in a busy city center or a bustling suburban area. Leaseholds often come ready to use, saving you money on setting up the space.

On the flip side, choosing a freehold property gives you long-term stability and control over your practice’s space. With a freehold, you own the entire property and can make any changes without asking the landlord. This lets you customize the space to fit your needs and create a unique environment that reflects your brand.

Consider your future plans and the growth potential of your dental practice. If you expect to expand your services or patient base, a freehold property may offer more room for growth compared to a leasehold, where you might be limited by the lease terms. However, keep in mind that freehold properties usually come with higher initial and ongoing maintenance costs, so it’s crucial to think about the financial side before deciding.

Ultimately, your specific needs and goals should guide your choice between a leasehold and freehold property. Consider factors like location, long-term plans, and financial feasibility as you weigh the pros and cons of each option. Making an informed decision ensures that you choose the option that best suits your practice and puts you in a good position for the long haul.

Lower upfront costs

When deciding between leasehold and freehold for your dental practice, the initial costs are a crucial factor.

Cheap rent, or a cheap freehold, usually means it is not going to be in a strong enough location to get the new patient visibility you desire, ultimately, you do get what you pay for. Whilst it may be tempting to get some premises for a squat, especially as there are so many empty units at the moment, do your research and make sure you choose a strong location with high visibility.

Leasehold arrangements usually mean renting a space for a set period, often with the option to renew the lease. Compared to buying a freehold property, leasehold options typically have lower upfront costs. Instead of a big lump sum payment, you’ll likely need to pay a security deposit or advance rent, making it more affordable for new dental practices or those with limited capital.

Moreover, leasehold agreements often make the landlord responsible for the property’s upkeep and repairs. This can shield you from unexpected expenses related to building renovations or fixes, as those are usually the landlord’s responsibility.

On the flip side, freehold properties involve buying both the building and the land. While this may require a significant upfront investment, there could be financial benefits in the long run. By owning the property, you have the potential for its value to increase over time, and you can also make changes or additions without needing approval from a landlord.

The decision between leasehold and freehold should be based on your specific situation, financial capacity, and the long-term goals of your dental practice. It’s crucial to carefully assess the upfront costs and consider how they align with your budget and plans.

Potential limitations and restrictions

When picking a leasehold or freehold property for your dental practice, it’s crucial to think about the potential downsides and restrictions that come with each choice.

One possible restriction of a leasehold property is the length of the lease agreement. Depending on what you negotiate with the landlord, you might only be able to use the property for a set period. This can limit your flexibility and long-term security, as you might need to rethink or find a new space when the lease ends. Also, leasehold properties often come with rules set by the landlord or property management, restricting certain activities or changes you can make.

In contrast, freehold properties give you ownership and control. Owning a freehold property means you can do whatever you want with the space without needing permission. This is especially valuable if you have specific needs for your practice layout or equipment. However, keep in mind that owning a freehold property also means taking on responsibilities and costs like property taxes, maintenance, and repairs.

Another potential obstacle to consider is the financial aspect. Leasehold properties often involve regular rental payments, which can impact your cash flow. On the other hand, buying a freehold property usually requires a larger upfront investment, including mortgage payments if financing is needed. To figure out which option is more financially viable for your dental practice, carefully assess your financial situation and projections.

Strong locations in town centers still command good rents. Yes, they may have dropped, but going in with a ridiculously low offer for a premium space may be tempting, but it’s likely to be ignored promptly too. Do your research properly, see who are the other occupiers, what terms can you realistically negotiate, are you in competition with others. Location is paramount when doing a start-up. Get this wrong and you will be facing an uphill battle from day one.

Ultimately, the choice between leasehold and freehold depends on various factors, including your long-term goals, financial capabilities, and the specific terms offered for each option. It’s advisable to consult with professionals like realtors, lawyers, and financial advisors who can provide valuable guidance and help you make an informed decision that aligns with your unique needs and circumstances.

Risk of rental increases and lease renewals

When deciding between a leasehold or freehold property for your dental practice, it’s crucial to think about the potential risks tied to rental increases and lease renewals.

Leasehold properties often come with the downside of regular rent reviews. These reviews can lead to significant hikes in rental costs, impacting your profit and long-term financial stability. It’s important to carefully review your lease agreement, especially regarding how often rent reviews occur and the potential magnitude of increases.

Lease renewals can also be a gamble for dental practice owners. When your lease term ends, negotiating a new lease with the property owner may be required. This can bring uncertainties and potential disruptions to your business operations. If property owners decide to raise rent, change lease terms, or not renew the lease at all, you might have to relocate your practice.

Choosing a freehold property, on the other hand, eliminates the risk of rental increases and lease extensions. As the sole owner of the property, you avoid the uncertainties that come with lease agreements. This provides more stability and allows you to plan for the long-term growth and success of your dental practice without worrying about unexpected changes in rental terms.

In the end, your dental practice’s specific situation and long-term goals should drive your choice between leasehold and freehold. It’s crucial to carefully weigh the potential risks and benefits associated with rental increases and lease renewals when making this important decision. Consulting with a legal expert and considering your financial capabilities will help you make an informed choice that best suits the unique needs of your practice.

Pros and cons of freehold for dental practices

Deciding between a freehold or leasehold property is a big deal if you want to own a dental practice. It’s crucial to think about the pros and cons of freehold before making a decision, even though both options have their perks.

One major advantage of owning a freehold property for your dental practice is the security it brings. You have the freedom to make any changes to the property without asking the landlord, as you fully own it with a freehold. This is especially helpful if you have long-term plans for your practice and want complete control over its physical space.

Additionally, owning a freehold property can be a wise investment. Property values usually go up over time, and if you decide to sell your dental practice later on, you might benefit from the increased property value. This can give you more financial flexibility and a significant return on your initial investment.

However, freehold ownership comes with its own considerations. The upfront cost of buying a property outright is a significant downside. It requires a substantial capital investment, which may be challenging for some dental professionals, especially those starting their practice or looking to expand.

Moreover, as the freehold owner, you’re solely responsible for the property’s upkeep. This means you’ll have to take care of any needed renovations or repairs, which could cost you more money and take up more of your time.

In summary, choosing a freehold property for your dental practice can provide a sense of security, investment potential, and full control over the space. However, the upfront costs and ongoing responsibilities of freehold ownership need careful consideration. By weighing the pros and cons, you can make an informed decision that aligns with your long-term goals and financial capabilities.

Did You Know?

Rarely owned by the dentist: A 2022 survey by the Dental Elite found that only 40% of UK dental practices are freehold, highlighting the prevalence of the leasehold model. (Source: https://dentalelite.co.uk/)

Potential hidden costs: Leasehold contracts often involve ground rent and service charges, which can significantly impact your annual expenses. (Source: https://www.ft-associates.com/)

Limited control over signage: Your landlord may restrict the size and style of signage, impacting your practice’s visibility. (Source: https://www.langford-rae.co.uk/articles/what-is-the-difference-between-freehold-and-leasehold)

Potential for additional income: Owning the freehold allows you to rent out unused space to generate additional income, such as by partnering with another healthcare professional. (Source: https://dentalelite.co.uk/)

Greater flexibility for expansion: Owning the freehold simplifies obtaining planning permission for property extensions or renovations to accommodate your practice’s growth. (Source: https://www.ft-associates.com/)

Potential tax benefits: Capital allowances may be available for certain improvements made to the property, reducing your tax liability. (Source: https://www.ad-solicitors.co.uk/dental-law)

Impact on borrowing costs: Lenders typically offer lower interest rates for freehold properties, reducing your long-term financing costs. (Source: https://www.ft-associates.com/)

“Marriage value” can be significant: This additional value, reflecting the specific use as a dental practice, can substantially increase the property’s selling price. (Source: https://dentalelite.co.uk/)

Full ownership and control over the property

When starting your dental practice, one of the major decisions you’ll face is whether to have complete control over the property or go for a leasehold arrangement. This choice can have a long-term impact on the financial growth and stability of your practice.

Full ownership, also known as freehold, means you have total control over the property. You don’t need permission from a landlord to make any changes or improvements to meet your specific needs. This level of control allows you to create a space that reflects your practice’s brand and vision.

Moreover, full ownership offers the potential for long-term capital appreciation. As the property owner, you can benefit from any increase in its value over time, which can be a valuable asset for your business. Additionally, you won’t have to worry about rising rental costs or the possibility of being asked to leave when your lease ends.

However, it’s crucial to consider the financial impact of full ownership. Buying a property outright requires a significant upfront investment, which may not be feasible for every dental practice. Before choosing this option, carefully evaluate your financial situation and ability to secure financing.

Also, owning a property comes with additional responsibilities. You’ll be responsible for all costs related to upkeep, repairs, insurance, and property taxes. When assessing the financial viability of full ownership, it’s important to factor in these ongoing expenses.

In the end, the decision between full ownership and a leasehold arrangement depends on your specific circumstances and long-term goals for your dental practice. While full ownership provides unmatched control and potential financial benefits, it comes with a significant upfront investment and ongoing obligations. Take the time to weigh the pros and cons, consult with experts, and make an informed decision that aligns with the needs and expectations of your practice.

Potential for long-term financial benefits

When deciding between a leasehold or freehold property for your dental practice, it’s crucial to think about the potential long-term financial benefits. Each option has its pros and cons, so it’s important to assess which aligns best with your business goals and financial situation.

Leasehold properties often provide more flexibility in terms of location and budget. With a lease agreement, you can choose an ideal spot for your dental practice without the upfront costs of buying a property. This can be especially helpful if you’re just starting out or want to focus on marketing and equipment. Additionally, leasehold properties may come with shared maintenance responsibilities, reducing potential financial burdens in the long run.

On the flip side, freehold properties offer the potential for long-term financial stability and value growth. You have complete control over how the property is used and developed because you own it. You can benefit from both rental income and potential capital gains as property values increase over time. Owning a freehold property also gives you the flexibility to make changes and improvements without needing permission from a landlord.

However, the financial implications of owning a freehold property should be considered. Upfront costs, such as a larger initial investment and ongoing maintenance expenses, need to be factored into your decision-making process. Additionally, the property market can be unpredictable, and the value of your freehold property may fluctuate over time, impacting your long-term financial benefits.

In the end, the choice between leasehold and freehold for your dental practice depends on various factors, including your financial capabilities, business objectives, and long-term plans. To thoroughly evaluate your options and make an informed decision that aligns with the requirements and goals of your practice, it’s recommended to consult with a property specialist or financial advisor.

Higher upfront costs and maintenance responsibilities

When choosing between leasehold and freehold for your dental practice, a crucial factor to consider is the higher upfront costs and ongoing maintenance responsibilities associated with each option.

In the case of a leasehold, you might need to pay a lease premium and other upfront expenses like agent and legal fees. This initial financial commitment can be significant, requiring careful financial planning. You might also have to provide a personal guarantee or a rental deposit, adding to the initial costs.

Moreover, as a leasehold tenant, you’re responsible for ongoing upkeep. This includes following lease terms related to maintenance and improvements, as well as handling property repairs and maintenance. These costs vary based on the property’s condition and lease agreement terms. It’s important to factor in these ongoing costs when considering a leasehold option for your dental practice.

On the flip side, freehold ownership comes with a higher upfront cost but eliminates the need for ongoing rental payments. When purchasing a freehold property, you should consider the purchase price, legal fees, inspections, and potential renovation costs. Although the initial investment may be higher, you gain the advantage of complete ownership and control over the property.

Maintenance responsibilities for a freehold property rest solely on the owner. As the owner, you have the freedom to manage and maintain the property according to your preferences and needs. However, it’s crucial to allocate sufficient funds for any necessary repairs or improvements over time.

Your preferences, long-term goals, and financial situation will all play a role in deciding between leasehold and freehold for your dental practice. Before making an informed decision about which option is best for your dental practice, carefully evaluate the higher initial costs and maintenance obligations associated with each option.

Limited flexibility for relocation

When deciding between leasehold and freehold for your dental practice, consider how much flexibility you might need for potential moves.

With a leasehold property, you’re bound by the lease agreement’s terms, often for a set period. If you decide to relocate your dental practice during the lease, you could face challenges and costs associated with breaking the agreement. Moving a dental practice involves keeping patients, finding a suitable location, and transferring equipment and records. So, if you anticipate needing flexibility in the future, a leasehold property might not be the best fit.

On the flip side, opting for a freehold property provides more freedom and control. You can move your dental practice to a new location without being tied to a lease agreement because you own the property and can sell or lease it. This flexibility is valuable if you foresee the need to expand, downsize, or relocate your practice.

However, owning a freehold property comes with its own responsibilities, like covering the costs of repairs, upkeep, and property taxes. Owning a dental practice can be expensive, and it’s crucial to keep these factors in mind.

Are freeholds available in the UK? It depends where you are in the country. If you are in central London, then there’s not a lot of freeholds around. There are mostly leaseholds. But if you are out outside London, then there can be freeholds available. When people are looking at a leasehold, they seldom ask if the freehold is available, because very often the seller owns the freehold. Now, initially, they might not want to sell it, but when they realise how much it’s actually worth, they might want to sell it. And also just putting that idea into their head makes a big difference. And probably there are more freeholds becoming available around the country, mainly because shops and offices are becoming more vacant and high streets are becoming more occupied by service industries. So there’s every opportunity, especially if someone owns, let’s say they have four or five shops in a row, and three of them are vacant. You got to look at that and say, well, they’re not getting any rent. So they might be willing to sell one. So it’s always worth asking.

Ultimately, the choice between leasehold and freehold for your dental practice depends on various factors, including your long-term goals, financial situation, and the flexibility you desire. Carefully weigh the pros and cons of each option and consult with professionals, such as realtors and financial advisors, to make an informed decision that aligns with your specific needs and circumstances.

Factors to consider when choosing between leasehold and freehold

When deciding between leasehold and freehold for your dental practice, there are key factors to consider. Understanding the pros and cons of each option can help you make a well-informed decision aligned with your practice’s long-term goals.

Firstly, assess your financial situation. With freehold ownership, you have full control over the property and no ongoing rent payments. However, purchasing a property outright requires a substantial upfront investment, which might be challenging for many dental practices, especially those in their early stages.

On the other hand, leasehold arrangements offer more financial flexibility initially. Leasing allows you to save money that can be allocated to essential aspects of your practice, like staff and equipment. Nevertheless, carefully review the lease agreement, including rental terms, renewal options, and any potential restrictions imposed by the landlord.

Next, consider your long-term strategies. Leasing may be preferable if you plan to expand your dental practice or anticipate a future move. Shorter lease terms can help you assess your practice’s viability before committing to a long-term property investment. However, freehold ownership provides stability and the potential for property appreciation over time.

Also, factor in market dynamics and location. Evaluate the cost and availability of suitable properties in your desired location. Purchasing a freehold property can be a good investment, especially in sought-after areas with limited options. Leasing, on the other hand, offers flexibility and reduces financial risks in areas with a volatile market or uncertain growth prospects.

Lastly, seek professional guidance from real estate experts or attorneys experienced in commercial property transactions. They can guide you through the intricacies of leasehold and freehold arrangements, ensuring you are aware of your legal responsibilities, potential challenges, and negotiation opportunities.

The choice between leasehold and freehold for your dental practice depends on factors such as your financial capacity, long-term plans, market conditions, and preferences. By carefully considering these aspects and seeking professional advice, you can make an informed decision that best aligns with the needs and goals of your practice.

Long-term goals and plans for the dental practice

When deciding between leasehold and freehold for your dental practice, consider your long-term goals and plans. The type of ownership you choose can significantly impact the future stability and growth of your practice.

If you have a clear vision of expanding your practice, adding new services, or even opening multiple locations, freehold ownership provides greater flexibility and control. Owning the property outright allows you to make structural changes, expand the space, or implement necessary alterations without seeking permission from a landlord. This level of independence is valuable when customising your practice to meet specific needs and accommodating future growth.

On the contrary, a leasehold arrangement may be more suitable if your long-term plans focus on stability, maintaining your practice’s current size, and scope. Leasing offers advantages such as easier relocation in emergencies, lower maintenance costs, and reduced initial expenses. This option provides more flexibility in changing your practice’s location or downsizing if the need arises.

Consider the financial implications as well. Purchasing a freehold property requires a significant initial investment, including a down payment and mortgage payments. On the other hand, leasing typically involves monthly rental payments, which may be more manageable for some dental practices, especially those in their early stages.

Evaluate the local market conditions and trends. If property values in your area are rapidly increasing, a freehold property could be a good long-term investment with the potential for appreciation. However, if the market is uncertain or property values are stagnant, leasing might be a more prudent choice, helping you avoid potential financial risks associated with property ownership.

Understanding your long-term goals and plans for your dental practice is crucial when choosing between leasehold and freehold. By carefully assessing your growth potential, financial capabilities, and market conditions, you can make an informed decision that aligns with your vision for the future of your practice.

Financial considerations and budget constraints

When deciding between leasehold and freehold options for your dental practice, your financial situation and budget constraints are crucial factors. Both choices have their pros and cons, so it’s important to thoroughly examine the details before making a careful decision.

Leasehold arrangements typically involve renting a space from a landlord for a set period, often several years. Compared to purchasing a freehold property, this option usually requires a lower initial investment. Leasehold agreements may also provide more flexibility, making it easier to move or expand your practice if necessary.

However, it’s crucial to fully assess the financial implications of leasing. Consider monthly rental expenses, additional fees or service charges, and the possibility of lease increases over time. Renting may result in long-term costs that could impact your practice’s profitability, especially if rental rates significantly rise.

On the other hand, freehold ownership gives you complete control over your practice’s premises. It offers stability and the potential for long-term investment. Purchasing a freehold property allows you to potentially benefit from property appreciation over time and build equity.

Nevertheless, acquiring a freehold property requires a substantial initial investment, including higher mortgage payments, legal fees, and down payments. It’s important to consider the impact on your cash flow and overall budget when assessing your financial capabilities.

A financial advisor or accountant can assist you in evaluating your financial situation and provide insights into the long-term financial implications of each option, helping you make an informed decision. Additionally, consider your practice’s growth plans, future needs, and how the chosen course of action aligns with your business objectives.

Remember that every dental practice is unique, and what works for one may not work for another. By carefully assessing your financial considerations and budget limitations, you can make a decision that best suits your practice’s needs and lays a solid foundation for its future success.

Location and market dynamics

The success of any dental office relies heavily on its location. It can impact how accessible, visible, and busy your practice is. When deciding between leasehold and freehold options for your dental practice, it’s crucial to thoroughly analyse the location and market dynamics of the area.

Start by assessing the demographics of the location. Look at factors like population density, age groups, income levels, and overall dental health awareness in the area. Understanding your target market will help you estimate the potential patient base and the demand for dental services.

Market dynamics are equally important. Research the local competition, identify the number of existing dental practices, and understand their specialties. This insight will help you gauge the level of competition you might face and assess the market saturation. Additionally, explore the area’s potential for growth, considering any upcoming changes or developments that could impact the demand for dental services.

Consider accessibility and convenience factors. Evaluate proximity to public transportation, parking availability, and major roads. An easily accessible location with ample parking options can attract more patients and enhance their overall experience.

The visibility of the practice is another aspect to consider. Being in a popular commercial area or on a busy street can increase brand awareness and attract new patients. However, if your practice relies heavily on referrals, being situated in a medical complex or close to other healthcare providers may be advantageous.

In summary, conducting a thorough analysis of the location and market dynamics is crucial when choosing between leasehold and freehold options for your dental practice. Understanding demographic factors, competition, growth potential, accessibility, and visibility will help you make an informed decision that aligns with your practice goals and target market.

Click here to read our article on How to market a dental practice.

Personal preferences and risk tolerance

Choosing between leasehold and freehold for your dental practice involves considering your personal preferences and risk tolerance. These factors are crucial in determining the best option for your practice, as each choice comes with its own set of advantages and disadvantages.

Some dentists may prefer the flexibility and lower upfront costs associated with a leasehold arrangement. Leasing allows you to occupy a space without the long-term commitment and financial burden of purchasing a property. It provides an opportunity to test the viability of a location or practice before making a full commitment. Additionally, lease agreements often include maintenance and repairs as part of the contract, relieving you of these responsibilities.

On the other hand, dentists who value stability and long-term investment may lean towards freehold ownership. Complete control over your practice’s location and the ability to make necessary changes or improvements come with owning the property outright. Furthermore, it offers the potential to build equity and generate additional income by renting out unused space.

Considering your risk tolerance is also crucial. Property ownership entails risks such as market fluctuations and responsibility for upkeep and repairs. If you are willing to take on these responsibilities and have a higher risk tolerance, freehold ownership might be a better fit for you. Conversely, if you prefer to focus solely on your dental practice and have a lower risk tolerance, leasing may be a more suitable option.

Ultimately, the decision between leasehold and freehold depends on your personal preferences, financial situation, and the long-term goals of your dental practice. Carefully evaluating your needs and weighing the pros and cons of each option will help you make a decision aligned with your vision for the future of your practice.

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Examples of dental practices choosing leasehold or freehold

Let’s explore some examples to help you make an informed decision on whether to choose leasehold or freehold for your dental practice. These case studies offer valuable insights into the experiences of dental practice owners who have opted for these choices in the past.

Case Study 1, keeping costs lower: Dr. X, a well-trained dentist, decided to establish her own dental clinic in a bustling downtown area. After careful consideration, she opted for a leasehold property. Her decision was mainly influenced by the prime location of the building, ensuring a continuous flow of potential patients. By choosing a lease, Dr. Smith avoided the high initial costs associated with purchasing a freehold property in such a sought-after location.

Case Study 2, more control: Dental Group X, a multi-location group practice, chose the freehold option for their main clinic. With plans for long-term customization and expansion to accommodate their growing patient base and specialised services, they wanted the freedom to make necessary changes without landlord approval. Owning the property gave them control, allowing them to save costs in the long run and have more say in their practice’s physical space.

Case Study 3, more flexibility: Dental Practice X, a newly established dental practice opted for a leasehold property in a suburban area. As a startup, they were attracted to leasing due to lower initial costs. The flexibility in lease terms allowed them to relocate or expand as their practice grew. This choice enabled them to focus their initial investments on acquiring cutting-edge equipment and hiring skilled staff.

These case studies highlight that factors such as location, financial considerations, long-term goals, and the need for flexibility all play a role in the decision between leasehold and freehold ownership. By examining your specific needs and learning from real examples, you can make an informed decision aligned with the unique circumstances and expectations of your dental practice.

Expert advice and considerations from industry professionals

When deciding between leasehold and freehold options for your dental practice, it’s crucial to seek guidance from experts and consider the insights of professionals in the field. These specialists can provide valuable advice based on their experience and knowledge of the dental industry.

Financial considerations are paramount. Consulting with a financial advisor specializing in real estate and business properties can help you understand the long-term financial implications of each option. They can analyze your practice’s financial health, projected growth, and market conditions to determine which option aligns better with your goals.

Additionally, connecting with a commercial real estate agent experienced in dental properties is a wise move. They can offer insights into your location, market trends, and potential opportunities that may influence your decision. Their expertise can help you assess the pros and cons of leasehold and freehold properties in specific areas and identify any potential challenges or advantages.

For legal aspects and consequences related to leasehold and freehold options, legal professionals, particularly those specializing in commercial real estate, can provide invaluable assistance. They can review contracts, lease agreements, and property documents to ensure you are fully aware of your rights and any limitations as a tenant or owner.

Industry associations and dental practice experts can also offer valuable insights into the practical considerations of buying or leasing a dental practice. They can provide information on licensing requirements, regulatory compliance, and operational considerations tailored to the dental profession.

In conclusion, seeking advice from these industry experts will help you make an informed decision that considers market conditions, growth plans, location, legal considerations, and other factors crucial to the success of your dental practice. Their expertise will ensure that you choose the option that best suits your unique needs and goals.

Assessing the potential return on investment for leasehold and freehold options

When deciding between leasehold and freehold options for your dental practice, it’s crucial to assess the potential return on investment. This evaluation will help you determine the option that best aligns with your long-term success and financial goals.

When considering a leasehold option, carefully examine the terms and conditions of the lease agreement. Factors like the lease term, lease accelerations, and potential limitations affecting your practice’s growth should be taken into account. Additionally, assess the costs associated with leasehold improvements and ensure they fit within your budget.

On the other hand, opting for a freehold property means you have complete ownership of the premises, providing stability and the potential for long-term financial gains. However, it’s vital to evaluate the initial investment required to purchase the property and any potential ongoing costs for maintenance and repair.

A lot of people look at the asset value and say, oh, that’s a marvellous asset value, but then look at the damage to kind of cost you. So, if you’re buying a three- or four-pound freehold, as opposed to buying a 2-million-pound freehold, there’s a big difference in cost. So, you’ve got to be careful. The lenders will want to look at what profit the business makes, how that will play out, how profit will be distributed between the owner of the business because obviously, you need to get paid for doing the work, and also the bank. And they will build certain things into that, and they will build certain buffers and reservations in there to protect them and to protect the owner. There are things other people don’t understand, they think the rent or the business can afford just to cover that mortgage but, in most cases, the banks will want that covered one and a half, one and a quarter time, because that buffer allows for interest rates to go up even further in and not hurt the business. If you’re buying the business without the freehold, obviously, they require a huge amount of information. Because they’re going to lend it unsecured.

The lenders will lend you the money for a freehold for over 20-25 years, on average, sometimes a bit longer. If you’re buying the practice at the same time, they will often then give you 20 years to repay the purchase price of the practice as well. Whereas if it’s leasehold, it will be a maximum of 15 years. So that extra five years would bring down your costs on purchasing the actual business quite considerably. The fact is that on most freeholds when you’re buying premises for your binding existing practice, lenders will give you 100%. So you haven’t got to put a deposit down and that is a huge advantage. Because if you are doing a startup, for instance, any sort of startup business, the banks will then lend you 70%. So being an owner gives you the advantage of them lending you all the money, so you don’t put any money in yourself for the freehold, you only have to find the money for the purchase of the business and you get the extended term for the actual business as well.

To make an informed decision, consider conducting a thorough cost-benefit analysis. Calculate the expected return on investment for both leasehold and freehold options, taking into account factors such as your practice’s expected growth, market trends, and the potential resale value of the property.

Seeking advice from professionals, such as financial advisors or commercial real estate specialists, is advisable. Their expertise can provide valuable insights and guidance in navigating the complexities of evaluating the potential return on investment.

Remember that every dental practice is unique, and what works for one may not work for another. By carefully assessing the potential return on investment for leasehold and freehold options, you can make an informed decision aligned with your practice’s financial objectives and set the groundwork for its long-term success.

Practical tips for negotiating lease agreements or purchasing a freehold property

When deciding between leasehold and freehold for your dental practice, it’s crucial to consider the practical aspects of negotiating lease agreements or acquiring a freehold property. Utilise these tips to navigate the process and make an informed decision that aligns with your practice’s requirements.

Clarify your long-term goals: Before entering negotiations or making purchases, have a clear understanding of your dental practice’s long-term objectives. Plan for growth, potential expansion, and financial security. This clarity will help you determine which option aligns better with your goals.

Seek professional advice: Consult with experts like a dental-focused commercial real estate agent or real estate attorney. Their expertise can provide valuable insights and guidance throughout the buying or negotiating process, ensuring informed decisions based on accurate information.

Analyse the local market: Thoroughly investigate the local real estate market, including lease rates and property prices for dental practices. Understanding market dynamics will empower you to negotiate or purchase with confidence.

Evaluate lease terms or freehold conditions: Carefully review the terms of a lease agreement or the conditions for purchasing a freehold property. Pay attention to any restrictions that may impact your dental practice, such as rent increases, lease duration, and maintenance obligations. Ensure the terms align favourably with your practice’s requirements.

Negotiate favourable terms: If opting for a leasehold property, negotiate the details of the lease agreement. Work closely with your agent or attorney to secure favourable conditions, such as rent caps, renewal options, or the inclusion of necessary equipment or fixtures. These terms can significantly impact your dental practice’s long-term success and profitability.

Consider financial aspects: Compare the costs associated with both options. Contrast leasing costs, such as monthly rent and maintenance, with the expenses of purchasing a freehold property, including mortgage payments, insurance, and property taxes. Evaluate your practice’s income, budget, and long-term financial projections to make an informed decision.

Remember, your dental practice’s choice between leasehold and freehold ownership is significant and can impact its success. By following these helpful tips and seeking professional advice, you can confidently navigate the negotiation or purchasing process and select the option that best suits your practice’s needs and goals.

Conclusion: Making an informed decision for your dental practice’s future

In the big picture, choosing between leasehold and freehold for your dental practice is a decision that should not be taken lightly. It requires careful consideration of various factors, including your long-term goals, financial capabilities, and the specific needs of your practice.

For those who are starting out or uncertain about future plans, leasehold might be attractive due to its flexibility and lower initial costs. Leasing allows you to use the space for a defined period, offering the option to relocate or expand as your practice develops. However, a thorough review of the lease agreement is crucial to ensure it aligns with your practice’s goals and is financially viable, considering factors like lease term and rent escalations.

On the flip side, freehold provides ownership and stability. It eliminates the risk of rising rental prices and grants full control over your practice’s location. Property ownership can also present future investment opportunities. Nonetheless, it comes with a significant upfront investment and ongoing maintenance costs, making it unsuitable for all dental practices.

Ultimately, the decision between leasehold and freehold should be based on a comprehensive assessment of your practice’s unique circumstances. Seeking professional advice from a commercial property expert and financial advisor is advisable to evaluate the financial implications and long-term viability of each option.

Remember, choosing the right property arrangement for your dental practice can significantly impact its success and growth. Making an informed decision sets a solid foundation for your practice’s future, creating a conducive environment for delivering quality dental care to your patients.

Additional resources and references for further exploration

There are numerous extra sources and references available to help you make a well-informed decision if you’re still unsure about choosing between a leasehold or freehold option for your dental practice. To learn more about the pros and cons of each option, consider exploring these resources.

Connecting with industry experts, such as real estate professionals or property advisors specialising in commercial properties for dental practices, is a valuable resource. With their market experience, they can offer tailored guidance based on their knowledge.

Additionally, there is a wealth of online articles, forums, and blogs discussing leaseholds and freeholds in the context of healthcare practices. These resources often feature case studies, expert opinions, and real-world examples, providing deeper insights into the implications and factors associated with each option.

Industry affiliations and associations related to dentistry may have resources available to their members. These resources, including publications, webinars, and workshops on property ownership, can offer valuable insights from dental professionals and assist in understanding the nuances of each option.

Lastly, engaging in conversations with other dental practice owners who have navigated the decision between leasehold and freehold ownership can be beneficial. Their firsthand experiences can provide practical advice and a better understanding of the potential challenges and benefits associated with each choice.

By utilising these additional resources and references, you can ensure that you have all the information needed to make a well-informed decision aligning with the specific needs and goals of your dental practice.

Ultimately, the right choice depends on your unique situation and long-term goals. Each option has its pros and cons. By thoroughly pondering the factors highlighted in this post—like financial implications, flexibility, and potential for future growth—you’ll be equipped to make a well-informed decision that aligns with your dental practice’s needs. Remember, seeking advice from a real estate agent or attorney is crucial to ensure the best decision for your practice’s future prosperity.

Our Expert Opinion

Sadly, I have seen too many people focus on buying a freehold for their dental clinic at the detriment of getting the right location.

If you are going to be running a dental clinic the most important thing is to get the location right as this will help the business grow and thrive.

Often the best locations are not available as a freehold but instead as a leasehold. In my view, go for the best location to make your business work. However, if the freehold is available, and you can fund it, then of course buying the site can be a good idea if you are certain on the location.

One good idea we tell our clients is if they find a location, take the leasehold, but have drawn up in the agreement that if you the landlord does decide to sell, that you have the first right of refusal to purchase it. This can allow you to set up your business under a leasehold and then potentially down the line buy the freehold.

Bottom line, focus on the location to make your clinic thrive, and if the freehold is available then go for it – otherwise tread carefully!

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Frequently Asked Questions Should I buy or Leasehold

What is the difference between leasehold and freehold?

The key difference between leasehold and freehold is ownership. With freehold, you own the property and the land it sits on outright, giving you full control and responsibility. In contrast, leasehold means you own the property for the duration of a lease, but the land remains under the landlord’s ownership. When the lease expires, ownership typically reverts to the landlord unless the lease is extended or renewed. Leaseholds often come with additional costs, like ground rent and service charges.

Which is better for a dental practice—leasehold or freehold?

Whether leasehold or freehold is better for a dental practice depends on long-term goals. Freehold offers full ownership and long-term stability, making it a good choice for those looking for full control and investment benefits. Leasehold can be more affordable upfront, with shorter commitments, but comes with restrictions and additional costs like ground rent. It may suit practices with limited capital or those not looking to settle permanently. Evaluate financial and operational needs before deciding.

What are the advantages of buying a freehold property?

The advantages of buying a freehold property include full ownership of both the property and the land, providing long-term stability and control. You won’t pay ground rent or service charges, and you’re free to make modifications without landlord approval. Additionally, owning a freehold can increase the property’s value, making it a more attractive long-term investment. Freehold ownership also simplifies property sales, as there are fewer restrictions compared to leasehold properties.

What are the disadvantages of buying leasehold?

The disadvantages of buying leasehold include limited ownership, as you only own the property for the duration of the lease. Additional costs like ground rent, service charges, and possible restrictions on modifications are common. Lease terms can also be short, and renewing or extending a lease can be costly. Furthermore, the property reverts to the freeholder (landlord) when the lease expires, potentially lowering its resale value as the lease length decreases.

How long does a leasehold last?

The length of a leasehold typically ranges from 99 to 999 years, but shorter leases, like 40 or 50 years, can also exist. As the lease term shortens, the property’s value may decrease, making it harder to sell or remortgage. It’s crucial to check the remaining lease duration when buying, as renewing or extending a lease can be expensive and complicated.

Can I extend a leasehold if it runs out?

Yes, you can extend a leasehold when it runs out, but it requires negotiation with the freeholder. In the UK, leaseholders usually have the legal right to extend the lease by 90 years for residential properties, but this can be costly, especially as the lease gets shorter. The process typically involves paying a premium and legal fees. It’s recommended to extend the lease well before it reaches 80 years, as properties with shorter leases become less valuable and harder to sell.

What additional costs are involved with leasehold properties?

Leasehold properties typically involve additional costs such as ground rent, which is paid to the freeholder, and service charges for the maintenance of communal areas. There may also be management fees for administrative tasks and building insurance premiums handled by the freeholder. If you want to make modifications to the property, you may need to pay for consent fees. Over time, extending the lease or purchasing the freehold can also incur significant costs.

Do I need landlord approval to modify a leasehold property?

Yes, you usually need landlord approval to modify a leasehold property. Lease agreements often include restrictions on structural changes or significant alterations, requiring the leaseholder to seek consent from the freeholder before proceeding. This can include internal renovations, extensions, or changes to the exterior. Additionally, there may be consent fees involved. It’s important to review the terms of your lease and consult the landlord before making any modifications.

How does property ownership affect practice value?

Is it easier to sell a freehold or leasehold practice?

It is generally easier to sell a freehold practice because the buyer gains full ownership of both the property and the land, offering long-term security without additional costs like ground rent. In contrast, leasehold practices can be harder to sell, especially if the lease is short, as it may involve additional costs and limitations. Buyers might also be wary of expiring leases or restrictions on property modifications, making freehold properties more appealing for long-term investment.

Are there restrictions on leasehold properties?

Yes, leasehold properties often come with restrictions. Common limitations include prohibitions on structural changes or major renovations without the freeholder’s approval. You may also be restricted from subletting the property or using it for certain commercial activities. Additionally, there could be specific rules regarding maintenance, appearance, or how the property is used. These restrictions are typically outlined in the lease agreement, so it’s important to review the terms carefully before purchasing a leasehold.

How do property rights differ between leasehold and freehold?

Property rights differ significantly between leasehold and freehold. With freehold, you own the property and the land it sits on outright, giving you full control with no time limits. In contrast, with leasehold, you only own the property for the length of the lease, and the land remains owned by the freeholder. Leaseholders may face restrictions on property modifications and must often pay ground rent and service charges, while freeholders have no such obligations and enjoy more autonomy.

What should I consider when buying leasehold for a dental practice?

When buying a leasehold for a dental practice, consider the length of the lease—shorter leases may decrease property value and require expensive renewals. Assess any restrictions on property modifications, and be aware of ongoing costs like ground rent and service charges. Ensure the lease terms align with your business plans, especially if you intend to expand or modify the practice. Finally, check for any additional landlord approvals needed for renovations or business operations.

What are the legal implications of owning a freehold?

Owning a freehold means you have complete ownership of both the property and the land, granting full control over modifications, usage, and long-term security. However, this also brings legal responsibilities such as property maintenance, compliance with building regulations, and paying taxes like Council Tax. If you own a freehold commercial property, like a dental practice, you are also responsible for any liabilities related to the building, such as structural repairs and health and safety compliance.

Can I convert a leasehold property to freehold?

Yes, it is possible to convert a leasehold property to freehold in certain cases. This process, known as “leasehold enfranchisement,” allows leaseholders to buy the freehold from the freeholder, either individually or collectively (in the case of flats). The process can be costly and complex, involving legal fees and valuation assessments. It’s important to understand the eligibility requirements and negotiate terms with the freeholder. Consulting a legal expert is recommended to navigate the process smoothly.

How does property ownership affect long-term financial planning?

Property ownership plays a key role in long-term financial planning by providing stability, asset appreciation, and control over business operations. Owning a freehold property, for instance, offers long-term cost savings, as there are no ongoing lease payments, and the value of the property may increase over time. It also simplifies future financial decisions, such as selling the business or passing it down. Conversely, leasehold ownership may involve ongoing expenses and less control, potentially complicating long-term financial strategies.

Is a leasehold property riskier for a business?

Yes, a leasehold property can be riskier for a business due to the limited ownership period and potential restrictions on modifications or usage. Leaseholds involve ongoing costs like ground rent and service charges, which may increase over time. Additionally, if the lease term is short, it can affect the property’s value and resale potential. Businesses also face uncertainty regarding lease renewals, which can be costly or denied, impacting long-term plans.

What should I look for in a lease agreement?

When reviewing a lease agreement, look for key details such as the length of the lease and renewal options, ground rent and service charges, and any restrictions on property modifications or use. Pay attention to maintenance responsibilities (who covers repairs), break clauses (allowing early termination), and the terms for lease extension. Additionally, check for any landlord approvals required for changes to the property or business operations, and understand the conditions for selling or transferring the lease.

What happens when a leasehold expires?

When a leasehold expires, ownership of the property typically reverts to the freeholder, meaning the leaseholder no longer has rights to the property. The business occupying the leasehold may need to vacate or negotiate a lease extension, which can be costly. If no extension is agreed upon, the property’s value can significantly decline as the lease term shortens. It’s advisable to renew or extend a lease well before it expires to avoid complications.

Are there tax benefits to owning a freehold?

Yes, owning a freehold property can offer tax benefits. For example, freehold owners may benefit from Capital Gains Tax (CGT) exemptions if the property increases in value and is sold, especially for primary residences. Businesses may also claim capital allowances on the property’s assets, such as equipment or fixtures. Additionally, freeholders avoid paying ground rent and other leasehold-related charges, reducing ongoing costs. However, tax treatment varies, so consulting a tax professional is recommended.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Buying a Dental Practice: Get Started

When buying a dental practice (especially if it’s for the first time), you need the competent hands of qualified professionals. Not only have we been helping the UK’s dentists to buy, start and sell dental practices for over 20 years, we are dental practice owners ourselves! We know what it takes to buy the right dental practice, we can help you find it, buy it and get it up and running.

Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help buy your dream practice.

With Samera Business Advisors you can rest easy knowing that your investment is secure and your future is brighter. Contact us today so we can help plan for your tomorrow.

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Learn More: Buying a Dental Practice

For more information please check out the articles and webinars in the buying a dental practice section of our Learning Centre like the Guide to Buying a Dental Practice.

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How to Finance a GP Practice

Our in-house finance brokers are former bankers who help general practitioners and primary care specialists raise the finance they need to build and grow their business. You will most likely need different forms of funding to support for primary care business, ranging from buying into a GP practice, refurbishment projects, office space, new equipment or simply to pay your tax bill.

Getting the right financial solutions is essential for you to operate your practice to the best of its ability. We help GPs find the best finance solutions to their needs.

Finance options for GPs

Funding to buy an existing medical practice

You can either buy a GP practice outright or you can buy into an existing practice as a partner. Both of these options require significant funding, as well as a lot of in-depth research carried out by yourself or your team.

This research needs to include the performance of the business if it is an already existing practice and understand its current value as a business, or of the premises alone. The location is everything when it comes to how successful your business will be.

The patient base, the premises and any existing equipment that may be there, as well as the value of any NHS contracts, need to be both assessed and understood before you can begin the process of buying your GP practice.

Contact us to find out more

We can help you arrange the type of finance that will be best suited to you and your business. The two main types of loans that may be useful to you are either a Secured Loan or a Partner Equity Loan.

A secured loan is one answer, with the security of this loan being the practice itself. Partner equity loans are the best option if you are thinking of buying into an already existing larger practice as a partner or a buy-out for an existing partner who may be retiring.

Buy-in and Buy-out finance can also be a great option for you as it can accommodate the challenges of buying in and out of a GP practice, as it is funding tailored to help you make full use of the opportunity.

Becoming a partner in your GP practice

If you have been working in an existing GP practice for a number of years, you may consider becoming a partner at your surgery.

Don’t be concerned, most lenders are keen to lend finance for GPs for the buy-in loan that you will require, and lenders are not generally seeking additional security to secure the facilities they will lend on an unsecured basis

There are normally two situations when you will be offered the chance to buy into a practice as a partner.

An existing partner is retiring/leaving and wants to sell their share of the partnership
The existing partners would like to bring a new partner in and they will be willing to reduce their current ownership share so you can buy-in.

Either scenario is acceptable to lenders who are used to providing finance for GPs.

Click here to know more about 3 main ways to raise finance.

Buy-in loans

Most doctors own the doctor’s surgery where they are based as GPs and can’t sell the goodwill of the practice, so buy-in loans are normally calculated on a percentage of the freehold owned by the partnership.

Click here to avail our services on acquisition finance.

The partners will all need to agree the percentage that you will need to purchase (most partners would all have an equal ownership share of the practice). Based on a partnership of 4 GP’s with all partners having a 25% ownership and the freehold being valued at £1m, the buy-in amount needed would be £250k.

The freehold value would need to be confirmed by an independent valuer and all the partners must agree to the final buy-in figure.

The majority of buy-in loans agreed are on an unsecured basis, but you can offer additional security if you wanted to secure a lower interest rate. That being said, most lenders will be comfortable funding 100% of the buy-in amount totally unsecured.

Click here to read about a guide to acquisition finance

How long is the loan term?

Buy-in loans are normally termed over 15-20 years. Some banks will allow you to make lump sum repayments with no charge, which can help reduce the term and allow you to repay the loan earlier if that is your plan.

Click here to watch our webinar on how you can obtain loans after COVID-19

The next question would be…

How do you pay for the loan?

Most partners earn more than a salaried GP. As a partner you will earn a share of the primary care practice’s profits and a share of the notional rent. The average salary for a partner in England is over £100k.

Click here to know about how to make sure your loan application is successful.

Contact us to find out more

The loan serviceability will be calculated on your new salary, less tax and your current personal outgoings.

The benefits of becoming a GP partner

Firstly, you have a say in how the practice is run. You will have an input on who the practice employs and what new services the practice can look to offer.

Of course, there is also the increased income. As a partner you will receive a higher salary and notional rent from the practice.

You will now own part of an asset, being the freehold of the practice. Once you come to the point of leaving or retiring from the practice, you would have hoped that the asset would have increased in value and you will receive a higher return on the asset than what you originally paid.

As with most things in life, there are also negatives to becoming a partner.

Click here to know about key mistakes to avoid: buying or starting a practice

The negatives of becoming a GP partner

You will shoulder more of the responsibility. Unlike being a salaried GP, you are responsible for the running of the practice and will have extra duties as a partner.

If the practice has any loans in the partnership name, you will be jointly and severally liable for that facility once you become a partner. Make sure you understand the full financial position at the practice.

What are the other important factors to take into account?

Partnership agreements make sure that you sign an up-to-date copy of the agreement once you become a partner. This will set out their rules and expectations at the practice.

Once you become a partner, you are no longer an employee. You will need to understand sickness, annual leave entitlement, paternity/maternity leave and how the practice deals with any disciplinary matters.

Setting up a new primary care practice

When you are setting up a new General Practice it can be both rewarding and liberating, especially if you are setting up your own private practice. Going private frees you from a lot of the burden that is accompanied by NHS regulations and allows you to spend a lot more time with your patients. Being a private practice means that you do not have any target to meet or any QOF (Quality and Outcomes Framework) points and a lot less government interference with your business.

Click here to check our webinar on how to set up a profitable private practice

Funding for your GP clinic

Finance for medical equipment

Whether you are a new start-up or you need funding for your already-established primary care practice, you will need a range of equipment. This equipment can take quite a toll on your expenses.

The type of equipment you may need will include:

X-ray equipment
Equipment sterilizers
IT equipment
Practice room equipment

New or used?

Good quality equipment doesn’t always necessarily mean new equipment, the goal is to get good quality equipment which can also be used. Many business owners miss out on potential savings because they believe that they have to go for brand new equipment.

This is not the case, especially when you are a start-up business, buying good quality used equipment will help you buy the equipment you need for your practice for a fraction of the cost it would have cost you to get the same thing brand new in turn, saving you a lot of money.

Click here to read more about asset finance.

Join the Samera Alliance today to save money on all the equipment, products and consumables you’ll need to build or grow your surgery.

Contact us to find out more

Leases

Leasing equipment or a vehicle will allow you to get the latest equipment or asset you need without the hefty cost of owning it outright. Leading will give you the flexibility and freedom you need. Leasing also means that any maintenance that needs to be carried out is not your responsibility. These duties lie within the leading company therefore reducing costs for the equipment further down the line.

Hire purchase

Hire purchase is a great solution for you if you need equipment that you want to keep giving you good service for years and years. Hire purchase allows you up to five years to spread the most of most of the different types of equipment your general practice surgery will need.

Tax loans

VAT and tax demands can be a huge strain on any business, especially start-ups. Tax loans can help alleviate some of this stress by allowing you to pay back what is owed at manageable monthly costs.

Vat and tax loans will spread the costs of your taxes into affordable monthly payments there ensuring that you have a surplus of cash flow in your business rather than facing cash flow difficulties due to your tax bills.

Click here to read more about tax loans.

Practice loan

A practice loan is a loan solely based on your status as a doctor and your GP service and does not require any security. This loan can provide a relatively high level of funding at very favourable interest rates. Practice loans are not only for start-ups, you can use this loan can be used for many purposes including Buy-ins, cashflow support, any refurbishments or a capital injection for your business.

Working capital finance

Working capital is also known as net working capital. It is a loan that is taken to finance a company’s everyday operations. These loans are not designed to buy long term assets or investments. It is often used for specific growth projects; it is solely designed to boost the working capital available to a business.

Click here to read about a guide to working capital finance

Setting up your GP practice

Location

One of the first issues to be addressed by a practitioner is where the location of their private services is going to be carried out.

Demographics

There are two important sides that you should look into when looking at demographics. Firstly, you need to consider who your customers are and how important their proximity to your chosen location is. For a general practice, this is critical. You need to ensure that the local residents are affluent enough to continuously use your service.

The demographics you have of your target market should reflect the type of residents that are located in the area you chose your business to be in. The second side is to then look at the community. If your customer base will mostly be locals, which is highly probable for a GP surgery, does a sufficient percentage of the community population match your customer profile in order to support and sustain your business?

Foot Traffic, Accessibility & Parking:

For most retail businesses foot traffic is extremely important. Being a local business, you don’t want to be tucked away in a corner when people are likely to bypass you and not take any notice that your business even exists there.

You also need to consider how accessible the facility will be for everyone who will be using it, this includes customers and employees. If you are on a busy street you need to consider how easy it is for cars to get in and out of allotted parking spaces, you need to consider whether there even is adequate parking for your customers. As a GP practice, you need to also consider disability access.

Local competition

You will not only have other private practices that are your competition, but you will also have NHS practices. You need to know if these competing companies are located nearby, if so, how close are they? Sometimes if you are surrounded by other practices that are also private, comparison shopping may work in your favour depending on if your prices, reviews and services are more favourable than your competitors. You may also catch the overflow from existing businesses which could be a positive thing for you.

Proximity to other businesses

Look at the proximity of other businesses to your business. If you can see if you reap any benefits from these businesses being located next to you it will be great. You may be able to benefit from them by the customer traffic they generate. This is because those companies and their employees and even their own customer base could become your customers.

Contact us to find out more

Profit margins and scalability.

Although the aim for your practice is to help people, the end goal for your business is to make money, specifically, to make a profit and to pay yourself as well as any staff you have an income. The reality of your business will be, in the private sector, time is quite literally money and the more time you spend in your business, the more money you will be able to make. Unlike with NHS practices, you will only get paid for the specific services you provide.

When you are starting up, you will need enough income in order to cover the various set up costs including funding the premises, tax requirements as well as paying your staff and yourself a decent salary. Your profit will not be evident within the first couple of months at least, therefore, you will need enough funding to cover these costs over the first couple months while you start up.

Private or NHS

There is also the risk that your practice may not succeed in the way you think it will, which means that you should always be open to continuing your medical services with the NHS. The very popular perception that private GPs earning much larger sums of money is often untrue and should not be the primary reason to get up a private practice.

There are a variety of factors to consider when setting up in private practice. Remember, the grass is not always greener on the private side rather than the NHS. With the NHS, there is a lot more security for your business. It is also important to note that NHS indemnity schemes do not cover any private work therefore it is essential that all private practitioners have an adequate level of indemnity cover from one of the medical defence bodies. That being said, having a private practice can be quite lucrative.

Taxes

One of the first things you need to do within the first three months of starting your General Practice is to register with HMRC that you are starting a private practice that is fee charging. If you fail to do this, it is likely that you will be charged a fine.

Bookkeeping

Even though you are in the healthcare sector, at its core, your practice is a business that needs a separate business bank account to keep track of cash flow and taxation for all the doctors in the practice. You will need to develop a form of bookkeeping that is well organised and easy to use and understand.

Your GP services

Everyone needs a GP at some point, but what you are competing against is free NHS GPs. So, you need to make sure that you have a market for the primary care services you are offering. Most private general practices are in quite affluent areas where there is a high density of people who can afford the services that you will be providing.

Patients accessing your service will also expect a higher level of service since they are paying for a service that they could otherwise get for free. They will expect to get same-day appointments, longer appointment times and greater access with the doctor.

Applying for funding as a GP

When you apply for finance for your GP clinic, lenders will need to see from you:

A personal profile which details your background assets and your monthly income/outgoings
3 years of financial accounts for the partnership
3 months personal bank statements
Confirmation of the amount and the percentage that you are buying
An indication of the salary that you will earn as a partner and what share of the notional rent you will receive

This information is needed by lenders to assess firstly, whether you can afford the loan against your present lifestyle/expenditure, and also that the existing business you are buying into or your plan for the business you intend to build is financially sound.

Contact us to find out more

Whether you are already working in private practice or considering setting up your own surgery we can help you find the financing option specific for your individual needs and circumstances. We can help with:

Setting up a new practice
Purchasing new premises
Acquiring new equipment & assets
Dealing with tax issues
Sourcing working capital
Accounts and tax

Click here to read our blog on how to finance a healthcare business.

Using a Commercial Finance Broker

We specialise in sourcing and negotiating the best terms for medical health professionals when they take out a business loan. Our team know exactly how to give your application the best chance of success. We know who to approach for the best rates. We know how to negotiate more favourable terms.

We understand how to raise finance for medical businesses.

If you’re looking to raise finance for a GP practice, Samera can help make sure you get the best possible deal for your business.

Click here to find out more about using a commercial finance broker.

Our Expert Opinion

“Understanding how GP practices are financed is key to securing the best terms available. This means using a broker that knows the GP market and also the banks requirements is key to funding your GP practice”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Business Loans for Healthcare Businesses

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Financial Services

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Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

How to Finance a Dental Practice

Finance-a-Dental-Practice_-Samera-How-to-Guide

As you buy or start your dental practice and as a dental practice grows, there is likely to come a time when significant additional funding is required in order to scale further. This funding may be needed to purchase new equipment, to extend a current practice, or to buy more dental practices and build a group.

While routine services like cleanings and fillings are always in demand, cosmetic dentistry is also widely getting more popular. As demand grows, so does the annual salary for a dentist. Although dentistry in the UK took a hit in 2020-21 (due to the lockdowns), the industry has bounced back strongly.

Now is the time to build a dental business.

Buying or starting a dental practice is one of the biggest decisions that a dentist is likely to make and can be a stressful time for all parties involved. The various aspects involved, from creating a great business plan to determining the prime location, as well as many other legal and personal factors, must be carefully taken into consideration before taking the plunge.

There are several rewards and stresses that are associated with building a dental practice, depending on whether you want to go down the private route, the NHS route or a mixture of both. This is why we are here to lessen any burdens on you when it comes to financing a dental practice.

Click here to read more about why dentists want to own their own practices.

One of the most important skills in your personal and business life is learning how to manage your finances. If you can manage this skill well, you will then be on the path to obtaining the finance and business loans you need to build a dental business.

When you are seeking a loan to buy, start or grow a dental practice, banks and lenders will look at your personal finance history to help them ascertain whether you will be a secure and reliable client that can repay the loan.

If you do not currently own a dental practice, your personal circumstances are one of the information sources that lenders will have to assess your ability to manage a dental practice when you acquire one. They will also look at your CV and whether you have undertaken any roles in your current dental practice to gain skills such as management of staff, accounting or involvement with premises issues and the CQC.

Up to this point in your life, managing finances has been just for you and your family, with little scrutiny from others.

To get the finance and business loans required to buy, start or grow a dental practice will require some effort to convince a lender you are worthy of the finance.

Action Plan

Evaluate the need for additional funding to scale your dental practice, considering new equipment purchases, extensions, or acquiring more practices.
Recognize the increasing demand for cosmetic dentistry and its impact on the dental industry’s growth potential.
Approach the decision to buy or start a dental practice with thorough planning, considering business plans, location, legal factors, and personal readiness.
Understand the various challenges and rewards associated with different dental practice models, such as private, NHS, or mixed.
Develop strong financial management skills as a foundational element for securing loans and financing for your dental practice.
Prepare to present a comprehensive profile to lenders, including personal financial history, professional experience, and potential for practice management, to secure the necessary funding for growth or establishment.

Watch this webinar on how to raise finance for your dental practice.

Click here to read our 11 top financial tips for associate dentists.

Contact us to find out more

How Do You Get a Business Loan For a Dental Practice?

There are a number of banks and lenders out there looking to help you buy, start or grow your dental practice. They all have their own policies and limitations as to whom and how much they will lend.

Most lend on an unsecured basis up to a certain level and, therefore, will want to be sure that you have the skills and the financial ability to repay them when you take out a loan for your business.

When you approach lenders for finance they will want to see a breakdown of your current personal assets and liabilities and how you currently spend your income.

They will review how much you have been able to save, and if you have not saved, they will ask where the money has gone. They will also be looking to see if you have invested in property or other assets.

This is a detailed examination of your income and expenditure and will need to be supported by the provision of bank statements verifying what you have put down as your income and expenditure.

Your bank statements also show how you have conducted your bank account. Many lenders ask for six month’s bank statements to see your income as a Dental Associate.

They also look at how you control your funds, and whether you overdraw your account on a regular basis. In addition, they will also want to see three years of associate accounts again to verify your historical income.

Most of the lending for the first purchase of a practice is unsecured, so understandably lenders want to be sure you have a sound financial background and can control your own finances. They want to see a good degree of financial sense and control which will be needed to manage your own dental practice.

If you have a good credit score, experience in dentistry and a well-prepared application, you should have little trouble obtaining a business loan for your dental practice.

Click here to find out more about making sure your loan application is successful.

Applying for Finance for a Dental Practice

Remember that if you’re buying a practice, it’s not necessary to have a particular practice in mind when applying for funding. As long as there is a plan in place.

You can read more about creating a business plan for a dental practice here.

Every dental professional has a different story when it comes to setting up a dental surgery. Take a look at our unconventional story, for instance. Whatever the story is, it’s important to go about securing finance in the right manner.

Options for funding a dental practice

From experience, there are three main options when it comes to acquiring funds to buy a dental surgery; one of which is the most common.

Loans from banks and other financial institutions. This is the most common option.
Bank of mum and dad. In certain families this may be an option, and repayment arrangements are likely to be more flexible.
Self-funding. Some dental professionals have the resources to do this. However, it’s not always a good idea to invest the majority of savings as any business comes with some inherent risk attached. Having substantial personal financing in place helps with maintaining a comfortable lifestyle during any lean periods for the practice.

From working with clients over the years, we realise that most often a lending institution will need to be approached. If this is the case, there are certain factors to consider when deciding on the best time to apply for a loan.

Action Point

Research various banks and lenders to understand their specific lending policies and the amounts they are willing to lend to dental practices.
Prepare to demonstrate your financial capability and professional skills to assure lenders of your ability to repay the business loan.
Compile a detailed breakdown of your personal assets, liabilities, and income expenditure for lender review, supported by bank statements and other financial documents.
Maintain a good financial record, including savings, investments, and prudent management of your bank account, to present yourself as a reliable borrower.
Consider the three common funding options for acquiring a dental practice: bank loans, family support, or self-funding, each with its own set of implications and requirements.
Evaluate the optimal timing for loan application, ensuring you have a solid plan in place, regardless of whether you have a specific practice in mind for purchase.

Contact us to find out more

When to apply for a business loan for a dental practice.

Competition for lending is high, so it’s important to have the best opportunity of being in the successful percentile. With this in mind, here is what we would advise.

Prepare for lending more than 12 months in advance as banks will scrutinise documentation for the previous 6-12 months, and take note of any issues.
Make sure that everything is in order and that good financial acumen is apparent.
Have a history of making payments on time and a strong credit score.
Know what the business aspirations are and whether practice purchase or start-up is the aim.
Have a team of professionals in place. At the very least, this should include a dental accountant, dental solicitor, and a financial planner for life insurance and disability insurance.
Hire a commercial finance broker, such as Samera Finance that can help you secure funding on the best terms available.
Understand the difference between lending. Some banks will offer a conventional loan while others will offer a loan which is specifically aimed at start-ups and small businesses

Make sure that all of this is in place before applying for funding from a lender.

Click here to learn more about applying for loans after COVID-19.

Approaching a lender for the first time

Remember that although lenders are there for the same overall purpose, they all have slightly different policies and processes in place. Some have a specialist team in place to deal with business loan applications, others do not.

It helps to do research when raising finance for a dental practice, and find out as much about the lender as possible. That’s where a commercial finance broker who knows dentistry is worth their weight in gold, as they know which lenders are most suitable for which clients.

Whichever lender is chosen, they will want to know that they are providing finance to a reputable borrower and that they can rely on the money being repaid as agreed. With this in mind, any professional who is looking to invest in a dental surgery should be prepared to prove their financial reliability when they visit a lender. This is likely to include:

Proving comprehensive bank statements for at least six months (professional and personal).
Providing associate accounts for at least three years, to verify income.
Providing evidence of regular saving.
If there is no regular saving pattern, there should be proof of what earnings were spent on. This could include professional expenses, or home improvements. It’s important to be able to show wise spending choices.

It makes sense that banks, and other lenders, want to verify that borrowers are a good risk. These loans are usually unsecured; so they want to be as sure as they can that they will get the money back.

When speaking to clients about their lending situation, we always stress how important it is to be able to show that they are proficient at managing money, and ideally have significant savings or investments.

Please click here to learn more about why your loan application might have been denied.

Do you need to provide security for a business loan for a dental practice?

What will financial lenders assess?

Getting qualified for a loan can be a daunting experience. The process itself is non-binding because the information you provide has not been verified.

Any dental professional who is looking to finance the purchase of a dental practice usually needs to have a deposit of at least 10%. When approaching a lender for the rest of the money, there are certain factors they will consider when making their decision.

The history of any earnings as an associate dentist.
Management of personal finances.
Living situation of the applicant. Is the accommodation rented or owned?
Career in dentistry and level of management experience.
Ability to repay any loan that is provided.
Any personal savings that are in place. Showing a propensity to save rather than make rash purchases is an indication of being low risk for lending.
Evidence that tax payments are up to date.
The personality and character of the applicant.

Contact us to find out more

Lenders look for a few key aspects of your application in order to confirm whether you are a worthy lender. These aspects include:

Credit

Credit history and activity have a major impact on loan approvals and will heavily influence whether you get approved or not. It is also important to know that the lowest rates available are usually only obtainable by borrowers with high credit scores.

Lenders use your credit scores to assess the reliability of you as a borrower. It will help them assess the risk being taken when providing you with financing.

In addition to looking at your credit score as an indicator, they often review your payment history which they consider to be a strong indicator of the likelihood that you will make timely repayments in the future.

Debt

Lenders often use a debt-to-income ratio that compares the amount you earn to the amount to owe. This is to ensure that you will not be over extended with your new loan repayment. Debt-to-loan limits vary depending on what type of financing you need and the type of lender you go to.

Click here to read more about dealing with debt as a dentist.

Income

In order to apply for a loan your lender will need to review your income, the same can also be said for your employment history for most types of financing that you will apply for. Not having steady work or a steady source of income for the last two years could impact your eligibility for getting approved for financing for your dental practice.

Lenders will often call your current employers and verify your salary. If you are self-employed, lenders will look at the adjusted gross income on your tax return to assess if your business is making any profit.

Assets

Depending on what type of financing you need for your dental practice, you may need to secure your loan with assets to put up as collateral in case you default on any repayment on your loan.

Do banks lend only on projections?

Contact us to find out more

What banks are looking for in a dentist

Unless you are being represented by a business advisor, or a professional who is qualified in dental practice transactions, you will be expected to provide the following:

Details about your assets liabilities, personal Income and expenditures over the last three years or SA302s – and the appropriate documentation
They might also ask for details of hours you’ve worked, list of services provided, or even your earning history as an Associate Dentist
Your personal financial track record will also come into play: how you’ve managed your finances, high credit card bills, low credit score, etc)
Your current living situation i.e. do you own your own house or rent

Preparing to apply for a business loan

It stands to reason that any bank, or other financial institution, wants to reduce the risk of non-payment. For this reason, they look to lend to businesses that can prove they have reliable revenue and are in a position to make repayments on time.

It’s worth bearing this in mind when making decisions to grow a dental practice. Planning ahead is essential. Ideally, plan 10-12 months ahead of time, and make sure that revenue is optimised and accounts are up to date and accurate, before applying for funding. When funding is applied for, be prepared to provide a significant amount of documentation including:

An up-to-date business plan.
Up-to-date and accurate accounts (personal and business).
Up-to-date tax records.
Details of expenditure.
Detailed analysis of proposed finance spending and growth of the practice.

Having everything in one place before applying for growth or acquisition funding makes a successful outcome more likely.

Show a good sense of financial control

Banks and lenders will want to see that you have demonstrated a good sense of financial control before they offer you a loan. Having some savings for a deposit, or an investment property and investment in your professional skills provides a level of comfort to banks.

This along with a well-run and controlled bank account all start to build a picture for lenders to enable them to consider your request for a loan and leads to a good credit score.

Don’t buy a new Jaguar annually!

So, buying a new Jaguar every year, running up large credit card debts and showing a large surplus of income over expenditure with no visible savings is not the way to go. If you constantly overdraw your account with no overdraft limit in place this indicates no control of your spending.

Having a bank overdraft limit in place is not a bad thing, it demonstrates the ability to plan and foresee pinch points in your finances and the financial skill to deal with this in advance.

This is not to say you cannot buy a nice car and have good holidays and send your children to private school. It just all must be managed in the correct way.

Avoid Credit Card Funding

Professional courses and school fees should not be funded on a credit card, banks like to see that you have used appropriate loan facilities to fund such activity indicating to them your financial acumen.

If surplus income has been spent on something considered good such as further professional qualifications/property investment, make sure you highlight this to the lenders as this is not always clear from bank statements where it may merely show a loan payment.

Planning for Tax Liabilities

It is important you keep up to date on all your tax payments too. When applying for financing for your dental practice purchase, they will always ask for confirmation that your tax payments are up to date, or you have made sufficient provision for them.

Click here to read more about accounts and tax for dentists.

Bearing all of these points in mind, we would say that the most important thing is living within your means. This does not mean that going on great holidays, buying a luxury car and paying for private tuition for children are all no-go areas.

It means that there should be a balance between spending and saving. Banks need to see sensible financial behaviour, sensible use of credit and wise investment of money.

Always question outside reports and accounts

Sometimes, accounts can be misleading (i.e valuations, investment profits). Without the proper context, the avalanche of reports you will review while buying your dental practice will be enormous, it will be easy to lose focus. Things may be hiding in your accounts might no longer be necessary. On occasions we have even seen costs included that are relevant to another practice entirely!

It is always important to trust the reports you receive, but verify them. Although it would be lovely if we could trust every document that is handed to us, people make mistakes. It is our job to catch these slight missteps before they cause any problems.

Honesty is essential

When you own a practice, you need to be good at many things – other than dentistry. You may need to deal with complaints, sickness, CQC, Health and Safety, debtors, invoicing, marketing and all of the other trappings of owning and operating your own successful dental practice.

Ask yourself – and be honest – do you have the skills to manage these tasks? Be straightforward with yourself about your skills as well as your limitations, and you will go far as a private dental practitioner. Also, this will give you a good idea of the kind of staff requirements that you will need moving forward to fill in the gaps. These figures will also factor into your loan application.

Action Points

Prepare early for loan applications, ideally more than 12 months in advance, to ensure all financial documentation reflects stability and reliability.
Maintain good financial health by making timely payments, saving regularly, and having a strong credit score to increase loan approval chances.
Assemble a professional team including a dental accountant, solicitor, and financial planner to enhance your loan application’s credibility.
Consider hiring a commercial finance broker with dental industry expertise to navigate the loan process and secure favorable terms.
Understand the nuances of different lending options, from conventional bank loans to specialized start-up and small business loans, to choose the best fit for your practice’s needs.
Approach lenders with comprehensive financial documentation, including bank statements, associate accounts, and evidence of responsible spending, to demonstrate your financial acumen and reliability.
Plan for tax liabilities and ensure all tax payments are up-to-date or adequately provisioned for, as this will be a critical factor in loan evaluations.
Live within your means, balancing spending and saving to present yourself as a low-risk borrower with sensible financial behavior to potential lenders.

Contact us to find out more

Plan for applying for finance in 5 Steps

It may be a cliché, but it’s true that you need to live within your means. A quote from Charles Dickens – Mr Micawber

Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Mr Micawber

Step 1: Review your personal income and expenditure

The first step is to review your personal income and expenditure – look at it from an outside perspective, and consider what would others think when looking at your expenditure.

Would an outsider consider the £2000 per month you put aside for holidays excessive or just right?

The loan repayment figure you are showing at £1200 per month what does it relate to?

Make sure that you have a breakdown of your debt repayment schedule, showing all your payments, what they are for and who they are going to. Is it all a car loan or made up of some car loan and some professional qualification costs?

Click here to download a free debt structure template.

Step 2: Obtain your Bank statements and look at your account conduct

The second step is to obtain your bank statements and look at your bank account conduct. Do you stay in credit or within the overdraft limit? Are there any times when your finances get really stretched and if so, can you do anything about this?

Step 3: Obtain your Credit Score

Thirdly, obtain your credit score for free and make sure that it is correct. Check there is nothing on there you were not aware of, as credit scoring companies do often make mistakes. If you use multiple credit cards consider reducing the number of cards as having many credit cards can lower your credit score.

Step 4: Consider your partner’s financial background

Make sure your partner’s financial health is strong too. If borrowing in joint names you will both have an examination of your financial status.

Step 5: Use an experienced Commercial Finance Broker

Utilise the skills of an experienced commercial finance broker such as Samera to help you raise the finance. Our team are experts in helping dentists get finance and business loans for their practice acquisition.
Our specialist finance brokers will be able to guide you through the process to ensure you put in the strongest application to the banks and lenders to obtain the best available deals on the market.

Our finance brokerage team can advise you at every stage of your application to ensure you understand the process and don’t fall into the many potential pitfalls when raising finance for your dental practice purchase.

The Importance of a Business Plan

Opening up your own dental clinic is an exciting aspiration and starting up a successful dental practice from scratch is a very possible business endeavour. However, it requires an important set of skills that unfortunately not everyone has. We will guide you through all the stages that you need to go through to enable you to open a successful dental practice.

Click here to read our guide to starting a dental practice.

There is a substantial difference between buying an existing practice and starting your own practice from scratch. Call us for a free consultation and we will guide you through the pros and cons that come with starting or buying your own dental practice.

Click here to read our guide to buying a dental practice.

When starting your own practice there are many different aspects that you need to consider that will substantially affect your business. These include the location of your business, the type of services you offer and how to attract patients who may already have their own local dentist, amongst a whole range of other considerations you will have to think about.

Contact us to find out more

The most crucial aspect of your entire endeavour of starting your own dental practice is the planning stage, which entails writing a thorough business plan.

Every owner envisions opening a successful dental practice, but you need an actionable plan to get you there, which often includes needing to apply for additional funding. This is where your business plan comes into play. You need to create your vision on paper by describing your business, goals and by addressing all your finances.

More often than not, once you open your practice, your payroll will most likely be your biggest expense. So it would be a good idea to not bring on too many people at the beginning. In addition, you should start with a few basic services and treatments to keep costs low until you gain a bigger customer base.

Financial planning especially for the first year is needed in your business plan to show that you can account for projections of the coming years as well as the profits and losses that may occur.

Click here to read more about creating a business plan.

Applying for a business loan to buy a dental practice

When raising finance to buy a dental practice, you’ll be taking out an acquisition loan. The value of the dental practice you’re buying and, therefore, the price, will depend on several factors. The most notable of them is EBITDA.

It is important to understand what EBITDA is before buying a dental practice. EBITDA is a calculation that professionals use in order to get a clear picture of the “true profit” of their dental practice.

Essentially, EDITDA is: Earnings before Interest, Tax, Depreciation and Amortization. From the profit and loss account: you take the net profit figure (before tax and interest costs), and add back depreciation and any debt interest repayments.

Be very careful not to be misleading when presenting your sales figures. EBITDA has been calculated by adding on items that you will still have to pay – we often see subscriptions, travel, repairs and renewals added back on (they will still be a cost to you going forward). Doing this will inflate the EBITDA, which will jeopardize your loan.

You can find out more about valuing a dental practice here.

Your financial standing is measured at a particular moment in time, the moment you are applying for a loan. Banks will look at your position now and scrutinise your situation over the previous 6-12 months.

You cannot change your lifestyle in a week and you cannot change what is showing on your credit history or bank statements, so you need to prepare and plan ahead.

Before you apply for the loan, it is imperative you have your house in order and show good management and financial acumen. This will improve the likelihood of you obtaining a competitive loan for your dental practice acquisition.

So, make sure you follow the steps outlined above!

Click here to read more about how much you can raise.

How much deposit will you need to buy a dental practice?

Financial lenders for dentists will usually lend Private, NHS or mixed practices 70% to 80% of the value of the “good will money”. However, it is possible to borrow up to 95% of the value.

But usually you must offer some additional collateral in order to perform the transaction, such as a buy-to-let property or your existing residential home.

However, the banks will also take into account the practice’s EBITDA to repay the loan, and cover any additional costs as well as providing the required standard of living adjustments.

3 important points when raising finance to buy a dental practice

Review your finances early on, not when you want to purchase a practice. Ensure that you look at these critically and obtain an outside view, if possible, our team perform this at no charge.
Make sure you are in financial control, provide explanations for existing debts and any large expenditure items. Make sure your CV is up to date and it includes all your professional skills, as this will be read by bankers, not dentists, so make sure you explain any technical phrases.
Make sure all forms are completed fully as lenders check bank statements, accounts and business loans with credit reference agencies. So make sure everything is disclosed as this will ease the process and remove the need for further questions and explanations.

If you follow the points detailed above, you will find it much easier to raise finance and business loans to buy a dental practice.

Improving your new dental practice

The interior design and equipment changes to your dental practice can be done over a period of months or years. These upgrades must be accounted for in your financial analysis and taken into consideration for many of your profit goals – as this process may disturb your production if not handled correctly.

If, at the outset of your purchase, you know that important equipment must be changed – you should also factor this number into your purchase price. Most sellers are very conscious that they’re practice may need a “face-lift” after years of dedicated service. It’s expected – so don’t be afraid to use this as a point of negotiation.

Applying for a business loan to start a dental practice

Starting a dental practice from scratch means financing a whole range of things you wouldn’t necessarily need to when you purchase an existing practice. Since you’re not buying a ready-made business, you’ll need to build it yourself from scratch. This means funding:

Equipment
Consumables
Staff
Premises
Inventory
Marketing
IT
Tax

Many young dentists are hoping to start-up a squat practice. You can read our guide to starting a dental practice in 13 steps here.

You will need to prepare a business plan showing the area’s demand for the practice in covering: competition, other local services, hours of opening and provision of services, and other details.

You will also be asked to offer projections of 3 years of income and/or expenditures in a profit and loss format as well as cashflow planning.

Dentists who don’t enlist the help of a qualified business advisor may initially only work in their new practice one to three days per week with a full time receptionist or hygienist. You should factor in the work you will need to do outside of your practice in order to fill in the wage gap – and plan for it.

The price of developing building plans and renting equipment also need to be analyzed before lenders will review your application.

Our team of experienced dental practice accountants can prepare all of the necessary projections for you, and assist with your business planning.

Click here to listen to our podcast episode on how to organise your dental practice finances.

Contact us to find out more

Location

Picking the best location for you may take some time. Location is key for many businesses, but especially for dentists, you want a location that is generally quite visible for your potential patients, centrally located and in an area that your target market would be in.

There will always be a prime location for your business that may just be out of your price range. It is okay to understand that price matters and will play a vital role in the location you choose.

In the larger sense, it is better to wait for the right location as it heavily impacts how much business your practice will get. It will be much better for you, in the long run, to wait for the best location suited to you to come around rather than to open your business sooner in a more remote location.

Click here to find out more about raising finance for property development.

After finding a location

Here are the specific steps you need to take before physically setting up shop.

Find a location that you want to work in
Find a property within said location that can be converted or one that already has Class E planning permission
Ensure the lease you have is for 15 years within the Landlord and Tenant Act or if freehold, a valuation will be required in due course
Draw a plan of the premises and obtain a quote for the refurbishment
Prepare at least 3 years of projections. This should preferably be done by an accountant and should include cashflow and profit and loss
Prepare a thorough business plan
Lastly, you need to obtain the finance you need to make your business plan a reality

At what rates will banks lend for squat practices?

Lenders will look to assist with finance up to 70% of the build and equipment costs subject to a cap on the maximum loan. They will want to see only one surgery completed fully in a single-handed practice and staff costs kept to a minimum with perhaps a nurse and receptionist at first to keep costs under control.

When reviewing your projections, they will want to see these in a standardised format and they do expect to see losses in the first few months. Be realistic, as lenders will expect you to be.

How much does it cost to start a dental practice?

We can’t give you a specific quote on how much it will cost because in truth, it depends on various factors. These include:

The location of your site
The building you’re going to need to acquire for the practice
What type of equipment you’re going to be putting into the practice
How many surgeries you are going to be putting into the practice as well as waiting rooms
How much the building work is going to cost

So, the cost will vary and differ greatly between any two circumstances. You can easily spend anything from £100,000 to £500,000 and quite easily maybe even more in some cases.

But you need to make sure that you have a budget and a business plan that will forecast future trajectories. These forecasts will help you to make an efficient plan to repay all the money you’re going to need to start up your own dental clinic.

The most important thing you need to do before you even start preparing for building work is planning and budgeting for how much it is going to cost.

Click here to watch our webinar on financing your first dental practice.

Equipment selection for a start-up dental practice

There are many suppliers of dental equipment and whilst you maybe excited about your new venture it’s important you get the balance right. Purchase what you may need, and then perhaps once things are running well, you can purchase some of the extra’s you may desire!

Through the Samera Alliance, our Dental Buying Group, we can help you find excellent equipment on great terms. So make sure when starting out, you join the Samera Alliance if you want the right advice at the right price.

Here is a list of the consumables our partners in the Samera Alliance suggest every squat practice will need:

Start up consumables list Download

How long the dental practice start-up process takes (really).

In short: establishing your new dental practice can take several months (in some cases up to 8) so it is imperative for you to remain patient.
This timeframe includes the completion of the following tasks:

Your due diligence period, where you will review the premises and then obtain the appropriate planning permissions – which generally takes a couple of weeks.
CQC approval must also be acquired in order to being operations once the transaction is completed
Lenders will take 2-3 days to give you an outline of what they will lend. 5-8 days after you provide them with the requested information, they will usually give you a full credit backed offer.
A thorough dental practice valuation.

Click here for more articles and webinars on starting a dental practice.

Applying for a finance to run or grow a dental practice

Without a doubt, the costs of running a dental practice, or any type of medical practice, has been on the rise in the last several years. Usually, with many businesses, if the cost of the product or service rises, that will then translate onto the customer to make up that extra cost.

Unfortunately this does not always apply in medical healthcare practices. Dental practices experience many extra costs that other businesses do not necessarily have to invest in, such as capital equipment that can often be very expensive.

This may come as a surprise to some but there are many dentists that are happy to go through their entire career as an associate dentist without the aspiration to buy or start-up their own dental practice. However, with the rise of the pandemic and the consequences that many dental associates have experienced as a result, there are now many dental associates realising that there are so many benefits to opening their own private practice ,without the NHS contracts weighing them down.

Being your own boss and working for yourself can be incredibly hard and it comes with a lot of challenges that you may have never even anticipated. After being in the game for over 20 years, Samera has got you covered. We have a few costs you need to anticipate that are often forgotten about or overlooked when people decide to start their own dental practice.

Click here to find out more about secondary sources of finance.

Staff Costs in a Dental Practice

One of the main costs many do not consider are the staffing costs. Most dental practices will feature different types of specialist dentists, often including an orthodontist who can typically earn between £60,000 – ££80,000 per year. In order to grow clientele you may also want to employ a separate hygienist, who will also retain a high-earning salary.

Although you may be aware of the costs of each of the dentists you may be employing, it is also very important to factor in any other staff members you will need. Each dentist will usually require at least one assistant – this will be highly dependent on how many dentists you have working in your practice. A receptionist will also be necessary and depending on the size of your practice, you may have to hire two receptionists.

Staffing costs themselves are a huge cost for any practice, however, what you need to take into account is that when your practice becomes more successful, your staffing costs will rise as a result. It is especially important that these costs are accounted for and managed properly when you are starting out.

Finance costs

Finance costs need to be controlled and reviewed to ensure that you are getting the best deal on the market. Some lenders charge 3.75% above base rate, while others may charge 2.5% above base rate. It is important to shop around the market to see these differences, as the difference between these percentages over the course of even one year can be substantial.

If you have started a squat practice, costs may be even higher. However, once established, these costs can be reduced by a well thought out refinancing package.

Managing cash flow

Buying equipment is a huge strain on many dental practices and sometimes buying the necessary equipment out of cash flow (or working capital) may seem to be saving on any long-term loans or interest. However, buying these things straight from your cash flow can create a big strain on the cash available to the business.

Should anything unfortunate happen (e.g. Covid-19) you need to ensure that your business has the necessary reserves to save itself. Always consider whether to buy with cash or finance over the longer term. There are many financing options available to you should you need any information of what type of finance would be best for your situation.

Click here to find out more about managing cash flow.

Rent and business rates

If you are paying rent for your dental practice that can often be a big cost for you. In some areas of the country it would be cheaper to buy the freehold if possible, so it is always worth asking. It is also important to note that lease payments rise on a very regular basis, thereby increasing your costs further.

Equipment

This one is a fairly obvious cost, but it can take its toll on your dental practice. You will need necessary office equipment such as a computer, desk and chairs for your reception area. You may even want to furnish your waiting room, which can be an expense you need to factor in.

However, your largest expense will come from purchasing the necessary dental equipment for your surgeries. A dental chair, lighting, dental tools, X-ray equipment, anaesthetics, sterilising equipment and even consumables such as mouthwash and toothpaste are all part of equipment costs that you need to consider.

Contact us to find out more

These do not all have to be bought outright all at once. There are many financing options that are lenient and can help your dental practice in the long run. Although you may factor in the costs of financing all the equipment you will need, you also need to factor in the costs that are included in keeping all your equipment up-to-date and maintained. You will also need to factor in the costs of lighting, heating and cleaning services of your dental practice.

Click here to find out more about asset finance for dentists

Although these costs will be a considerable amount, they are essential when it comes to setting up and running a functional and successful dental practice.

Overall, the costs of running a dental practice are high, like many other medical healthcare practices. Often with dental businesses it can take some time and hard work before you start to see increasing profits. However, these profits are more than worth the costs of running your own dental practice and being in charge of your own business.

Dental practice financing in the UK

Buying, starting or growing your own dental practice is not a cheap process. Whether it is for property, assets or acquisition, the chances are that you will need to raise finance to build your dream practice.

You will be able to get funding from many different mainstream lenders to finance a dental surgery, but it is imperative that you show good management of income, evidence of savings and prove your credibility with those lenders.

Acquiring a dental practice involves a large financial investment, so a comprehensive due diligence process is absolutely essential. It is also important to work with specialists along the way such as a dental solicitor, a commercial financial broker, and professional dental accountants, in order to minimise any risks.

Click here to listen to our podcast episode on financing a squat practice.

Whether your dental practice is NHS or private, we can help secure the tailored finance your business needs to grow and succeed.

Mortgages for dentists

We can help you find the right mortgage product to suit your needs. Whether you are re-mortgaging or buying a new site.

Click here to find out more about commercial mortgages.

Acquisition finance

Acquisition financing will allow you to gain capital specifically for the purpose of buying your new dental practice. We can guide you through the best cost effective ways to do this and mentor you through how it will affect you and your business.

Click here to find out more about acquisition finance.

Asset finance

Dental equipment is expensive, you need to think about all aspects that you will need to finance such as chairs, X-ray machines, you name it, it all comes with quite a hefty price tag. Asset finance assists you with spreading the cost of repayment of equipment over time.

This eases the financial stress and allows you to avoid the need to buy the equipment that you desperately need outright. Asset finance means that your practice can continue to deliver the highest quality of dental services without compromising on price.

Click here to find out more about asset finance.

Business loans

There are many reasons as to why a business loan would be a great financing option for you. These types of loans are one of the best ways to secure working capital. You will need this type of capital to keep day to day operations consistent in your practice. There are two types of business loans available to you, secured and unsecured. Secured is a longer term lending based on the security of your business assets or unsecured which is a flexible, alternative finance solution, usually for smaller amounts.

Click here to find out more about working capital.

Best banks for dental practice loans

Unfortunately, there is no easy answer to this question. It all comes down to what deals or terms work best for you and your business. This is why it is always best to use a professional who is qualified in handling the unique aspects of a dental practice sale and/or purchase.

Most of the high street banks all lend to dentists, but their offerings and terms vary greatly depending on what your requirements are.

For instance, whilst one bank may offer a lower interest rate, they may require more security than another. In addition, new challenger banks are interested in providing loans to dentists, so they are another source to consider for good terms.

To ensure you get the best deal available when you require finance, using Samera Finance to help you navigate the best loan terms available is highly recommended.

Our team of finance professionals are perfectly positioned to help you understand your financial requirements and provide a selection of finance offers for you.

Work with a commercial finance broker

In the same way as it’s important to work with expert dental accountants and dental solicitors when financing and buying an initial dental practice, it’s vital to do so when growth and further purchasing is required.

Never forget that a dental surgery owner’s talents lie with running the practice itself and not with accounting or legal implications. It’s better to work with experts to deal with these factors. We’ve worked on these aspects of scaling a dental practice with clients on many occasions and it’s made the process a lot simpler for them.

When you use a commercial finance broker like Samera, you tap into our decade’s of experience in the healthcare finance market. Remember, it’s not just about finding a deal for you, it’s about everything else the broker will do for you.

A broker can negotiate much more affectively, since we know the different structures and formats of deals and applications that lenders look for.

We are completely independent of any one lender. We will approach several lenders to find you the right finance solution for your business.

Click here to read our 5 reasons to use a commercial finance broker.

How to Finance a Dental Practice FAQ

What are the main financing options for buying a dental practice?

Common financing options for buying a dental practice include traditional bank loans, Small Business Administration (SBA) loans, private lenders, equipment financing, and seller financing.

Can I get a loan to start a dental practice?

Yes, many lenders offer loans specifically for dental professionals looking to start their own practice. These loans can cover startup costs like equipment, leasing, marketing, and working capital.

How do SBA loans help finance a dental practice?

SBA loans provide lower interest rates and longer repayment terms, making them an attractive option for dentists looking to finance the purchase or expansion of a dental practice. They are government-backed, reducing the risk for lenders.

What is equipment financing for dental practices?

Equipment financing allows dentists to borrow money specifically for purchasing dental equipment. The equipment itself serves as collateral, often resulting in lower interest rates compared to unsecured loans.

What is seller financing, and how does it work in dental practice purchases?

Seller financing occurs when the seller of the dental practice finances part of the sale themselves. The buyer makes regular payments to the seller, which can make it easier to purchase a practice without securing a full loan upfront.

How much down payment do I need to buy a dental practice?

The down payment required typically ranges from 10% to 20% of the purchase price, depending on the lender and the type of loan you secure.

Can I finance a dental practice with bad credit?

Yes, though it may be more challenging. You may face higher interest rates or need to provide additional collateral. Working with alternative lenders or improving your credit score beforehand can increase your chances of approval.

How long does it take to get financing for a dental practice?

The approval process for dental practice financing typically takes between 30 to 90 days, depending on the lender, the complexity of the deal, and the completeness of your application.

Can I finance a dental practice expansion or renovation?

Yes, many lenders offer financing options for expanding or renovating an existing dental practice, covering costs like new equipment, additional staff, or property improvements.

What financial documents do I need to apply for dental practice financing?

To apply, you’ll generally need tax returns, personal and business financial statements, a business plan, credit history, and details about the practice you’re purchasing or expanding.

How can I improve my chances of getting financing for a dental practice?

Improve your chances by maintaining a strong credit score, having a well-prepared business plan, providing detailed financial projections, and demonstrating industry experience.

What are the interest rates for dental practice financing?

Interest rates vary depending on the lender, loan type, and your creditworthiness, but they typically range from 4% to 10% for dental practice loans.

Is it better to buy or lease dental equipment when financing a practice?

Buying equipment adds long-term value to your practice, while leasing allows for lower upfront costs and regular upgrades. The decision depends on your cash flow and long-term goals.

Can I refinance my dental practice loan?

Yes, refinancing your dental practice loan can lower your interest rates, reduce monthly payments, or help consolidate multiple loans into one, improving cash flow.

What are the benefits of working with a financial advisor when financing a dental practice?

A financial advisor can help you understand your financing options, structure the best deal, and ensure the loan terms align with your practice’s long-term financial health.

Our Expert Opinion

“There are so many options to borrow money on various terms these days which can be confusing. The cheapest rate is often not the best deal available, As loan to value, term of loan, arrangement fees, exit fees and legal fees are all things that need to be considered. That’s why now more than ever it’s essential to have a commercial finance broker assist to get the best deal, not just the best rate.”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

Book a consult

Financial services

Dental Practice Finance: Further Information

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

How Much Can I Raise?

It is still a surprise to me that many borrowers are not aware of how much they can raise when seeking finance for a project.

In most cases, potential borrowers underestimate what they can raise and, therefore, what they can purchase.

When looking at buying a dental practice, the amount you can borrow is often linked to several things and lenders (Banks) all have different policies, limits and requirements.

Who am I dealing with when I borrow finance?

It is very important to ensure that you are dealing with a lender who has experience and knowledge of the dental market. Many bankers are “generalists” and deal with many types of businesses.

Several lenders have set up specialist healthcare teams, staffed with knowledgeable staff who can assess your application in the correct way.

These specialist teams are rarely located in local branches and their experience (as you would expect) varies with how long they have been with the team.

Action Point

When seeking finance for a project, borrowers often underestimate their borrowing potential. It’s crucial to work with lenders experienced in the dental market, as they can accurately assess your application. Specialist healthcare teams within certain lenders can provide valuable insights and tailored financing solutions for dental practice acquisitions.

Click here to read more about finance options for dentists.

What determines what I can borrow?

Bank Policy determines this, and this can vary as to:

Lending an amount per dentist for each transaction
Lending a percentage of the goodwill valuation
Lending a percentage of the goodwill valuation plus lending against security
Sometimes lenders vary the amount they will lend according to where you are in the UK
Your professional experience – lenders require between 3 and 5 years minimum in a practice
Some borrowers restrict the term of the loan to 10 years, others to 15 years
If you are setting up a squat (start-up) then 70% finance may be available

Click here to read more about how banks assess you when you apply for finance.

What does this mean in terms of how much I can raise?

If you take a figure of 70% -80% as a guide for purchasing an NHS or private practice, this will give you a good idea of what can be achieved.

However, loans can be available for up to 95% with security.

Before everyone goes off to look at that £1,000,000 practice, there are some basics to remember.

Contact us to find out more

How to Finance a Squat Practice

How Should a Dental Practice Organise its Finances

Funding Options for Dentists

Loans must be affordable. The EBITDA of a business (Earnings before interest, tax, depreciation and amortisation) will demonstrate whether a business can afford to support a borrowing. You will need to have cash available for a deposit, solicitor’s costs and fees that lenders charge.

You may need to look at how the business will perform in the future with you as the owner. Will you keep on the seller and the existing associates? What new services will you introduce? What will you change?

Lenders may require projections as evidence of how you intend to grow the value of the business.

Action Point

Your borrowing capacity is determined by various factors outlined in bank policies, such as lending amount per dentist, percentage of goodwill valuation, professional experience, and location. Typically, loans can range from 70% to 80% of the practice’s value, with up to 95% available with security. However, affordability is paramount, considering the business’s EBITDA and your ability to cover costs like deposits and fees. Lenders may also require projections demonstrating how you plan to enhance the business’s value under your ownership.

Click here to watch our webinar on financing your first practice.

How to navigate the maze when applying for finance

You could contact your own bank and see if they can assist. However, considering all the differences would that be the right structure and cost for you?

Could you get a better deal elsewhere? Remember this is going to be for 15 years!

With all the differences in pricing, fees, loan terms, commitment periods and early repayment penalties it is best to shop around.

Click here to read our blog on How to finance a healthcare business.

So why use a broker?

As brokers, we are independent. We are not tied to any lender and will look at the market for you, we act solely for you.

We will assess your own situation as an individual case, we will approach several lenders who we believe can help you, using our own experience and knowledge of the industry.

We will obtain offers of finance for you from several sources so that you can compare the offers and decide which is best for you and your business.

We will negotiate on your behalf to get the best price for you and liaise with the lender through the process of due diligence, valuation, taking of security and any other requirements they may have.

You will have us by your side throughout the process, utilising 200 years of banking experience across the team and the knowledge of us having completed so many deals in that time.

Action Points

Independence: Brokers are not tied to any specific lender, allowing them to impartially assess the market and find the best fit for your needs.
Personalized approach: Brokers evaluate your unique situation and approach multiple lenders they believe can offer suitable solutions based on their industry expertise.
Access to multiple offers: Brokers obtain finance offers from various sources, enabling you to compare terms and select the most favorable option for your business.
Negotiation support: Brokers advocate on your behalf, negotiating with lenders to secure competitive pricing and favorable terms.
Expert guidance: With years of banking experience and numerous deals completed, brokers provide invaluable support and guidance throughout the entire process.

We will make sure that you see what is available across the market.

Click here to read 5 reasons to use a commercial finance broker.

How much can I raise frequently asked questions

How much capital can I raise for my dental practice?

The amount of capital you can raise for your dental practice depends on several factors, including the practice’s profitability, creditworthiness, and the type of financing sought. Lenders typically consider your financial history, loan-to-value ratios, and the purpose of the funding, whether it’s for expansion, purchasing equipment, or acquiring a practice. With proper financial projections and a solid business plan, dental practices can secure significant funding through loans, equity, or other financing options.

What factors affect the amount of funding I can raise for my practice?

The amount of funding you can raise for your dental practice is influenced by factors such as the practice’s profitability, cash flow, and financial stability. Lenders also consider your credit history, the loan-to-value ratio, and the purpose of the funding, whether it’s for expansion, acquiring new equipment, or purchasing a practice. A strong business plan, solid financial projections, and collateral can further improve your chances of securing a higher amount of capital.

What types of financing options are available for dental practices?

Dental practices can explore several financing options, including:

Traditional Bank Loans: For equipment purchases or practice expansion.
Small Business Loans: Government-backed loans offering favorable terms.
Equipment Financing: Specifically for purchasing dental machinery.
Private Investors: Equity-based funding from investors.
Lines of Credit: Flexible funding for ongoing operational costs.

Each option offers varying interest rates, repayment terms, and eligibility criteria, depending on the practice’s financial health and funding needs

Can I raise capital to expand my dental practice?

Yes, you can raise capital to expand your dental practice through various financing options. These include traditional bank loans, small business loans, and private investors. Lenders typically evaluate your practice’s financial health, profitability, and growth potential when determining the amount of capital you can raise. Expanding into new locations, upgrading equipment, or increasing services are common reasons for seeking expansion funding.

How do lenders assess dental practice loan applications?

Lenders assess dental practice loan applications by evaluating several key factors, including the financial health of the practice, its profitability, and cash flow. They also consider the applicant’s credit history, collateral, and business plan. Lenders look at the purpose of the loan (e.g., for expansion, equipment, or practice acquisition) and assess whether the practice has a solid growth potential. Strong financial projections and past performance improve the chances of securing a loan.

How does practice profitability influence the capital I can raise?

Practice profitability plays a crucial role in the amount of capital you can raise. Lenders and investors assess profitability to determine the financial stability and growth potential of the practice. Higher profitability indicates lower risk, which can result in better loan terms, higher loan amounts, or more favorable interest rates. A profitable practice also demonstrates strong cash flow, making it more attractive to lenders when seeking funds for expansion, equipment purchases, or other needs.

Can I raise funds to buy an existing dental practice?

Yes, you can raise funds to buy an existing dental practice. Financing options include traditional bank loans, small business loans, and specialized healthcare financing. Lenders will evaluate the practice’s current profitability, assets, and cash flow, as well as your personal credit history and business plan. The purchase price and projected return on investment are key factors in determining the loan amount and terms.

What is the loan-to-value ratio for dental practice loans?

The loan-to-value (LTV) ratio for dental practice loans typically ranges from 70% to 85%, depending on the lender and the specific financial situation of the borrower. This means lenders may provide loans covering up to 85% of the practice’s value, while the buyer is expected to contribute the remaining percentage as a down payment. A higher LTV ratio may require stronger creditworthiness or financial guarantees to secure favorable terms.

What documents are needed to secure dental practice funding?

To secure dental practice funding, you’ll typically need the following documents:

Business plan: Detailing the purpose of the loan and projected financial growth.
Financial statements: Recent profit and loss statements, balance sheets, and cash flow reports.
Tax returns: Both personal and business tax returns for the last 2-3 years.
Practice valuation: If purchasing or expanding a practice.
Credit report: Personal and business credit history.
Legal documents: Any relevant agreements or licenses.

How does my credit history impact my ability to raise capital?

Your credit history significantly impacts your ability to raise capital, as lenders use it to assess your financial reliability. A strong credit score demonstrates responsible debt management and reduces the risk for lenders, leading to better loan terms and higher borrowing limits. Poor credit history, on the other hand, may result in loan rejections, higher interest rates, or the need for additional collateral. Improving your credit score before applying can enhance your chances of securing funding.

Are there government loans for dental practices?

Yes, there are government-backed loans available for dental practices, such as those offered through the British Business Bank and other small business loan schemes. These loans often come with favorable terms, lower interest rates, and extended repayment periods, making them an attractive option for financing. Programs like the Startup Loan Scheme and the Coronavirus Business Interruption Loan Scheme (CBILS) also provide funding opportunities for healthcare businesses, including dental practices.

What role do financial projections play in raising capital?

Financial projections play a crucial role in raising capital by providing lenders or investors with a clear picture of your dental practice’s future revenue, profitability, and cash flow. Accurate projections demonstrate your ability to repay loans, manage expenses, and achieve growth. They help assess the financial viability of the practice and can influence the loan amount and terms. Strong financial forecasts increase investor confidence and improve your chances of securing the necessary funding.

What are typical interest rates for dental practice loans?

Typical interest rates for dental practice loans can vary based on factors like the lender, the borrower’s creditworthiness, loan term, and the amount borrowed. Rates typically range from 4% to 12%, with lower rates for highly qualified borrowers or government-backed loans. Secured loans generally offer better rates, while unsecured loans may come with higher interest. It’s essential to compare lenders and loan options to secure the most favorable terms for your dental practice.

Can I use personal savings to fund my dental practice?

Yes, you can use personal savings to fund your dental practice. This is a common method for many business owners looking to avoid debt or interest payments. Using personal savings offers full control over the practice without needing to rely on outside lenders or investors. However, it’s important to assess your financial situation carefully, ensuring that tapping into your savings won’t impact your personal financial security. It may also be helpful to combine personal savings with external funding sources for flexibility.

What strategies can improve my chances of securing a loan?

To improve your chances of securing a loan for your dental practice:

Prepare a strong business plan detailing your growth strategy and loan purpose.
Maintain a good credit score by managing personal and business debt responsibly.
Ensure accurate financial records including profit, cash flow, and tax returns.
Offer collateral or a down payment to reduce risk for lenders.
Show profitability and positive cash flow to prove the practice’s financial stability.

How much equity can I raise for a dental practice?

The amount of equity you can raise for a dental practice depends on the value of the practice and the percentage of ownership you’re willing to sell to investors. Typically, practices with strong profitability and growth potential can attract higher equity investment. Valuations will factor in assets, revenue, patient base, and market conditions. Engaging with investors or private equity firms specialized in healthcare can maximize the amount of equity you raise.

How does practice size affect the amount of funding available?

The size of your dental practice affects the amount of funding available by influencing profitability, cash flow, and overall financial stability. Larger practices with higher revenues and established patient bases are typically seen as lower risk by lenders, making it easier to secure larger loans or investments. Smaller practices may need to provide more robust financial projections and demonstrate strong growth potential to secure similar funding levels. Practice size also impacts the amount of collateral and equity available for securing loans.

Can private investors fund my dental practice?

Yes, private investors can fund your dental practice by providing equity or debt financing. In exchange for equity, investors may take ownership shares, while in debt financing, they provide loans with agreed repayment terms. Attracting private investors often requires a solid business plan and a proven track record of profitability or growth potential. Private investors can offer more flexible terms than traditional lenders and may also provide strategic support to help grow the practice.

What risks should I consider when raising capital?

When raising capital for your dental practice, consider risks such as:

Debt burden: High loan amounts can strain cash flow if revenues fall short.
Dilution of ownership: In equity financing, selling shares may reduce your control over the practice.
Interest rates: Loans with high-interest rates increase long-term costs.
Repayment terms: Inflexible terms can lead to financial strain during slower periods.
Risk to personal assets: Collateral-backed loans could put your personal assets at risk if the practice underperforms.

What common mistakes should I avoid when seeking funding for my dental practice?

When seeking funding for your dental practice, avoid common mistakes such as:

Failing to prepare a detailed business plan.
Not understanding the terms of loans or equity agreements.
Overestimating revenue and underestimating expenses.
Relying on a single funding source.
Ignoring cash flow management post-funding.
Taking on too much debt strains the practice.
Not considering the impact on ownership and control when seeking investors.

Business Loans for Healthcare Businesses

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Financial Services

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Raising Finance for a Veterinary Clinic

The UK veterinary sector

The veterinary service industry has seen an average of 3.2% per year between 2017 and 2022, faster than the UK economy. The UK vet industry is expected to increase 12.2% in 2022.

You can find out more about the growth of the UK’s veterinary sector here.

The growing popularity of owning pets has raised the demand for quality pet care at competitive prices – which is great news for veterinary practice business owners.

Veterinary practices can often be quite expensive to start up. However, how much is costs to start a veterinary clinic is dependent on a few things, such as the location and size of the practice, how well-equipped it is, and several other important factors. It is essential that you are ready for what to expect from the get-go.

You will most likely need to secure some level of commercial funding through loans, investors or a combination of both to fund equipment, real estate, renovations and more.

Action Plan

The UK veterinary sector has seen robust growth, averaging 3.2% annually from 2017 to 2022, outpacing the wider economy, with a projected 12.2% increase in 2022. Rising pet ownership is driving demand for quality pet care services, but starting a veterinary practice can be costly, requiring commercial funding for expenses like real estate, equipment, and renovations.

How We Help Vets Raise Finance

We support vets who need to raise finance for their clinic, so they are able to do what they love without the big financial strains of property, equipment or marketing. While many veterinarians choose to happily work as associates within an established practice, some decide to venture out on their own and build a new veterinary practice from the ground up.

Starting any business can be a difficult and expensive task, which is where our expertise and experience can help. We can help source the financial help you will need to start, buy, run or grow your business. Our in-house finance brokers are all former bankers. They can help make sure that you carefully plan out the entire process to ensure a smooth and successful application process from start to finish.

Action Plan

We specialize in assisting veterinarians in securing financing for their clinics, alleviating the financial burdens associated with property, equipment, and marketing. Our team of former bankers ensures a seamless application process, helping you plan meticulously for success.

Please click here to find out more about raising finance with Samera.

Loans for a veterinary practice

We are able to arrange a variety of veterinary loans and asset based finance tailored to you and your specific business needs. Whether you are looking to raise finance, need accounting help, raise working capital, VAT or arrange a corporate tax loan then we are the experts here to help you.

Please click here to book a free consultation with the Samera finance team.

Do you have to be a vet to own a vet clinic in the UK?

In the UK you are allowed to start up and run a veterinary practice without being a qualified veterinarian. You will of course need to employ veterinarians to work in the practice and abide by national industry regulations.

Hiring your team and having a plan

There are so many things that need to be done before opening your veterinary practice. After finding the perfect property and location for you, you will need a business plan and a team. Whether your background is within veterinary medicine or not, you will need experts to assist you in other areas of your plan, specifically within the accounting and finance area.

Most people hire a business manager or advisors such as Samera early in the process in order to secure the services of experienced financial advisors and accountants. Ideally, you would want your team to all be experienced in the healthcare sector. It is also a great idea to hire a marketing professional early in the process to help gain some traction before you are ready to announce your launch.

Action Plan

We provide customized veterinary loans and asset-based finance solutions. Book a free consultation with Samera today.
In the UK, you can own a veterinary practice without being a vet, but you must employ qualified veterinarians and follow regulations.
Before opening your practice, create a solid business plan and assemble a skilled team, including financial advisors like Samera and a marketing professional.

Creating a business plan for a veterinary clinic

Your start-up veterinary clinic’s business plan will be crucial to your application for a commercial loan. It will also help you let out your goals, plan your next steps and manage your finances properly.

There are several things you need to include in your business plan for it to stand a chance of being accepted by lenders. these include:

The aims and objectives of the clinic
The services you intend to provide
Information about the market and your local competition
Costs of purchasing or starting the business
Costs of running the business
How you intend to run the business (hours, staffing, roles etc)
Financial forecasts

Your business plan should be split into 3 sections, the executive summary, the narrative and the financials.

Action Plan

To ensure your veterinary clinic’s success and secure financing, craft a detailed business plan covering your clinic’s mission, services, market analysis, operations, and financial projections.

Click here for more information on creating a business plan for a healthcare business

How much does it cost to set up a veterinary clinic?

Setting up a new vet practice, like any other business, can be very daunting, especially once the bills come in. You want to set up a service that provides quality care, while also making enough money to keep the business afloat at a minimum. One cannot thrive without the other doing well.

Contact us to find out more

The costs for setting up a veterinary clinic are both expensive and extensive. While you need to be aware that there are a lot of hefty upfront costs to cover that will often require funding. We believe that usually the clinic should be able to generate a positive cash flow after 12-18 months.

Action Plan

Setting up a veterinary clinic involves substantial upfront costs, covering equipment, renovations, licenses, and staff salaries. Expenses can range from tens to hundreds of thousands of pounds, but with proper planning, a clinic can become profitable within 12-18 months.

Location Costs

There are several aspects of your practice that will affect your costs. The first being the location of your clinic. Choosing the optimum location for your business is one of the most important decisions you will make for your business venture.

Your location will impact how much business you will get. The location should also reflect if the practice is easily accessible or visible to potential customers who are simply passing by. Is there on-site parking nearby? Most importantly, is there already competition in the area?

If you are looking for a great location you may want to begin with a place that does not have a lot of veterinary services already, that way you will be finding the gap in the market rather than setting up shop in a place that is already crowded, struggling to define yourself as different from the others.

You will also need to look at the demographics in the area you have chosen. Is this area likely to be made up of affluent pet owners who will be your future clients? Your building may be nice but if you will not have the clientele close to to you, it’s likely that you may struggle to

How big do you need your vet clinic to be?

Your practice does not need to be huge but it does need to include specific rooms. You will need a consulting room, a waiting area and a reception at the least. Many veterinary practices will also have a theatre, lab space and kennels. Some surgeries can get away with offering consultations only. However, if this is your main or only practice site, clients will usually expect both medical and surgical provisions.

Marketing your vet practice

In order to attract the number and quality of clients you’ve estimated in your business plan, you’ll need to market your new clinic both before and after the launch. Building awareness is your first and arguably most important task. Your next one is trust. Building both trust and awareness in your local community is the best way to achieve sustainable growth.

Marketing is very important and needs to be continuous and frequent. The idea is to create momentum for your business and keep it up. Old forms of marketing such as flyers or newspaper ads tend to be quite outdated, expensive and are not really effective anymore.

Starting out on social media platforms such as YouTube, Instagram or Facebook are a great way to start gaining traction to your new business, they also are cheaper and far more effective options.

No matter which strategy you choose to use, your marketing campaign should tie in your brand, ethos and services all together. A unified message will help build momentum as you develop your vet practice over time.

Remember, your marketing campaign is just the promise. You need to follow through with your prospective clients and ensure that you are offering high quality medical services, friendly and knowledgeable staff, and excellent customer service. Word of mouth is the biggest and best marketing tool you have. No matter how good your marketing is, if people have a bad experience in your practice, they will make it known and before you know it, word will spread.

Action Plan

Your vet clinic needs essential rooms like a consulting area, waiting room, and reception. Marketing efforts should focus on building trust and awareness in the community through social media platforms like YouTube and Instagram. Prioritize delivering high-quality care and excellent customer service to build a positive reputation.

Click here for more tips on marketing for medical businesses.

What are the ongoing expenses for a veterinary practice?

Clinics are expected to keep a steady supply of prescription medicine that is in date, on hand at all times, similar to pharmacies. Often their patients’ lives depend on receiving specific medication in a timely manner. While your monthly rent and start-up costs are admittedly going to be a big expense, once you open up, your inventory of medicine and a range of specialty food that you will need will probably be one of your biggest ongoing expenses.

Action Plan

Ongoing expenses for a veterinary practice include the steady supply of prescription medicine, which is crucial for patient care. Additionally, expenses such as rent and inventory of specialty food contribute significantly to the clinic’s operational costs.

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Renting, Leasing or Buying

Renting and leasing rates vary depending on the location you are in. Renting is the best option if you don’t want the headache of owning a property and prefer to have more cash flow than equity. Renting a space often offers you the option to work out of a smaller space while you are getting started. You need the property you choose to have the potential to expand. That way, when you want to expand or add an extra room or two, all you have to do is rent the extra space rather than packing up and having to start up again in an entirely new location.

Action Plan

When deciding on a property for your veterinary practice, consider factors like flexibility, financial situation, and long-term goals. Renting offers cash flow benefits and flexibility, while leasing provides similar advantages with a longer-term commitment. Buying a property offers stability and potential long-term benefits but requires a significant upfront investment. Tailor your choice to your business needs and financial capabilities.

Please click here for more information on commercial mortgages.

Equipment

Your basic equipment needs are likely to include a veterinary stethoscope, digital X-ray imaging machine, veterinary ultrasound and believe us, many, many other quite expensive pieces of equipment. Nowadays, many veterinary practices have in-house labs for blood tests and blood analysers as many clients expect all services to be carried out under one roof.

Along with specialised equipment, your veterinary practice will also need normal business equipment. This will include computers, CCTV, and related IT services. What you may also need is access to a vehicle for home visits, this would be an extra service you may want to offer to a wider range of clients and perhaps make you different to your competition. Asset finance covers a range of solutions designed to let you spread the costs of any equipment you may need.

Asset finance will help you fund not only new but also used equipment that you need to buy. This means that you could get the equipment you need for a fraction of the price of a new one.

Please click here to find out more about asset finance.

New or used equipment?

Buying new equipment outright can be quite expensive. A good alternative for a new business could be to buy used equipment. If you are setting up a new practice there will be a lot of steep costs. Buying good quality used equipment can provide a solution not just for the clinical equipment that you need but also for any items that you need in your practice.

Action Point

Consider your veterinary practice’s equipment needs carefully, including specialized tools like stethoscopes, X-ray machines, and ultrasound devices. Additionally, invest in basic business equipment such as computers and CCTV systems. Asset finance offers solutions to help you acquire both new and used equipment, allowing you to manage costs effectively. Assess whether new or used equipment is the best fit for your practice’s requirements and budget.

Please click here to find out more about refinancing.

Finance options for your veterinary practice

The veterinary profession, like many others in the healthcare sector, is highly competitive. As the demand for local and mobile vets is continuously increasing, you will be able to find a lot of veterinary practices dotted around in your area, many of which are large chains or franchises. If you are working as an independent practice you will need to find a way to provide the same level of equipment as they do which is one aspect that Samera specialises in.

We can help you find the right type of funding for all your Veterinary needs such as:

• Setting up a new veterinary clinic

• Acquiring new premises for your veterinary practice

• Paying tax

• Providing capital for growth

• Acquire assets and equipment

We help to provide vets and veterinary owners with lenders and loaning options that are best designed and suited specifically to you and your business in order to assist with the growth and development of your business.

Contact us to find out more

5 Reasons Why You Should Outsource your Veterinary Practice’s Accounts

A Guide to Invoice Financing for Vets

Understanding Finance to Increase Profits

The market for loans and finance options is so crowded that you may need assistance with finding the right financing option for you. This is where we are able to use our contacts and expertise to help you build your business in the most cost effective way.

Action Plan

In the veterinary sector, accessing the right financing is vital for independent practices to compete with larger chains. Samera specializes in tailored loan options, connecting professionals with lenders to support growth. With our expertise, we navigate the market to find cost-effective solutions.

Traditional Bank Loans

Usually the first place many people will go is to the bank for a loan. While it is true that banks are able to offer lower interest rates and usually higher loan amounts, for young veterinary practices this may not always be the most viable route for you.

High street banks are a great option for loans. However, there are several brokers and lenders willing to lend money to veterinary SMEs. These loans can be either both secured or unsecured depending on the size of your loan and your individual circumstances. The loan can also be either short or long-term.

Action Plan

Traditional bank loans are often the first choice for financing, offering lower interest rates and higher loan amounts. However, for young veterinary practices, alternative lenders may be more accessible, providing secured or unsecured loans tailored to individual circumstances. These loans can be short or long-term, offering flexibility for business needs.

Tax and VAT loans for veterinary practices

Tax loans are helpful for many startup businesses as they can help you to spread the cost of quarterly VAT and annual tax demands by allowing you to pay them off with manageable, affordable monthly payments in turn, helping your cash flow. These types of loans are becoming increasingly popular amongst many companies all over the UK.

Action Plan

Tax and VAT loans offer startup businesses the flexibility to manage quarterly VAT and annual tax payments by spreading the costs into manageable monthly payments. This helps improve cash flow and is increasingly popular among companies across the UK.

Credit cards for your practice

You need to start somewhere with the credit of your business. You can build up your business’ overall credit by getting a business credit card. This can be helpful to you as business credit limits are often a lot higher than those for personal use and when used correctly, it can help you build the credit for your business. Many credit providers also offer cash back and reward points that can benefit you and your business. Keep in mind that this will only work well for you and your veterinary practice if you keep up with your credit repayments.

Action Point

Utilizing a business credit card can be a valuable tool for establishing and building your practice’s credit. Business credit cards often offer higher credit limits than personal cards and can earn rewards or cash back, providing additional benefits. However, it’s crucial to maintain timely repayments to ensure the effectiveness of this credit-building strategy for your veterinary practice.

Hire purchase

Hire purchase will allow you outright ownership of the given asset and also allows you to spread the cost over time at a manageable rate that suits you. This is a great option for capital preservation, it means you do not have to buy any equipment outright and any existing funds you have can be used elsewhere.This also enables an easier cash flow budgeting for your business as repayments are fixed.

Hire purchase also means that you get outright ownership of the goods on completion of the agreement. It is important to note that interest charge can be offset against profits for taxation.

Action Point

Hire purchase offers outright ownership of assets while spreading costs over time, preserving capital and facilitating predictable cash flow management for your veterinary practice. Ownership is granted upon completion of the agreement, and interest charges may be offset against profits for taxation purposes.

Leasing

Leasing will allow you to maximise the use of your equipment without the responsibility of actually owning it. If you need more freedom and flexibility, leasing is the best option for you. Leasing equipment, whether it is IT equipment, vehicles or any specialist equipment / machinery, usually with no upfront payments on deposits required. It allows you to have up to date equipment without having to buy it outright while also preserving your capital and staying ahead of your competitors. Leasing will consist of fixed monthly repayments, not only does this mean easier cash flow budgeting but repayments are also tailored to suit your individual circumstances.

Action Plan

Leasing offers the flexibility to utilize equipment without the burden of ownership. It requires no upfront deposits and provides access to up-to-date equipment, preserving capital and staying competitive. With fixed monthly repayments, leasing facilitates cash flow management tailored to your needs.

Personal Loans

A personal loan is quite different to a business loan. It is a form of borrowing finance that can literally be used for any purpose you deem fit which is both easy and convenient for you as a business owner and allows you great flexibility. As this type of financing is not based on any particular spending, you can use this loan for equipment, rent, designers, staffing or anything you see fit for your veterinary practice.

Acquisition finance

Acquisition finance is the capital you need to obtain for the sole purpose of buying another business. Acquisition financing may be the best financing option for you as it provides immediate resources to users that can be applied to the transaction allowing you to meet your acquisition aspirations quickly.

Action Plan

Personal loans offer flexibility as they can be used for various purposes in your veterinary practice. They provide easy access to funds for equipment, rent, staffing, or any other needs. Acquisition finance, on the other hand, is specifically tailored for purchasing another business, providing immediate resources for such transactions.

Business loans

Business loans can often be quite timely to obtain however, they are often quite necessary when buying into or starting up a new business. Starting your own veterinary practice will be quite a costly task so one of the first areas of borrowing finance you may want to look for is a business loan.

Be sure to keep a detailed record of your credit history and have a very in depth, detailed business plan, your loan will be highly dependent on it. This loan can be also used for acquisition finance, Buy ins / Buy Outs, capital injection and refurbishment projects.

Consolidation loans

There are various loan options out there for you based on your individual circumstances. If you are an individual who has a number of existing credit card balances, existing agreements and various other regular finance overhead, a consolidation loan may be the best loan for you.

Action Point

Business loans are essential for starting or expanding a veterinary practice, providing necessary funds for various purposes like acquisition, capital injection, or refurbishment. It’s crucial to maintain a good credit history and a detailed business plan to secure these loans. Additionally, consolidation loans can help individuals manage multiple existing financial commitments by combining them into a single loan.

Asset Finance

Asset finance offers funding, usually raised by a third party company, to either purchase or hire the necessary assets you need for your veterinary practice. Asset financing can work in a number of different ways and the terms of your loan will vary and be heavily dependent on the provider you choose. Samera can ensure you the best terms for your assets and equipment finance.

We know that it is daunting to start a new veterinary practice, especially one with a new name without any existing clients and not knowing whether you will make enough revenue to pay your expenses and turn a profit.

As an entrepreneur, you are ready to tackle this challenge. You believe in your vision and your drive and that your practice will be successful and with the help of Samera, it will be successful as well as profitable.

If you do not have all the answers to your questions from this article, we have a great team of advisors on hand that can talk to you about your individual circumstances and where you are in your journey of acquiring or starting your own veterinary clinic. This is the first step for you to achieve the purpose, the mastery and the autonomy of owning your own practice.

Action Plan

Asset finance offers funding options to acquire or lease necessary assets for your veterinary practice. With Samera, you can secure the best terms for your equipment finance needs. Starting a new veterinary practice can be daunting, but with our expertise, we can help make it successful and profitable. Our team of advisors is ready to assist you based on your individual circumstances, guiding you through the journey of owning your own practice. Contact us today to take the first step towards achieving your goals.

Click here to read our article on How to finance a healthcare business.

Business Loans for Healthcare Businesses

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Financial Services

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Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Navigating your Dental Practice Financial Future

In this webinar, Arun and Gurpreet discuss how best to structure your finance and accounts, as well as how to save money on your consumables.

Click here to read our articles Samera Learning Centre.

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Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult

Dental Accounts & tax

Dental Accounts & Tax: Further Information

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Raising Finance for a Pharmacy

We believe that pharmacists and all potential pharmacy owners and managers should have access to all the necessary information, finance options and support they need in order to successfully open, start and finance their pharmacy business.

Whether you are a qualified pharmacist or already a pharmacy owner, buying, starting or running a pharmacy could be a rewarding next step for you.

We can help provide financing for:

Purchasing a pharmacy
Refurbishment funding
Specialist equipment/technology asset finance
Equity purchase
Tax funding
Commercial mortgages

Do banks like to lend to the pharmacy sector?

The first place most would-be pharmacy owners will go to seek finance to buy or grow a pharmacy would be the high street banks.

All banks have different risk appetites, and while this varies from sector to sector (as well as individual circumstance), most banks consider pharmacists and pharmacy finance as being a relatively low risk and a good investment. Generally, the pharmacy sector is seen as a green sector which means banks and quite often happy to lend to pharmacists.

Why is there more demand for pharmacies at the moment?

There has been a big increased demand for pharmacies, especially within the last years. Pharmacies have definitely been one of the few businesses that traded well during the entire rise of the Covid-19 pandemic outbreak and through the following lockdowns.

This has also meant that pharmacy goodwill values have also held up throughout the entire pandemic. Pharmacies are businesses that are a necessary and vital service to all local communities (e.g. helping with the vaccination program).

It is also important to note that there is a barrier to enter the market. There are restrictions to where new pharmacies open. There are rules about not being able to open a new pharmacy right next to an existing pharmacy. This could in fact work to your advantage as it diminishes the amount of competition in the area which gives your pharmacy a higher/ better chance to succeed.

The Decline of Pharmacies in the UK: A Growing Opportunity

In the last few years, the number of pharmacies in the UK has been dropping. Many local pharmacies have had to close because of money problems, higher running costs, and cuts to government funding. The National Pharmacy Association (NPA) says that around 650 pharmacies have shut down in the last six years, making it harder for some communities to get the healthcare they need.

This has hit rural areas the hardest, where small, independent pharmacies are struggling to survive. Even in towns and cities, big chains or online services are replacing local pharmacies, but they can’t always offer the personal care and advice that people appreciate.

A Gap in the Market: The Perfect Time to Invest

Even though this decline may seem worrying, it actually opens up a great opportunity. People still need easy access to healthcare, and with fewer pharmacies available, there’s now a clear gap in the market. This is especially true in places where pharmacy closures have made it harder for people to get their prescriptions and healthcare advice.

Starting or buying a pharmacy now lets business owners step in to fill this gap. Local communities still need personalised care, and by offering trusted advice, customised services, and convenience, you can create a pharmacy that becomes a key part of your area. The government also knows how important pharmacies are and still provides funding for those offering extra services like vaccinations or minor illness consultations.

Why Now?

With less competition and ongoing demand, now is a great time to think about owning a pharmacy. By focusing on good customer service, being innovative, and offering a variety of services, a new or expanding pharmacy can do well even in tough times.

Seize the opportunity presented by the current market and become a vital, reliable part of your community. This is the moment to make a difference in the pharmacy field.

Action Plan

The demand for pharmacies has surged due to their indispensable role during the COVID-19 pandemic, ensuring continuous access to essential medications and participating in vaccination efforts. This sustained demand has also bolstered pharmacy goodwill values, while entry barriers limit new competition, further strengthening existing pharmacies’ prospects.

Start or buy a pharmacy?

Many pharmacists dream of owning their own pharmacy. So, what is the best way of making this happen? To build? Or to buy?

Both options come with a lot of pros and cons that you need to weigh out depending on your individual circumstances. On the downside, buying a business is often more costly than starting from scratch but it also has many added benefits.

It is much less common to start a pharmacy from scratch. This is because most areas that need a pharmacy already have one. However, if there is a gap in the market, it is possible to fill it.

Action Point

Starting or buying a pharmacy both have their pros and cons. While starting from scratch offers more control but requires significant investment and market analysis, buying an existing pharmacy provides immediate clientele and established infrastructure at a higher initial cost. The decision depends on factors like market demand, financial resources, and entrepreneurial goals.

Setting up a pharmacy

Setting up and building your pharmacy business from scratch is often accompanied by some substantial costs.

To begin with, there will be the cots for the premises itself, which is most likely to be a rental agreement for at least the first couple of months or even years. The costs of applying to physically set up your pharmacy are fairly minimal however, you will need to set some money aside for necessary NHS contracts and premises registration fees. There also may be additional planning fees if a specific change of use is required.

Action Plan

Setting up a pharmacy involves substantial costs such as premises rental and regulatory fees for NHS contracts and premises registration. Budgeting for these expenses is essential for a successful establishment.

Contact us to find out more

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Registering a pharmacy in the UK

A pharmacy can only be registered by a pharmacist, a partnership consisting entirely of pharmacists or a corporate (usually a limited company). There are two key parts of the process of registering your pharmacy in the UK. The first is to make an application to the local NHS England Team for inclusion in the pharmaceutical list. Before a registered pharmacy can dispense This process can take from four months or even longer in event of appeals. The second is the pharmacy premises needs to be registered with the General Pharmaceutical Council which can also take up to 3 months.

What does a start up pharmacy need to fund?

If you’re going to start a pharmacy from scratch, you’ll need to purchase the property, the equipment, consumables, everything! These are the kind of costs you’ll need to consider and factor into your projections.

Inventory, consumables and supplies
Equipment
Staff
Property
Technology/IT
Marketing
Legal & insurance
And more…

Action Point

Starting a pharmacy from scratch in the UK requires funding for various essentials including inventory, equipment, staff, property, technology, marketing, legal, and insurance. These costs must be carefully budgeted for and factored into financial projections.

How to open a pharmacy in the UK

There are two key parts to the process, the first is to make an application to the local NHS team in order to be included in the pharmaceutical list. Before a registered pharmacy is able to dispense prescription issues under the National Health Service, it must be included in the pharmaceutical list relating to a Health and Wellbeing Board Area.

It is important to note that this process can take up to four months or even longer in the event of appeals. The second is that the pharmacy premises must be registered with the General Pharmaceutical Council (which can take up to 3 months).

Action Point

To open a pharmacy in the UK, you must apply to the local NHS team to be included in the pharmaceutical list for dispensing prescription medicines under the National Health Service (NHS). This process can take up to four months or longer. Additionally, the pharmacy premises must be registered with the General Pharmaceutical Council, which can take up to three months.

Assemble a team of advisors

Tapping into some expert advice may be pricey, but will be essential for you. Find a solicitor who understands you, your business plans and goal and most importantly someone who understands the independent retail pharmacy business. Having a financial broker will also help you immensely. One of the first steps in starting your business is setting up its legal status. You will also need advisors in real estate and insurance as well as lenders who are all instrumental in making your pharmacy business real. To create your own team of expert advisors you can start by enlisting our help with funding and accounts.

Create a solid business plan

Creating a business plan is one of the most important things that you need to take time out to perfect. In a way there is always a demand for people’s pharmaceutical needs. However, most of your potential customers may already be going somewhere else for all their pharmacy needs. Because of this, your business plan needs to specify why those customers will come to your pharmacy instead.

Action Plan

To open a pharmacy in the UK, gather a team of advisors including a solicitor, financial broker, real estate advisor, insurance advisor, and lenders. They’ll assist with legal, financial, and operational aspects. Craft a strong business plan highlighting reasons why customers should choose your pharmacy.

Find the optimum location

When it comes to any retail business it’s always location, location, location. It is the most critical success factor. In order to choose where the optimum location to open you pharmacy will be you must consider:

Traffic: Are your ‘ideal customers’ likely to travel to this location?
Visibility: Will your pharmacy be easily visible to attract customers to provide a constant flow of business to your pharmacy?
Access: Does this location allow people to easily enter and exit? Is there parking or even a drive through option?
Size: Can your pharmacy grow in this location?

You need to do your research! Has an independent pharmacy recently closed in the area? If so, it is important that you understand the reasons why. This may present an opportunity for you to capture a customer base that was already going to an independent pharmacy. It is also important to note that you will probably only have a six-month window to save that existing customer base.

Even the largest retailers such as KFC and Starbucks conduct extensive research before settling on a location, so maybe having one of them near you is a good sign. If you are able to set your pharmacy apart with your unique products and services, your pharmacy can thrive being near one of the big chain pharmacies.

When choosing a location for your pharmacy you need to also consider the proximity of other businesses.

Action Plan

When selecting the optimal location for your pharmacy, consider factors like traffic, visibility, access, and size. Research recent closures of independent pharmacies in the area to understand opportunities. Proximity to big chain pharmacies can be beneficial if you offer unique products and services. Also, consider the proximity of other businesses in the area.

Financing options for a pharmacy

Like any small business owner, it is important to pick the right financing option for you. At this stage, having a financial advisor or broker is crucial to begin the process as there are many financing options available including loans from traditional lenders such as commercial banks. There are 3 key elements that most lenders are primarily looking for:

Good credit history
Sufficient working capital
A significant initial upfront investment

When you are preparing to ask for a loan, your business plan and financial statements should include three types of funding:

Built-out capital to pay for the building of the store itself and any renovations, fixtures or any other fixed assets.
Opening inventory financing, this is to pay for the initial stock you need to acquire to stock your pharmacy. While wholesalers can usually provide favourable terms for you it is highly unlikely that you will have a positive cash flow for at least the first six months.
Working capital in order to fund day to day operations such as utilities, bills and payroll.

Contact us to find out more

Action Plan

When financing a pharmacy, traditional lenders offer loans requiring good credit history, working capital, and a significant initial investment. Funds for built-out capital, opening inventory, and working capital are essential. Buying an existing pharmacy can be profitable with proper evaluation and a skilled team. Consider fees and explore options like buying out a partner or acquiring shares.

Buying a pharmacy in the UK

Buying a pharmacy, especially one in the right location, can definitely create a good profit. You might decide to buy an existing business rather than start your own venture from scratch. The biggest advantage of buying an existing pharmacy is that products, staff, premises, equipment, regular sales and customers are already in place.

However, buying an already operating business can be hazardous and if you aren’t careful, an extremely expensive process. This is why having the rightly skilled team in place from the get-go is so important. The team with the right skills, experience and legal know-how will be able to ensure that you do not have to pay through the roof.

Income streams and future cash flows from existing businesses are a lot easier to predict than if you were to start the business fresh from the ground up. You are in an even better position if you are able to assess the performance of the business to understand its current cash flow and value. It will be easier to agree to a price that works in yours and the seller’s best interest.

You need to also consider solicitors and accountant fees that you will need to pay. If the business you are trying to acquire is a large practice, you may need to do so as a partner. Another great option for you would be to buy out a current partner who may be retiring or selling their shares. We recognise that there are many challenges that come with Buy In and Buy Out finance and its provided funding tailored to help you make full use of the opportunity.

What information should you look at when buying a pharmacy?

Local Competition.
GP practice in the local area – patient numbers.
Number of prescriptions that the pharmacy is doing.
The over the counter sales (OTC).
Cash flow, debts and assets of the business.

How long does it take to buy a pharmacy?

Once you have found a pharmacy that you would like to purchase, there are a few factors that can impact the time scale such as:

Transfer of the property lease – third party landlords.
Change of ownership – you will need approval from NHS England.
Due diligence – make sure you use a specialist Pharmacy solicitor.

It is almost impossible to say how long any given sale of a pharmacy will take. On average, you will be able to realistically buy a pharmacy in 3-6 months.

Action Plan

When buying a pharmacy, consider local competition, patient numbers, prescription and over-the-counter sales, and the pharmacy’s financial health. The timeline for purchase varies but typically takes 3 to 6 months, contingent on factors like lease transfer, NHS approval, and due diligence.

Costs to consider when buying a pharmacy

The purchase of a Pharmacy is a major financial commitment and for most, a long-term one

Of course, you most likely need to raise acquisition finance to purchase the actual pharmacy business. You will also need to take into account any leasehold or freehold costs, or any rent and business rates.

When you are buying a pharmacy there will be many ongoing expenses that you will have to prepare for such as security measures, leases and payroll for your employees. Your largest expense is and will remain to be maintaining your prescription medication supply.

It can be difficult to maintain as you must always have enough on hand to meet monthly demand while ensuring that no medicine that you have expires before it is dispensed. Salaries and payroll come as a very close second.

You will also need to consider your ongoing costs for IT and cybersecurity, accounts, tax and marketing.

Action Plan

When purchasing a pharmacy, consider upfront costs like acquisition finance, leasehold or freehold expenses, and ongoing expenses such as security measures, payroll, and prescription medication supply. Additionally, budget for IT and cybersecurity, accounting, tax, and marketing.

Contact us to find out more

How can Samera business advisors help secure funding to purchase a pharmacy?

At Samera, we are committed to offering you financial services that will fit your business needs as well as your personal ones. We have a team of former bankers, all with extensive experience in the UK’s healthcare lending sector. We understand the sector and have the necessary contacts to ensure you get the best terms available and we connect you with the right contacts to make sure you get the best experience while obtaining your new pharmacy.

How much deposit do you need to buy a pharmacy?

We typically see pharmacists achieving 70-90% LTV (loan-to-value) rates, meaning you will often need a deposit of 10-30% of the value of the business. It all depends on the strength of the business you wish to purchase though.

What will the bank need to see before they lend?

Target Pharmacy

Last three years accounts
Sales particulars
FP34 Statements – Can often take minimum 6 months

This information will give you an indication of how the business has been trading over a period of time. What is the turnover, how many prescriptions have they undertaken (is this consistent) and what are the business profits?

Personal information

CV
6 months personal bank statements
Personal profile form
Last two years tax returns

This information is important as lenders want to understand what experience you have as a pharmacist, have you taken on any extra management responsibilities that would help you run a business.

Banks also want to understand how you conduct your personal finance, are your personal accounts well run, do you have assets in the background (property/cash)?

Action Plan

At Samera, our expert advisors specialize in securing pharmacy acquisition funding. With tailored solutions and industry connections, we help pharmacists navigate the lending process. Typically, a deposit of 10-30% is required, with loan-to-value rates ranging from 70-90%. Banks assess eligibility based on financial documents and personal information provided by the applicant. Our streamlined approach ensures efficient financing tailored to your needs.

Funding options for pharmacists in the UK.

When funding your pharmacy, whether it be to start, buy, grow or maintain the business, you have various financial options.

Acquisition finance.
Buy out a business partner/partner buy in finance
Asset Finance
Smaller loans to help with cashflow or stock purchase.
Relocation loans – Help to move the pharmacy, maybe into a GP practice.
Refurbishment loans – It is more important than ever for pharmacies to have the right clinical look or to add a consultation room.
Tax loans.

The pharmaceutical profession, like many others in the healthcare sector is highly competitive. As the demand for chemists is continuously increasing, you can find chemists on every high street, many of which are large chains or franchises. If you are working as an independent pharmacy, you will need to find a way to provide the same level of equipment as they do, which is one aspect that Samera specialises in.

We can help you find the right type of funding for all your pharmacy needs such as:

Setting up a new business
Acquiring new premises for your pharmacy
Acquire assets and equipment
Paying tax
Providing capital for growth
Acquire a pharmacy franchise

We help to match pharmacists with lenders and loaning options that are best designed and suited to you and your business specifically to assist with the growth and development of your business. The market for loans and finance options is so crowded that you may need assistance with finding the right financing option for you. This is where we are able to use our contacts and expertise to help you build your business in the most cost effective way.

Action Plan

In the UK, pharmacists have various funding options:

Acquisition Finance: For buying existing pharmacies.
Partner Buy-In/Buy-Out: Partner-related financing.
Asset Finance: Equipment funding.
Working Capital: Small loans for cash flow.
Relocation and Refurbishment Loans: Premises-related financing.
Tax Loans: Covering tax obligations.

Contact us to find out more

Unsecured business loans

Like many types of financing, Unsecured Business loans provide you with a large sum which you will agree to pay back over a certain term including interest. This is usually done through fixed monthly repayments.

They are much like personal loans and are quite easy and simple to arrange. Lenders choose to approve your loan request based on various factors including your personal credit history and the credit rating of your business.

Unsecured loans differ from secured loans in that they do not require you to put up any assets as security or collateral. This means that in the unfortunate event that something is to go wrong and you are unable to keep up the repayments of your loan, the lender will not be able to seize any assets.

However, to make up for the lack of security on the loan, lenders usually expect a personal guarantee from you and any business partners you may have. This will ensure to the lender that you will be able to make the repayments even if your business cannot. You can usually secure less money through an unsecured loan, due to the risk to the lender. You may also face higher interest payments.

Why you need Samera to arrange an unsecured loan for you.

In this day and age there are many unsecured loan providers for Pharmacists in the UK ranging from traditional high street bank lenders to the new generation of online lenders. All of whom have terms and rates that vary substantially.

Finding the right lender for you is essential to minimise the cost of your borrowing. Here at Samera, we work with you to ensure that you get the loan that is most favourable to your needs. We use our knowledge of the UK market to find lenders that suit you with the most competitive deals.

Action Plan

Unsecured business loans, akin to personal loans, don’t require collateral but may necessitate a personal guarantee. Samera specializes in securing these loans for UK pharmacists, offering tailored solutions with competitive terms from a range of lenders, ensuring minimal borrowing costs.

Secured business loans

Secured loans can be one of the most cost effective ways to borrow large amounts at once. If you are looking to borrow from £50,000 or more, a secured loan will probably be a good option for you. A major advantage of using secured loans as a means of financing your pharmacy is that it can cut the cost of borrowing and can help you borrow larger amounts than other types of lending.

Secured loans are ‘secured’ by something you use as security in case you cannot pay the loan back. This ensures the lender that in the event that you are unable to repay back the loan, they can possess whatever assets you put up as security instead. If you do not repay as upon the agreed terms, the lender had the right to take ownership of the assets. Assets can be anything of value such as estate, cars or stock.

You are usually able to borrow more through secured loans as they are less risky for lenders. This is why they are usually a more cost effective option as they can have lower rates of interest than Unsecured loans.

Why do you need us to arrange a secured loan

Just like unsecured loans, secured loans have many different lenders offering various terms and rates and each of their rates vary substantially based on the ‘security’ being offered. We use our expertise and contacts to ensure that we find the most appropriate lender for you with the most competitive deal. We can also help you decide on the most appropriate and suitable form of security to offer.

When large sums of money and long financial commitments are involved, it pays to have expert support on your side to guide you through what is often a stressful process. Our aim is to use our expertise to ease the stress and burden off you so you can focus on what you do best in your business.

Action Plan

Secured business loans offer a cost-effective solution for borrowing larger sums, typically £50,000 or more. With assets like property or inventory serving as collateral, lenders are assured repayment, often resulting in lower interest rates compared to unsecured loans. Samera helps pharmacists navigate secured loan options, securing favorable terms to support business growth.

Leasing

Leasing is often a great idea if you want to maximise the use of the equipment you need without the full expense and responsibility of owning it. Leasing gives you the flexibility and freedom that could work in your favour.

With leasing you receive up to date equipment which allows you to always be ahead of your competitors and there are no upfront deposits required which works well for your cash flow.

You also have easier cash flow budgeting as repayments are fixed. The repayments are usually tailored to suit your individual circumstances. Leasing is also tax efficient as repayments may be offset against taxable profit.

Action Point

Leasing offers flexibility and cost-effectiveness, providing access to up-to-date equipment without the upfront expense or responsibility of ownership. With no need for upfront deposits, leasing supports cash flow management. Fixed repayments facilitate easier budgeting, tailored to individual circumstances. Moreover, leasing can be tax-efficient, as repayments may be offset against taxable profits. Samera assists pharmacists in navigating leasing options to optimize equipment acquisition.

Buy-Ins and Buy-Outs

A management buy-out allows a company owner to sell their entire business to an existing management team. Instead of starting a whole new business on your own, you can join an existing practice. The simplest way to do this may be a Partner Buy-In. This is where you become a new partner and join an existing team.

Partner Buy-Ins are common with professional practices and may be an opportunity for an existing firm to bring in new financial partners or even new talent. The most common way to Buy-In is when an existing partner is looking to leave the business or retire.

As a new partner you will be required to put down funding to either to support the growth plans of the business or to compensate the existing partner.

Asset finance

Asset finance offers financial support for both small and medium sized businesses. It is the funding raised by usually a third party company, to either purchase or hire the necessary assets for your pharmacy business. Asset financing can work in a number of different ways and the terms of your loan will vary depending on the provider.

Samera can ensure simple, fast and transparent assets and equipment finance for you.

Action Plan

Management buy-outs enable company owners to sell their business to an existing management team, while partner buy-ins allow individuals to join an established practice as new partners. Samera facilitates partner buy-ins, supporting the acquisition process and financing needs. Asset finance provides funding for acquiring essential assets for your pharmacy business, with Samera ensuring swift and transparent financing solutions tailored to your requirements.

Contact us to find out more

Tax loans

Paying your taxes is something that unfortunately no business can escape from. Within your first 6 months of starting your business profit margins are usually quite low, and you may even run into cash flow issues. Tax loans allow you to spread out the cost of your tax demand into affordable monthly payments. They benefit your business as you will have a controlled cash flow, they often have flexible repayment terms and you will not have HMRC on your back or receive any fines as they will receive the funds from you on time. These types of tax loans are also quick and simple to arrange.

Acquisition Finance

Acquisition finance is the capital you need to obtain for the sole purpose of buying another business, like a pharmacy. Acquisition financing may be the best financing option for you to buy a pharmacy as it provides immediate resources to users that can be applied to the transaction, allowing you to meet your acquisition aspirations quickly.

Action Plan

Tax loans offer a solution to managing tax obligations by spreading payments over affordable monthly installments, ensuring controlled cash flow, and avoiding HMRC penalties. Acquisition finance provides immediate capital for purchasing a pharmacy, enabling the swift realization of acquisition goals.

Click here to read our article on How to finance a healthcare business.

Our Expert Opinion

“Understanding how pharmacy practices are financed is key to securing the best terms available. This means using a broker that knows the pharmacy market and also the banks requirements is key to funding your pharmacy practice”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Business Loans for Healthcare Businesses

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Financial Services

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

What the Google Experience Update Means for Dentists

SEO for Dental Websites in 5 Steps

How to Grow Your Dental Practice with Google PPC

How To Market A Dental Practice

Our Expert Opinion

“The Google Experience Update changed the game for SEO. Basically, it now means that the better your website performs, the better Google will consider it.

You need to make your website fast, so pay more for a better server and get a developer to speed your site up. Your website also needs to be stable. This is also probably going to need the work of a developer, but it really will pay dividends.

Keywords, backlinks and the rest of the SEO concepts are still going to matter. However, it’s not just your content that needs to be good anymore. The platform on which they are hosted (your website) needs to be as good as possible too. “

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Grow Your Dental Practice With Clever Marketing

5 Reasons to use Facebook Ads for a dental practice

Email marketing for dentists

Should You Use Social Media in a Dental Practice?

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How To Market A Dental Practice

Marketing-a-Dental-Practice_-Samera-How-to-Guide

Paying attention to marketing is essential if you want to appeal to new patients, build your brand awareness and grow your dental practice. It provides you with an opportunity to attract new patients as well as to keep current patients engaged and connected.

Making use of techniques such as website optimisation, SEO, social media, PPC and email marketing helps you grow your dental practice and make sure that it continues to flourish as you want it to.

The basis of your dental practice should begin with getting the right team in place. However, growing your business and getting that attention that you need for your dental practice to succeed, is where your efforts need to be drawn to next. This is where marketing comes in.

After nearly 20 years in the business, it has been a shame to see many dental practices who have the potential to thrive, fail due to the inability to get people through the door. This is why marketing is paramount to growing your business. Marketing a dental practice effectively can make all the difference when it comes to getting new patients in and retaining current ones.

Click here to watch our webinar on using marketing to grow a dental practice.

Action Points

Start by creating a user-friendly website for your dental practice, keeping it simple initially, possibly even with just a homepage that includes all essential information.
Ensure the website is easy to navigate without using complex jargon or categorizing treatments in a way that might confuse potential patients.
Incorporate multiple contact options, making phone numbers clickable for direct calling, including contact forms on every page, setting up online booking systems, and adding a chat feature or WhatsApp number for ease of communication.
Prioritize making your website mobile-friendly, ensuring it not only looks good on desktops but also provides an optimal experience on mobile devices, where the majority of your traffic is likely to come from.

You can read more about creating websites for dentists here.

Search Engine Optimisation

Theoretically, you can have the best dental practice in the world in terms of patient care, and it will still fail to thrive if people do not know that it exists. Gone are the days when word of mouth was the way most people found a dentist. Today, people go straight to Google and search for a dentist in their area. This is why it’s so important to use SEO for dentists, to attract patients to your practice.

SEO helps you to optimise your search engine rankings. So that your practice features at the top of the results list when people carry out a search. For this to happen, it’s important that SEO is done well. There are several things to think about to successfully grow your dental practice with SEO.

Make sure you are using the proper keywords on the relevant pages. For instance, if you’re a dentist in Baker Street, you need to make sure your dental implants page uses phrases like ‘dental implants in Baker Street’ in the body of the text and preferably in the headers.

Start a blog right now if you haven’t already – it’s the perfect excuse to create content around any keyword. Write about the top tips for getting white teeth, the 5 reasons to use Invisalign, the best ways to avoid bleeding gums and so on.

Action Points

Implement SEO strategies to enhance the online visibility of your dental practice, ensuring it appears at the top of search results when potential patients search for local dentists.
Focus on using relevant keywords throughout your website, especially on service pages, incorporating specific phrases like ‘dental implants in Baker Street’ to match local search queries.
Start and consistently update a blog on your dental practice’s website, using it as a platform to create keyword-rich content on various dental topics, tips, and treatments to attract and engage potential patients.

Effective-marketing-strategies-for-dentist-1.

Read our article on SEO for dental websites here.

Pay-Per-Click Advertising

Pay-per-click (PPC) advertising can be one of the most effective way of getting your adverts seen by potential patients. By using platforms such as Google Ads and Facebook Ads, businesses can pay to have their adverts shown to the exact audiences they want. With PPC, you pay every time a user clicks on your advert.

Read our blog on using Google PPC to grow a practice.

Google and Facebook both allow you to use narrowly defined target audiences, meaning you are not paying for your adverts to be shown to audiences with no intention of becoming a patient. With Google and Facebook by far being the largest search engine and social media platform, the advertising potential with these two services are enormous.

Start advertising on Google right now for simple keyword searches like ‘dentist in [your area]’. Set up ads for emergency patients especially, they are a great way to grow a practice and find new patients. You can target specific audiences but you can also simply target everyone within a certain radius of your practice.

Facebook can be great for PPC when used correctly. We recommend using Facebook ads for cheap brand awareness campaigns, just to get your name out there to people within your area. You should also use Facebook (and Instagram) ads for one-off offers and discounts. Target the people who have visited your website, your followers on Facebook and Instagram and also upload your patients’ emails. This means your adverts will go to more qualified leads who you know are at least somewhat interested in your services (since they have already interacted with you in the past.)

Set up a Facebook Pixel on your website – this allows Facebook and Instagram to track their users when they use your website. This then allows you to send adverts to people who have visited specific pages on your website. For instance you could send Invisalign adverts ONLY to people who have been on your Invisalign page.

Action Points

Leverage Pay-Per-Click (PPC) advertising on platforms like Google Ads and Facebook Ads to target potential patients directly, paying only when your ad is clicked.
Utilize the targeting capabilities of these platforms to ensure your ads reach specific, relevant audiences, such as those searching for a ‘dentist in [your area]’ or requiring emergency dental services.
Consider using Facebook for brand awareness campaigns to familiarize your local community with your dental practice and for promoting special offers or discounts to a more engaged audience.
Implement a Facebook Pixel on your website to track visitor interactions, enabling more precise ad targeting, such as showing Invisalign ads to visitors who have shown interest in that specific service on your site.

Effective-marketing-strategies-for-dentist-2

Watch our webinar on using Facebook and Instagram ads for dentists.

Creating Content

Creating great content is key to digital marketing, it’s your ammunition! If you haven’t already – you need to start blogging and writing articles. These are some of the main things that search engines like Google will use to analyse and rank your website.

Write about top tips, give guides to different treatments, do top 10 lists, there are so many options to choose from and so many topics to write about! It takes time, but it will pay dividends in the long run in terms of SEO. Google notices when your website is constantly updating itself with new content and it prefers websites that do.

Read our article on content writing for dentists here.

But blogs aren’t the end of it. The most successful and engaging form of media on any website is video. It attracts customers, it engages them and it converts. Get yourself in front of the camera and talk about your services, dentistry in general, your team and your mission & values.

You can create a short video for each treatment page explaining the procedure. You could also have a video for each team member on their profile page. Video is more engaging for audiences and also performs better than simple text or images.

Effective-marketing-strategies-for-dentist-3

There is no doubt that social media plays a larger than ever role in dental marketing. Using social media gives you the opportunity to interact with people in the local community who are patients or potential patients. You can post updates about the practice, including details of your community work and of any new treatments that are being provided.

You can also interact with your patients, by encouraging them to provide reviews of your practice, or ask questions. Do not forget that it is not sufficient to simply set up social media accounts; you need to make sure that they are managed effectively and regularly updated.

At the very least, you need to be on Facebook and Instagram. Not only can you keep in contact with your patients, keep them engaged and send them updates, offers and news. You can also advertise very effectively straight from these platforms.

Social media is essential to growing and marketing a practice. Even if you do not use Facebook or Instagram in your personal life, you need to be using it for your dental practice. Post about once a day. Post things like blogs, articles, behind the scenes videos, even content that isn’t directly related to the practice like motivational pictures!

Action Points

Actively use social media platforms, especially Facebook and Instagram, to engage with the local community, patients, and potential patients by sharing updates, community involvement, and new treatments.
Encourage patient interaction through reviews and Q&A sessions to foster a community around your practice.
Maintain a consistent and effective social media management strategy to ensure your accounts are regularly updated with relevant content.
Utilize social media for direct advertising, leveraging the platforms’ targeting capabilities to reach specific audiences with updates, offers, and news.
Post diverse content daily, including blogs, articles, behind-the-scenes videos, and motivational images to keep your audience engaged and informed about your dental practice.

Effective-marketing-strategies-for-dentist-4.

Read our article on using social media to grow a practice here.

Reviews

One of the best ways to grow your practice using digital marketing is to encourage current customers to review your practice. Hopefully, these reviews on online spaces such as Google Reviews or Trustpilot will be positive. However, negative reviews can still be an opportunity for you to address them in a helpful and positive manner. Look at the negatives as constructive criticism and make sure you are seen to be addressing the problem.

In this day and age, when prospective patients are looking to go to a new dental practice, the first thing they usually look at is reviews. Reviews are what will entice or repel prospective clients. When people see those reviews online, they will (hopefully) see that your dental practice is reputable and highly thought of. This makes it more likely for them to book an appointment with you and use your services.

Should You Use Social Media in a Dental Practice?

How to Market Your Dental Practice Online

Marketing to Millennials for Dentists

Your best, as well as your worst, reviews equally have a way of quickly spreading online. Encouraging customers to review your company is an easy way to expand your brand’s reach. When people have good things to say and have a positive experience at your practice, they are more likely to spread their review to more sites including external websites such as TripAdvisor, Yelp and FourSquare.

Not only will good reviews impress possible patients, it also impresses Google. The better your reviews, the more reputable and trustworthy in the field of dentistry Google will consider you.

Action Plan

Actively encourage your current patients to leave reviews for your practice on platforms like Google Reviews or Trustpilot.
View negative reviews as opportunities for improvement and address them publicly in a constructive and positive manner.
Recognize the importance of online reviews in attracting prospective patients, as they often check these before choosing a new dental practice.
Promote customer reviews to enhance your practice’s online reputation and visibility, which can lead to increased appointments and service usage.
Understand that positive reviews not only influence potential patients but also contribute to Google’s perception of your practice as reputable and trustworthy in dentistry.

Watch our webinar on marketing and patient care here.

Email Marketing

Email marketing is still one of the most effective digital marketing methods, if it is utilised in the right way. You can provide a means of people giving you their email address, such as a newsletter sign-up page on your website or in person when they book an appointment. Once you have collected email addresses, you need to decide on your campaign.

Click here to read our article on Email marketing for dentists

For instance, you may want to offer discounts for treatments or an ongoing newsletter with details of latest news within your practice. Newsletters that consist of getting to know the staff segments and continuous updates of your practice, helps your clients feel closer to you as a business. Think carefully about the people you are targeting with your emails and make sure that the tone of your email content is engaging and appropriate.

Newsletters can be a great way of keeping your customers engaged, enhance your brand awareness and build a feeling of community.

Action Points

Implement a strategy for collecting email addresses, such as through newsletter sign-ups on your website or during appointment bookings.
Plan your email marketing campaign, considering offering discounts or sending newsletters with updates and news about your practice.
Include personal touches in your newsletters, like staff introductions and practice updates, to foster a sense of connection with your clients.
Tailor the content and tone of your emails to suit your target audience, ensuring it is engaging and relevant.
Utilize email marketing to keep your patients engaged, increase brand awareness, and cultivate a community around your dental practice.

Watch our webinar on using marketing to increase profits here.

Offline Marketing for Dentists

Branding

Before we begin on effectively marketing a dental practice, we need to start with what you are promoting. Needless to say, it is your brand name and image that will define you and get you recognition. But you need to start somewhere else entirely, your brand should come later. The first thing and main thing you need to market is the benefits of your practice. This is what will get you the attention you need. Remember, benefits before branding.

You need to promote the specific benefits patients will get if they visit your dental practice. The fact of the matter is, the dental industry is heavily populated. You need to market what makes you different and special. That is what your audience will respond to, your unique selling points.

It is hard to be unique as a dental practice, but there are certain aspects of your practice that can make you different, that is what you should market.

Think about anything positive about your surgery that can be promoted. Here are a few aspects that we have come up with but remember, with the right team, you can promote just about anything.

Easily available emergency appointments.
Easy access to appointments.
Orthodontic surgery available on site.
Specialist care for nervous patients.
Specialists available (eg, orthodontists, hygienists).
Children’s dental care specialists available at the practice
Cosmetic dental procedures available on site.
Location!

Many dental patients tend to respond well to benefits like these before they even begin to respond to traditional commercial branding. Now you know the specific aspects of your dental practice that you need to promote, you need to remember to navigate a direct path from these benefits to the name of the dental practice. The aim is for patients to associate the benefits of the practice to the name of your practice, this will be your brand. Essentially, you will be branding your dental practice with your unique selling points.

Action Points

Focus initially on promoting the unique benefits of your dental practice rather than the brand itself to capture attention and differentiate from competitors.
Highlight your practice’s unique selling points (USPs) such as emergency appointment availability, specialist care, or convenient location to appeal to potential patients.
Identify and market the aspects of your practice that set you apart, like specialized services for nervous patients, children’s dental care, or on-site cosmetic procedures.
Craft your marketing messages to directly link the benefits of your services to your dental practice, aiming to create a strong association in patients’ minds.
Use your practice’s USPs to define and build your brand, ensuring patients recognize and remember your practice for its distinctive advantages and quality of care.

Interact with the community

The patients who attend your practice are part of the local community, so it makes sense that you should ensure that your practice is known and respected locally. Community involvement can be of huge benefit to any business that is so closely involved with people in the local area.

The type of involvement that you can consider includes attending local fêtes, contributing to local charities and sponsoring junior sports teams. You may even be able to attend local schools, to talk about the importance of good dental care or about the pros and cons of a career as a dentist.

Action Points

Engage actively with your local community to build a positive reputation for your dental practice.
Participate in local events such as fêtes to increase visibility and connect with potential patients.
Contribute to local charities and causes to demonstrate your practice’s commitment to community well-being.
Sponsor local junior sports teams to support youth activities and enhance your practice’s presence in the community.
Offer educational visits to local schools to discuss dental care and career opportunities in dentistry, further establishing your practice as a knowledgeable and caring community member.

Postcards and Flyers

It is important to remember that not all of your dental marketing efforts need to be based online. Your practice is physically located amongst both your current patients and prospective patients. Therefore, you are in the ideal position to make use of non-digital marketing solutions such as postcards and flyers.

Make sure that your postcards and flyers are relevant and have something important to say about your practice. Remember that there are many businesses that post their advertising materials through the postboxes of your potential clientele. Many people still get bombarded with many flyers and postcards that are all more or less the same, which is why your content needs to stand out.

Using customer testimonials on your flyers is always a great thing to add, but be sure not to go crazy with any designs. Sometimes it helps to include a promotion or discount on your flyers to provide more of an incentive for people to come to your practice and actually keep the flyer rather than throwing it away.

However, with society becoming more environmentally conscious, it is important to use sustainably sourced materials and to advertise that fact.

Action Points

Utilize non-digital marketing methods like postcards and flyers to reach current and prospective patients in your local area.
Ensure your printed materials convey relevant and compelling information about your dental practice to stand out from other advertisements.
Consider incorporating customer testimonials into your flyers and postcards to build trust and credibility.
Include special promotions or discounts in your materials to incentivize potential patients to visit your practice.
Opt for sustainably sourced materials for your printed marketing efforts and highlight this eco-friendly choice to align with increasing environmental awareness among consumers.

SMS reminders

SMS marketing has made a huge comeback recently. If you’re like me and knew nothing about text marketing until recently, then you’re in for a pleasant surprise. In the last few years, there have been a lot of new and old marketing strategies that have seen a sudden boost in popularity, and SMS marketing is one of the older ones but is now more effective than ever. It has been around for a couple of decades now but only now has it really caught on, especially with the smaller to medium-sized business market.

SMS reminders are a great way to keep existing patients engaged by reminding them about scheduled appointments or prompting them to book an appointment if they haven’t been in a while. Almost everyone has a smartphone in their pocket nowadays and SMS reminders can help you reach your patients directly, cheaply and easily.

Action Points

Explore the potential of SMS marketing as an effective tool for engaging with patients in today’s digital age.
Implement SMS reminders to keep existing patients informed about their upcoming appointments or encourage them to schedule a visit if it’s been a while.
Leverage the ubiquity of smartphones to ensure your messages reach your patients directly, offering a cost-effective and straightforward communication channel.

Effective-marketing-strategies-for-dentist-5

How To Market A Dental Practice FAQ

Why is marketing important for a dental practice?

Marketing is essential for a dental practice to attract new patients, increase brand awareness, retain existing patients, and grow the practice’s reputation in a competitive market.

What are the best marketing strategies for dental practices?

The best marketing strategies for dental practices include a mix of online and offline approaches to attract new patients and retain existing ones. Here are some effective strategies:

Search Engine Optimization (SEO): Optimize your website with relevant keywords, quality content, and local citations to rank higher in search engine results and attract more organic traffic.
Pay-Per-Click (PPC) Advertising: Use Google Ads or social media ads to target specific demographics and drive immediate traffic to your website.
Social Media Marketing: Engage with patients on platforms like Facebook and Instagram by sharing educational content, promotions, and patient testimonials to build a community and increase visibility.
Email Marketing: Send regular newsletters, appointment reminders, and promotions to keep patients engaged and encourage them to book regular checkups.
Local SEO: Focus on local search strategies, such as optimizing Google My Business listings, getting reviews, and using location-based keywords to appear in local search results like “dentist near me.”
Referral Programs: Implement patient referral programs to encourage existing patients to refer new clients, leveraging word-of-mouth marketing.
Content Marketing: Create blog posts, videos, and infographics that provide dental health tips, explain procedures, and showcase your expertise to attract and educate potential patients.

Combining these strategies can help you increase patient acquisition, improve brand awareness, and grow your dental practice.

How can SEO help market my dental practice?

SEO helps your dental practice rank higher in search engine results, making it easier for potential patients to find you online. Optimizing your website with keywords, local citations, and quality content can improve visibility and attract more patients.

What role does social media play in marketing a dental practice?

Social media allows you to engage with current and potential patients, share educational content, promote services, and build a community around your practice. It also helps boost brand awareness and patient loyalty.

How can patient reviews improve dental practice marketing?

Positive reviews build trust and credibility, encouraging potential patients to choose your practice. Reviews also improve your online reputation and help with local SEO rankings.

Should I use paid advertising to market my dental practice?

Yes, paid advertising like Google Ads (PPC) or social media ads can help target specific demographics and increase visibility, leading to more appointments and new patient acquisition.

How can email marketing benefit my dental practice?

Email marketing helps maintain patient engagement by sending appointment reminders, newsletters, promotions, and follow-up emails, boosting patient retention and encouraging regular visits.

What content should I include on my dental practice’s website?

Your website should include service pages, contact information, patient testimonials, an about us section, a blog with dental health tips, and online appointment booking options to attract and engage visitors.

How does local SEO help market a dental practice?

Local SEO focuses on optimizing your online presence for local search queries, such as “dentist near me,” helping your practice appear in local search results, Google Maps, and local directories.

What are the benefits of referral programs for dental practices?

Referral programs offer several benefits for dental practices, helping them grow their patient base and strengthen their reputation. Here’s how they can help:

Increase Patient Acquisition: Referral programs encourage satisfied patients to refer friends and family, leading to more new patients without heavy marketing costs.
Build Trust: Referrals come from trusted sources, making potential patients more likely to choose your practice based on recommendations from people they know.
Cost-Effective Marketing: Referral programs are a low-cost marketing strategy compared to paid ads or other promotions, as they rely on word-of-mouth and customer satisfaction.
Boost Patient Retention: Offering rewards for referrals, such as discounts or free services, incentivizes current patients to stay loyal to your practice.
Enhance Practice Reputation: A successful referral program indicates that your patients are happy with your services, improving your practice’s credibility and overall reputation.
Expand Local Reach: Referrals often come from within the local community, helping you grow your practice’s presence in the area and attract more nearby patients.

Referral programs are an effective way to organically grow your dental practice while strengthening relationships with existing patients.

How can I improve patient retention through marketing?

Patient retention can be improved by maintaining consistent communication through email, offering loyalty programs, following up after appointments, and providing educational content that encourages regular checkups.

What marketing metrics should I track for my dental practice?

Track metrics like website traffic, conversion rates, social media engagement, patient acquisition cost, and return on investment (ROI) for paid campaigns to evaluate the success of your marketing efforts.

How can I use video marketing for my dental practice?

Video marketing is a powerful tool for showcasing your services, sharing patient testimonials, and educating viewers on dental procedures. Posting videos on your website and social media platforms can boost engagement and patient interest.

Should I hire a marketing agency to promote my dental practice?

Hiring a marketing agency can be beneficial if you want expert guidance in creating and managing SEO, PPC, social media, and content marketing campaigns, especially if you lack the time or resources to manage it in-house.

How often should I update my dental practice’s marketing plan?

Review and update your marketing plan regularly—at least once a year or quarterly—based on changing trends, new services, and the performance of your current strategies to ensure continuous growth and success.

Our Expert Opinion

“Marketing, especially online marketing, is one of the most important aspects of running any business. It can make or break your business, especially if you’re a start-up practice or an existing practice that’s struggling.

My biggest recommendation would be to focus on getting the SEO right. This means you need to focus on content optimisation, user journey, user experience and the speed of your website.

There are so many tools and Google Chrome extensions you can use for free. Download Google Lighthouse and the Website SEO Checker extension on Google Chrome. Feed your website urls into these tools and they’ll tell you what you need to do to your website.

Some of it will need to be handled by your developer, and hopefully they’re already on top of it. But if I can give you one piece of advice, it’s focus on SEO and your website. Ads can work brilliantly but they cost money. SEO is free, it’s effective and it can be done fairly easily if you know what you’re doing.”

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

How to Start a Dental Practice in 13 Steps

Practice Startup Checklist
Download the Starting a Dental Practice Guide
What is a Squat Dental Practice?
Create a Business Plan
Choose the Right Location
Create a Flexible Business Model
Hire an Expert External Team
Raise the Finance
Put a Great Team Together
Market Your New Dental Practice
Growing Your Dental Practice
Get Your Structure and Systems Right.
Always Be Ready to Sell
Live and Learn
Be Ready For a Challenge
Regulations for a Start-up Dental Practice

Setting up your own squat dental practice is a way of getting into ownership without the costs of buying an existing dental practice.

This is the story of how we started our first dental practice in 13 steps and how you can too.

Back in 2004, when many dentists were bumbling along with the old NHS contract, we decided to start up a squat dental practice. We had no experience of how to start a dental practice, we just had plain business ideas and clinical knowledge to back us up.

Most dentists we spoke to said we were mad not trying for an NHS contract, but we believed (and still do today) that being business-like in our approach to delivering dentistry would ensure our success. It did.

To date, we have done pretty well by taking the road less travelled, and with the prospect of further changes in the NHS, we only anticipate things to be even more difficult in the NHS for the UK’s dentists.

So now we want to share with you our story, how you can go it alone and how to set up your own successful private dental practice from scratch in just 13 steps.

Click here to read more about why dentists want their own practices.

Practice Startup Checklist

Download the Samera Dental Practice Startup Checklist to make sure you’re following every step on the path to becoming a dental practice owner.

Samera-Dental-Start-Up-Guide-Checklist

Download the Starting a Dental Practice Guide

Start a Dental Practice – Samera How to Guide

What is a Squat Dental Practice?

Usually this is a single surgery practice started from the beginning with a view of turning this into a highly profitable business. It can be more than one surgery if there are multiple dentists involved in the project.

You will need to have a vision of what you want to achieve and build your business plan around this, take into account the services you will provide, and ensure you research the area you are to set up in to ensure that there is demand.

Think about your opening hours and whether these will include weekends and early starts or late finishes. Most importantly, make sure you have the right location, with new clients being able to find your premises clearly.

Create a Business Plan

Putting Our Ideas on Paper

The first stage in setting up our first dental practice was putting down onto paper what we wanted to create. We had ideas, dreams, even aspirations, just like you almost certainly do. It was imperative to start putting these ideas down on paper as the first step to making it really happen.

Using sound business techniques, we clarified our vision of what we wanted to create and then, most importantly, started putting a business plan together.

After a couple of months, we had a great looking business plan, with our goals, mission and values. However, as wonderful as these ideas looked on paper – we had no location!

Learning Point 1: Clarify your vision of what you want to create and seek assistance if necessary to put a detailed and well thought through business plan together. Make sure your business plan includes:

The aims and objectives
Services that will be available
Market research
Acquisition and operational costs
How you intend to run the practice
Financial forecasts

You need to consider what your practice will become and work out the costs and income that you will generate so that projections can be calculated to provide lenders with a well thought out viable business opportunity. You can find further information on business plans for dental practices at the link below.

Click here to read more about putting a business plan together.

Choose the Right Location

Driving Around London at Night and Finding a Site

How could we have a wonderful business plan and idea with no location? Well, our plan had identified exactly what type of customer we wanted to come to our dental practice, including their psychographic and demographic characteristics. All we needed to do was start looking for suitable premises! Premises with everything we were looking for don’t come up regularly, so we started scouring London for suitable properties.

Click here to learn more about choosing between leasehold and freehold.

This meant walking and driving around looking for suitable sites at particularly strange hours of the day. We found the site of our first dental practice in Wandsworth Town, after driving back late from dinner with friends in North London. Days later we agreed the contract with the vendor.

We followed the same approach for our subsequent sites in Canary Wharf, Esher, Surrey and Fleet Street – always checking out the competition, visibility of the premises and the amount of traffic passing by. Hours spent doing this proved to be very valuable indeed!

Learning Point 2: Finding the right location to open your dental practice is critical. Don’t settle for second best, walk around different areas at different times of the day and speak to many agents and you will eventually find a suitable location for your new dental practice.

Make sure you do the necessary market research on the demographics of your chosen location and any competition you may face from existing practices in the area. Be prepared to make some tough decisions, like having to move to an area you hadn’t originally dreamed of.

You will need to research this carefully – remember you are going to be working there for several years and it needs to be an area you would want to work in. Look at the local competition, how much footfall is there, are there good transport links and can patients park easily.

The building will need to be adapted and will need ventilation, space for plant and equipment and enough space to develop the practice into a 2/3 surgery practice or more.

Click here to find out more about choosing a location in our webinar on starting a profitable private practice.

Contact us to find out more

Create a Flexible Business Model

Becoming pregnant was not part of our equation, we had to create a flexible business model.

A week after agreeing all the terms for the premises we found in Wandsworth Town, Principal dentist, Smita, who was supposed to be doing most of the dentistry (particularly in the early days of the practice) was in fact, pregnant. Although this threw us momentarily, we decided to take the plunge anyway.

However, we decided we had to re-design our business model, where from an early stage, the practice would not rely upon the earnings of the Principal dentist – pretty much unheard of in the setting up of a squat dental practice.

Learning Point 3: In business, you have to be flexible and be ready to change your ideas and plans quickly. Don’t be inflexible, always be ready to adapt and change as circumstances change. You will make mistakes. You will face obstacles. Things will go wrong. It is important that you are ready to adapt to these new situations. Make sure you have a plan B for every eventuality. It is also essential that you create a business crisis continuity plan for your practice in case the worst should happen.

Click here to watch our webinar on mistakes to avoid when running a dental practice.

Hire an Expert External Team

The next few months were very exciting. What we had on paper was now being transformed into reality. Our next stage involved hiring experts to help with the business, something which we firmly believe in. Cutting corners can appear to help in the short-term, but 9 times out of 10, this approach can eventually come back to haunt you.

So, we hired a design team to aid us with the branding and design of the practice. We knew we had to create something special that stood out in a crowded environment. Their expertise was essential in creating a brand that ensured we got the right customers.

Learning Point 4: Build a team of experienced professionals from day one, don’t try and do it on your own, as it will be much more difficult to reach the lofty heights of success alone. People you will need include accountant, lawyer, designer, website and digital marketing experts just to name a few! Yes, it’s possible to do all these things on your own, but it’s not a good idea. Your skill is dentistry, not accounting or marketing or brokering.

Click here to read the 10 things to look for in a dental accountant.

Raise the Finance

Raising cash and being tight with the purse strings

Naturally, we had in our hearts a picture of the dream practices we wanted to build, with the newest technology, the most futuristic decor and a dozen surgeries. However, in our heads we also had budgets, cash flows, expenses and reality!

We got to work figuring out what we knew we could afford to raise, we calculated projected profits, we found as many quotes for every purchase we could.

Click here to listen to our podcast episode on financing a squat dental practice.

With great designers supporting our start-up, we now needed associate dentists, especially since our business model was not going to have our own Principal dentist earning for a while. We knew we had to be careful in our set-up costs. So, armed with a detailed business plan and robust financial forecasts, we approached various banks to support the venture.

Our plan, which was paramount to raising the finance, was approved by one of the major banks and we got the go-ahead to move forward. That said, sticking to our budget was also essential in successfully getting the business off the ground. Not spending on superfluous dental toys was an essential aspect to doing it right too. Hard negotiation and saying NO to salespersons was an essential part of the set up process.

How Much Does it Cost to Start a Dental Practice?

How much it costs to start a dental practice will vary greatly and depends on a huge range of factors, such as:

Where you’re opening the site
What type of building you’re going to be trying to acquire to put a dental practice into
What type of kit you’re going to be putting into the practice
How many surgeries you’re going to be putting into the practice
How much the building work is going to cost, what the design is etc.

The ball park figure for starting a dental practice that we’re seeing today is anything between £100k and £500k. On average, probably about £200,000 to £250,000 to start up a dental practice as a squat these days.

Click here for more information on raising the finance to start a dental practice.

Contact us to find out more

What Does a Dental Practice Need to Purchase?

There can be a seemingly endless list of equipment and consumables that dental practices need to purchase. It’s great to have up-to-date technology and all the latest gear, but it’s also important to be mindful of your cash flow and working capital.

So, what exactly are you going to need to budget for?

Here is a list of just some of the equipment for which you may need to raise asset finance. Please bear in mind that this list is not exhaustive, nor will you need to purchase everything on this list.

Samera-Dental-Start-Up-Guide-Checklist

Here is a list of the consumables our partners in the Samera Alliance suggest every squat practice is going to need:

start-up-consumables Download

Click here to find out more about asset finance.

Learning Point 5:

The project will consist of two main costs –

The Build – this is the transformation of the property into a dental practice the cost of taking out the fabric of the premises if necessary and installing your electrical requirements / surgery rooms / decontamination room / staff room / toilets / disabled access and toilets
The Equipment – the cost of buying and installing a chair / x-ray machine / autoclave/ suction / compressors etc

These costs will form the basis of your projections (required by all lenders) showing how the practice will grow and become profitable.

Put some tight financial management into play by setting a budget, negotiating hard and keeping a close eye on your costs. Don’t get too excited and spend more than you have to use, only spend money on space and equipment you 100% need.

Make sure you have all the necessary documentation like accounts and bank statements. Contact a commercial finance broker (with experience in the dental sector) to discuss the different funding options available to you. You will get a better price and a better deal by using a broker. You will need to think about finance to cover assets, property, staffing, working capital and much more. Download our free cash flow forecast template.

Click here to watch our webinar on financing your first dental practice.

Put a Great Team Together

The old cliché –TEAM

Whilst the practice was developing, in parallel, we had to hire and build a team of associates and nurses. Did we get it right first time? Of course we didn’t! Do we still make mistakes? Of course we do, but we have pretty much experienced anything and everything that can occur within a team. However, without a dedicated team, the business would not be in its strong position today.

Keep in mind the basic principles of hiring a team. You’re going to be working with these people for quite a while (if all goes the plan!). Make sure you hire people you get along with, and make sure you hire people your patients will get along with!

Learning Point 6: Yes, it’s team again. You will need to hire your practice team too, so it’s imperative to start looking early for quality people to join your team. Don’t hire them because they are cheap, hire them because they can help you build your business.

Not everyone who is great at dentistry is also great with people. Make sure your clinical team have a good bedside manner and know how to upsell. Remember that your front-of-house staff can make or break a dental practice – they are the face of your business so make sure they are friendly, well-trained and great communicators.

Click here to read more about putting a dental team in place.

Market Your New Dental Practice

Pre-opening Marketing – The First Day

With our first team in place, and around 6 months after finding the premises, we opened the doors of our first dental practice to the public by holding “The world’s first tooth-brushing class!” A bit cheesy, but it worked, plus it certainly got the local community involved. We offered discounted check-ups and various other incentives to get people through the door.

Contact us to find out more

Before we actually opened (due to our pre-opening marketing exercises) we had over 50 patients booked for appointments in the first 2 weeks. During those first few months, the business grew, then grew some more, whilst being blessed with our first child. As the business went from strength to strength financially, we felt (12 months on) that we had designed a strong enough business model that could be sustained and replicated again, perhaps on a higher risk scale.

Learning Point 7: As part of your business plan, make sure you have a detailed plan of marketing in place. Don’t just wait for patients to come in, you will need to be active before you open and even more active in your marketing once open. Make sure you have sufficient budget to do this, else you will open a practice with no patients to see! Start building a website at least 3 months before the practice opens – Google takes a while to rank new websites. Start some Google and Facebook ads to start building brand awareness online.

Click here for all our articles and webinars on marketing a dental practice.

Growing Your Dental Practice

Think BIG – Roll on practice number two!

Despite what other people said (including our bank at the time) we decided to take a MASSIVE step for us – the decision to open up a dental practice in 2006 at Canary Wharf. Bigger overheads, higher profile based in the shopping malls, but also more to lose if it went wrong!

We were confident that using the same sound business acumen and techniques we had used on the Wandsworth Town practice would ensure that the new practice would be a roaring success.

Within 12 months of opening, the Canary Wharf practice was doing extremely well, and growing beyond our expectations. How did we do it?With the right location, right team, and a bit of luck.

Learning Point 8: Always think big, or else go home. You need to think about growing your business, it may not be another location but it could be new services or more surgeries, but always be thinking about how to grow! Make use of any extra space in your premises. Step up your marketing efforts. Try to minimise your costs as much as you can by cutting expenses where possible. Raise your prices. Be prepared to borrow further finance to help grow the practice, or perhaps refinancing your current loans.

Click here to watch our webinar on how to grow a dental practice.

Get Your Structure and Systems Right.

And then practice number three, all due to systemisation and structure!

Our first two squat dental practices started in 2004 and 2006 respectively, both of which were in good London locations, with leasehold premises (as the freeholds were not available). Then, in 2009, after exiting a local Waitrose in Esher, we saw a disused and empty building that looked perfect for our next site.

Following discussions with estate and planning agents, banks and structural engineers, we received the keys in December 2009 to our first freehold commercial premises of over 3500 square feet, which was to contain practice number 3.

By May 2010 practice number 3 in Esher was officially opened in an affluent Surrey town. Third time around, we knew much more than the first time, but we also had written systems in place, which was key for our expansion plans.

Learning Point 9: Write down everything and put systems into place for everything you do, as this will help when growing and developing your team. It is vital that the practice can be run without you. If the practice relies too heavily on you personally, that can be a problem. Systematise your practice and procedures so that the business can be run on its own comfortably. Your procedures need to be well documented and accessible by the whole team. The team itself needs to be well trained in these procedures as well. A business that is run on systems, not on individuals, is much easier to scale and/or replicate in a new practice.

Click here to read more about structuring a dental group.

Always Be Ready to Sell

But then out of the blue…Remember always be flexible.

We were approached by a leading Healthcare insurer wanting to buy us out. Again, we were 50/50 but eventually in May 2013 we sold our Canary Wharf site. It was not in our plans, but it made considerable sense for our personal needs (we have young children after all) and this worked for us financially too.

Contact us to find out more

In late November 2015 our Fleet Street practice was born, and a year later Notting Hill gate opened too. Both in fantastic locations for a practice to serve the many working people in their respective areas. Our ability to open in a location like this came from us taking the big step back in 2004 into the unknown. The Neem Tree brand is growing with partners across the UK, so if you want to be part of it do get in touch.

Learning Point 10: Always be ready to sell, and we were in this instance. At the time we were not even considering a sale, however, if the right offer comes along, it is sometimes a much better idea to receive much more than you thought you would get and secure one’s financial position. You are growing a business, after all, and it is important to think of it in business terms. By maximising your turnover and reducing your costs, you can grow your practice to a point where selling it returns an enormous profit on your original investments.

Click here to read more about selling a dental practice.

Live and Learn

Would we do it all again? Absolutely!

We have learned so much, worked with some wonderful people, and have helped secure the financial future for our family. We achieved this whilst encountering so many challenges, but this has made us stronger and fitter and ready for the new challenges that lie ahead of us all.

Learning Point 12: Live a life of no regrets and learn from everything you do! Expect problems, expect failures, expect obstacles. Nothing worth having in life comes easy. It’s okay to get things wrong (within reason!), as long as you learn from those mistakes and do what you can to avoid them again in the future. You can read more about the five traits of failed dental start-ups here.

Click here to learn from our mistakes and watch our webinar on mistakes to avoid when setting up a practice.

Be Ready For a Challenge

So, is setting up a dental practice for everyone?

Honest answer; probably not. It requires stepping out of your comfort zone many times. Working extremely hard, taking decisions that impact not just you but many others, and basically putting yourself on the line. If you relish that kind of challenge and possess an appetite for calculated risk-taking, then you probably need to set up your own dental practice!

If you are serious about setting up a dental practice, here are our 5 top tips for success:

Use professionals to help you – ensure they have experience of squats and have done these before
Research the area thoroughly and review the competition
Speak early about Finance to ensure you have enough of a deposit to see the project through
Plan what sort of dental practice you want but make sure that it is affordable and use the saying: What do I want / What do I need / What can be afforded?
Use the experience of others to guide you through the process

Learning Point 13: If you want to grow, you need to take risks, so if you have the appetite of being your own boss, become a serial (but calculated) risk taker.

Click here to watch our webinar on how to start a dental practice during a pandemic.

Regulations for a Start-up Dental Practice

The building for your new dental practice will need to have suitable planning use for a dental practice. Class E is the recently introduced new coding system for dental practices and this can be checked with the local council planning department.

You must register with the CQC as a provider – you must be interviewed and the premises is inspected once complete. Once you have the premises and the finance you should start the registration process, as this can take some time.

Our Expert Opinion

“Having opened many dental practices over the years, I personally know it is not easy. The key is building a great team to support you, finding a prime location, marketing it strongly and then ultimately doing great dentistry. Easy? No. Possible. Yes! If you have the vision to do this, it is possible but don’t expect a smooth ride!”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Starting a Dental Practice: Get Started

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

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Dental practice start-up

Learn More: Starting a Dental Practice

For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

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How To Grow A Dental Practice

In this article, we’ll take a look at all the different factors you need to consider to grow a dental practice. From structuring your finances and accounts to digital marketing techniques, this guide will cover everything you need to know when it comes to growing a dental practice.

Download guide as a PDF

Why the Climate is Right for Growing a Dental Practice

According to a report published by IBIS World in 2017, the size of the dental market in the UK was £6.7bn, with a growth projection of 1.1% over the following five years. This means that the time is right to grow a dental practice. If you get it right, you can take advantage of the growing UK population, which is leading to a growing demand for dental health services nationwide.

The UK population is continuing to grow. By 2039 it’s estimated to reach 74 million. You can take a look at more detailed figures, provided by the Office for National Statistics. A growing population leads to an increased need for resources, including dental care. As strain on NHS dental care increases, there is an increased need for good quality private dental care.

The population is also ageing and, as the only part of the human body that has no self-repair ability, teeth require on-going repair and maintenance, if they are to last into later years. As I have discussed with several clients in recent years, there is plenty of opportunity to scale a dental practice, as long as the scaling process is completed correctly.

Listen to our podcast on the climate for dental practice growth in the UK.

Factors to Consider When Growing a Dental Practice

In order to grow a dental practice, it’s important to have a good understanding of the methods that you need to use. Making the right use of these methods is essential if you want your dental practice to expand and thrive.

From accounting and finances to the in’s and out’s of digital marketing, it’s essential that you consider all aspects of the business when you decide to grow your dental practice.

Click here to read more articles about growing a dental practice.

As a dental practice grows, there is likely to come a time when significant additional funding is required in order to scale further. This funding may be needed to purchase new equipment, to extend a current practice, or to buy more dental practices to become a group.

The first point I want to make is that it’s not all about profits when it comes to growing a dental surgery.

It’s important to consider the costs of running a practice, which are also likely to increase significantly over the coming years. For instance, payroll costs can account for almost 60% of revenue expenditure on average. In 2019 especially, the increase in the National Living Wage made a significant difference to dental practices that employ younger administration and support staff.

Click here to read more about the costs of running a dental practice.

These cost increases need to be factored into any decision to scale a dental practice. Other on-going costs that should be accounted for include non-payroll related expenses, such as the purchase of materials, payment of utility bills, insurance premiums and the cost of marketing.

The obvious lesson to take from all this is that any dental practice owner needs to concentrate their efforts on increasing revenue as soon as they take over at a practice or start up their own dental surgery. It’s these efforts that make expansion a possibility.

Click here to read about how to build a dental group.

Contact us to find out more

Work with Professionals When Looking for Growth and Acquisition Financing

In the same way as it’s important to work with expert dental accountants and dental solicitors when financing and buying an initial dental practice, it’s also vital to work with professional brokers when you plan to grow your dental practice.

Click here to book a free consultation with our finance team and discuss your options.

Never forget that a dental surgery owners talents lie with running the practice itself and not with accounting or legal implications. It’s better to work with experts to deal with these factors. on these aspects of scaling a dental practice with clients on many occasions and it’s made the process a lot simpler for them.

Click here to read the 5 reasons you need to use a commercial finance broker.

Actions

Contact a dedicated dental accountant if you haven’t already. You can read more about what look for in a dental accountant here.
Contact a commercial finance broker before you approach a bank or other financial institution to borrow finance. It’s important that you make sure the broker you work with has extensive experience in the UK’s dental sector. They will be able to make sure you choose the right option and get the best deal for your business.

Apply for Financing

There are a wide range of reasons for which you may need to raise funds as a dentist. From expanding the premises and equipping new surgeries to raising working capital or paying off outstanding debts, there will most likely come a time when you need to raise commercial finance.

Click here to find out more about funding options for dentists.

Banks and other financial institutions want to reduce their risk and tend to only lend to businesses that can prove they have reliable revenue and are in a position to make repayments on time.

It’s worth bearing this in mind when making decisions to grow a dental practice. Planning ahead is essential. Ideally, plan 10-12 months ahead of time, and make sure that revenue is optimised and accounts are up-to-date and accurate before applying for funding. When you apply for funding, be prepared to provide a significant amount of documentation including:

An up-to-date business plan.
Up-to-date and accurate accounts (personal and business).
Up-to-date tax records.
Details of expenditure.
Detailed analysis of proposed finance spending and growth of the practice.

Click here to find out more about how banks judge dentists.

Having everything in one place before applying for growth or acquisition funding makes a successful outcome more likely.

You can find more webinars and articles on financing the growth of a dental practice here.

Actions

Cut your business’s expenses where you can. You can read more about cutting small business expenses here.
Conduct a cash flow assessment of your business. You can find out more about managing your cash flow, including performing a cash flow forecast, here.
Consider refinancing your business’s assets. You can find out more about asset finance for dentists here.

Structure Your Accounts and Finances Correctly

We’re dental accountants at heart and we firmly believe that structuring your accounts correctly can make or break your business. You can save time, money and effort when you go digital with your accounts and use programmes like Xero and Quickbooks. Automating your accounts and finances with these kinds of programmes brings huge benefits for your business. You can read more about the benefits of automated accounts here.

As we’ve already mentioned, it’s essential that you choose a dental accountant who has experience in the dental industry. It’s not enough to find a good accountant. They need to have a working knowledge and understanding of the tax, accounting and financial issues facing the UK’s dentists.

Click here to listen to our podcast episode on how to structure your finances.

Actions

Use programmes like Xero to streamline and automate your accounts and get rid of the need for mountains of paperwork and receipts. You can read more about how to streamline your dental accounts here.
Make sure your accountant is experienced in the UK’s dental sector.
Structure your accounts and finance to reduce your tax bill.

Contact us to find out more

Maintain a High-Performing Team

When you set up your dental practice, you put a team in place that you could trust. It’s important to retain this team if you want to grow your dental practice successfully. This means that you have to consider several factors.

Make Sure The Working Environment is Positive.

A working environment that is less than positive will deter people from wanting to remain working at your practice. Make sure that everyone is aware of the vision of the practice and working towards it. You should also make sure that members of your team have access to the training and technology that they need.

Watch our webinar and listen to our podcast on leadership skills for dentists.

Encourage Good Performance.

You cannot grow a dental practice without having a high performing team in place. This is why it’s so important to make use of key performance indicators, SMART objectives and an effective appraisal system that includes an emphasis on personal development.

Read our article on building a dental team.

Make Sure That Communication Works.

Effective communication is central to the success and growth of any dental practice. This may sound easy, but communication can become confused and messy if you let it. Make use of tools such as a communications strategy, an Intranet system and weekly team meetings, to help make sure that this does not happen. It may sound simple, but a clear communication strategy that everyone understands can make the world of difference in any workplace.

Click here to watch our webinar on The Language of Communication.

All of these factors can help you to keep your high performing team in place.

Actions

Set KPI’s and objectives with your team.
Dedicate a specific time each week (or every 2 weeks at the most) to meet with your team to listen to their ideas and air any issues.
Make sure you are open about, and that your team buy into, your vision for the practice. Be prepared to make some tough decisions about staffing if any of your team do not buy into the vision and objectives of the practice.

Use Marketing to Grow A Dental Practice

You can have an exceptional dental practice, but it’s not going to grow and flourish if you do not market it effectively. Optimised marketing is essential to the growth of any business. It’s important that you emphasise the benefits that people can get from choosing your dental surgery, rather than simply concentrating on the brand itself.

It’s these benefits that will attract people to your practice and make it easier for you to retain their loyalty.

The first step is creating a website for your dental practice that ranks highly on Google and converts patients. It’s important that you understand the basics of SEO for websites, if you’re planning on creating it yourself. You can find out more about SEO for dental websites here.

Remember to keep your website’s layout simple. Make sure everything is easy to find and the menus are simple to navigate. Whilst you need videos, images and other widgets, it’s essential to keep in mind that speed is paramount. Don’t go overboard! Do not forget to optimise your website for mobile. More people use mobiles to access the internet than desktops or laptops.

You can find out more about creating a website for dentists here.

When you are marketing your dental practice, do not forget to make full use of social media. This is where large numbers of potential patients spend time. It’s the perfect place for you to reach them and communicate with them. You can also choose to pay for social media advertising with Pay-Per-Click (PPC) advertising.

Click here to read more about growing a dental practice with social media.

Your website and social media’s content should be central to your marketing efforts. You need to make sure that the content is fresh, interesting and well-written. Starting a blog may seem time-consuming but you’ll be surprised at how easy it is to get into – and how useful it is for marketing! Start writing your top tips, educating patients on your different treatments, start a newsletter. You’ll start attracting new, interested leads and it will improve SEO.

Click here to read more about writing content for dentists.

By getting the marketing right, you’ll attract new patients, convert leads and retain new patients far easier. Digital marketing especially is becoming more and more important with each year. You need to make sure you are paying attention to SEO, social media and PPC in particular to ensure the growth of your patient list and practice.

Watch our webinar on Using Marketing to Increase Profits.

Actions

Perform an SEO audit on your website and improve the on-page and local SEO as much as you can. You can learn more about SEO for dental websites here.
Start writing blogs and articles, as well as creating video content with your team.
Improve your social media profiles and start posting your blogs and engaging with patients. Set aside an hour a day for either you or a team member to post and respond to followers.
Start some simple Google Ads campaigns using your most popular treatments and your location as keywords. For instance ‘invisalign Brighton’, ‘dental implants Wigmore Street’
Use these 5 free ways to grow your dental practice.

Attract Emergency Patients

Emergency patients are our secret weapon to growing a dental practice. Emergency patients are actively and urgently looking for a dentist right now. They’re most likely in pain, a little desperate and willing to travel farther than general patients. Other patients are idly considering dental work sometime in the future while they look at your website. Emergency patients are looking for a dentist right here and right now. They’re qualified, hot leads just waiting to be converted.

The best bit is that you’re not just trying to attract patients for one-off emergency treatment. You were there for them when other dentists weren’t – maybe even their regular dentist. Hopefully your front-of-house and clinical staff impress them. This gives you a real chance of turning these emergency patients into regular patients. Patients will travel farther than you think for a dentist they like – make sure that dentist is you!

Click here to listen to our podcast on using emergency patients to grow a practice.

Actions

Make sure your website has a page dedicated to and optimised for emergency dental appointments.
Give patients as many ways as possible to contact you in an emergency. For instance; WhatsApp, Facebook messenger or you could forward the practice phone to your own personal mobile out-of-hours.
Offer as many evening and weekend appointments as are feasible for your team and practice.
Set up PPC campaigns on Google Ads and Facebook Ads for emergency dental appointments in your area.

Contact us to find out more

Retain New Patients

Attracting new patients is not enough to grow a dental practice, you need to make sure that they are retained. There are several things that you need to do, in order to make sure that this happens.

Make a good first impression. Maintain a welcoming but tidy waiting room and making sure that reception staff are friendly as well as efficient. The importance of friendly front-of-house staff that your patients get on with cannot be overstated!
Engage with your patients. No-one expects you, or the associates who work at your practice, to be best friends with patients. However, you do need to engage with them. Few patients will return to a dentist who is unapproachable and distant.
Remind patients in a friendly manner. We all lead busy lives, and it’s easy to forget things like dental check-ups. Keep your patients engaged by sending them friendly reminders, but do not harass them with constant contact.
Monitor the retention of patients. In order to understand how your patient retention efforts are working, you need to monitor their effectiveness. If you do not do this, you cannot hope to grow your dental practice successfully.

Read our article on retaining new dental patients.

Actions

Set up a simple contact form on your website (just ask for name and email address) for people to sign up for a newsletter. Send these contacts offers, discounts and updates once a month.
Set up a referral programme and offer benefits to patients who return and refer a friend.
Upload your patient list to Facebook and encourage patients to follow you on social media. Make sure you are posting interesting content and engaging with your followers as often as possible.
Install an automated process for reminding patients of their upcoming appointments or that they need a check-up soon.
Set up a cheap brand awareness campaign on Facebook Ads and Google Ads.

Expanding a Dental Practice

If you’re successful in scaling a dental practice, there will hopefully come a time when a physical expansion is necessary. There may be an option to re-design the current surgery in order to make this happen. Or, it may be necessary to acquire additional property, in order for expansion to take place.

Optimising the use of current space

The first question to ask when looking for room to expand is, “How effective is the current use of space?”. For instance, staff break rooms do not need to be large, luxurious spaces. They simply need to be a place to take a reasonably comfortable break before returning to work. It may be possible to use some of this space as a treatment area.

Unused hallways and storage areas can also be utilised. Take the time to consider the current usage of the entire surgery space, and come up with new design options. This can save on the cost of having to acquire additional premises, in some circumstances.

Click here to read our guide to commercial mortgages.

Dealing with the landlord

This will only be an issue if the leasehold of the property is not owned by the dental practice. If this is the case, it’s important to discuss any refurbishment or re-design ideas with the landlord first. Failure to do so could lead to legal complications further down the line.

Depending on how good the relationship with the landlord is, there could be an argument for involving a dental solicitor. At least you need to be seeking their advice and support.

The Issue of Planning Permission

If the purpose of the premises is to remain the same, it’s unlikely that planning permission will be needed. However, there may be times when there will be a need to acquire planning permission when extending a dental practice. For instance, part of the property which is currently being used as a residence may be converted for business use. Also, neighbouring residential property may be purchased for conversion.

Any property that is going to be used as part of a dental practice should have Class E planning consent. If the correct consent is not in place, it’s possible that enforcement penalties could be imposed. It’s always best to check if planning consent is needed, before going ahead and making any changes. The government provides advice on this subject.

Actions

Contact a commercial finance broker to discuss your financial options when it comes to expanding the practice.
Conduct market research and be certain you will have the capacity to fill the extra surgeries or chairs after expansion.

Our Expert Opinion

“There’s no one particular route to grow a dental practice. It requires a multi faceted approach to ensure you achieve your goal of growth. Marketing, finance, pricing, teamwork plus of course great clinical care, all contribute to growing your practice.

How do we grow our practices? We focus on improving online visibility with SEO and sometimes Pay-Per-Click campaigns targeting emergency patients. We have also recently expanded our Esher practice by turning under-used office space into more clinic space.”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Grow Your Dental Practice with Samera

Join the Samera Alliance buying group today for free to save money on your consumables and assets, increase your profits and grow your dental practice.

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Samera Alliance

Chris O’Shea

Head of Marketing

Chris is a digital marketing expert and head of marketing at Samera. He specialises in SEO and content strategy for healthcare businesses.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

How Emergency Patients Can Help to Grow your Dental Practice

The Dental Business Guide Podcast Episode | March 10th 2021
Arun Mehra & Smita Mehra

Arun Mehra: Hello and welcome back. This is Arun Mehra from the Dental Business Guide podcast and today I’ve got Smita Mehra, how are you?

Smita Mehra: Yes, very well. Thank you, Arun, very good. Just looking forward to talking a little bit more about emergencies today.

Arun Mehra: Yeah, so today Smita is going to share her experience and knowledge and expertise on how to get emergency dental patients. Now obviously, this has perhaps been an odd year to say the least.

But maybe you want to share a little bit of experience of what you did in your practices, and then how this has translated into your business and then how you can suggest other people to do it themselves as well.

Smita Mehra: Well, yes, as you rightly said, it’s been quite an odd 12 months really for us. Well, as it has been for everybody, certainly in the dental field, and obviously wider fields.

Patients Don’t Want General Treatment, But They Still Have Dental Emergencies

But what what I found most interesting, certainly recently over the last few months of lockdowns, and then Boris Johnson making speeches and somebody else coming on to to make either further lockdown restrictive speeches or opening things up, is that our emergencies and new patients and people calling the practices have been very linked to these announcements that the government makes.

So for example, if Boris is announcing further restrictions or a new lockdown, suddenly we get a lot of cancellations, and people will phone up in fear. Whereas conversely, recently, they’ve started to open things up. And Boris spoke just a week or so ago about the roadmap to recovery. And suddenly, the phone starts to get very much more busy as confidence grew.

So what we found during the sort of worst phases of lockdown when the books did really go quiet, is that we realised that people weren’t going to come in for general treatment, they weren’t advised to move around. And they were trying to restrict movement of people. So the only reason and way that people would be coming to us would be an emergency situation.

So no check-ups and general treatment, but just more emergencies. So we decided to focus our online attention to marketing towards emergencies and same-day appointments. And we also opened up our hours, we increased our hours of opening, we increased our days of opening. And we went to seven days a week. And that helped.

Arun Mehra: So, obviously it was a difficult time for everybody. But the team stepped up, correct?

Your Team Needs to Step Up

Smita Mehra: Yeah, we’re very, very lucky, the team stepped up, everybody stepped up, they stepped up their game. And it ended up being very fruitful in many ways. But the other thing to remember is that we’re looking at just the business of the book and the figures. Now reflecting back on it, one of the big reasons we ended up doing quite well at that point was because none of the dentists were taking time off, none of them were taking holidays.

And so those, I don’t know, four to six weeks or more, that dentists would normally take time off, and hence the books would go quiet or your patient base would go on holiday, for example, through the month of August or at Christmas, those quiet periods weren’t there.

Conversely, it was quiet in many other ways. But if you then busied up the books by getting people in to do the only thing they could do, emergencies, then that obviously generated further treatment and goodwill.

Arun Mehra: So on the emergency front, how did you get the message out through the various lockdowns that, firstly, that you are open, but also that you can deal with emergency patients.

Contact us to find out more

5 Free Ways to Grow a Dental Practice

Using Marketing to Increase Profits in your Dental Practice

How AI will Change Running a Dental Practice

Get The Word Out There

Smita Mehra: The first thing we did is we announced it on our website, on our homepage that we were open or not open, depending on which lockdown we were in. We also made sure that we had regular social media updates, whether it be Facebook or Instagram, going out, reaching out to our patient base and beyond.

We had simple things outside the door, we had a blackboard out which notified you of what our current status was. And we also emailed our patient base just to let them know whether we were closing down or opening up etc. So there were various modes of communication that we used.

Arun Mehra: Okay, but then obviously, that’s to your existing patient base. What about attracting new patients? How did you go about doing that?

Smita Mehra: That was mostly based on website and Pay Per Click marketing, and just notifying patients or notifying the wider public through our homepage on the website. That’s the predominant way.

Arun Mehra: And am I right in saying that one of the team was fully solid and creating content around emergency care and content around COVID. What to do in the instance of COVID and therefore, when people were searching for seeing a dentist during COVID, the page is ranked organically very, very well.

Smita Mehra: Yeah, absolutely. I mean, we had a couple of people and one certainly was working full time on just creating new and interesting and relevant content, even during the first lockdown nearly a year ago now.

So that two odd months that we were closed or quiet, you know, a couple of people were in the background really working to build up content, that then really helped us once we opened up because we were at a certain level, because of the organic growth of the content that we had.

Open a Dental Shop

And that was at a period when most websites or most dentists were completely, you know, locked down and the sort of locked the door and left the building as it were, both physically and metaphorically. So because we didn’t do that, because we didn’t leave the building metaphorically. And we were really working sort of backstage on all of these things.

We even built an online shop literally within a couple of days, with the help of our online marketing team. And that, you know, carried on, it held some traction with emergencies that were coming in, I would direct them to the shop. And they would purchase emergency kits and temporary filling kits, etc.

From there, that wasn’t a huge amount of business in terms of revenue. But it was just that we were keeping things going online and keeping our methods of communication going. And the phone calls, I was answering the phone calls throughout the first lockdown, almost 24 hours a day. So there were open lines of communication at all times.

Arun Mehra: Okay, great. So, obviously now, getting emergency patients seems to be the big thing that you’ve focused on in the last year. Now, I suppose, as a result of lots of NHS practices, not providing much or limited care.

That’s obviously helped, not just in your practices, but other private practices out there in terms of clients I’ve spoken to. So now, for those people who haven’t targeted emergency patients in the last 12 months, what do you think the benefits are to you to your business?

Pick Up the NHS Slack

Smita Mehra: Well the privilege is that we are fully private. So the provision of NHS obviously, they’re very, very stretched at the moment and have been for the last 12 months. And due to the lack of provision or how stretched they are, people have been making a private call and coming to us through other means.

So in other words, they were NHS patients, but obviously they’ve had to make the call to come privately. Now, I know that there will be a core of patients who perhaps can’t afford it and have gone to hospitals.

But then there are groups of people who can afford to be treated privately, they’ve just chosen to go down the NHS route, but now have realised that actually through the private route the provision of care and the immediacy of the care that they’ve received has been far superior, just because the ability of what private practices can do at the point of need, so it’s really, really helped.

The new patients that have come through over the last 12 months have been phenomenal, because not only have they turned into treatment, and they’ve referred their friends and family to us. But the types of treatment that we’ve been doing have been much more complex.

Contact us to find out more

And, even things like leads from that, things like Invisalign, for example, which Okay, it’s not an emergency, but it’s very lockdown friendly. So, you know, that’s been doing very, very well as well. So, yeah, for us, it’s been actually, it’s turned out to work well so far.

Solving Emergencies Creates Goodwill

Arun Mehra: So then, if I’m a dentist and I’m running my own practice, emergencies is a great angle, as you said, for those people, get them out of pain sort their problem out.

Smita Mehra: And the goodwill that that creates has been phenomenal. And the comments and the reviews that we’ve got, as a result of it have been brilliant, and also very heartening for the team. And given the team a big morale boost at a time when it’s been tough.

It’s been really tough working with all of the peopIe. And in those conditions, it’s not been easy at all. But to be fair, if your team steps up, then you know you have everything.

Arun Mehra: Okay, brilliant. So there you have it thank you so much. I think the points you’ve raised here, are that emergency care has been something that you and your team have focused on and delivered to a very high standard. And your marketing team have also stepped up to help you there.

So if for anyone else, thinking about going down that route to build a solid business is to have a good foundation of having emergency patients. Or sorting people out their pain has to be the number one priority and then everything else can be built upon that degree.

Smita Mehra: Yeah, absolutely. And so it’s very clear that there’s Front of House that need to step up and step in and deliver but it’s also very much back-office. And it really has almost been like, I liken it to a game of netball. You know, you’ve got people who pass the ball to the goal attack or the goal shooter.

And without the ball coming to the goal shoot, there are no goals to score. So it is really a team approach and it’s not just the people who are delivering the care. It’s in private practice, certainly from our experience, it’s been a whole team approach that has led to, you know where we are today.

Arun Mehra: Thank you. There you have it. That’s Smita telling you all about how to get emergency patients. That’s been really, really helpful. Really, really interesting. So watch out for our next podcast and or listen out for our next podcast and which will be very, very soon. Thank you.

Smita Mehra: Thanks. Have a great day.

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

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Five Traits of Failed Dental Start Ups

The Dental Business Guide Podcast Episode | 24th February 2021
Arun Mehra & Chris O’Shea

Learning from Failure: 5 Common Traits of Failed Dental Start-Ups in the UK

Starting a dental practice can be exciting and rewarding, but it comes with challenges. Unfortunately, not all dental start-ups in the UK succeed. However, understanding why they fail can be useful for aspiring dental entrepreneurs. In this blog, we will explore five common characteristics that often lead to the failure of dental start-ups. By learning from these mistakes, you can improve your chances of building a successful dental practice in the UK and navigate the competitive landscape better. So, let’s dive in and uncover the key lessons we can gather from failed dental start-ups.

Lack of Market Research and Analysis

One common reason why dental start-ups fail in the UK is because they don’t do enough market research and analysis. Many entrepreneurs underestimate the importance of understanding the market before starting their business. Without proper research, it’s hard to know who their target customers are, what services are in demand, and how to stand out from competitors.

Market research gives valuable insights into the business environment, such as the competition, trends, and customer preferences. By investing time and resources in market analysis, dental start-ups can learn a lot about what the market needs and tailor their services accordingly.

Not doing market research can lead to several negative effects. For example, a dental start-up may struggle to attract patients if they don’t identify the gaps in the market or develop unique selling points. Not knowing about the competition can result in setting inadequate prices or failing to differentiate from other established practices. Moreover, without market analysis, start-ups may fail to recognize potential challenges or adapt to changing market dynamics. For instance, not recognizing emerging trends or changes in customer behaviour can lead to an outdated business model or the inability to meet growing patient needs.

To avoid this common mistake, dental start-ups should make market research and analysis a vital part of their business strategy. This includes conducting thorough market research, analysing industry data, and staying updated with industry trends. By understanding their target market, offering innovative solutions, and making well-informed business decisions, start-ups can position themselves for success.

Action plan

Insufficient market research and analysis is a common pitfall for dental start-ups in the UK, often resulting in challenges in attracting patients and standing out from competitors. Without understanding customer preferences, competition, and industry trends, start-ups struggle to identify market gaps and make informed business decisions. Prioritizing thorough market research helps align services with market needs and positions start-ups for success by staying ahead of industry trends.

Inadequate Financial Planning and Management

One common reason why dental start-ups fail in the UK is because they don’t plan and manage their finances properly. Many dental entrepreneurs underestimate the importance of careful financial planning and fail to allocate enough resources to their practice. This lack of foresight and understanding can lead to various financial challenges, ultimately causing the start-up to fail.

A key mistake made by failed dental start-ups is not conducting thorough market research and analysis. Without a clear understanding of the target market and the financial aspects of running a dental practice, entrepreneurs often make uninformed financial decisions. This can result in a mismatch between the revenue generated and the expenses incurred, leading to financial instability and potential debt.

Inadequate financial management practices like poor budgeting, ineffective cash flow management, and insufficient financial forecasting can worsen the financial challenges faced by dental start-ups. Entrepreneurs may overspend or allocate resources inefficiently without a clear and realistic budget, making it difficult to cover essential expenses or invest in necessary technology and equipment. Similarly, mismanaging cash flow can make it hard to meet financial obligations, impacting day-to-day operations and hindering growth.

Furthermore, not having proper controls and accounting systems in place can hinder the ability to monitor and manage the financial health of the start-up effectively. Without timely and accurate financial reporting, entrepreneurs may not be aware of potential problems or opportunities, making it difficult to make informed decisions and take corrective actions.

To avoid these pitfalls, dental entrepreneurs must prioritise financial planning and management from the beginning. This includes conducting thorough market research, developing a realistic budget, implementing effective cash flow management techniques, and establishing robust financial controls. Seeking guidance from industry experts, such as dental specialists or financial advisors, can also provide valuable insights and support in navigating the complexities of financial management.

Recognizing the importance of adequate financial planning and management can improve the chances of long-term success for dental start-ups. Proactively addressing financial challenges and implementing sound financial practices can help these businesses thrive in a competitive industry and contribute to the overall growth and development of the dental profession in the UK.

Action Plan

Inadequate financial planning and management are common reasons for dental start-up failures in the UK. Entrepreneurs often underestimate the importance of careful financial planning, leading to challenges in covering expenses and achieving profitability. Without thorough market research, start-ups may make uninformed financial decisions, resulting in mismatches between revenue and expenses. Poor budgeting, cash flow management, and accounting practices exacerbate financial challenges, hindering growth and sustainability. To avoid failure, dental entrepreneurs must prioritize financial planning, conduct thorough market research, develop realistic budgets, and implement effective financial management techniques with the guidance of industry experts.

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The 3 Stages of the Life of a Dental Practice

Weak Marketing and Branding Strategies

One common reason why dental start-ups fail in the UK is because they have weak marketing and branding strategies. While having skilled dentists and a great team is important, it’s equally crucial to effectively market and brand your start-up. Without a good marketing plan, your dental practice may struggle to attract new patients and build a good reputation in the industry.

A common mistake is not investing enough time and resources in developing a comprehensive marketing plan. This involves identifying your target audience, understanding their needs and preferences, and creating a compelling brand message that captures their interest. Simply having a website and some basic online posts is not enough – you need to stand out from competitors and create a unique identity.

Another mistake is neglecting to use digital marketing channels effectively. Having a strong online presence is essential in today’s digital age. This includes using online advertising to reach a broader audience, engaging with patients through social media, and having a user-friendly website optimised for search engines. Ignoring these digital marketing channels can seriously limit your visibility and growth potential.

Consistency in branding is also crucial. Your branding should be consistent across all touchpoints, from your logo and web design to your signage and promotional materials. Inconsistency can lead to confusion among potential patients and make it difficult for them to trust your brand.

Furthermore, not tracking and measuring the effectiveness of marketing efforts is a common mistake. Without analysing data and metrics, it’s challenging to determine which strategies are working and where improvements can be made. Implementing tools like Google Analytics and conducting regular marketing audits can help make data-driven decisions.

Lastly, failing to keep up with the latest marketing trends and strategies can hinder your success. The dental industry is always evolving, so it’s essential to stay updated on new marketing techniques that can give you a competitive edge.

By avoiding these common mistakes and implementing strong marketing and branding strategies, you can position your dental start-up for success, attract a loyal patient base, and set yourself apart from failed dental start-ups in the UK.

Action Plan

Weak marketing and branding strategies hinder the success of dental start-ups in the UK. Neglecting to invest in comprehensive marketing plans tailored to the target audience limits visibility and growth. Failure to utilize digital channels effectively, such as online advertising and social media engagement, restricts outreach potential. Inconsistency in branding and a lack of tracking and measurement impede trust-building and informed decision-making. Remaining updated on marketing trends is crucial for staying competitive in the evolving dental industry. By addressing these shortcomings and implementing strong marketing strategies, dental start-ups can attract patients, differentiate themselves, and avoid failure.

Poor Patient Experience and Customer Service

One common reason why dental start-ups fail in the UK is because they don’t provide good patient care and customer service. While offering quality dental treatment is important, it’s equally crucial to ensure that patients have a positive experience throughout their interactions with the practice. Failed dental start-ups often overlook the importance of customer service and fail to prioritise the needs and comfort of their patients. Unhappy patients are less likely to come back or recommend the practice to others.

One aspect of poor customer service is significant delays. Patients value their time and don’t appreciate waiting for long periods before receiving treatment. A dental start-up that doesn’t manage appointments efficiently and minimises waiting times can quickly lose patients to competitors who prioritise reliability and efficiency.

Unfriendly staff is another factor in poor patient experiences. Patients expect to be greeted warmly and attentively from the moment they enter the practice. Staff members who lack interpersonal skills or training to effectively respond to patient inquiries and concerns could lead to a failed dental start-up. This can create an unpleasant atmosphere and make patients feel uncomfortable, leading to a negative perception of the practice overall.

Additionally, poor patient experiences can be exacerbated by inadequate communication. In any healthcare setting, timely and clear communication is crucial, and dental practices are no exception. Patients may feel confused and frustrated if a dental start-up fails to effectively communicate treatment plans, costs, and post-operative instructions.

Moreover, an absence of personalised care can also contribute to an unsatisfactory patient experience. Patients want to feel like their individual needs are being recognized and addressed. A dental start-up that treats patients as just another number or fails to tailor treatments to their specific needs may struggle to retain loyal patients.

In conclusion, providing a positive patient experience and excellent customer service is essential for the success of a dental start-up. By focusing on efficient appointment management, training staff in communication skills, improving communication, and delivering personalised care, dental practices can create a positive environment that fosters patient satisfaction and loyalty.

We hope you found our blog entry about the common reasons why dental start-ups fail in the UK informative and helpful. Learning from the mistakes of others is an important way to ensure the success of your own dental practice. By understanding these common pitfalls, you can take proactive steps to avoid them and position yourself well. Remember, building a successful dental practice takes time, effort, and careful planning. If you have any questions or need further guidance, please don’t hesitate to reach out to us. Your dental website can be a powerful tool in attracting new patients and growing your practice, so make sure to make the most of it.

Action Plan

Poor patient experience and customer service contribute to the failure of dental start-ups in the UK. Delays in appointments, unfriendly staff, inadequate communication, and a lack of personalized care can lead to dissatisfied patients and hinder practice success. Efficient appointment management, staff training, clear communication, and personalized care are essential for fostering patient satisfaction and loyalty. By prioritizing patient experience and customer service, dental start-ups can improve their chances of success and stand out in a competitive market.

Starting a Dental Practice: Get Started

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

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Dental practice start-up

Learn More: Starting a Dental Practice

For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

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Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

The Guide to Buying a Dental Practice

Buy-a-Dental-Practice-Samera-How-to-Guide

Buying a dental practice is the most thrilling, and the most difficult, aspect of your professional life. Providing vital oral healthcare and cosmetic treatments to the public both rewards you and helps local communities.

Whether you are buying your first practice or you are building a dental group, Samera Business Advisors are here to help you to achieve your goals and build your future.

We’ve been helping the UK’s dentists start their own dental practices for nearly 20 years and, as dental practice owners ourselves, we’ve learned a thing or two about buying dental practices.

For our friends and colleagues who are looking to embark on the journey of dental practice ownership, we hope this guide helps to start you on the path to your future in dentistry!

Click here to read more about why dentists want their own practices.

Starting or buying a dental practice can be a big task, especially if you’re new to the field. The dental market is always changing, so it’s important to stay updated on the latest trends and rules. In the UK, the dental business is growing, and there’s a high demand for good dental services. However, finding the right dental practice to buy can be challenging.

In this guide, we’ll give you all the information you need to understand the dental practice market in the UK. We’ll cover everything from current market trends and regulations to finding the right dental practice that fits your needs and budget. Whether you’re a first-time buyer or an experienced professional looking to expand your business, keep reading to learn how to navigate the dental practice market.

The Current State of the Dental Practice Market in the UK

The dental practice market in the UK is always changing and growing. More dentists are thinking about owning their own practice, whether it’s starting their own practice or expanding an existing one. Whether you’re a new dental graduate looking to set up your own practice or an experienced professional aiming to acquire one, it’s crucial to understand the current state of the dental practice market.

With interest rates currently higher than we’ve seen for a good number of years, it looks as though buyers are hesitant. This has pushed the price of many practices to be higher than they are really worth as sellers struggle to get the price they want.

Many buyers are waiting for interest rates to fall to get a better price. However, if you have the capital then this could be a great time to get the practice you want while other potential buyers hesitate.

It may be a better option for many to start their own practice. However, buying a practice will of course give you an instant, already existing revenue stream immediately.

Click here to read more about whether you should start or buy a dental practice.

Understanding the different types of dental practices available for purchase

When thinking about buying a dental practice, it’s important to understand the different types available for purchase. Each type has its own unique qualities, and making an informed decision will greatly impact your success as a practice owner.

Solo Practice:

This is a dental practice owned and operated by a single dentist.

It allows complete independence and control, making it a popular choice for dentists who prefer working on their own.

If you are considering a solo practice, you need to understand that most of the burden will fall on your shoulders. Assess your ability to handle both the clinical aspects and the business management side of running a practice honestly. This includes financial management, staff hiring, and patient acquisition strategies.

Partnership Practice:

Involves two or more dentists owning and running the practice together.

This arrangement allows for shared responsibilities, accountability, and financial risks. It’s great for dentists who want to collaborate with colleagues and share costs.

When thinking about a partnership practice, it’s crucial to identify potential partners whose vision, work ethic, and business goals align with yours. Draft a clear partnership agreement that outlines roles, responsibilities, profit sharing, and conflict resolution mechanisms.

Dental Group:

A dental group is 2 or more dental practices that all work together under a single name or brand.

These practices often have a centralized management structure but there are several ways a dental group can be structured. They may offer a wider range of dental services and each practice can specialise in treatments or simply cover a different area.

For those interested in building a dental group, it is essential that you get the financial and tax structure right from the start. If you’re thinking about buying multiple practices, you’ll really need the help of experienced dental accountants like Samera.

Specialist Practice:

A specialist practice focuses on providing specific dental services, such as orthodontics, periodontics, endodontics, or oral surgery.

These practices require additional training and expertise in specific areas of dentistry. Buying a specialist practice can be a rewarding opportunity for dentists with specialized skills or those looking to expand their service offerings.

It’s important to recognise that you may be limiting your potential patient list and you may need to work with other dentists under a referral programme.

Understanding these types of dental practices will help align your goals, preferences, and skills with the right practice. It’s crucial to carefully evaluate each option, considering factors like your experience, financial capabilities, desired level of independence, and long-term objectives. Taking the time to research and consult with professionals in the field will ensure you make an informed decision and position yourself well in the dental practice market.

Action Points:

Fully understand the structure of any dental practice you are looking purchase or buy into.
If you are thinking about building a dental group then you have to get the structure right.
Contact a specialist dental accountant to help with the financial and tax structure.

How Long Does it Take to Buy a Dental Practice?

The short answer to this question is: it takes as long as the buyer and seller allow it to take.

Like any important transaction, buying a dental practice hinges on whether or not the buyer and seller can agree upon a price and contract terms. As the buyer, you are expected to make the initial offer on the practice, with negotiations to follow.

However, there are many tasks that you, or a representative like Samera Business Advisors, must perform in order to make sure that your transaction is legal and your resources are secure. These include:

Care Quality Commission (CQC): The timing and execution of your CQC application is crucial to ensure that you are ready to begin operation of your practice after ownership is transferred; without CQC approval you won’t be able to trade.
Click here to find out more about registering with CQC
Funding: Unless you plan on financing your transaction in cash, you will likely be using your bank for funding. Banks are notoriously cautious. Both parties will need to agree the terms of borrowing with a business manager, and the contract will need to be approved by the bank’s Securities Department. Using a finance broker will help you ensure you consider all the funding options available in the market.
Click here to watch our free webinar and find out more about financing your first dental practice
Property and Leases: Often, the property side of the transaction can slow the deal down. It’s important you have a property lawyer that can assist in ensuring any lease in place can be assigned to you as new owner.
Click here to find out more leasehold vs. freehold.

Factors to consider when buying a dental practice: location, patient base, and competition

When thinking about buying a dental practice in the UK, there are important things to consider that can greatly affect its success. These factors should be carefully thought about during the decision-making process.

Location:

The first thing to think about is where the dental practice is located. A convenient and easily accessible location is crucial for attracting and keeping patients. It’s best if the practice is in a well-populated area known for dental services. Being close to public transportation and having enough parking options can also make it more convenient for patients.

You need to be honest and realistic about your goals. Most of you may want to own a practice on Harley Street and live in Central London, but how realistic is that? If you want to own a practice at a good price, you may need to consider living in a part of the country you never envisioned yourself in.

You’ll need to reconcile your business goals with your lifestyle and family goals.

Patient Base:

Another important factor is the existing patients of the dental practice. How big is their current patient list and what is the potential to grow it? Understanding the demographics of the current patient base and the local area gives insights into the potential for growth and success. Things like age, income level, and dental insurance coverage can help plan marketing strategies and services that meet the specific needs and preferences of the patients.

Competition:

It’s equally important to assess the competition in the area. Analyzing the number and types of other dental practices nearby helps determine the level of competition and how saturated the market is. It’s also important to consider the services offered by competitors and any unique features that can make the practice stand out.

Growth Potential:

Evaluating the growth potential of the dental practice is essential. Factors like population trends, economic indicators, and the potential for new patients can impact the long-term viability and profitability of the practice. Conducting market research and seeking expert advice can provide valuable insights into growth prospects in a specific geographic area.

By carefully considering the location, patient base, competition, and growth potential, potential buyers can make informed decisions when navigating the dental practice market in the UK. These factors will help ensure that the purchased practice has a solid foundation for success and long-term profitability.

Action Points:

Location Evaluation:
- Map potential locations, assessing their accessibility, visibility, and proximity to public transport and parking.
- Balance your ideal location aspirations with realistic financial and lifestyle considerations.
- Visit different areas to understand local dynamics and lifestyle fit.
Patient Base Analysis:
- Obtain demographic data of the existing patient base, focusing on age, income, and insurance types.
- Develop targeted marketing plans based on these demographics.
- Conduct surveys or focus groups to understand patient needs and preferences.
Competition Assessment:
- Identify and visit other dental practices in the area to gauge services offered and client volume.
- Analyze market gaps that your practice could fill.
- Plan unique services or approaches to differentiate your practice from competitors.
Growth Potential Evaluation:
- Research local population growth trends and economic indicators.
- Consult with a market analyst for insights into the dental market in the area.
- Develop a long-term growth strategy based on this research.

Dental Practice Valuations and Due Diligence

You must get a valuation from an established provider to receive an accurate purchase price of the dental practice for sale. Always remember, the valuation from the seller needs independent assessing. Do your own homework and employ your own valuer to ascertain if the dental practice for sale is really worth what the seller is asking for!

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is currently used as part of the dental practice valuation process.

It’s important to remember that every practice is different. There are several factors that can form part of the value of a practice, including the accounts over the previous three years, the potential for development and expansion and whether a time limited (PDS) NHS contract is in place or an open ended (GDS) NHS contract.

Read our article on dental practice valuations to find out more.

Contact us to find out more

Keep in mind you are not just buying real estate, you are buying a business. This may be the foundation of the next 30 years of your professional life! You must take the time to learn every facet of the dental practice for sale.

Once you know which dental practice you would like to purchase, it’s essential to know that you are investing in the right one. It’s too late to have regrets and doubts after you have signed contracts. This is an investment in the following years of a dental professional’s life, so it’s important to make sure everything is in order.

From the accounting to the exterior bricks and mortar, a magnifying glass must be applied everywhere. A specialist dental lawyer will know the right questions to ask so you can assess the business and plan for its growth.

You will also want to ask an experienced accountancy firm to review the financials and check the numbers for validity now and potential in the future. Management information, details from the software system and other important financial information will help you get a much better picture of the health of the business too.

As part of the due diligence process, your solicitor must request the seller to guarantee that the supplied information is correct in order to protect against any loss caused by misrepresentation.

There are certain aspects of due diligence that dentists themselves are best placed to examine, such as the way the practice operates and the treatments that are provided. However, when it comes to legal and financial considerations, a specialist dental solicitor and dental accountants should be part of the team.

It’s never a good idea to proceed without this expert help. Professionals know what questions to ask and what to look for in accounts and financial records. I have worked with many clients to co-ordinate the due diligence process, during the dental practice acquisition process, so I know how important an expert eye is.

A specialist dental accountant will:

Analyse historical financial statements to verify accuracy and identify trends or anomalies.
Evaluate the financial health of the business, including cash flow, profitability, and debt levels.
Identify any existing or potential tax liabilities that could impact the business.
Advise on tax-efficient structuring of the acquisition.
Provide an independent valuation of the business to ensure the purchase price is fair.
Prepare future financial projections to assess the potential growth and profitability of the business.

What is Included in the Due Diligence Process when Buying a Dental Practice?

“Due diligence is the process of evaluating a business from all aspects before making a purchase decision…It includes specific elements that can vary based on the situation and the nature of the business. Due diligence protects both parties but primarily the purchaser. It can uncover potential liabilities and financial matters and make sure nothing is hidden.”

Jean Murray, The Balance, 2018 (4)

Include everything that pertains to the viability of the business in due diligence. Do not leave anything to chance. From the building itself, to treatment lists, accounts and software, everything needs to be checked in microscopic detail. Too often I have seen clients getting ahead of themselves. Take a step back from the buying edge and make sure every aspect of the practice is viable, before taking the leap into purchasing.

There are several different points to consider when checking documentation during the due diligence process.

Here are some key questions and areas to challenge

Staff Costs:

Are staff costs broken down by individual employees.
Are hours worked and hourly rates provided.
What are the contractual terms for each staff member.
Are the services currently provided at the practice a good match to the services that can be provided should the sale progress?

Staff Continuity:

Will current staff members remain post-completion.
Do the staffing numbers look correct or are there family members within the financials who won’t be there post-sale.
Do staff have signed contracts ensuring their retention.
What level of income are the employees generating.
Is the ethos of the current owner similar to the ethos which will continue?

Rental and Lease Agreements:

What is the current rental amount.
What type of lease is in place, and what term is left.
Is the freehold available for purchase, and if so, what is its purchase price.

Income and Financials:

Does the value of the business make sense based on its level of profit.
Have non-recurring costs been accurately identified and excluded from reworked profits.
Are they fully fulfilling contracts that might impact future income.
Does billing match procedures that were carried out?
Does cash recorded match what is reflected in tax returns?

This is only a fraction of what should be considered as part of due diligence when buying a dental surgery. Take time to make sure that every detail has been scrutinised. This is an important business and life decision that is being made, so do not take any chances. Remember to obtain a guarantee from the seller, as to the accuracy of the information provided. This provides protection against any future financial or legal issues caused by misrepresentation.

Action Points:

Independent Valuation:
- Hire an independent valuer to assess the practice’s worth.
- Compare the seller’s valuation with your independent assessment.
EBITDA Analysis:
- Review the Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) as part of the valuation.
- Analyze the practice’s financial health over the past three years.
Potential for Development:
- Assess the potential for development and expansion of the practice.
- Consider the type of NHS contract in place (PDS or GDS) and its impact on the practice’s value.
Legal and Financial Expertise:
- Engage a specialist dental lawyer for legal due diligence.
- Consult with an experienced dental accountancy firm to review financials and validate projections.
Seller’s Guarantee:
- Ensure that your solicitor requests a guarantee from the seller for the accuracy of the provided information.
Operational Due Diligence:
- Personally evaluate the operational aspects like treatment quality and practice management.
- Match the services provided with your capabilities and future plans.
Financial Checks:
- Verify billing accuracy and cash flow against tax returns.
- Review the current wage demands and rental terms of the property.
Comprehensive Review:
- Scrutinize all aspects of the practice, including the building, equipment, accounts, and software systems.
- Ensure that the ethos of the practice aligns with your vision.

Negotiating the Price and Terms of the Deal

When it comes to buying a dental practice at the right price, figuring out the details of the price and deal terms is a crucial step. This is your chance to make sure you’re getting the best value for your investment and that the specifics of the deal match up with your goals. Remember, you make your profit when you buy at the right price and add value over the lifetime of your ownership.

First off, doing your homework and gathering as much information as possible about the practice is important. This includes checking the financial records, looking at the types of patients, evaluating the equipment and facilities, and understanding how much similar practices are worth in the current market. Armed with this information, you can confidently enter discussions with the seller.

One key thing to think about is the price tag. It’s crucial to have a clear understanding of how the price is set and if it makes sense based on the practice’s financial performance and potential for growth. It’s essential to get help from a professional valuer or a dental practice expert who can give an independent assessment of the practice’s value and guide you through the negotiation process.

Working out the details of the deal is just as important. This includes figuring out the payment structure, financing options, and any conditions that need to be met before the sale is finalized. For instance, you might want to include plans for a smooth transition period where the current owner helps with handing over patients and staff.

During negotiations, being flexible but also firm in your position is crucial. Be prepared to justify your offer or counteroffer with solid reasoning and evidence. Remember, it’s a two-way process, and finding an agreement that benefits both parties is the ultimate goal. A clear, honest and open conversation is crucial.

It’s highly recommended to engage the services of a legal professional experienced in dental practice acquisitions. They can make sure all the necessary legal documents are in place and help protect your interests throughout the transaction.

In summary, negotiating the price and terms of the deal is a critical step in buying a dental practice. By doing thorough research, seeking professional help, and staying persistent during negotiations, you can secure a deal that puts you in a good position in the dental practice market.

Action Points:

Independent Valuation:
- Engage an independent valuer to provide a realistic appraisal of the practice’s worth.
- Use this independent valuation as a basis for your negotiations.
Market Conditions Assessment:
- Research current market conditions, including demand for dental services in the area and recent sale prices of similar practices.
- Use this data to argue for a price that reflects the current market.
Negotiation Preparation:
- Prepare a well-founded argument for your proposed price, backed by your research and valuations.
- Be ready to explain why your offer is fair and reasonable.
Flexible Yet Firm Approach:
- Enter negotiations with a flexible mindset, but be firm on your maximum budget.
- Be prepared to walk away if the price exceeds what you believe is fair value.
Counteroffer Strategies:
- If the seller’s initial price is too high, present a counteroffer with justification.
- Include aspects like needed renovations, equipment upgrades, or other investments as reasons for your counteroffer.
Consider Total Acquisition Cost:
- Factor in additional costs such as legal fees, renovation expenses, and equipment upgrades when negotiating.
- Negotiate a price that accounts for these extra investments.
Use Conditions as Leverage:
- If certain conditions (like lease terms, equipment status) are not ideal, use these as leverage to negotiate a lower price.
- Highlight how these factors will incur additional costs for you post-purchase.
Professional Assistance:
- Consider hiring a negotiation expert or a dental practice broker who specializes in such transactions.
- Their expertise can be invaluable in achieving a favorable price.

Legal Considerations When Buying a Dental Practice

When it comes to buying a dental practice in the UK, there are important legal and regulatory things you need to know. These considerations are crucial to make sure the transition into owning and running a dental practice goes smoothly.

First and foremost, it’s crucial to understand the legal requirements set by the General Dental Council (GDC). The GDC sets standards and rules that all dentists must follow, covering professional conduct, clinical management, and patient safety. It’s important to check that the practice you’re looking at meets these requirements and that the current owner has stayed compliant.

Also, if you’re buying a dental practice that already has employees, you should carefully review the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). These rules are in place to protect employees’ rights during a change of ownership. Understanding your responsibilities as the new owner regarding employee contracts, terms, and conditions is crucial.

Another important thing to think about is the legal structure of the dental practice. You can choose to buy the practice as a sole trader, partnership, or limited company. Each structure has its own legal and tax implications, so it’s a good idea to consult with a legal professional or an accountant to figure out the most suitable option for your specific situation.

In addition to these legal considerations, it’s important to conduct thorough due diligence on the practice you’re thinking of buying. This might include reviewing financial records, contracts, leases, and any existing liabilities. Getting the help of an expert experienced in dental practice acquisitions can ensure that all legal aspects are properly addressed, and you’re fully informed before going through with the purchase.

By carefully looking into the legal and regulatory aspects involved in buying a dental practice in the UK, you can ensure a successful and smooth transition into ownership, paving the way for a prosperous future in the dental industry.

Click here to listen to our podcast episode on the 7 legal pitfalls of buying a dental practice.

Action points:

General Dental Council (GDC) Compliance:
- Verify that the practice adheres to GDC standards, including professional conduct, clinical management, and patient safety.
- Ensure that all practicing dentists at the practice are registered with the GDC and compliant with their regulations.
Employee Rights under TUPE:
- Review the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) to understand your responsibilities regarding existing employees.
- Assess employee contracts, terms, and conditions, ensuring that their rights are preserved during the transition.
Choosing the Legal Structure:
- Evaluate different legal structures for owning a practice, such as sole trader, partnership, or limited company.
- Consult with a legal professional or accountant to determine the most beneficial structure for your situation, considering legal and tax implications.
Due Diligence Process:
- Conduct a comprehensive due diligence investigation, including financial records, contracts, property leases, and existing liabilities.
- Utilize the expertise of a professional experienced in dental practice acquisitions to ensure all legal aspects are thoroughly examined.
Regulatory Requirements Check:
- Ensure compliance with other relevant regulations, such as health and safety standards, data protection laws, and any specific local council requirements.
- Plan for any necessary updates or changes to maintain regulatory compliance post-purchase.
Consult Legal and Financial Experts:
- Engage with legal advisors and financial experts who specialize in dental practice transactions.
- Use their expertise to navigate complex legal and financial aspects of the acquisition process.
Insurance and Liability Considerations:
- Review and update insurance policies, including malpractice, property, and liability insurance, to reflect the new ownership.
- Understand your liabilities as the new practice owner, including any outstanding debts or legal issues associated with the practice.
Contract Review and Negotiation:
- Examine all existing contracts, including supplier agreements, lease agreements, and service contracts.
- Negotiate terms as necessary to align with your operational plans and legal obligations.
Post-Acquisition Compliance:
- Develop a plan for maintaining CQC compliance with all relevant regulations and standards after taking ownership.
- Stay informed about any changes in dental regulations and standards that may impact your practice.

Raising the Finance to Purchase a Dental Practice

When it comes to buying a dental practice, funding might be the most important thing to think about. It’s crucial to explore different funding options to make sure the transition is smooth and the growth is sustainable, if you can’t fund the purchase yourself.

One option is, of course, traditional bank loans. Many banks have special loan programs for healthcare professionals, like dentists. These loans usually have competitive interest rates and flexible repayment terms tailored to the specific needs of dental practice owners. However, getting a bank loan will require a strong financial history and collateral.

Another funding option to consider is seller financing. In this arrangement, the current owner acts as the lender and provides a loan to the buyer. This can be beneficial for both parties, allowing more flexibility in negotiating the terms of the loan. Seller financing may involve an initial payment and regular installments over a set period.

There are also specialized healthcare banks and dental practice finance companies that focus specifically on funding dental practice acquisitions. These lenders understand the unique financial needs of dental professionals and can offer customized funding solutions that align with the cash flow and revenue projections of the practice.

Another avenue to explore is seeking investment from partners or dental associates. This could involve bringing on a partner who contributes to the initial purchase cost and becomes a co-owner of the practice. Alternatively, dental associates might invest in the practice in exchange for a future ownership stake.

Lastly, it’s crucial to consult with a financial advisor specializing in dental practice acquisitions. They can provide guidance on the best funding options available, help navigate the financial aspects of the purchase, and ensure that the chosen funding strategy aligns with the long-term goals of the buyer.

Overall, exploring different funding options is crucial to finding the best solution for buying a dental practice. Each option has its own advantages and considerations, and it’s important to carefully evaluate them to make an informed decision that supports the growth and success of the practice.

How Much Will You Have to Pay?

A deposit of at least 10-20% is standard when buying a dental practice, whilst the remainder can be financed from a bank. The minimum cash deposit will usually be 5%.

It’s important to remember that when the lenders use their estimate of 80% of the value, they’re only estimating that value on goodwill. They do not include the fixtures and fittings in that. This is especially important to remember if the fixtures and fittings figure it quite high.

Click here to watch our webinar on the fees and costs of buying a dental practice.

When a lender assesses your loan application they will be looking at a variety of factors. These include:

Your earning history as an Associate Dentist
Your financial track record and how you have managed your personal finances e.g. do you have high credit card balances is always a bad time to apply for a loan.
Your current living situation i.e. do you own your own house or rent?
Your management experience and number of years you have from leaving Dental School
Your ability to repay the loan with a comfortable margin of error if interest rates rise
If you place an offer for a practice and do not have available funds (or a finance agreement in place) you risk being unable to buy a practice whilst losing credibility with a seller.

Click here to read more about financing a dental practice.

Check the Ratios and Find the Potential Profit

It’s important to chart the potential profit of your new dental practice. How much of an opportunity for growth do you see?

Make sure you ask how many active (seen in the last 10 months) patients the practice has. Out of those active patients, what are the ratios between check-ups versus treatments? That will give you a birds-eye-view of the type of work and, therefore, cash flow you are inheriting.

Ask the seller for a short (3-5 examples) list of their most outstanding treatments to gauge the effectiveness of their follow up system. If the seller is a member of a local business referral group or association, follow up with other members. After all, you are entering their community and early networking prevents many headaches.

Click here to watch our webinar on the top 10 mistakes to avoid when buying a dental practice.

Contact us to find out more

Key Performance Indicators (KPIs) like these reveal the day-to-day work being done to maximize the practice’s earning potential. There are a number of dental KPIs, but let’s look at a few basic numbers you must ask for:

How many new patients have they generated in the last 12 months? Is this rate on the rise?
What are the exam and hygiene recall rates? Are they rising?
What marketing is working the best for the practice and which marketing avenues are exhausted?
What’s the level of new patients received from direct referrals?
What is the patient retention rate? How many patients did the practice lose over the last 12 months?

This will help you to understand how good the patient experience is and what you can do to improve it.

Action points:

Research Loan Options: Explore bank loans for healthcare professionals and compare terms.
Consider Seller Financing: Assess seller financing as a flexible alternative for funding.
Seek Specialized Lenders: Look into healthcare banks and dental finance companies for custom solutions.
Explore Partnerships: Think about joint investments with partners or associates for shared ownership.
Consult a Financial Expert: Get advice from a financial advisor experienced in dental practice acquisitions.
Prepare for Deposit: Ready a deposit of 10-20% for the practice’s value.
Understand Lender Valuations: Know how lenders value practices, especially concerning goodwill and fittings.
Evaluate Loan Eligibility: Check your qualifications for loans, considering your financial history and professional experience.
Assess Practice Profitability: Analyze patient ratios, treatment types, and referral networks to gauge potential profits.
Review Key Performance Indicators (KPIs): Examine KPIs like new patient rates, recall rates, marketing effectiveness, and patient retention.

Managing the Transition Period Effectively

Owning your own practice can be both exciting and challenging. It’s crucial to handle this transition period well to ensure a smooth and successful change. Here are some important tips to help you navigate this process with confidence and clarity.

Firstly, being open is crucial during the transition period. Maintain open and honest communication with the previous owner, staff, and patients. This will build trust and ensure a smooth transfer of responsibilities. Schedule regular meetings or check-ins to address concerns, provide updates, and create a supportive environment for everyone involved.

Next, learn about the practice’s existing systems and processes. Take the time to understand the daily operations, patient management procedures, and financial aspects of the practice. This knowledge will help you identify any areas that need improvement or adjustment to align with your vision and goals as the new owner. Implementing changes gradually and with sensitivity will help maintain stability and minimize disruption.

Also, value the expertise of the current staff. They have valuable knowledge and experience that can contribute to the success of the practice. Encourage open discussion, listen to their insights, and establish a collaborative environment where everyone feels valued and motivated. This will facilitate a smooth transition and ensure continuity of care for patients.

Additionally, consider seeking guidance from experienced dentists or mentors who have gone through practice transitions. They can offer valuable advice and support, helping you navigate potential challenges and make informed decisions. Their expertise can be crucial in ensuring a successful transition and preparing you for long-term success as a practice owner.

Lastly, prioritize patient care during the transition. Communicate any changes or updates to patients in a clear and compassionate manner. Assure them of your commitment to maintaining the highest standards of dental care and address any concerns or questions they may have. Building trust and a positive reputation from the start will help retain existing patients and attract new ones.

By effectively managing the transition period, you can establish a solid foundation for the future success of your dental practice. With clear communication, a thorough understanding of the practice’s operations, collaboration with staff, and a focus on patient care, you can navigate this stage with confidence and position yourself for a thriving dental practice in the UK.

Many dentists who are selling their practice factor in a sense of legacy to the transaction, and may be more willing to negotiate with someone who can show respect for their accomplishments – while also being conscious of their own ambitions.

Click here to find out more about patient retention.

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A good relationship with the seller is really help keep the process smooth. Not only that, some sellers may wish to remain working in the practice for some time. Others may still have close connections in the practice’s staff. Keeping the seller happy and onside will really make things easier for you.

Click here to find out more about selling a dental practice.

Action points:

Maintain Open Communication: Regularly engage with the previous owner, staff, and patients to build trust and facilitate a smooth handover.
Understand Practice Operations: Learn about existing systems, patient management, and financial aspects to identify improvement areas.
Value Staff Expertise: Recognize and utilize the current staff’s knowledge and experience; foster a collaborative and supportive environment.
Seek Experienced Guidance: Consult with experienced dentists or mentors who have undergone similar transitions for advice and support.
Prioritize Patient Care: Ensure clear communication with patients about changes, maintaining high care standards and addressing concerns.
Respect Legacy: Show appreciation for the seller’s legacy and achievements, balancing it with your own vision and goals.

Keep the Dental Team

We think it is important to retain the team when you buy a new practice. Think of them as one of the assets of the business. They already have the trust of and their own loyalty to your patients, they are more loyal to each other and the practice (in most cases) and they have the knowledge of the business.

If you buy a dental practice and start getting rid of staff, you’re also getting rid of knowledge and experience. Not just in dentistry in general, but in your practice in particular.

If you want to build that loyalty and trust between yourself and your team as the new owner, consider holding one-to-one meetings, or group meetings with different teams, like your nursing or orthodontic teams.

Also, look at their pay. Make sure they are at least in line with national averages and include performances bonuses – there aren’t many better ways to get a team onside!

Enroll the whole team in your vision for the practice, it’ll make it easier to realise.

Click here to read more about building a dental team.

Action points:

Value the Existing Team: Recognize the team as a vital asset, appreciating their established patient relationships, loyalty, and business knowledge.
Avoid Unnecessary Staff Changes: Understand that retaining staff maintains valuable experience and continuity within the practice.
Conduct Personal Meetings: Schedule one-to-one or team meetings to establish rapport, understand individual roles, and communicate your vision.
Review Compensation: Ensure staff salaries align with national averages and consider implementing performance bonuses to foster motivation.
Share Your Vision: Actively involve the team in your future plans for the practice, encouraging their participation in realizing these goals.

Dental Practice Marketing

Building a successful dental practice involves more than just providing quality dental care. It requires effective marketing, patient retention strategies, and a focus on growth. In this section, we will explore some key strategies that can help you establish and grow your dental practice in the UK.

Click here to find out more about marketing a dental practice.

Make sure to ask the seller about the marketing relationships they’ve forged during their time at the practice. Ask them what ways they’ve advertised in the past, and if there were any open accounts with dental marketing specialists that you could utilize.

Firstly, marketing plays a crucial role in attracting new patients and creating awareness about your dental practice. Using both traditional and digital marketing methods can help you reach a wider audience. This may include creating a professional website to showcase your services, implementing search engine optimization (SEO) techniques to improve your online visibility, and using social media platforms to engage with potential patients.

It is important to check what their online presence is at the moment. How high does their practice rank in google in their area among dentists? Do they already have brand-awareness online? Do they have a large following on Facebook or Instagram that you can leverage?

In addition to attracting new patients, focusing on patient retention is equally important. Building strong relationships with your patients is essential for their loyalty and long-term satisfaction. Implementing strategies such as personalized communication, offering loyalty programs or discounts for returning patients, and providing excellent customer service can go a long way in ensuring patient retention.

Moreover, growth should always be a part of any dental practice. This can be achieved through various strategies, such as expanding your range of services to meet the changing needs of your patients, investing in advanced dental technologies that enhance patient experience and outcomes, and actively seeking referrals from satisfied patients.

It is also crucial to continuously evaluate and analyze your practice’s performance. Regularly reviewing patient feedback, tracking key performance indicators (KPIs), and making necessary adjustments based on the data can help you identify areas for improvement and make informed decisions to drive growth.

By implementing these marketing, patient retention, and growth strategies, you can position your dental practice for success in the competitive UK market. Remember, building a successful dental practice is an ongoing process that requires dedication, adaptability, and a commitment to providing excellent dental care to your patients.

Click here to read our article on How To Market A Dental Practice

Action points:

Develop a Marketing Strategy:
- Utilize both traditional and digital marketing methods.
- Create a professional website and apply SEO techniques for better online visibility.
- Engage with potential patients on social media platforms like Facebook and Instagram.
Evaluate Online Presence:
- Assess the practice’s current online ranking and brand awareness.
- Leverage any existing social media following.
Focus on Patient Retention:
- Build strong relationships through personalized communication.
- Offer loyalty programs or discounts for returning patients.
- Maintain high standards of customer service.
Plan for Growth:
- Expand service offerings to meet evolving patient needs.
- Invest in advanced dental technologies to enhance patient experiences and outcomes.
- Encourage patient referrals to attract new clients.
Analyze Practice Performance:
- Regularly review patient feedback and track key performance indicators (KPIs).
- Make data-driven adjustments for continuous improvement.

Contact us to find out more

Using a Specialist Dental Solicitor

Placing an attractive offer on your future dental practice is one of the most essential elements in completing a successful purchase. After all, if the seller doesn’t like your proposal, they will simply move on to the next buyer – there is no prize for second place.

To ensure that your offer is fair (to both you and the seller) we always recommend enlisting the services of a professional dental solicitor. A good solicitor will carry out due diligence, negotiate the property aspect of the deal and look at the NHS contract with you. In essence, they make sure all of the t’s are crossed and i’s are dotted, so you don’t have to.

A specialist dental solicitor will:

Analyse all existing contracts, including employment, lease, customer, and supplier agreements, ensuring they are legally sound and transferable.
Identify potential legal issues or liabilities that could impact the business post-acquisition.
Ensure the purchase agreement reflects your interests and includes necessary warranties and indemnities.
Confirm the business complies with all relevant industry regulations.
Review lease agreements to ensure favourable terms and conditions.

It is important to research the right solicitor for your transaction. Check in with colleagues to see if they have any firms that they’ve used in the past, do your research, and interview several providers until you find the “right fit” for you.

By joining the Samera Alliance, we can put you in contact with our legal partners for their help in buying a dental practice.

Click here to find out more about the Samera Alliance.

Conclusion: Final Thoughts on Buying a Dental Practice

In summary, exploring the dental practice market in the UK needs careful thinking and thorough research. Buying a dental practice is a big investment and a decision that should be taken seriously.

Firstly, it’s important to conduct a detailed analysis of the market and identify potential areas for growth and profitability. Understanding the local demographics, competition, and demand for dental services will help you make an informed decision.

Moreover, seeking professional advice from dental practice consultants, accountants, and experts is highly recommended. These experts can guide you through the legal, financial, and regulatory aspects of buying a dental practice, ensuring a smooth and successful transition.

Additionally, assessing the current patient base, practice reputation, and infrastructure is essential. Look for practices with a solid history, positive patient reviews, and up-to-date equipment that aligns with your vision for the future.

Funding options should also be thoroughly explored, whether through traditional lenders, dental-specific lenders, or seller financing. Having a well-structured financial plan will contribute to the long-term success of your dental practice.

Finally, don’t forget the importance of effective marketing and building strong relationships with your patients. Use various marketing strategies to attract new patients and retain existing ones, such as online presence, referral programs, and patient education initiatives.

In conclusion, successfully buying a dental practice in the UK requires a combination of strategic planning, due diligence, and professional guidance. By carefully considering the key points highlighted in this guide, you will be better equipped to make informed decisions and embark on a rewarding journey as a dental practice owner.

Our Expert Opinion

“Over the last 20 years I have personally been involved with several hundred dental practice purchases. From first time buyers to large corporate groups, I have seen most things across the accountancy and financial spectrum.

Many inexperienced buyers, feel they have to offer the price the vendor wants for the practice, whilst sometimes the price may be justified, often it isn’t, so when you start your journey of buying a dental practice, it is imperative to get some help in the process.

I would recommend the following steps when buying a dental practice.

Think hard about the location, type and size of practice you are buying – NHS/Mixed or Private? For your first practice don’t underestimate if you have to travel quite far the impact this can have on your life. Some better deals maybe available away from the main cities, but this often means you having to compromise on lifestyle -it has to be a very personal decision.

Early in the process understand how much you can borrow with the deposit you have in place. If you don’t have a deposit, start saving early. Get in touch with the Samera Finance team, they should be approached early on as they will be able to help you understand the maximum you can borrow and hence the size of practice you can purchases.

Register with all the agents on the market and as I mentioned before be quite ruthless about what you want to buy. Don’t be pressured by any of the agents, as remember they are being paid by the vendor to get the best sale price.

Go and see as many practices as possible – the more you see the better the idea you will get as to what you like but more importantly don’t like.

If you like the look of a practice, ask the agent for up to date accounts and information. If up to date information is not available, ask the question why not? If the vendor is serious they could at least spend a few thousand pounds to provide some transparency to you.

Once you have the required information, it’s imperative to analyse this and assess what the practice is worth to you. Do your own sums, or work with a firm like ours, who has done this so many times. This is the opportunity to offer a price that works for you.

Of course there may be some negotiation but eventually a price maybe settled on, however, this is still near the beginning of the buying process and a lot can still change!

Lawyers will need to be engaged and heads of term drafted which outline the deal value and structure. Once these are agreed the proper due diligence begins.

At this stage too, you will need to decide how you will be funding the purchase, again speaking to our finance team.

Whilst legal and clinical due diligence occurs, one of the most important aspects that needs to be carried out is financial due diligence. Do the numbers presented actually represent reality? This is so important as things may be found that can provide you the opportunity to re-negotiate the price. Unfortunately I have seen some dentists ignore this step at their peril, only realising after they have taken ownership that they have been ripped off!

Once all the legal aspects have been covered, then the legal exchange and completion occur, and then you have the excitement of being the new owner of your dental practice!

It’s a long process, and requires tenacity, and of course paying for professionals who know what they are doing.

Don’t cut corners on probably one of the biggest investments you make in your life, as this may come home to roost if you do!

Good luck and get in touch with the Samera team who can help”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

Buying a Dental Practice FAQs

Why Should You Use A Dental Practice Broker And Dental Sales Expert Such As Samera When Buying A Practice?

We have a personable and sustainable relationship with our registered buyers, and we always strive to match the right practice with the right buyer. We listen to each buyer and discuss their selection criteria, sourcing the right practice.

Click here to know more about dental practice sales.

What is EBITDA?

EBITDA is (E)arnings (B)efore (I)nterest, (T)axes, (D)epreciation and (A)mortisation it is an industry-standard way of determining a business’s profit and overall financial performance.

It is one of the key metrics we use to valuate dental practices.

You can read more about EBITDA here.

What Is Due Diligence?

Due diligence is a very important exercise carried out during any dental practice sales and acquisitions process.

It is divided into legal and financial due diligence. It is an exercise to confirm that all information provided at the time of discussing and agreeing to offers is accurate and precise.

Information such as accounts, management accounts, patients number, staff contracts, NHS contracts and any legal issues such as change of control clauses, lease and property contracts, are just some of the documents to be checked and diligently controlled.

An expert legal and financial team will know what to look for in a professional and time-effective way.

Why Should I Carry Out The Due Diligence Exercise?

After you visit the practice and check the property and surrounding areas, have a good look at the last 3 years’ financial statements. Find out if the turnover is steadily increasing or decreasing and check if the private revenue is made up of fee-per-item or capitation scheme.

You also want to check if the number of full-time equivalent dentists is less than the number of surgeries, so that there is an opportunity to increase the workload and the revenue.

If the practice is incorporated, make sure that there is not a ‘change of control clause’ in the NHS contract and, if you are buying halfway through the year, check the performance of the UDAs delivery to avoid any unwanted clawback in the next financial year.

Do I Need A Specialist Dental Lawyer?

Never consider the services of a solicitor or a firm with no experience with dental practice sales.

It’s that simple. But occasionally we experience some dental principals going down the route of a solicitor who may be brilliant dealing with purchasing houses, but could slow down the process of selling or buying a practice, potentially increasing your legal fees or asking unnecessary or more than necessary due diligence documentation to complete, ending up wasting precious time.

You can find out more about the legalities of buying and selling a dental practice here.

How Do You Value A Dental Practice?

Every practice is unique and every single dental practice has a price range of value, dictated by many factors and many variables.

It is important to look at the last 3 years’ set of accounts as well as the latest and up-to-date management account to see any upward or downward income trend. The surgery percentage of utilisation and opportunity to expand are also factors that can potentially increase value and marketability.

You can find out more about dental practice valuations here.

How Long Does The Dental Practice Sales Process Take?

The average timescale for a dental practice sales deal to complete is approximately 5 or 6 months.

However, there are many factors, such as the type of practice and the legal and financial support team selected, that can influence the timeframe and speed up or slow down the process of buying a practice.

You can find out more about selling a dental practice here.

What If I Buy A Practice With NHS Contract?

If you’re buying a dental practice with an NHS contract, ask for the electronic copy of the GDS or PDS contract, checking all variations and any potential change of control clauses.

Regarding the sale of the dental practice with the NHS contracts, there will be 28 days’ notice between exchange and completion to add to the NHS element of the deal.

What Is The Dental Practice Sales Process?

We like to simplify the process of buying and selling a dental practice to 8 major steps.

Initial enquiry – the vendor sends the completed data collection form to Samera and initial discussion with our team takes place.
Valuation and practice visit – this is when we confirm the key variables and arrange a visit at the practice and our report is discussed with the vendor(s). Phase one of Samera marketing process is explained and begins straight after the meeting.
Viewings – Phase 2 of Samera marketing process. This consists of arranging appointments with potential buyers that have already been screened and viewing the property.
Offer stage – we negotiate the best financial package and best terms, then Heads of Terms are negotiated and agreed.
Due diligence – key information and documents are reviewed by legal teams.
Ongoing Support – we are there at every step of the way, supporting sellers during the financial and legal due diligence for a smooth completion.
Completion – sales and transfer of funds to the vendor’s bank account.

Does The Practice Need To Have A Partnership Structure?

No, not necessary. A buyer will always consider private limited companies and sole traders. Each one is treated differently from a legal perspective and the way in which NHS England is informed is different depending on whether the vendor decides to sell the dental practice via assets sale or shares sales.

What Issues Do You Come Across When Dealing With Dental Practice Sales?

We have never encountered an issue that we can’t resolve.

No practice is the same, but we have never encountered an issue that we can’t resolve; sometimes it just takes a little longer. Any problems usually come to light at the due diligence stage when all documents are thoroughly inspected.

The most frequent time delaying issues are regarding the property or the lease negotiations.

You can find out more about selling a dental practice here.

What Type Of Deal Structures Are Available On The Market?

We are experts in the buying and selling of dental practices and we will help all dentists to structure a deal to suit them.

Each dentist has specific expectations, tax situations and desires.

Payments usually take the form of upfront transfer on completion for NHS-driven profits, deferred payments for performance-based criteria, earn-out for private revenue, and negotiated UDA rates for vendors working at the practice after completion, who may prefer to have a higher on-going salary rather than an upfront payment depending on their individual tax position.

Why Do Dentists Sell Their Dental Practices?

Investing in alternative businesses and retirement. The most common reasons for selling a dental practice are investing in alternative businesses, to add to a retirement fund or to gain freedom from all of the administration and regulations of running a practice, allowing the vendor to once again focus on the things they enjoy.

How Much Money Is Needed For Buying A Dental Practice?

You should always discuss your financial position with an expert broker and usually have at least a 10% deposit when thinking of buying a practice.

Most lenders will offer a maximum of £500,000 unsecured loan per dentist, depending on the practice and personal situation so if you are thinking of buying a practice worth £1,500,000 with a partner, you must have a minimum of £500,000 deposit.

If you place an offer and don’t have available funds or a finance agreement already in place, you risk being unable to buy a practice and, of course, losing credibility in the dental world, where news travels at the speed of light.

Who Is Selling And Their Reasons For Selling?

More often than not we come across sellers wishing to take the practice to the next level with a new buyer, whilst relinquishing the responsibility of running the practice, as they have done this for many years.

Having a seller deciding to stay at the practice to help with the transaction time is most valuable for any buyer, especially a young dentist buying a practice for a long-term project.

So, have a good conversation with the seller and explain your idea, as money is not the only driver for a seller.

Why Should I Check The CQC Inspection Report?

Once your offer is accepted and you are in the process of the due diligence, check the quality of the equipment, cabinetry, compressors, floor or anything that could perhaps cost you money from day one.

You also need to ask the details and date of the last CQC inspection and DDA compliance to make sure that any potential requests outlined in the report have been satisfactorily covered. Your solicitor will help you with checking all equipment certificates, as well as indemnity insurance for the staff.

What If The Seller Is Becoming An Associate?

The seller may wish to stay at the practice for a number of years. Make sure you discuss and agree on an associate contract with the seller and agree on the number of UDAs to be performed, pay per UDA and working hours.

Of course, if the seller is not staying at the practice, make sure that there are some restrictive covenants preventing the seller to work near the practice that you have just bought.

A minimum of 2.5 miles in a rural area and 0.5 miles in a city should apply.

What If I Wish To Buy The Property?

For a vendor, the options are either selling the property or have a lease in place with the buyer.

The property will be valued as a commercial property and not on a residential basis so this is a point to consider when thinking about buying it or not.

What If There Is A Lease On The Property?

If there is a lease on the property and the lease is less than 15 years to the expiry date, it is advisable to talk to the landlord about a potential extension and engage the landlord at an early stage.

Any buyer would want at least 15 years lease or more if possible and the likelihood is that the landlord would ask for his legal costs to be covered.

Do I Need To Have All My Certificates Ready And Available?

During the due diligence process, you will be asked to provide and show your certificates such as the GDC registration.

Have all those ready and will save you time and during the selling process.

Do I Need To Ask For An Inventory?

Yes most certainly so, it takes some time and is boring but it will create clarity with regards to the items purchased at the practice and the items that are taking away. Also it will avoid any potential arguments and dispute further down the dental practice sales process.

Will The Dental Practice Sales Process Trigger A New CQC Inspection?

Care Quality Commission is another potential reason for a delay in buying a dental practice. Sometimes even 3 months delays if either the buyer or the seller don’t have their DBS check ready and available to submit, or the practice has not been inspected lately.

The process of selling the dental practice will involve deregistration of the seller and registration of the buyer to work at the practice. This process will likely trigger a new CQC inspection, unless one was carried out recently. So, have everything ready and DBS not older than 6 months.

What Happens To The Equipment Still Leased?

If all, or part, of your equipment is leased, sellers could either transfer the arrangements to the buyer or pay it off, which is usually most buyers’ preferred choice.

What Are The Legal Warranties?

Most solicitors acting on behalf of their clients as buyers will advise their client to include in the Standard Purchase Agreement ( SPA ) document, a warrant from you as a seller that all information provided including any financial and contractual aspect of the practice is true and accurate.

On the other hand, the seller’s solicitors should negotiate and deal with the warranties in a way that protects the vendor and minimise their risks against potential claims in the future.

You can find out more about legal issues when buying a dental practice here.

What is a deferred payment structure?

When buying or selling a dental practice, a deferred payment deal is one where part of the agreed-upon price of the practice is withheld and paid over a series of months or years.

These deferred payments are often tied to the performance of the practice. In other words, if the practice underperforms in certain key areas, some of the deferred payment is reduced.

Buying a Dental Practice: Get Started

Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help buy your dream practice.

With Samera Business Advisors you can rest easy knowing that your investment is secure and your future is brighter. Contact us today so we can help plan for your tomorrow.

Book a consult

Dental practice sales

Learn More: Buying a Dental Practice

For more information please check out the articles and webinars in the buying a dental practice section of our Learning Centre like the Guide to Buying a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

7 Legal Pitfalls to Avoid when Buying a Dental Practice

The Dental Business Guide Podcast Episode | February 16th
Arun Mehra and Kate Ford

Arun Mehra: Hello there now welcome back to the dental business guide podcast and today I’m joined by Kate Ford from Rudlings Wakelam Solicitors. Hi, Kate, how are you?

Kate Ford: Hi, I’m not too bad yourself?

Arun Mehra: Yeah. Good, good. Thanks. Now, Kate, what’s your background? What’s your experience.

Kate Ford: I’ve been a qualified solicitor for just under two years now. And I am originally from Liverpool but moved down to Norfolk a few years ago. And I’ve been with Rudlings for the past few years, where we’re quite an experienced firm when it comes to dental practices, or other health care transactions such as vets or doctors.

But I think dental is one of our biggest areas. And so we’re kind of fully equipped when it comes to all the various bespoke bits and bobs that arise when it comes to selling and purchasing dental practices.

Arun Mehra: All the nuances that I’ll I’m very well aware of indeed. So today, I’ve got a bunch of questions I want to ask you, for any listeners out there who are potentially buying a practice, whether it’s mixed, NHS or private. So I know one of the most popular questions we get all the time is: what is due diligence and why is it so important?

Due Diligence

Kate Ford: Yeah, so due diligence is just simply a term which is used to describe the gathering of information for a prospective buyer. It is basically one of the most important stages really, so that the buyer can decide if they most definitely do want to progress with the sale.

Due diligence is an aspect which requires a lot of patience and scrutiny. But essentially the better the due diligence stage is, the better equipped the buyer is. Without an investigation, the buyer would only be able to judge the practice on its face value, but also not be able to identify any potential issues or concerns which they hadn’t previously been aware of.

I always compared it to if you are buying a residential home, you wouldn’t proceed without looking into the title documents or the property searches. And it’s basically the same when you’re buying a practice. Due diligence is an exercise which allows the buyer to address issues or misconceptions or any worries that you may have.

Because a seller and the agents, they can paint quite a deceiving picture about a practice. Whereas, there could actually be some major elements both practically or from a legal point of view, which the buyer is essentially going to take on the responsibility for.

Arun Mehra: Totally, I kind of concur with that. I’ve been dealing with practice sales for many years. And as you mentioned, houses and house due diligence is relatively straightforward. But when you’re looking at business there’s so many aspects – it’s staffing, its contracts that you’ve signed up to, it’s legal, it’s so many things that can be there.

So you cannot not do a good thorough job. If you don’t do the due diligence, you really need to get the due diligence right and have the right solicitors and the right team to help you do this.

Kate Ford: Exactly. And as you said, there’s so many different aspects. Particularly when you’re purchasing, say, a large practice or a group of practices, you’ll usually have multiple legal departments involved. So you’ll have your employment solicitors, you’ll have your property solicitors, you’ll have the commercial solicitors because there’s just so much that forms a business that it’s hard to overlook it. It can be quite an error if a buyer doesn’t, because they’re essentially taking on the financial implications and they’re taking all the risks on it.

Action Point

Conduct thorough due diligence when buying a dental practice to uncover any potential issues and assess the practice’s true value, ensuring a sound investment.

Contact us to find out more

Transferring an NHS Contract

Arun Mehra: Okay, so now, I’m a buyer, I have the due diligence done, and I’m buying an NHS practice. What are the most important things to consider when transferring the NHS contract over to me?

Kate Ford: Well, so the first thing to look at is whether the NHS contract is a GDS or a PDS contract, because that can seriously affect the time scale of the transaction.

So GDS contracts, you always hope to find because they’re usually a lot simpler and straightforward. Usually, the LAT requires three months to transfer a PDS contract. And if you haven’t taken that into account when you’re working out your timeline for the transaction, if you get to a point of completion and you haven’t notified the LAT that you’re transferring a PDS contract, then there’s an extra three months that you’ve got to add on to everything.

Whereas with GDS, it’s a lot more shorter and more straightforward. However, when you’re transferring a GDS contracts, there are some elements which buyers would probably not be aware of, in that there’s a specific route which you’ll take which is called ‘the partnership route’.

So the NHS aren’t informed that a seller is actually physically selling their practice. But instead, the seller and the buyer enter into a partnership. And so on completion, the seller and the buyer, they execute a partnership agreement. And then usually after a period of time, which is around a few months, the seller then retires from the partnership. And then the contract is transferred essentially into the sole name or the sole names of the buyer or buyers.

And the NHS, using this route, they only usually require a month’s notice to affect the change to the partnership. But, and typically when you have engaged solicitors, the solicitors are responsible for serving that notice, because we can line it up with the hopeful completion date. Because NHS are usually quite particular, they want the notice within 28 days off the first of the month. So it’s usually important to instruct a solicitor who’s familiar with, not only the notice periods, but the particular days that NHS want notices served.

Arun Mehra: Okay. So, in a nutshell, there is a process that has to be followed. And it’s important in my experience, that you have solicitors that understand the NHS nuances and contracts, because otherwise, it could take significantly longer if you don’t have that experience in your team correct?

Kate Ford: Yeah, definitely. And the NHS they have a kind of standard partnership agreement. Not a template, but they look for certain provisions, in which if you just have a buyer and a seller acting for themselves, and they don’t have a properly drafted partnership agreement, it’ll get rejected, which adds on just even further delay.

So as you say, it’s always very important to instruct a solicitor who is familiar with what the NHS are wanting. But bearing that in mind, if you’re purchasing an incorporated practice, then you don’t need to do any of that. And it’s just the case of purchasing their shares. Because essentially, the corporate body that’s party to the NHS contract, they don’t change at all. It’s just the owners of the corporate body.

And, of course, the NHS will need to know that there’s been a change of control of the limited company, but it’s a lot easier and a lot more straightforward to simply inform the NHS that the shareholders are changing, as opposed to a whole new partnership agreement drafted.

Action Point

For transferring an NHS contract, understand the type of contract (GDS or PDS) and the associated timescales. Consider the partnership route for GDS contracts to facilitate the transfer. Ensure proper notice is given to the NHS, adhering to their specific requirements and timelines. For incorporated practices, the process involves notifying the NHS of a change in company control, which is straightforward. Engage a solicitor experienced with NHS contracts to navigate the process efficiently.

What Happens to the Staff?

Arun Mehra: Okay, cool. So now when I’m buying a practice on a question I always get from so many people is – I’ve got staff that I’m going to be taking on, do they all transfer automatically to me? Or can I move some staff on? What do what happens is this situation?

Kate Ford: Yeah, so I think employees and the employment obligations are often overlooked, because usually a practice will only have a small number of employees and you think, ‘Oh, I can just let them go and bring in my own employees. And it won’t be an issue.’ But there’s actually quite an important regulation which applies to this situation, which is called TUPE. And the TUPE regulations basically apply whenever there’s a transfer of an undertaking. So the sale of a business, therefore, applies under TUPE.

And so whenever a buyer is taking on a practice, all of the employees who are on payroll at the time of completion will transfer to the buyer. And it’s very important that the buyers are aware of the terms of each employee’s contract, if you will. And it’s important that they know that there are limitations to how they can firstly change any of these terms, and whether they can dismiss any of these employees. Because it may be the case that they don’t want to take on so many employees.

But if you dismiss one after completion, you’re making yourself very vulnerable to breaching the TUPE regulations. There’s also obligations on the sellers that they must consult with the employees and they must inform the buyer of all of the various details and all of the various terms concerning all of the employees. And it’s a situation where a lot of buyers get themselves into trouble because they don’t realise that after completion, they can’t change the terms of the under which the employees that have transferred over.

So it is very, very important that where there are employees involved, either solicitors or even HR advisors, they can guide buyers into how to negotiate TUPE regulations. Because annoyingly, they are a bit of a minefield, there are various obligations for various parties. And these obligations change depending on how big the practice is and how many employees there are. So, if there’s over 10 employees, the seller and the buyer have to do one certain thing. If there’s over 20, they have to do a different thing.

So it is definitely important just to, even if you you don’t want the solicitor to act for you for the entire transaction, but just at the outset to assess the employee’s situation, and just to confirm what your obligations will be, both before and after completion of the purchase.

Action Point

When buying a dental practice, all existing staff automatically transfer to the new owner under TUPE regulations, preserving their employment terms. Buyers and sellers must comply with specific obligations, including informing and consulting with employees about the transfer. Altering employment terms or dismissing transferred employees without just cause can violate TUPE regulations. It’s important for buyers to be aware of their responsibilities and possibly consult with legal or HR advisors for guidance.

Indemnity and Warranties

Arun Mehra: Okay, fantastic. That’s very useful. So now in terms of when you get the sale and purchase agreement, I’ve seen so many in my time, there are lots of clauses in there and the ones that always stand out, the indemnity and warranties. What are they and why are they so important?

Kate Ford: Well, warranties and indemnities are essentially just a means of reallocating risk between the seller and the buyer. They’re also a really useful way of ascertaining important information and disclosures, which may not have been obvious from the due diligence process.

But warranties are essentially a number of statements about the business which confirm its position. And this can basically include matters like there haven’t been any litigation issues in the last two years, or the seller hasn’t dismissed any employees in the last year. If any statements are untrue, the seller can make disclosures against them, informing the buyer of any breaches of the warranties, and this will be put into a disclosure letter. Should the seller failed to disclose a particular breach of a warranty, then the buyer can issue a claim for this breach if they’ve suffered a loss.

So if there’s a statement, which says that the seller hasn’t dismissed any employees in the last year and they have done, and this particular employee issues a claim for unfair dismissal, after completion, the buyer is essentially responsible for that claim. And so any losses that they suffer, any damages they suffer, they can pursue the seller. Because you can say ‘you didn’t inform me of this properly, and you’ve breached a warranty’.

So it’s very important that when drafting the purchase agreement, that from a seller’s perspective, they’ll want as few as warranties as possible. And they’ll want to make sure that they disclose as much information as possible. And the buyer will want to make sure that there are more warranties in there because there are more elements that could be covered.

Now, indemnities are very similar. They, in principle, have the same meaning, but they offer an element of protection for the buyer. Usually warranties are general sweeping statements like ‘there have been no litigation matters in the last two years’, whereas indemnities cover specific issues. So say, for example, we take the employee that was dismissed before completion, they issued a claim, the buyer would want an indemnity to deal with that specific tribunal claim, in which the seller would make sure that the buyer is compensated pound for pound for that specific tribunal matter.

And essentially, we as lawyers, we consider indemnities blank checks. So when you’re acting for a seller, you don’t want any indemnities, you want to avoid them all. Because it could be quite costly for the seller. But for a buyer, if there are any significant, specific issues, you want to make sure that they are all covered in the indemnity to make sure that your client is covered, if they do incur a risk to the most amount as possible.

Action Points

Warranties and indemnities reallocate risk in business transactions. Warranties are statements on the business’s condition, with sellers required to disclose any inaccuracies. Indemnities provide specific protection, compensating buyers for certain losses. Sellers aim to limit these clauses to reduce potential costs, while buyers seek them for protection against future liabilities.

Contact us to find out more

Defective Work

Arun Mehra: Okay. Very helpful. So now if I’m a buyer, or even a seller, there’s always gonna be work that hasn’t been finished or completed and how is that apportioned? And also what happens in respect of defective work as well? Is there a claim that could be made against those? Or does it come under warranties or indemnities again?

Kate Ford: Yes. So one unusual thing about a dental transaction is that there’s usually quite a substantial section of the purchase agreement which deals with apportionments. And for some reason with other businesses, there isn’t so much of a focus. But with dental work, as you know, dentists will sometimes you have advanced payments, sometimes you’ll have a lot of uncompleted work that will be going on at the time of completion. And there’ll be customers or patients who aren’t happy with treatment that they received before completion, but now the buyer is responsible for them.

And the main way to deal with it will be through the purchase agreement and the negotiation process. So essentially, the buyers and the sellers will have to come to an agreement of how to deal with each matter individually. So for example, advance payments, you’ll have to assess whether all advance payments will stay with the seller, or if they’re going to be to the buyer wholly or if they’re going to be split 50/50. There isn’t a set format, it’s just more kind of who wins the negotiations.

Usually you find that work that’s already been started but hasn’t yet been paid for, if all of the works been completed, and none of the fees have been paid, all of those fees will be apportioned to the seller. And essentially, the buyer pays the seller after completion for those specific bits of work. Whereas, if there’s part of the work has been done, but part hasn’t been done, there’ll be a percentage split once the payments been received.

You also have to think of apportionment of monthly BSA payments. Typically, they’re split on a day rate. So if completion falls on the 15th of the month, then they’ll be split to 15 days and 15 days. You have to think about underperformance of targets. At the moment with COVID, obviously the NHS have changed their targets. But if before completion, your due diligence has shown that there will likely be an underperformance because of the seller, quite often there’s a retention which is included in the purchase agreement.

So the buyer gets to hold on an additional piece of money which the seller pays. And if there is, in fact, an underperformance the buyer can keep that money. But if in fact, the buyers work fairly hard, they only keep a proportion of that money and they pay back the remainder to the seller. So it’s all things which there isn’t a set format for that this is how it will work. But it’s more negotiations. And so it’s good to get an an experienced solicitor, who’s familiar with all of these bespoke things that dental practices incur, and who knows how to properly negotiate them.

Action Points

In dental transactions, handling unfinished or defective work involves negotiating terms within the purchase agreement. Buyers and sellers must agree on how to apportion costs for advanced payments, incomplete work, and underperformance issues. This often includes dividing advance payments, allocating fees for partially completed work, and considering underperformance retentions. The process is highly negotiated, with no set format, emphasizing the need for experienced legal guidance to navigate these unique aspects effectively.

Reviewing the Property

Arun Mehra: Okay. All right. And then the last couple of questions here, Kate. Properties are always a large part of the transaction quite often, whether it’s a freehold or whether it’s a leasehold. What are the top tips in terms of reviewing the property carefully?

Kate Ford: Yes, so obviously, when you come to purchase a practice, it’s always good to assess whether you want to purchase the freehold or just take out a leasehold. It may be the case that you don’t have any choice in the matter. But both freehold and leasehold give you pros and cons depending on your personal situation.

Obviously, freehold you have a lot more autonomy in relation to how the property is dealt with. But leasehold, you’re only obligated to hold that property for a fixed period of time. And little things like if there’s an issue with the roof, generally the landlord’s responsible for it. Whereas, if you own it, it’s your responsibility.

And so this is where due diligence again comes back into it. It’s just so important to to know exactly what you’re taking on a property is such a large asset, it’s usually the largest asset of a dental practice. If you own it outright and something goes wrong, that’s a substantial bill that you’re going to have to fit.

And if it’s a lease holder, however, you won’t be responsible for the major repairs. But if you breach the lease, you could be in breach. And so it’s always just best to, if you’re purchasing a property, double check over the title deeds. Because there may be rights which your neighbor has a right of access over, which you may not be familiar with. And the practice owner may not be familiar with. But there’s this right there. And if you stop a neighbor using that particular right of access, then you could have a serious financial liability on your hands.

Similarly, there may be covenants which the property is bound by. And if you breach that covenant, the person who benefits from that could then again issue you for breach of Covenant, and you’d be faced with a significant financial responsibility.

There are also property searches, which are a really useful way of not only knowing more about your property, but the surrounding area. And there are a lot of searches that we can undertake, where it will show you all the nearby commercial property. So it may be other dentists or GPS, or shops, which may affect how you want to carry out your business.

So it isn’t just whether your property is connected to mains drainage, but also other things like, there’s a development proposed on a couple streets over which may mean more patients, which could really benefit your business. Or it could be that around the corner there’s a very large dental practice, which you may think well actually ‘I don’t want to be competing with them, I’m not going to proceed’. So it may look like a great property on the face of it. Or it may look like a bad property on the face of it. But having these property searches and doing a full review of the title documents can really make or break your business.

Action Plan

When reviewing property for a dental practice transaction, consider the type of ownership (freehold vs. leasehold) and its implications for autonomy and responsibility. Conduct thorough due diligence to understand property rights, covenants, and potential liabilities. Review title deeds and undertake property searches to gain insights into the property and surrounding area, including commercial competitors and potential developments that could impact your business. This comprehensive approach ensures informed decisions and can significantly influence the success of your dental practice.

Buying the Practice You Work In

Arun Mehra: All right, cool. And then I suppose one of the things that I see all the time is that there are a lot of buyers out there who are actually working in the practice that they intend to end up buying. So do they have to go through this whole process as well? What would you recommend?

Kate Ford: Yep. So as you say, it happens so often that an associate will come into a position where they can either purchase the practice outright, or quite often will be able to buy into a practice. And there’s this misconception that because I work for a practice, either as an employee or self-employed contractor, that because I work for them, I don’t actually need to carry out any reviews, I don’t need to go through this long arduous due diligence process or going through the negotiations with the purchase agreement.

But often, there’ll be elements of a business where the practice owner doesn’t want to disclose it to all of its employees and all of its contractors. For example, litigation matters, as an employee myself, if my employer has a litigation matter, or an employee unemployment matter, often, they’re obligated not to disclose that information to other employees or other contractors, because it doesn’t involve me.

And going back to the property as well, there’ll be property elements, which I myself am not party to, until I do those reviews, or ask the seller to provide me that information. When you’re buying a practice, you want to make sure that you pay the market value for it. And without doing a full review, you won’t actually know if the practice is trading well, or if it’s trading really well.

So doing the due diligence process and doing the negotiations process, you know exactly what you’re buying into, or what you’re purchasing. You know how the business is doing and how it’s trading, so that you can project what your profits are going to be once you own it. And you can also just make sure that you’re entering into this deal on the best terms that you want to be party to. It is just so important.

As we said earlier, there are so many elements that make up a business. It isn’t just a property where you purchase bricks and mortar, you’re buying employment contracts, you’re buying supply and maintenance contracts, you’re buying stock, you may buying vehicles. There are so many elements, which can so easily be overlooked when you’re already part of a business. But there are too many things which, firstly, you legally can’t be aware of. But practically you can’t be aware of every single element as an employee. So it is most definitely just to, even if you do it yourself just to have a thorough review of what you’re buying into.

Action Plan

Even if you’re an associate or employee planning to buy the dental practice you work in, it’s crucial to undergo the full due diligence and negotiation process. This ensures you understand all aspects of the business, including hidden liabilities or potential issues not visible to employees or contractors, such as litigation matters or property issues. Thorough review helps ascertain the practice’s true value, trading status, and future profitability, allowing you to enter the transaction informed and on favorable terms.

Contact us to find out more

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Always Engage a Legal Professional

Arun Mehra: Okay, well, that’s been really, really helpful, Kate. We’ve gone through seven major kind of pitfalls that people hit sometimes when they’re buying a practice. Any the last comments to people when buying a dental practice, from a legal perspective?

Kate Ford: I think from a legal perspective, you know, obviously legal fees can be quite overwhelming. But even if you don’t want to engage a solicitor for all of the transaction, there are certain parts like the due diligence, or the purchase agreement, where it’s just best to have a legal person look over it for you.

So even if you’re quite confident that you can do a lot of it yourself, I would advise just to get a legal person glance over over the transaction, because there may have been things which you’ve missed or haven’t realised. And so yeah, it is always just worth speaking with a legal professional to make sure that it is as you’re hoping to buy.

Arun Mehra: Okay, fantastic. Well, thank you very much today for your inputs. Okay, and been really helpful. I think the seven legal factors that people should be looking out for when they’re buying a practice are essential. And I think as deals get more complicated, I think these issues are just getting more and more important. So there you go. That’s Kate, from Rudlings Wakelam, and if you’re looking for business tips, check out our next podcast on the dental business guide. Thanks, Kate.

Reviewed By

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

7 Legal Pitfalls to Avoid When Buying a Dental Practice FAQ

Why is it important to review contracts when purchasing a dental practice?

Reviewing contracts when purchasing a dental practice is crucial to identify any legal obligations, such as employee agreements, property leases, and restrictive covenants that may limit your operations. Contracts also outline financial terms, liabilities, and warranties that protect you from future disputes. Ensuring that contracts are clear and favorable helps prevent unexpected costs or legal issues after the purchase, safeguarding your investment and smooth business operations.

What are the common legal pitfalls in buying a dental practice?

Common legal pitfalls when buying a dental practice include not thoroughly reviewing contracts, such as employee agreements or property leases, which may carry hidden liabilities. Failure to conduct due diligence on the financial health of the practice or overlooking restrictive covenants can limit your operational flexibility. Additionally, incorrectly transferring NHS contracts or failing to understand tax obligations can lead to financial and legal complications. It’s crucial to address these issues to avoid future disputes and protect your investment.

How do restrictive covenants affect a dental practice acquisition?

Restrictive covenants in a dental practice acquisition can limit your ability to operate within a certain geographic area or offer specific services after the purchase. These covenants are often designed to protect the seller’s remaining interests, like preventing competition. If not reviewed carefully, they can restrict your growth potential or expansion plans. It’s essential to understand the scope and duration of these covenants to ensure they don’t hinder your business operations.

What legal documents should I review during due diligence?

During due diligence for a dental practice acquisition, important legal documents to review include:

Purchase Agreement: Defines the terms of the sale.
Employee Contracts: Ensures awareness of staff rights and obligations.
Lease Agreements: Reviews property obligations and restrictions.
NHS or private contracts: Ensures proper transfer of patient services.
Tax Records: Checks for liabilities.
Warranties and Indemnities: Protects against future claims.
Thoroughly reviewing these documents safeguards your investment and prevents future legal issues.

What are the risks associated with property leases when buying a practice?

When buying a practice, risks associated with property leases include hidden costs like rent escalations, service charges, and repair obligations that may not be apparent initially. Long-term lease commitments can limit your flexibility if you want to relocate or expand, and restrictive terms might prevent modifications to the property. Additionally, unclear lease renewal terms can create uncertainty regarding your tenure, affecting the stability of your practice in the long run.

How do employment contracts impact the purchase of a dental practice?

Employment contracts impact the purchase of a dental practice by transferring existing employee rights and obligations to the new owner. You may inherit contractual commitments such as salaries, benefits, and working conditions, as well as any potential liabilities related to employment disputes. It’s crucial to thoroughly review these contracts to ensure alignment with your business goals and to identify any risks, such as restrictive terms or costly benefits, that could affect the practice’s profitability after acquisition.

What are the tax liabilities when buying a dental practice?

When buying a dental practice, tax liabilities can include Stamp Duty Land Tax (SDLT) on property purchases, Capital Gains Tax (CGT) on assets, and VAT if applicable. It’s important to assess the tax status of the business to avoid unexpected liabilities. Additionally, how the deal is structured—whether as an asset or share purchase—affects tax treatment. Consulting with a tax advisor ensures you understand these implications and can plan effectively.

How do warranties and indemnities protect the buyer?

Warranties and indemnities protect the buyer by providing legal assurances from the seller regarding the condition and performance of the dental practice. Warranties are statements confirming key facts about the business (e.g., financial health or ownership of assets), while indemnities protect the buyer from specific liabilities or future claims. If these warranties are breached or undisclosed issues arise, the buyer can seek compensation, safeguarding against unexpected financial risks after the purchase.

What should I look for in the purchase agreement for a dental practice?

In a dental practice purchase agreement, you should look for key elements such as the purchase price and payment terms, asset or share purchase details, and any warranties and indemnities provided by the seller. Review employee and property transfer terms, any restrictive covenants, and the completion date. Ensure it includes a clear plan for handling existing NHS contracts and patient lists. Understanding these elements is crucial to avoid future disputes and financial risks.

How do transfer of assets differ from share purchases in dental practices?

The main difference between an asset purchase and a share purchase in dental practices lies in what is transferred. In an asset purchase, the buyer acquires specific assets of the practice, such as equipment, patient lists, or property, without inheriting liabilities. In a share purchase, the buyer acquires the entire company, including both its assets and liabilities. Asset purchases offer more control over what is bought, while share purchases allow for a more seamless transfer of ownership.

What legal issues arise from intellectual property when buying a practice?

When buying a dental practice, intellectual property (IP) issues can arise concerning ownership of the practice name, logo, trademarks, patient records, and marketing materials. It’s important to ensure that these assets are properly transferred and legally owned by the buyer. Misunderstandings regarding who holds rights to the branding or IP could lead to legal disputes. Reviewing any IP-related agreements or registrations during due diligence helps avoid complications and ensures full ownership post-purchase.

How do Care Quality Commission (CQC) regulations affect dental practice purchases?

Care Quality Commission (CQC) regulations affect dental practice purchases by requiring the new owner to meet CQC standards for patient safety, quality of care, and facility management. The buyer must register with the CQC before taking ownership and ensure that the practice adheres to regulatory requirements. Failing to comply with these standards can result in penalties or delays in the transfer process. It’s essential to review the practice’s CQC compliance history during due diligence to avoid future issues.

What are the consequences of failing to transfer NHS contracts correctly?

Failing to correctly transfer NHS contracts when buying a dental practice can result in losing the NHS contract, which is vital for practices providing NHS treatments. This can lead to financial losses and disruptions in patient care. The new owner must follow proper legal procedures to ensure the contracts are transferred smoothly, including notifying NHS authorities and adhering to their requirements. Failure to comply can lead to contract termination, regulatory issues, and potential reputational damage.

How can I avoid future liabilities after purchasing a dental practice?

To avoid future liabilities after purchasing a dental practice, conduct thorough due diligence to uncover any hidden financial or legal risks. Ensure that employee contracts, property leases, and supplier agreements are reviewed for potential liabilities. Verify the practice’s compliance with regulatory bodies like the CQC and ensure proper transfer of NHS contracts. Use warranties and indemnities in the purchase agreement to protect yourself against unexpected claims. Consulting legal and financial experts can further help mitigate future liabilities.

Why is it essential to have a solicitor when buying a dental practice?

Having a solicitor when buying a dental practice is essential to ensure the legal aspects of the transaction are properly handled. A solicitor reviews contracts, identifies potential liabilities, ensures compliance with regulatory requirements (like CQC registration), and safeguards the proper transfer of assets and NHS contracts. They also help negotiate favorable terms, protect you from legal pitfalls, and provide advice on warranties, indemnities, and restrictive covenants. Their expertise ensures a smooth, legally sound acquisition process.

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Learn More: Buying a Dental Practice

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Marketing to Millennials for Dentists

The Dental Business Guide Podcast Episode | February 24th
George Bellamy, Nikita Kanda, Chris O’Shea

Unlocking the Millennial Market: Effective Marketing Strategies for Dentists in the UK

The millennial generation is a very important group of people in the UK who buy things. It’s becoming more and more important for all kinds of businesses, even dentists, to know how to advertise to them because they have a lot of money to spend. Dentists might find it hard to connect with millennials. So, we’re going to talk about some good ways that dentists in the UK can use to get millennials interested in their services. We’ll talk about things like using the internet to show fun ads, working with popular people and using modern technology. We want to help dentists get the attention of millennials and make their dental practices grow.

Understanding the Millennial Market: Who are the Millennials?

To market your dental services well to millennials in the UK, it’s important to know who they are first. Millennials, also known as Generation Y, are people born from the mid-1980s to the mid-2000s. They are now in their late teens to mid-40s and make up a big part of the population.

Millennials are different from older generations because of their unique qualities and likes. They grew up with technology and the internet, so they’re really good with gadgets and being online. Before they buy something, they look at reviews and suggestions online, and they use social media a lot.

For millennials, experiences and making things personal matter a lot. They care about taking care of themselves and being well. When it comes to dental care, they want it to be easy, affordable, and a good experience.

Also, millennials care about the environment and social issues. They like brands that have the same values as them, like being eco-friendly and doing good things for society. Dentists who show they care about these things can get millennials interested in what they offer.

But just knowing the age range isn’t enough. To really understand millennials, you need to know how they act, what they like, and why they do things. If dentists in the UK can figure this out, they can make their ads and marketing fit what millennials want. This way, they can really connect with this important group and make them happy, loyal customers.

The Importance of Targeting Millennials for Dentists in the UK

Millennials are a big part of the people in the UK and they have a big effect on many industries, including dentistry. Millennials are the largest group of people alive right now. They care a lot about taking care of themselves and being healthy. They also have a lot of money to spend.

For dentists in the UK, it’s really important to understand that focusing on millennials is crucial if they want to stay important and do well in today’s competitive world. Unlike older generations, millennials like to prevent dental problems and they’re more likely to go to the dentist even if they don’t have a problem yet. This is a great chance for dentists to show that they’re good at keeping teeth healthy, not just fixing problems.

Millennials are also really good with technology and they use the internet to make choices. Dentists can use online ads, virtual campaigns, and good websites to show millennials what they offer.

Millennials also want brands to be honest and clear. Dentists can build trust and make friends with millennials by talking to them online, answering their questions, and sharing useful information about teeth and dental stuff.

A lot of millennials care about the environment. Dentists who use eco-friendly materials, reduce waste, and use energy-saving things can get millennials’ attention because they like things that are good for the Earth.

So, in short, dentists in the UK really need to pay attention to millennials. If they understand what millennials like, use online ads, build good relationships, and care about the environment, they can get millennials interested and become the dentists that millennials like to go to.

Utilizing Digital Marketing Channels to Reach Millennials

Getting the attention of millennials using traditional advertising methods might not work as well nowadays because millennials are very connected to the internet and use it for everything. They look at social media, search engines, and online reviews when they want to decide something. If you’re a dentist in the UK, it’s really important to use the internet to reach and interest millennials.

Social media, like Instagram, Facebook, and Twitter, is a great way to talk to millennials. You can show what your dental practice is like, share helpful information, and talk to people who might want to be your patients. If you keep putting up cool and useful stuff on social media, millennials will start to trust you and think you’re good.

Also, you need to make sure your website shows up when millennials search for dental stuff. You can do this by using the right words on your website and writing blogs that tell people useful things. If other good websites talk about your website, it will show up more in searches, and that’s good.

Millennials also really care about what other people say online. If happy patients write nice reviews about your dental practice on Google, Yelp, or other places, more millennials might want to come see you.

You can also use online ads that are just for millennials. Google Ads and online entertainment ads help you show your stuff to the right people. You can choose who sees your ads based on things like what they like and what they do online. This can help you get more millennials interested in your dental practice.

Lastly, teaming up with famous people online who millennials like can be a big help. These people can tell their fans about your dental practice, and more millennials will know about you.

So, to wrap it up, dentists need to use the internet to talk to millennials in the UK. Use social media, make sure your website is good, get good reviews, use online ads, and work with popular online people. This way, you can get millennials to know and like your dental practice in the digital world.

You can read more articles about marketing your dental practice here.

Creating Engaging and Relevant Content for Millennials

Creating interesting and relevant stuff is super important when you want to get millennials interested. Millennials really like things that feel real, special, and like they’re talking directly to them. If you’re a dentist, you can do this by making content that millennials will like because they know a lot about technology and care about important things.

First, think about where millennials spend their time online. They really like Instagram, TikTok, and YouTube. You can use these places to show them things that teach them and make them smile. For example, you can make short videos that show how to take care of teeth, how to keep mouths clean, or what it’s like in your dental office.

You can read more about video marketing for dentists here.

Think about what millennials care about when it comes to their teeth. They really like taking care of themselves and being healthy. So, make content that shows how healthy teeth are important for the whole body. Talk about natural stuff for teeth, like how to make them whiter or how food affects teeth. Give them useful tips so they know you’re really good at what you do.

Stories are great for millennials. Share stories from people who liked coming to your dental office and had good experiences. Millennials like real stories that make them feel something. You can also talk about causes you care about or things you’re doing to help the community. This will show them that you’re a dentist who cares about important stuff.

Lastly, you should let millennials join in. They like to be part of things and tell their opinions. Ask them to share their dental stories, ask questions, and tell you what they think. You can do this on social media by having contests, asking questions, and having Q&A sessions. When you include them, they’ll feel like they belong and want to be your patient.

So, in short, if you want to get millennials interested, make content that’s real, special, and looks good. Share stories, talk about what they care about, and let them be part of the fun. If you do these things, you can make millennials want to come to your dental office and become your loyal patients.

You can read more about creating content for a dental practice here.

Marketing and Patient Care in your Practice

How To Market A Dental Practice

Email marketing for dentists

Virtual entertainment has turned into a fundamental piece of our day to day routines, particularly for recent college grads. When it comes to connecting with this demographic and expanding your practice, harnessing the power of social media can be a game-changer for UK dentists.

Right off the bat, it’s fundamental to recognize which stages resound most with recent college grads. This generation is extremely fond of Instagram and TikTok because of their visually appealing content. Making outwardly engaging posts that exhibit your dental administrations, highlighting when pictures, patient tributes, and instructive substance, can enthrall recent college grads and arouse their curiosity in your training.

You can interact more interactively and authentically with millennials by making use of Instagram stories and reels. In the background film, back and forth discussions, and displaying the agreeable environment of your dental office can assist construct trust and experience with expected millennial patients.

Another powerful system is working together with powerhouses or miniature forces to be reckoned with who have serious areas of strength for a following. Find influencers with genuine ties to oral health and who share your brand’s values. By working with them to promote your dental services, you can increase your chances of getting new patients and increase your visibility among millennials.

Social media is all about engagement. Developing a rapport with millennials and demonstrating your dedication to providing excellent service are two outcomes of promptly responding to comments, direct messages, and inquiries. By offering a branded photo booth or hosting events or giveaways exclusively for your social media followers, you can encourage patients to share their experiences with social media.

Lastly, connecting with millennials can be made easier by utilizing user-generated content. Urge your patients to share their dental process, tributes, or even their stunning grins utilizing an assigned hashtag. This not only fosters a sense of community but also provides other millennials considering dental care with social proof.

In conclusion, dentists in the UK can connect with millennials in a variety of ways through social media. You can unlock the potential of the millennial market and take your dental practice to new heights by curating content that is appealing to the eye, collaborating with influencers, encouraging engagement, and utilizing user-generated content.

You can read more about using social media for dentists here.

Building Trust and Establishing Credibility with Millennials

For dentists in the UK who want to get involved with this group of people, it’s really important to make millennials trust and believe in you. Millennials are people born between the mid-1980s and late 1990s, and they really like when brands are honest and clear.

To connect well with millennials, dentists need to show that they know a lot and are really good at what they do. One good way to do this is by sharing helpful information about taking care of teeth. This could be in the form of blog posts, videos, or fun online posts that give useful tips.

Millennials like dentists who know a lot and keep up with new things in dental care. Dentists can show their knowledge through happy ads that make them look like trusted experts. Also, sharing stories from happy patients on websites and social media can make millennials trust them even more.

Making sure that going to the dentist is easy and personal is also important. This means letting people schedule appointments online, using email or texts to remind them, and making the dental office a nice and modern place.

Talking to millennials on social media platforms like Instagram and Facebook is also a must. Dentists can show pictures of their work, what goes on behind the scenes, and stories from patients. This way, they can show their skills and connect with younger people.

Lastly, dentists should reply quickly and politely to millennials’ questions, comments, and reviews. This helps show that they’re trustworthy and care about their patients.

By doing all these things, dentists in the UK can make millennials believe in them and like them. This will make millennials want to keep coming back to them for dental care.

Embracing Convenience and Technology in Dental Services

In today’s fast-paced world, making things easy and using technology are really important. Millennials, who are young people now, like it a lot when businesses use technology to make things better. For dentists in the UK, using technology and making things easy can help them get and keep millennial patients.

One way to make things easy is by letting people schedule appointments online. Millennials like being able to pick the time that works for them without having to call or wait. Having a simple online system to book appointments not only saves time for everyone but also makes the whole experience better.

Technology like digital X-rays and electronic health records can also make things better. These things help dentists work faster and better. They can quickly find out what’s wrong and make a plan to fix it. This makes millennials like going to the dentist more.

Also, making the dental office comfortable and modern is important. Offering things like free Wi-Fi, comfortable waiting areas with places to charge devices, and even things to do like watch TV or use tablets can make millennials feel good when they come for a visit.

Using social media, like Instagram and Facebook, is a great way for dentists to show millennials what they do. They can share pictures of their work, give tips about teeth, and talk to people online. Letting patients write reviews and stories on these platforms can help make other millennials trust the dentist too.

So, to sum it up, dentists in the UK should make things easy and use technology to get millennials interested and make them want to come back. They can do this by letting people book appointments online, using social media, making the office nice, and using technology for better dental care.

You can read more about building a website for dentists here.

Tailoring Pricing and Payment Options for Millennial Preferences

If you want to do well as a dentist in the UK, it’s really important to know what millennials like and change how you charge them and let them pay. Millennials are young people, and they care a lot about money and being able to pay in ways that are easy for them. By making your prices and payment choices fit what they want, you can get millennials to come to you and keep coming back.

One big thing is to make sure your prices are fair. Many millennials look for deals and might not want to spend a lot of money on dental stuff. Giving them good prices or special discounts can make them think your services are good and worth it. You can also make plans or programs that let them pay less for regular dental care.

Having different ways to pay is also really important. Millennials like having choices, like paying online or in parts. If you let them pay in ways that work for them, it can help if they’re worried about money for their dental work. You could even work with companies that help people with medical bills or make your own payment plans.

Being clear about how much things cost is really important too. Millennials want to know exactly how much they need to pay for things like procedures or treatments. Make sure your website and ads show exactly what you charge, so millennials know what they’re getting into.

Using technology for payments is also a must. Millennials know a lot about technology and they like it when things are easy. If you let them make appointments and pay online, it makes things better for them and they’ll like coming to your office.

By changing how you charge and let millennials pay, you can make them think your dental office is modern and good. This will make them want to come and also tell their friends about you. So, fitting your prices and payments to what millennials like can help your dental practice do really well.

Encouraging and Leveraging Online Reviews and Testimonials

In today’s digital time, online reviews and stories from customers have a big impact on what people decide to do. This is true for dentists too. Especially millennials, who are young people, look at what others say online before they pick a dentist. So, if dentists want more millennials to come to their office, they should ask for good reviews and use them.

One good way to do this is by asking happy patients for their thoughts. After they come for a visit, send them a message to say thanks and ask if they can share how it went online. You can even give them direct links to popular review sites like Google, Yelp, or Facebook to make it easy.

Think about starting a program where patients who bring in new people and leave good reviews get a small discount, gift cards, or other rewards. This not only makes happy patients tell others but also helps make millennials who might come later trust you more.

When you get a bunch of good reviews, put them on your website and social media pages. Millennials really like real stories from real people, so showing what other patients said can make them trust you.

Another thing you can do is talk back to the people who leave reviews, whether they’re good or not so good. This shows that you care about what people think and want to make them happy. If you reply quickly and nicely, it can help fix bad reviews and make millennials like you more.

Remember, millennials like to talk about their experiences and listen to others. By asking for and using online reviews, you can make them want to come to your office and tell their friends about you. This can really help you get more millennials interested in your dental practice.

You can watch our webinar on marketing and patient care here.

Measuring and Analyzing Marketing Campaigns for Continuous Improvement

Checking and understanding how well marketing plans are working is really important for dentists in the UK who want to get millennials interested. To really connect with these smart young people, dentists need to know what’s working and what’s not in their advertising.

One of the most important things to look at is how much money a marketing campaign makes compared to how much it costs. This is called the return on investment (ROI). Dentists can see which campaigns bring in the most money and decide where to spend their resources.

Another important thing is the conversion rate. This shows how many people who visit the website or show interest actually become patients. By tracking this, dentists can find where things are going well and make changes to make things even better.

It’s also important to see if digital marketing campaigns are doing well. Dentists should look at things like how many people visit the website, how long they stay, and if they leave quickly. This helps them know if people like what they see and if they’re interested.

Listening to what patients say is also a must. Dentists can ask patients for their thoughts and reviews to know if their marketing is working. This helps them learn how to make their services better.

So, to wrap it up, dentists in the UK should look at and understand their marketing plans to keep getting millennials interested. By checking things like ROI, conversion rates, website numbers, and patient feedback, they can make smart choices and make their marketing work even better for them.

Marketing to Millennials for Dentists FAQ

Why should dentists focus on marketing to millennials?

Millennials represent a large demographic with significant spending power. They value convenience, technology, and personalised experiences, making them key potential patients for dental practices.

What do millennials look for in a dental practice?

Millennials prioritize convenience, transparency, digital engagement, online booking options, and positive online reviews when choosing a dental practice. They also value practices that offer flexible payment options and emphasize preventive care.

How can social media help attract millennial patients?

Social media allows dental practices to engage directly with millennials, share educational content, promote services, and showcase patient testimonials. Platforms like Instagram and Facebook help build trust and brand awareness among this demographic.

What type of content appeals to millennial dental patients?

Millennials respond well to educational content like dental health tips, behind-the-scenes videos, patient success stories, and promotions. Visual content, especially on social media, is particularly engaging for this group.

How important are online reviews for millennials when choosing a dentist?

Online reviews are critical for millennials when selecting a dentist. They trust peer reviews and often check platforms like Google and Yelp before making healthcare decisions, so maintaining positive reviews is essential.

Should I offer online booking to attract millennial patients?

Yes, millennials expect the convenience of online booking. Providing a seamless, user-friendly online appointment scheduling system can attract tech-savvy millennial patients who prefer digital interactions.

How can email marketing engage millennial patients?

Email marketing can engage millennials by offering personalized content, appointment reminders, promotions, and dental health tips. Keep emails concise, visually appealing, and mobile-friendly for maximum impact.

What digital marketing strategies work best for attracting millennials to a dental practice?

The most effective strategies include social media marketing, search engine optimization (SEO), online reviews management, paid advertising (Google Ads, social media ads), and content marketing tailored to millennial preferences.

How important is mobile optimization when marketing to millennials?

Mobile optimization is crucial. Millennials are likely to access your website on their smartphones, so it’s important to have a mobile-friendly, fast-loading site with easy navigation and online booking options.

What role does transparency play in marketing to millennials?

Millennials value transparency, especially when it comes to pricing, treatment plans, and expectations. Clear, upfront communication about costs and services on your website and in consultations builds trust with this demographic.

How can I leverage video marketing to attract millennial dental patients?

Video marketing is highly effective in engaging millennials. Share educational videos, patient testimonials, and behind-the-scenes content of your practice on platforms like YouTube, Instagram, and Facebook.

What role does preventive care play in marketing to millennials?

Millennials value preventive care as a way to avoid major health issues and costs down the line. Promoting preventive dental services like regular cleanings and checkups can resonate with this group.

Should my dental practice offer flexible payment options for millennials?

Yes, offering flexible payment options like payment plans or financing can appeal to millennials, many of whom are cost-conscious and prefer payment flexibility for more expensive procedures.

How can dental practices retain millennial patients?

Retaining millennial patients requires consistent engagement through email marketing, offering convenient digital services, providing excellent customer service, and creating personalized experiences to meet their expectations.

How does sustainability impact marketing to millennials?

Many millennials are environmentally conscious, so marketing your dental practice’s commitment to sustainability—such as eco-friendly materials and energy-efficient practices—can be a strong selling point.

Our Expert Opinion

“Millennials are making financial decisions now and they’re not looking for your in local magazines or through flyers. They’re looking for you online and they need to hear recommendation – what is known as social proof.

Millennials are going to find you on Google or social media (most likely on Google – social media takes a lot of work to get right). So, your website needs to be as good as possible and your social media needs to exist at least.

We’ve covered websites and SEO for dentists in other articles, and your social media is going to act as more of a reference for future patients, rather than a magnet for leads. Millennials want to see reviews and testimonials. They are more immune to salesmanship and they need to see real patients giving real reviews. This means you need to do anything you can to get Google reviews and video testimonials from your patients.

Millennials also care about values, show that you do too. If you’re sustainable in any way, show it off. If you do work with charity or in the community, show it off.

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

How to use Video to Effectively Market your Dental Practice

The Dental Business Guide Podcast Episode | February 11
George Bellamy, Nikita Kanda

George Bellamy: Welcome back to the Dental Business Guide. I’m George. And once again, we’re here with Nikita, and we’re gonna change things up. Nikita now wants to ask me questions, so fire away.

Nikita Kanda: Yes, I thought I would switch it up today and I would be the one asking George questions because today we’re going to talk about video content and George has a lot more knowledge on this topic than I do, so I thought it’d be fun to switch it around.

So my first question for you George is: If I have a dental practice, what sort of video content should I be putting out on my social media?

George Bellamy: So, for social media, you want small snippets of information. The thing is, people scroll through their feed and if you don’t capture someone with a video in the first five seconds, you’ve lost them.

So really, you want to get your point across as quickly as possible. No one wants to be watching a 15 minute video of you rambling on. So I think if you want to do an advert, if you want to do a walkthrough of your practice for example, then yes, definitely do that. But I think stick it around the 30 second mark, but make sure the first five seconds are punchy and are key, so people can actually engage with it. They want to continue viewing for the rest of that 30 seconds.

Nikita Kanda: Yeah, that’s a really good point and do you think I should be posting videos of my team? What sort of content should I be putting out, the team or more teeth related information? Or is it just those people, those practice owners should find out what their unique selling point is, and then post about that?

George Bellamy: More or less with video, you want to film and edit and upload everything and anything. So the way I put it is, video is photos 24 times a second. I find video more convincing. Because my background is real estate, I would do real estate films and my selling point with the films I create was that they’re true, they’re real.

With photos, real estate photography is great, but you have the big wide angle lens that distorts the room, it makes the room feel a lot bigger than it actually is. With video, sure I use a wide angle lens, but it creates a sense of depth that has a sense of reality to it and same thing with dental practices.

So if you just keep having photos, you might seem like that stock photo surgery or that stock photo practice, if you will. But the video is you showing the real patients, the real dentists, the real place in its correct lighting. It just has that sense of reality to it and personal touch.

Nikita Kanda: I totally agree with you that it’s all about real, especially with what we’re posting on social media. You don’t want it to look like that stock image practice that you said so, definitely you’d say make it authentic content?

George Bellamy: Without a doubt, definitely.

Nikita Kanda: Okay. So how would that relate when I’m trying to make an ad for my practice? How would I go about making an ad? If I’ve never made an ad before, how would you help me with that?

George Bellamy: So I’m a videographer by trade, this is my livelihood, this is my living, I know what I’m doing. But to the average Joe, you probably have no idea where to start and you’ll probably buy some camera or just use your iPhone. Believe it or not, your phone is one of the best cameras you can use because it’s quick and easy.

For example, Nikita you’re on social media, doing small snippets of video is absolutely key. To go back on to your question with having an ad, at the end of the day you can make it how you want to make it. If you’re using your iPhone, as long as your audio is good, I think you’ll be fine. You can really tell the difference between an expensive camera with terrible audio and a cheap camera with great audio, they are two very different things.

Believe it or not, people have actually preferred the expensive audio. So if I was to say anything like that, I would say, to do an advert is, first of all, what do you want to have? What do you want your advert to do? What’s its purpose? Really, that’s the main thing.

If your purpose is to drive sales and gain more patients, then I personally would look into investing the money and to hiring a company to do an advert for you. For example, hiring a videographer just for the week, I don’t know what the going rate is but you can be looking at spending £500-£600 on a decent video and a decent advert, which as we mentioned in the previous podcast marketing and running adverts with that video, that’s the way Facebook works, it’s great.

Contact us to find out more

Video Marketing for Dentists

How to Market Your Dental Practice Online

Marketing and Patient Care in your Practice

You can run these adverts and these videos and the way you need to look at it is if you can get one sale out of that video, you probably made your money back in the long term. I think this is what you need to be looking at. Yes, you can make your own advert and I encourage you to. But, I think for big things like this, I would definitely suggest potentially looking into hiring a videographer for the day, and just filming a lot and go from there.

Nikita Kanda: No, that’s a great bit of advice. Actually, that was gonna be one of my next questions that should I hire a videographer but you’ve just answered that. I definitely think that people should definitely have a videographer on hand or on speed dial.

George Bellamy: Have someone in your phone book, that’s all. Someone that you can call and just say, hey, we need this, they’ll come, film it and edit it and then give it to you. But what I stress is, film as much as you can yourself, anything and everything. Film one of your dentists talking about who they are. It’s putting a voice mainly, and a face to the people.

Everyone has on their website, the ‘about me’ page where you have got the list of the dentists with all their qualifications and their little blurb about me, but you can’t convey personality through text or through one picture. So I think video is certainly key, just have a quick 30 second video just about who the dentist is.

That’s all it is because when people are looking for a new dental practice, they’re not just going on the website. They’re not just talking to their friends, they’re also nowadays going through their social media. Would I choose a dental practice that doesn’t post anything on social media, but has good reviews on Google for example? Or will I go with the company that seems to be engaging with their patients, seems to be putting out information, making you feel more relaxed and at home while you’re at the dentist? I think that’s definitely the angle you should be going with it.

Nikita Kanda: For sure. I think as well, don’t underestimate the power of your iPhone or your phone or your camera because they’re so good nowadays. And like you said, as long as you’ve got good quality, good sound, that’s all you need and just be consistent with it. So one question I have for you; quality versus quantity, would you rather be putting out one quality video a week? Or is it quantity where you’re putting out a video a day, what do you prefer?

George Bellamy: That is a really good question because it’s two different arguments you have. So, as we’ve said before, with Instagram, you want to be posting every single day, the repetition, you want to have that presence, but then also you don’t want it to be just random things, you want it to be structured and well thought out.

So there are two arguments to it, there is; should you post multiple videos a week or should you just post one? That is the million dollar question. For me personally, I’m a perfectionist, I like things to be perfect. I like them to be the exact way I envisioned it. But Arun the managing director of Samera, has said ‘I just want to post things, I just want to get that content out there.’ We’ve had some arguments in the past about this, but we’re two different mindsets, Arun just wants to publicise his practice and his business and I just want to create content I’m proud of.

Nikita Kanda: It depends on what you’re posting. With social media like I’ve said before, I mix it up. So I will do one day pictures, one day video ads so mix it up. But when it comes to a video ad, you want to get that quality right but because that’s going to be going out and continuously played.

George Bellamy: Yes, you want it to be shareable, definitely an ad, you want that quality to be perfect. You don’t want a single thing gone wrong. Because like you’ve seen some videos where at the end of it they leave four seconds of black video, that black clip, you don’t want that. That’s giving off the wrong signals.

But then, if it’s a video about a walkthrough of the practice that’s on your Instagram feed, quantity is fine. It really depends on what you’re trying to do. I would say for me, personally I’m more of a quality over quantity. But maybe quantity is better in some sense and to be honest with you, it’s anyone’s guess really. It depends what it’s being used for.

Nikita Kanda: Okay, you’ve already touched on how you would get people to watch your videos or your ads. You said before in the beginning that you need to capture a person’s attention straightaway, right?

George Bellamy: Yeah, that’s right straight away.

Nikita Kanda: What are the things would you say that people should put in their ads? Or what tips should they be using to capture patients’ attention?

George Bellamy: So being different and standing out, being that one shiny object in a sea of green, the key is to be different. The thing is to stand out in the 21st century especially in 2021 now, where everything is online, it’s very, very difficult.

To make a video go viral, for example, it is very, very difficult, and it’s hit or miss, sometimes you can think you’ve got the greatest idea for a viral video and it absolutely tanks. But other times you think you’re just going to post it even if it’s not that great and it gets millions and millions of views, it’s a very difficult thing to predict. So to get people to watch your videos, I mean realistically, you need to be engaging, you need it to be relatable, you need, as I’ve said before, to get them in the first five seconds.

More or less we now live in a society of bite sized information. People are too busy on their phones, they’re just scrolling, just absorbing information as quickly as they can. So if you have a video that is really informative, but you have the introduction to the video is just not adequate, you’re going to lose those viewers.

So to get people to watch your videos, I would say definitely quickly get them entertained. That’s usually either by comedy or by music or by text. That’s another thing, text – perhaps don’t use too much text because people will just look at a whole paragraph of text and go, ‘I don’t really have time to read all that’ and also, because it’s a video, you just want to be told the information. So more or less, I would say just make it as quirky and as different as possible, use bright colours etc.

Nikita Kanda: I think that’s a great point to make now that those are the things people should be looking out for. I would just like to add that when you said about people wanting to scroll quickly on their phones, definitely in terms of social media, I’d say if you’re going to make a video, or you’re going to post any videos, make it like 30 seconds to a minute, maximum a minute!

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People don’t want to sit there and watch long videos anymore, they just want the quick information so that’s definitely a good piece of advice, make sure you’re making quick, informative videos that will keep people watching and keep them engaged because long videos are a thing of the past now, aren’t they?

George Bellamy: Even YouTube for example, five years ago, the goal was to create videos as long as possible and gain their attention throughout. Nowadays youtubers want to get to the ten minute mark, because they’re gonna have two or three adverts inside the video to basically make more money from it. I think quick bites of information are certainly becoming the norm.

Nikita Kanda: That was gonna be one of my last questions to you about Youtube. So if I’m a dental practice owner do I need YouTube when I’m opening my practice? Is it something that I need at the beginning? Is it something that you would recommend?

George Bellamy: So I personally think YouTube is the second biggest search engine after Google and Google owns YouTube. So really, I would say yes but not for the reasons you’re thinking. I would say use YouTube to upload videos, that you can then use the embed code on your website personally, I would do that.

Nikita Kanda: And what does that mean, embed code for people that don’t understand what that is.

George Bellamy: When you have a video on your website, an embed code means instead of linking to the website, you can watch that video inside your page on your website. With social media videos, as I said before, you want it to be quick information. With YouTube, I think it’s not a game changer if you don’t have it but also it’s one of those things that is not expected of you yet, but it’s starting to become that norm.

Nikita Kanda: Like you said and you can use that in your website, I think that looks nice. It’s really professional when people do that, when you can watch the video right in one space it looks amazing.

George Bellamy: Well, one thing I absolutely love is on the ‘About Me’ page, again it’s what I was saying about videos, making those personal touches and having that personality. On your website when you have the ‘about me’ page, you click on individual dentists or the associates or nurses, and you have a quick 30 second video hosted on YouTube, consisting of who that person is and giving them a quick brief description of where they studied, why they wanted to get into dentistry etc and I think that gives it that personal touch, it truly does.

Nikita Kanda: I totally agree with everything you said about not needing YouTube, but it’s a good tool to use when you are starting up. So it’s not something that you need to be regularly posting on but it’s something that you can definitely use. It’s great for your website but I think definitely with video content, like we’ve said, hire a videographer, if you can.

George Bellamy: If you can

Nikita Kanda: Just shoot as much content as you can in maybe one day, get simple ads made and as you said, get genuine, real content of your team. It will help patients see that you’re real on social media, not just trying to get the numbers up or just post loads of pictures. You’re actually showing the real side of your business. That’s definitely hit the nail on the head with all video content, anything you’ve got to add?

George Bellamy: One thing I just thought of is you’re doing videos of your patients especially, a release form is completely key because you don’t want to be five years down the line where your video then goes viral and the patient says I don’t actually want my face to be on the video anymore. And then you unfortunately have to take that out or take the video down because you haven’t got written permission to film them. You can get your free templates online and I highly recommend them.

Nikita Kanda: That’s something that we do as well with Samera and The Neem Tree, we get written permission from all of our patients that have agreed to be on social media, it just makes things a lot easier and just covers your back as well.

George Bellamy: Yeah, it’s just hassle free for your future self really, because 99% of the time, the patient’s absolutely happy with it and won’t have a problem with it but it’s that 1% that can really more or less screw you over further down the line.

Nikita Kanda: I’ve had an experience in the past that the patient is happy for you to use their face in the video but they might not want their name. So sometimes remember, if they don’t want their full name or just ask them beforehand, are you okay with us using your full name or if you’re not, they don’t even have to put a name there. Just put that ‘our patient at…’ whatever clinic you are, so just bear in mind these little tips and things to note for future videos.

George Bellamy: Well, thank you for helping me come out of my shell and answering questions about video making, I’ve always been the one interviewing…

Nikita Kanda: It was nice to be the interviewer. I know.

George Bellamy: I’m too complacent with it. Well, I hope that helps you understand everything about video, it’s one of those things that people overlook.. Many people think photos are the way forward and unfortunately I think it’s the other way around.

Nikita Kanda: Don’t be scared to put videos out. Do it. Try it. You’re not going to know unless you try it.

George Bellamy: Exactly. Also, you’re not going to gain traction overnight. It’s going to be something you’d have to have the repetition.

George Bellamy: Yeah, well, anyway, thank you so much for listening and we’ll catch you on the next one.

Check out our other articles, webinars and podcasts in the Samera Learning Centre

Our Expert Opinion

“Video is very important when it comes to digital marketing. Whether it be educational videos, video testimonials or practice walkthroughs – you’re going to need video content. Anything that you host on the main page of your website, like a walkthrough of the practice, you’re going to want a professional involved. They need to look slick and show your practice off. More than that, no matter how great your practice is, if you have a poorly-made video of it you are going to look cheap and unprofessional.

Anything else, like educational stuff and testimonials, can be made on a decent quality phone. In fact, that can even be better as it look more personal.

I think the importance of video content has been a little overblown in the last few years, personally. It’s still incredibly important but it isn’t a silver bullet and it isn’t enough. You need to use a range of different media: text, images audio, video. However, text content will count for the bulk of your SEO.”

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How to Market Your Dental Practice Online

The Dental Business Guide Podcast Episode | February 11th
Arun Mehra, George Bellamy and Nikita Kanda

George Bellamy: Welcome back to The Dental Business Guide. I’m George and today I’m with both Nikita and Arun – welcome guys.

Arun Mehra: Hi George, Hello.

George Bellamy: Right, I think let’s just dive straight into it. So Arun, obviously when you started Samera and The Neem Tree, you didn’t really have a marketing team…

Arun Mehra: No, not at all, I remember I was the marketing team as well as the loo cleaner as well as helping out with everything behind the scenes. When you start the business, at that point you were learning as you started.

I remember when we started off the marketing, we were putting flyers together, we were getting posters together. In the days when we started this up, I created the website myself using something called Microsoft Front Page which was the tool in those days that talked about early 2000 to 2003. So were you even born? I’m not actually sure.

So I remember creating that and that was a great foundation for learning about marketing, but also a great foundation to realise how interesting it is, but also how bloody difficult it is!

George Bellamy: I definitely agree with that.

Marketing Can Make Your Business

Arun Mehra: It definitely is and marketing can ultimately make your business or destroy it and you can burn so much cash at the end of the day, you’ve got no customers, so you’ve got to be careful.

George Bellamy: I mean fast forward to 2021, Samera has five… six members of the marketing team or the digital team. I like to say; we’re thriving and I think we’re definitely trying to tackle the market as well as we can online.

Nikita this is where you come in, because we focus mainly on adverts and Facebook ads, Google ads and we didn’t really push anything on Instagram. We didn’t really push anything on any social media organically and in a way that’s really where you came in.

So you know, really what I’m just trying to ask is if I was a dental practice owner, why should I invest in a marketing team? Why should I even bother about social media?

Nikita Kanda: I think these days in 2021 you definitely need social media, whatever business you have. Whether it’s Dental or GP or anything, you need to have social media like Instagram or Facebook because it’s taken over the world at the moment. Social media has taken over everything and everybody’s got it, doesn’t matter what age you are, everybody is on it.

They will see your business on any social media platform and it’s so important because you can reach so many more people and you can reach more people in different countries and different age groups, there’s so much more reach you can get to and engagement. So I definitely think it helps your business.

It will draw clients or patients in the door, again, you’re reaching a different type of market. I think probably the number one tool at the moment for marketing is social media. There’s so many different platforms, Instagram, Facebook, LinkedIn, YouTube, you can go on and on and there’s a different trend every single week. So you got to keep up with it. I’d definitely spend at least one hour a day or a couple of hours a day on it, to make sure it can benefit your business, but it will benefit your business.

George Bellamy: Yeah, definitely.

Arun Mehra: I’m very much the dinosaur on the podcast today and it’s evident to me that you guys are in your 20’s me in my late 40’s and I’m 20 years behind. I am not really picking up. Obviously we have social media accounts personally as well, but it wasn’t part of the culture as I was growing up.

However, in terms of marketing, the same principles of marketing that we’ve been doing for the last 20 years still apply today. I think that’s the really important message here. Social media is just a layer on top of that to get that message out, but the principles of marketing definitely remain the same.

George Bellamy: Definitely. So I’m starting a practice and I’ve got the basics. I’ve got your dental nurses associates, I’ve got a receptionist, I’ve got all of that but I haven’t done anything about marketing. Do I need a whole full-fledged marketing team? Because as I said earlier, we have five or six members of our marketing team. I think it’s right, isn’t it? Five, six members?

Arun Mehra: Yeah, about six, yes.

You Need a Team to Support You

George Bellamy: We have many people on our marketing team. Do you need that six people, or can you get away with just having one?

Arun Mehra: I think in my opinion, obviously our marketing team is not just only for us, but we also support other clients. So that’s the first thing, we’ve obviously got more people than a normal dental business would have, but the roles are exactly the same.

So you need to have a team there that will support you through your business. Now, if you’re running a business or running a dental clinic, you’re busy doing dentistry. Do you really have the time, as Nikita mentioned earlier, to spend one or two hours getting the socials right on your website or out there in the marketplace? You probably don’t.

The key is to delegate these tasks to a number of team members, whether you hire someone internally or use an agency external, like ourselves, that’s your choice. But you need to have all these things ticked in the box, so that you’re ultimately getting the customers or patients through the door.

George Bellamy: Amazing. Alright so Nikita, you and I last time, we spoke about analytics and reading through with a fine tooth comb all your data that you get from your insights, the analytics through your Instagram, Facebook etc.

Analyse the Data

So how can you use that information with marketing? A lot of it is paid for marketing, advertisers doing Google ads, it’s doing Facebook ads, a lot of the time doing things organically takes a while to start to gain traction. Obviously, it’s easier, it’s quicker if you just pay to have adverts done. So how would looking through analytics on your Instagram page help you pinpoint your demographic for adverts?

Nikita Kanda: So with Instagram and Facebook, most social media platforms have this feature where you can see your insights in your data. So what that means is, you can see where your posts or your videos or your adverts are reaching; how many males and females it’s reaching, which age groups it’s reaching, which countries it’s reaching.

So that will help and it will also tell you what time of the day your posts are getting the most engagement or the most reach or being seen by the most people. I think it’ll help you in terms of adverts because then you’ll know which time to post it, when to post, where to post stories or your page is better for your advert.

But also, you can pick which countries you want it to reach to as well, all that sort of stuff. So it just helps you with getting this data, it really helps you know your audience and your followers, what they’re interested in or when they’re going to see your post, which is really important.

George Bellamy: Arun, anything else you would like to add?

SEO for Dental Websites in 5 Steps

How to Grow Your Dental Practice with Social Media

Marketing and Patient Care in your Practice

Pay-Per-Click for Faster Results

Arun Mehra: I’d like to add, I think it’s important on the social media side, it takes time to build up that following. Whilst it’s great, you want to also think about the advertising side of things, as Nikita said, you can post socially and post organically, but it takes time.

So you can jump to the top of the queue if you want by putting adverts out there and sometimes there’s a bit of confusion between what is social media. But nowadays social media covers the organic as well as the paid side of things.

So you want to put ads on Instagram and put ads on Facebook. It’s such a powerful tool. In terms of the data points that you’ve got, you can choose who, what and where, if they clicked on a certain website link, you can even market to those types of people specifically.

It is a bit creepy, to some extent, but that’s the world we live in these days. It’s just trying to help every kind of company or business who is doing this and trying to follow your path to ultimately lead you to making a sale.

You can do that in your dental clinic as well for this, but it takes time and effort to set up and again, this is something that you could do yourself 100%. But do you have the time and the resources to do that? If not, think about getting a third party to assist.

Take Your Time

Nikita Kanda: Just to add there as well, not to be pushy on social media we do that a lot at Samera. We don’t push people into signing up for this and that, we just organically do that. We want them to just see our stuff, but we don’t want to push it.

But I also think it is important to have somebody that is used to social media because, like I said, you do need to spend a good couple of hours on it every single day to build up that following and build up that engagement.

Because like Arun said, that isn’t going to happen overnight. Especially with social media, you want it to be organic, and you want to have those real followers as real people engaging with you. So it will take time.

So don’t don’t get scared if you’ve set up this Instagram page or Facebook and you’re not getting any followers in the first week, it will happen. But you just have to spend the time over a couple of months and build it up.

Arun Mehra: Valid point you raise there, because there are businesses that have thousands upon thousands or hundreds of thousands of followers. Have they really got those followers or are they fake followers?

George Bellamy: It’s the engagement rate really…

Nikita Kanda: Yeah, I think it’s the fake followers. To be honest, I think a lot of these practices or any businesses, they straightaway will have around 40,000 followers. You should think, well look at their engagement and see how many likes they actually get.

Does it compare to how many followers they have? If they have 40,000 followers, and they have ten likes on one picture that doesn’t quite add up. And also, people who have younger followers will see that and be like, ‘that’s not real’ so then they might not trust that dental practice or they might not trust that business and go somewhere else.

George Bellamy: What else are you lying about?

Always Be Organic and Authentic

Nikita Kanda: Yeah, I would always say be organic and it will happen, your followers will go up, you just have to push the right content and be genuine. I think that’s the main point.

Arun Mehra: I think that’s the key word you mentioned. Also ‘trust’ as well as that. Ultimately, you’re displaying who you are and what you do, and it’s that trust that is so important in business and in anything we do and in terms of social media as well.

George Bellamy: Definitely. So, this is another one for you, Arun. If I don’t have the resources to be able to have someone to do my social media for me full time and I want to start making ads, I want to start getting more patients, which platform should I use for adverts? Should I focus purely on Facebook, or should I focus purely on Google? Or are there any others that I’m completely missing?

Arun Mehra: Great question, George. Now, we’ve talked socials, but I am a huge fan of, ultimately, Google. Google is what I’ve built my businesses on over the last 20 years. Facebook wasn’t even around back then, so my view personally is to dominate Google, if you can.

SEO vs PPC

Now, how do you dominate Google? Well, there’s two primary ways. One is through search, so optimising yourself through Search Engine Optimization to get people to find you organically. Again, that is a long process that takes time, it also takes patience, it takes a lot of effort. Google’s always changing its algorithm to catch you out, but that’s part and parcel of the game.

The other way is through pay per click advertising on Google. It’s those ads you see at the top of Google, when you do a Google search. That’s a shortcut to the top and that’s how Google makes most of its money. It is in fact a powerful way, if it’s set up right, to get customers through the door.

Now, contrast that to Facebook ads, or Facebook social, no doubt, again, very powerful. But that’s social media, Facebook’s very much still around people are in their social element, they’re hanging out on Facebook or on Instagram. Google is very much a search engine, people are always searching for something, either I need a dentist today, I’m in pain today, see who comes to the top.

If it’s you or you’re near to the top, it’s very likely they’ll come to you. So you got to play the market right and play with these things. But, regardless, they’re both very powerful tools to use and I would strongly advocate it. If you don’t have the resources, as an answer to your original question George, if you had one thing to focus on, primarily just focus initially on getting Google right.

George Bellamy: Just Google, so would you then begin to narrow that question down, then would you then focus on just adverts or by boosting your SEO, If you had to choose one?

Arun Mehra: If your time is limited but you’re okay financially, I would go with Google ads because that gets you to the top of the list straight away, as long as you set it up right and optimised it correctly. Over the long term though, you will still want to have an SEO strategy because eventually you want to dominate organically.

So eventually, you won’t need the adverts at all, because you would just come up for the search term that people type in the search bar. That is a long term process that takes time, effort and money to do. If I look at our business, The Neem Tree, for instance, we started off with Google ads. Now, we still do Google ads but our budget has reduced because our SEO positions have just got stronger and stronger over the years, that’s how I would do it.

Reviews are Key

Nikita Kanda: I think talking of Google, I think Google reviews is another massive thing at the moment that I’m seeing. Every dental practice is posting their Google reviews a lot at the moment. I definitely think if you can, get your patients to send you Google reviews and post those on your social media because people are looking at reviews a lot at the moment.

George Bellamy: Yeah, to back off that, they always say don’t judge a book by its cover but everyone does. You know, if I’m on Just Eat, for example, looking for a nice takeaway at night. If I see a restaurant, which looks pretty good, but the reviews are a bit iffy. I won’t go with it just because I’m judging a book by its cover.

Arun Mehra: Did you see that case earlier this week, there was an unhappy client of a solicitors firm and he wrote a Trustpilot review about the solicitor on their website saying they weren’t very good, the solicitors ultimately sued him. So it definitely had a knock on effect on their business and the solicitor won and now he has to pay them £25,000.

It’s because the impact the review had and the way he did it, and the language he used. So that’s very interesting that now that the courts are showing favour this time, to the law firm, and so people who are posting negative reviews have to be careful as well, increasingly in this litigious environment we live in.

George Bellamy: Wow, I’ve seen lots of images of screenshots of restaurant owners when the customer leaves a one star review, because they can’t leave anything lower than that. They say that the service is horrible etc and the owner has actually replied to the comment to the review and has just completely called him out on everything. You know, it’s quite funny to see actually.

Arun Mehra: That’s the key, the key if you do get a bad review, you should definitely respond to it. There is no point getting into a debate or an argument online, but always respond to it.

George Bellamy: Accept if you are genuinely in the wrong. Accept it, put your hands in the air and say: ‘yeah we messed up. We do apologise. I hope we can rectify it.’

Arun Mehra: But also, but at the same time, if you’re not in the wrong, you just need to say it. You can make it clear, then obviously it takes two to tango, our opinion is very different but we wish you well.

George Bellamy: Yeah. Just say I’m afraid we couldn’t see eye to eye, etc, etc. I think that’s definitely right

Google ads, Google reviews are just as important because we do live in a world where we judge a book by its cover. I guess the 21st century it’s 2021, which is ridiculous. I didn’t think we would even get to this year. We do everything on our phones, It’s crazy.

You walk through the town and you see people just on their phones and everyone’s in a state of focusing on what’s on their phones, reading news articles, more or less it’s quite scary, actually.

You know, before lockdown I was on the train through London and people are on their phones on the train. If this was 15 years ago, there would be newspapers out, or there would be people reading books or even just looking out of the window. But nowadays, everyone’s on their phones. They’re watching their new TV series on Netflix and it is scary, it really is.

Arun Mehra: Where does it all end George?

Digital Marketing is Here to Stay

Nikita Kanda: I don’t think it will, I think it will carry on like this and social media and all these technologies are just gonna carry on taking over. You’ve just got to use it to your advantage, especially with businesses, use it to your advantage in a good way.

I’d also say, people search on Google for everything nowadays but a lot of younger people usually start searching on Instagram or Facebook first. So if your business doesn’t have an Instagram page or a Facebook page, people are going to be a bit more iffy about that. If you haven’t got a social media page, are you even real? Social media instils people’s trust in you.

Arun Mehra: You’re so right, Nikita. I was talking to my son the other day, and he’s just launched a little website and he’s not interested in getting it advertised on Facebook or Google, he said, it’s Instagram and Tiktok as what he’s doing. It’s all on Tiktok. He’s gonna get his customers through TikTok or Instagram and I’m completely looking blankly at him.

All I know is that some dancey thing that happens, but but you’re right, it’s evolving. As I said, right at the outset, I think, ultimately, it’s about getting your message out and it’s about crafting. Good marketing is ultimately about crafting good stories, interesting stories, which engage with your customers. You can’t be everything to everyone so you just want to engage the right kind of customer that works for you and it works for them and ultimately get a happy result for everybody.

Nikita Kanda: Definitely.

George Bellamy: Spot on, well, I think we should leave it as that, you know, marketing, it’s one of those things that you kind of turn a blind eye to and don’t think you need it but it’s very important. If you want to drive sales up, you’re going to gain more patients. You know, as you said, running Google Ads is probably your way forward if you haven’t got the resources to run your social media full time. But then again, Instagram is just as important. So they’re both very different angles to look at. Thank you so much for taking the time to speak with me today and we’ll catch you on the next one.

Arun Mehra: No worries George and good luck with your marketing everybody and if you need help you know where we are. Give us a shout. Thanks.

You can find all episodes of the Dental Business Guide Podcast here.

Our Expert Opinion

“Marketing online, as apposed to offline marketing such as flyers, local outreach etc, can be quicker, cheaper and reach much farther afield. As the generations who grew up with social media get older and start making more financial decisions, advertising on Instagram, TikTok etc is going to be come ever more important.

It can be a lot of work but by focusing on the best channels, you can implement it very effectively. You probably have someone younger in the practice who at least know the basics of posting and editing on social media – get them to handle posting on your pages. All you need to post is pictures/videos of your team, the practice, reviews and success stories, any blogs you have and any testimonials. Post a couple of times a week and that’s basic social media marketing sorted.

Get yourself on Google Ads, set up a simple campaign with a decent budget. There, that’s your PPC sorted.

The trickier part is going to be SEO, it involves more work but it gets you higher up on Google and will get most of your leads. Use our guides on SEO for dentists to work on the basics or get your web developer on the job and you’ll find yourself generating more leads.”

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Accounts and Tax for Dentists Explained

Keeping your dental practice’s accounts organized and up-to-date isn’t always easy. It’s certainly rarely ever fun, but it is one of the most important aspects of being a dentist or practice owner.

A well-kept set of accounts not only helps manage your cash flow and lower your tax bill, they will also be crucial whenever it comes to raising finance for your business.

After 20 years of experience working with dental practices and through owning dental practices myself, it is evident that across the entire industry, many practices are using out-of-date procedures and technology to run their dental practice finances & accounting.

The days of handwriting ledgers, updating cumbersome spreadsheets, and sending boxes of invoices to your accountant at the last minute before the looming submission deadlines, fortunately no longer exist!

The last few years have seen a revolution in the accountancy world. The technology has evolved to the point that much of the sending and processing of invoices can be done with simple technology systems.

Going digital with your accounts doesn’t just mean an end to endless paperwork. It also reduces the amount of manpower required to process accounts, both in the dental practice and in the accountancy office, saving both you and your accountant time, effort, and money!

The Importance of Cloud Accounting Software

One thing we often see in common between poorly run practices is that they have yet to embrace digital accounting and cloud software. Some practices are still relying on paper records for their accounts. Paper records are on their way out and digital accounts are the future.

We have seen many cases of missed opportunities to save tax or improve the profits of a practice. Or at best, the benefits are achieved 6 –12 months too late due to historic accounts reporting.

Typically (and back in the day) there would be a one-off meeting with your accountant after your year-end to go through the historical figures and discuss ways to improve going forward.

The problem with this is the word “historic”. By the time your accounts are finalized and you’re sitting down with your accountant, it’s often 6 months after the year-end, meaning some of the data you’re analyzing could be 18 months old!

Real-time accounting is important because it brings so many benefits to a small business. It’s easier, simpler, faster, cheaper. In short, it’s just better.

Click here to find out more about our dental accountant services.

Benefits of Cloud Accounting Software for Dentists

By having everything available on the cloud, what you see on the cloud is also what your accountant sees too, allowing your accountant to see real-time information on your practice’s (or your personal) expenses, finances and accounts.

Most accountants will be able to provide advice on tactics and strategies to improve your practices finances, and this is far easier with a clear, instant view of your accounts.

Sharing your accounts and finances digitally with your accountant allows them a much clearer picture of the financial health of your business, which in turn helps you to collaborate more effectively with either them or any other financial advisors.

With constant updates and real-time data, you and your accountant will be able to analyse trends, manage cash flow and identify potential issues far earlier than with old-fashioned hardcopy accounts.

The technology allows you to collaborate and work together to improve the value of your dental practice performance easier than ever before.

You can use cloud-based software from any device with an internet connection. Online accounting means small business owners stay connected to their data and their accountants. The software can integrate with a whole ecosystem of add-ons. It’s scalable, cost effective and easy to use.

Anyone in your business that needs it can have access at any time. You can restrict and retain far more control over who has access to your personal information.

Click here to read more about our financial director services.

Monitoring and improving key performance areas

Software packages such as Xero allow you to automatically run a variety of financial reports for you to analyse over a whole variety of time periods.

For instance, most cloud accounting software packages allow you to run reports such as Profit and Loss, Balance Sheets and Cashflow Reports. You can also create your own templates for reports so that you can see the exact data and trends you want.

These reports make it far easier to keep track of your accounts and finances by doing a lot of the leg-work for you. Instead of wasting your time and effort poring over an entire month’s invoices to spot trends, simply run your favourite saved report and see the data instantly.

We advise clients to run such reports at least quarterly so they can assess and routinely judge and keep up with the performance of their dental practice.

This used to be an area that only large businesses with internal accounting teams could tap into. Nowadays, however, with the help of real-time accounting, any sized business can have access to this data to monitor and improve their practice performance.

If you want to make good decisions, you need to base those decisions on good and timely information. Without such information, changes that you make in your business will be more like wild guesses than informed decisions.

Knowing and understanding the key numbers in your business helps you and your advisors to spot trends and take appropriate action to improve your business’s performance. Your accountant can then spend time really adding value to your business, providing you with better advice and alerting you when things go wrong.

Click here to find out more about How Should a Dental Practice Organise its Finances.

Save money in your dental practice with cloud accounting

We had a client who was paying £450 a month for 3 days of bookkeeping (using manual keystrokes and traditional software). With the implementation of Xero (our preferred Cloud Accounting platform), this was reduced to half of that for a day, saving £4,500 for the year.

The point here is, there is amazing technology available to automate the majority of this necessary evil work. If you are not utilising this, you are basically throwing your money away.

In order to have a business that is operating to its best potential, accounting information needs to be in real-time and your accountant should be able to access this at any point. Not 6-18 months after the event, when it is often too late.

We saw another client recently who saved a whopping £200,000 in tax, simply through having up-to-date information that we had access to!

Watch our talk on saving time, money and tax in a dental practice.

Work smarter with accessible data in the cloud

The beauty of this software is the flexibility it gives you to run your business from work, home, or on the go. You can be confident that you have an up-to-date picture of how your business is doing, no matter where you are.

Software updates can be developed and delivered faster and more easily in the cloud. This means you don’t need to worry about installing the latest version and you’ll get access to new features instantly. With cloud accounting software, you have the option to run your business remotely, from anywhere in the world. And when data is fluid and accessible, the possibilities are endless.

Make quality decisions

With the technology available to small businesses today, there is absolutely no excuse to be using out-of-date, old fashioned accounting systems. You could be running a far more efficient and profitable dental practice simply by doing digital with your accounts!

By switching to digital cloud accounting software, by using the online functionality to share and collaborate with your accountants and financial advisors and by using the automatically-generated reports, you can ensure that you make better, quicker, more informed decisions to continually improve the efficiency and profitability of your practice.

By looking at the performance detailed in the reports you can identify and interpret areas that need changing in your dental practice, whether it means cutting costs, increasing fees, or increasing marketing activity.

Understanding the management reports can only help you run a more efficient and successful dental practice.

Traditional software problems

Small business accounting software that’s not available via the cloud can be tedious.

Traditionally, it can suck up far too much of your business’s time and effort. This doesn’t add value, and takes the fun out of being in business. Cloud software can save your company time and money.

The data in the system isn’t up-to-date and neither is the software. This means events such as changes in regulations cannot be reacted to in a timely manner and the benefits of adopting changes are 6-12 months delayed (or too late!).
It only works on one computer and data bounces from place to place. For example, on a USB drive. This is not secure or reliable.
Only one person has user access. Key people can’t access financial and customer details.
It’s costly and complicated to keep backups (if done at all).
It’s expensive, difficult and time consuming to upgrade the software.
Customer support is expensive and slow

Click here to find out more about our cyber security and IT support services.

Security and Business Continuity

As a small business owner, you might be concerned about a cloud service provider storing your data. But the cloud is one of the most secure ways to store information. For example, using cloud software, if your laptop is stolen, no one can access your data unless they have a login to the online account. With cloud software, this is where the data lives –as opposed to on your hard drive.

In the event of a natural disaster or fire, being in the cloud means business productivity doesn’t need to be affected because there’s no downtime. All of your information is safely and securely stored off site. As long as you have access to any computer or mobile device connected to the internet, you’re back up and running.

In addition to this, if you invite users to view your data, you can control the level of access. This is much more secure than the old-fashioned way of emailing your files or sending out a USB stick with your data on it.

Cloud-based software companies ensure that the security and privacy of data about you and your organisation is always airtight. If you use online banking, then you’re already primed to use cloud accounting.

Click here to read our 10 cyber security tips for dentists.

Action Points

Collaborate in real-time with your dental accountant via cloud-based accounting software to provide instant access to your financials.
Use the software’s automatic reporting features, like Profit and Loss or Cash Flow reports, to regularly monitor your practice’s financial health.
Save costs by automating bookkeeping tasks, reducing the need for manual entry and traditional bookkeeping services.
Make informed business decisions based on up-to-date financial data and reports, identifying areas for improvement or cost reduction.
Ensure data security and business continuity by using cloud-based software, which offers secure storage and access from any internet-connected device.

How to Use Cloud-Based Bookkeeping and Invoice-Scanning Software

The Samera Dental Accountants team are huge fans of using the latest cloud accountancy software. Samera is a Xero partner and can help implement the Xero software system into your practice. This will save you time, make the running of your business much more efficient, and at the same time provide very up to date information to you to help you make better decisions about your practice.

Introducing Xero into your practice will also save you money, and ensure at the end of the year you don’t have to send a box of papers to your dental accountant if it has all be book-kept by you through the year on Xero.

By introducing Xero into your Dental practice, both you and your Samera accountant can have access to the same data, enabling you to work together on growing and developing your practice.

Financial Tactics During COVID-19

Tax Saving Strategies for Dentists

Dentist and Dental Associate Expenses Guide

With the software available to you today, there is no excuse to not be automating your finances in your dental practice. To do this, you need to make sure you are using cloud accounting software, like Xero. We use Xero to run our clients’ dental practice accounts and tax.

When you rely on paper records, you waste time and effort paying invoices, sending files and documents, missing key financial trends and a real-time analysis of your accounts.

Now, however, you can simply scan your invoices into software like Hubdoc. The key information is then extracted automatically and fed into Xero, which processes and prepares the accounts.

With your bank account securely connected to the process, your dental accountant can match off any payments that you make, any income that’s coming in, and reconcile the bank account quickly. All without waiting for paper records to be sent anywhere.

Instead of having to keep hardcopy records of all your invoices, receipts and documents, storing them and then shipping them off to your accountant when needed, all you need is a smartphone or scanner!

Simply take a photo of your receipts, invoices etc. via the cloud accounting app, or scan the documents with a scanner, and send them off via the app or email.

All your invoices are also stored in Xero too, so trying to find an old invoice is easy as they all reside in the Cloud, accessible 24/7 from anywhere with an internet connection.

Another benefit of digital accounts is that you can also make payments directly from your cloud accounting software like Xero. Instead of paying each individual invoice separately, which is time-consuming, you can tick all the invoices you want to pay and make one single payment to all suppliers you choose.

This means you can process and prepare your dental practice management accounts much quicker and easier, which means the annual accounts are easier and quicker to prepare. All of this can really help you spot cash flow problems sooner and organise your tax calculations and payments.

Simply put, when you automate your dental practice accounts and finances, you save yourself time, effort and money.

Action Points

Adopt Xero cloud accounting software with Samera Dental Accountants’ support to streamline your dental practice’s bookkeeping, enabling real-time collaboration and financial management.
Automate invoice processing with Hubdoc and Xero, connecting your bank account for efficient payment reconciliations and eliminating the need for physical financial records.
Digitally store all receipts and invoices in Xero for easy access, and utilize its bulk payment features to manage supplier payments efficiently, saving time and enhancing cash flow.

How to Use Xero to Manage Your Associate Accounts and Tax Return

Automating Your Finances with Xero and Hubdoc

How to Understand Your Dental Accounts and Tax Calculations

Running your dental accounts can often feel like the most dreaded and tedious aspect of the job. In this guide, we’ve tried to make accounts for dentists a little more simple.

It can be easy to fall into the trap of thinking that only practice owners need to really worry about their accounts. As long as your tax bill is kept low and your money keeps moving, that’s all that matters right? Wrong. If you decide to start a dental practice of your own, or indeed if you ever try to raise a business loan, your dental accounts and financial records are going to be crucial.

You will most likely be able to produce a set of accounts without expert help. However, it is almost essential to engage a specialist dental accountant like Samera to go through your accounts with you, should you wish to raise finance.

Profit And Loss Accounts

our profit and loss accounts will show your turnover for each of the last 2 years, usually generated by your service sales.

You will then list your cost of sales, such as materials.

Underneath this, you will need to list your expenditures. Here is a list of the kind of costs you will need to include here:

Protective clothing
Travel expenses
Laundry
Use of Private residence
Vehicle running costs
Professional indemnity insurance
Printing, postage and stationery
Training
Telecommunications and data
Accountancy fees
Professional subscriptions
Charitable donations

You will then subtract these expenses from your gross profit. This will give you your net profit for the year.

Balance Sheet

The balance sheet is also a key document and represents the financial health of your business. The profit and loss sheet shows you the financial situation for that year alone.

On the other hand, the balance sheet includes all of your assets and liabilities. Assets are split into current and fixed assets.

Typically for dental associate accounts, current assets will include your bank accounts and any money owed to you. Current assets are assets which can be expected to be sold or consumed within that fiscal year.

Fixed assets are tangible assets, such as loupes and their costs are included on the balance sheet and not the profit and loss sheet. This is because they are an asset of the business which you will theoretically use for many years, not as a one-off material within the fiscal year. The value will be depreciated across the period of its estimated useable life.

Liabilities are people or entities that you or the business owe money to.

Underneath your assets and liabilities, you need to list your Net Current Assets (subtract your total liabilities from your current assets), Total Assets Less Current Liabilities and Net Assets (current + fixed assets).

Balancing this all out is the Capital Account, which is where the accounts owner comes in. Here, you list your brought-forward profits from the previous year. You then list your new net profit for the year just ended. Then, off-setting all of that is what the owner has drawn for personal use, the money they’ve spent.

So, your brought-forward profits plus current year profits, minus drawings gives you your remaining cash reserves. This will also equal your assets minus liabilities (Net Assets).

In most cases, a financially healthy business will have a positive balance sheet.

Tax For Dentists Explained

Once you have properly organised your accounts, it’s time for the tax man to get involved.

On your tax calculation record, you’ll need to include your income received (before tax is taken off). This will typically include your profit from self-employment (as an associate dentist), which you calculated on the profit and loss sheet, as well as interest received from your bank accounts (even if it is only a couple of pounds). This gives the Total Income Received.

You then take away from this figure your pension contributions and your personal tax allowance. The remaining figure is your taxable profit.

You will then list out your tax payments categorised by the tax band you need to pay, how much at the basic rate, how much at the higher rate and any additional rate. You will also need to list any taxable interest payments you have received.

Also, you will need to report your National Insurance payments, which have different threshold bands. This will give you your total National Insurance liability.

Adding these figures (Income Tax Charged and National Insurance liabilities) together gives you your total income tax.

You should find that this figure is around 25% of your profit. This is why we recommend to our clients that they set aside 25% of their income to cover their tax bill.

Click here to find out more about our tax advisory services for dentists.

Paying The Tax

The next document you need to draw up will be the tax payment summary.

First, list your total tax payments due, which you calculated on the tax report. You will then minus any previous tax payments you have made for that year, as well as any deductions such as previous overpayments and rebates.

The resulting figure is the tax you currently owe for the financial year.

Remember, if your tax bill is over £1,000 you will need to make advance payments on next year’s tax bill, based on this year’s tax bill. You will be required to pay 50% of the total tax due in January and the remaining 50% in July.

So, your total tax bill due on 31st January will be the tax you currently owe, plus your first advance payment on next year’s tax.

Click here to listen to our podcast on how to legitimately reduce your tax bill.

What Dentists Can Claim On Expenses

As a dentist you can only claim on expenses items which have been purchased for business purposes, the items you use for dentistry.

While you may be tempted to try and put everything through the books, this can quite often end you up in trouble with HMRC. That’s why the Samera team have put together a Dental Associates Expenses Guide.

So when it comes to preparing your annual tax return, a degree of good judgement needs to be used to assess whether something is allowable for tax purposes.

Travel from home to practice is a big no no, however, if you travel between practices on a regular basis and keep records to support such journey costs, then this is allowable for tax purposes. Mileage records must be maintained – HMRC just love to investigate such mileage claims and then find that there are not any!

If you use a computer for your business, then some or even all of the capital cost could be claimed on your behalf.

New loupes, or other new kit? Then potentially this can also be claimed for.

Good Judgement is Essential

In respect of training, if you are building on existing knowledge, then this is usually deemed to provide you with CPD, which can then be claimed for. However, brand new knowledge is usually not deemed to be allowable, so again some judgement needs to be used on this aspect.

Action Points

Engage a specialist dental accountant like Samera to navigate your dental accounts effectively, especially if you’re considering raising finances or starting your own practice.
Understand and regularly review your Profit and Loss accounts and Balance Sheet to grasp the financial health of your practice, including turnover, costs, net profit, assets, and liabilities.
Organize your tax calculations meticulously, incorporating income, pension contributions, personal allowances, tax bands, and National Insurance payments to accurately determine your tax liability.
Set aside approximately 25% of your income to cover your tax bill and be prepared for advance tax payments if your bill exceeds £1,000, splitting the payment into two installments in January and July.
Utilize the Samera team’s Dental Associates Expenses Guide to accurately claim allowable business expenses and apply good judgment to distinguish between allowable and non-allowable expenses for tax purposes.

Click here to read our guide on expenses for dentists.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Accounts and Tax for Dentists FAQs

What tax obligations do dentists have?

Dentists have several tax obligations, including paying income tax on their earnings, National Insurance contributions, and potentially VAT if their practice meets the threshold. They must also file annual self-assessment tax returns, maintain accurate financial records, and comply with HMRC deadlines. Dentists running their own practice may need to manage payroll taxes for employees and handle corporation tax if their practice is incorporated.

How do I manage my dental practice accounts effectively?

To manage your dental practice accounts effectively, keep detailed and organized financial records, including income, expenses, and receipts. Utilize accounting software tailored to healthcare professionals to streamline bookkeeping, invoicing, and tax preparation. Regularly review financial statements to monitor cash flow and profitability. It’s also advisable to work with an accountant experienced in the dental industry to ensure compliance with tax regulations and optimize financial management.

What business expenses can I claim as a dentist?

As a dentist, you can claim a variety of business expenses to reduce your taxable income. These include costs for dental equipment and tools, professional fees (such as indemnity insurance and memberships), staff salaries, office supplies, marketing expenses, and utilities. If you use a vehicle for business purposes, related expenses like fuel and maintenance can also be claimed. Additionally, training courses and continuing professional development (CPD) are deductible.

How should I handle self-assessment tax returns?

To handle self-assessment tax returns as a dentist, start by gathering all relevant financial records, including income, expenses, and any other taxable earnings. Use HMRC’s online service to file your return or consult an accountant for accuracy. Ensure you claim all allowable expenses to reduce your tax liability. Keep track of deadlines to avoid penalties and consider making payments on account if your tax liability exceeds a certain threshold.

What are the key tax deadlines for dentists?

Key tax deadlines for dentists include:

31st January: Deadline for submitting online Self Assessment tax returns and paying any tax owed for the previous tax year.
31st July: Deadline for the second payment on account if applicable.
5th October: Deadline to register for Self Assessment if you’re newly self-employed.
6th April: Start of the new tax year.

How can I reduce my tax liability as a dentist?

To reduce your tax liability as a dentist, you can:

Claim all allowable business expenses, such as dental equipment, professional fees, and staff salaries.
Take advantage of tax-efficient pension contributions.
Consider incorporation if it suits your practice, as this can offer tax benefits.
Use capital allowances to deduct the cost of significant assets like dental equipment.
Plan for charitable donations, which can reduce taxable income.

What records should I keep for tax purposes?

For tax purposes, dentists should keep records of all income and expenses, including invoices, receipts, bank statements, and payroll records. Documentation of business-related purchases, such as dental equipment, professional fees, and office supplies, is essential. Keep records of any tax payments made, such as PAYE for employees and VAT if applicable. Accurate records should be maintained for at least six years to comply with HMRC requirements.

How do VAT rules apply to dental practices?

VAT rules generally do not apply to most dental services, as they are exempt from VAT. However, dental practices may still need to register for VAT if they offer non-exempt goods or services, such as cosmetic treatments or selling products like toothbrushes. If your practice meets the VAT registration threshold, you must register and charge VAT on applicable services while also being able to reclaim VAT on related business expenses.

What is the best way to pay myself as a dental practice owner?

As a dental practice owner, the best way to pay yourself depends on your business structure. If you’re a sole trader, you can simply withdraw profits, but you’ll pay income tax and National Insurance on these earnings. If your practice is incorporated as a limited company, a tax-efficient approach is to take a combination of a modest salary and dividends, which are taxed at a lower rate than income. Consult an accountant to determine the optimal strategy based on your specific circumstances.

Can I claim tax relief on dental equipment?

Yes, you can claim tax relief on dental equipment by using capital allowances. These allowances let you deduct the cost of equipment, such as dental chairs and X-ray machines, from your taxable profits, reducing your overall tax bill. Depending on the type of equipment, you may be able to claim the full cost in the year of purchase through the Annual Investment Allowance (AIA) or spread the cost over several years.

How does incorporation affect my tax as a dentist?

Incorporating your dental practice as a limited company can provide tax benefits, such as paying yourself through a combination of salary and dividends, which can be more tax-efficient than being taxed solely on profits as a sole trader. However, incorporation also brings additional responsibilities, like corporation tax, payroll for employees, and filing annual accounts. It’s important to weigh the potential tax savings against the administrative burden.

What are the implications of hiring staff for my dental practice?

Hiring staff for your dental practice brings tax and legal responsibilities. You’ll need to register as an employer with HMRC, manage payroll, and deduct income tax and National Insurance through PAYE. You’ll also be responsible for employer’s National Insurance contributions and offering workplace pensions. Accurate record-keeping and compliance with employment laws are essential to avoid penalties and ensure smooth operation.

What is the importance of keeping accurate financial records?

Keeping accurate financial records is crucial for several reasons. It ensures compliance with tax laws, helps you monitor the financial health of your practice, and provides the necessary documentation for claiming tax relief on allowable expenses. Proper records also support informed decision-making, help in preparing financial statements, and protect against potential audits or disputes with HMRC. Without accurate records, you risk penalties, overpaying taxes, and financial mismanagement.

How do I choose an accountant for my dental practice?

To choose an accountant for your dental practice, look for someone with experience in the dental industry, as they’ll understand specific tax rules and financial challenges. Check their qualifications and ensure they’re registered with a professional body, like ACCA or ICAEW. Consider their familiarity with dental practice management software and ask for references from other dentists. It’s also important to find an accountant who offers clear communication and tailored advice for your practice’s needs.

What happens if I miss a tax deadline?

If you miss a tax deadline, HMRC may impose penalties and interest on the amount due. The penalties can increase the longer the payment or submission is overdue. For example, missing the Self Assessment deadline can result in an initial £100 fine, with additional charges if the delay continues. It’s crucial to act quickly to minimize these penalties by submitting the required documents and payments as soon as possible.

Are there specific tax considerations for associate dentists?

Yes, associate dentists have specific tax considerations. They are often treated as self-employed, meaning they need to manage their own tax payments, including income tax through Self Assessment and National Insurance contributions. Associates can claim business expenses like professional fees, travel, and equipment costs. It’s crucial to maintain accurate records and understand the nuances of self-employment tax obligations to avoid issues with HMRC.

How do pension contributions affect my tax as a dentist?

Pension contributions reduce your taxable income as a dentist, leading to tax savings. Contributions made to a registered pension scheme are eligible for tax relief at your highest rate of income tax, which can significantly lower your overall tax bill. For example, if you’re a higher-rate taxpayer, contributing to a pension can reduce the amount of income taxed at 40%. This makes pensions an effective tool for tax planning and long-term savings.

Can I claim home office expenses if I work from home?

Yes, you can claim home office expenses if you work from home as a dentist. This includes a portion of household expenses like utilities, rent, or mortgage interest, based on the space used for business and the time you spend working there. These deductions can help reduce your taxable income. It’s important to keep detailed records to justify your claims.

What are the benefits of using accounting software?

Using accounting software offers several benefits for dentists, including streamlined financial management, automated bookkeeping, and easy tracking of income and expenses. It simplifies tax preparation by generating financial reports, helps ensure compliance with tax regulations, and reduces the risk of errors. Additionally, it can save time, improve accuracy, and provide insights into the financial health of your practice, allowing for better decision-making.

How do I handle tax if I own multiple dental practices?

If you own multiple dental practices, handling tax can become more complex. You’ll need to manage separate accounts for each practice, ensure all income and expenses are accurately reported, and determine if it’s beneficial to structure them under one limited company or multiple entities. Tax planning becomes crucial, particularly in optimizing corporation tax, VAT registration, and employee payroll across the practices. Consulting an accountant with experience in multi-practice management is advisable to navigate these challenges effectively.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

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Dental Accounts & tax

Dental Accounts & Tax: Further Information

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How to Finance a Squat Practice

Dental Business Guide Podcast Episode | 8th February
Arun Mehra & Nigel Crossman

Financing Strategies for Squat Dental Practices

Starting a dental practice from scratch can feel like a big challenge, especially when it comes to money. However, if you use the right methods, you can create a successful dental practice without spending all your savings. In this guide, we’ll explain the basic ways to get money for new dental practices. We’ll talk about different options like regular bank loans and other ways to get money. We’ll also give you tips to help you make the most of these options.

When you have the right money strategies, you can build a dental practice that will last a long time in your community. So, let’s explore the world of funding for dental practices and see what choices you have.

You can read more articles, webinars and podcasts on starting a dental practice on our Learning Centre.

Introduction to squat dental practices

Starting a new dental practice, which is also called a squat practice, is different from established practices in the dental field. These are new practices that are just beginning and they might face a bunch of challenges when it comes to getting the money they need. To understand what’s unique about these start-up practices, it’s important to learn about them.

Starting a dental practice from the beginning needs careful planning, managing money, and knowing how the dental industry works. Start-up practices face challenges like getting money to buy equipment, finding a good place to work, and hiring the right people. They might also have a hard time finding enough patients and making steady money at first. But even though there are problems, start-up dental practices also have chances for dentists to make their practice the way they want and create a special experience for patients. By using smart money strategies, dentists can understand money stuff and make their practice successful over a long time.

The challenges of financing a squat dental practice

Getting money for a start-up dental practice can be really tough. Unlike established practices that already have patients and money coming in, start-ups have to start from scratch. This can make banks more hesitant to lend money because it seems riskier. One big challenge is getting the money you need to start the practice. You have to pay for things like finding a place to work, buying equipment, hiring staff, and advertising. All these costs can be a lot.

Regular banks might not want to lend money to a proposed start-up practice without a good financial history or something valuable to offer if things go wrong. Another challenge is getting patients and making money regularly. It takes time and effort to build a group of patients, and it can be slow when you’re just starting. This can make it hard to pay for ongoing things and pay back any loans or money you borrowed. Also, start-ups might have trouble getting good loan terms. Lenders might ask for higher interest rates or stricter rules because they worry about the risks of a new and uncertain practice.

Contact us to find out more

This can make it hard for the practice to stay strong financially and grow. To handle these challenges, dentists who want to fund a start-up practice should look into different ways to get money. This might mean finding lenders who know about dental practices or looking at options like crowdfunding. It’s also important to have a smart and detailed plan for your business that shows how it can grow and make money. On top of that, building good relationships with dental experts, like suppliers or other dentists, can give you helpful advice and connections that might help you get money or find patients. So, funding a start-up dental practice can be tough under certain circumstances. But with careful planning, different money options, and a strong business plan, dentists can handle these challenges and set themselves up for success in the long run.

Action Plan

Starting a dental practice from scratch, known as a squat practice, presents unique financing challenges. Securing funds for equipment, hiring staff, and marketing can be difficult without an established patient base. Traditional banks may be hesitant to lend to new practices due to perceived risks. Additionally, attracting patients and generating steady income poses challenges initially. Dentists can overcome these hurdles by exploring alternative funding options, such as lenders familiar with dental practices or crowdfunding. A well-developed business plan and strong industry connections are also essential for success. Despite the challenges, careful planning and strategic financing can pave the way for a thriving practice in the long term.

Understanding the different financing options available

When it comes to getting money for your start-up dental practice, it’s really important to know about the different ways you can do it. This knowledge will help you make smart decisions that fit with your practice’s money goals.

One option is to get a regular bank loan. This means you ask banks or other lenders to give you money for your dental practice. These loans usually have set interest rates (either the rate stays the same or changes) and a plan for how you’ll pay it back. It’s really important to look into different loan options and pick the one that works best for your practice.

You can look into options for getting money to buy equipment using asset finance. Dental tools can cost a lot, and there are special ways to get money just for buying equipment. This can help spread out the cost over time, so it’s easier to handle your practice’s money.

For some dental practices, it might be an alternative option to get money to buy an existing practice or make your current one bigger. This is called practice acquisition funding. It gives you the money you need to buy established practices, which helps you switch smoothly and get more patients.

Last but not least, think about private funding or partnerships. People who have money, like family, friends, or other dentists, might want to invest in your practice. This can be another way to get money that fits your situation. Knowing about all these different money options is really important. It helps you make smart choices that work for your startup dental practice’s needs and goals. By looking into each option carefully and talking to money experts, you can get the money you need to make your practice grow and succeed.

Action Plan

When financing a start-up dental practice, several options are available to consider. Traditional bank loans offer a straightforward approach with set interest rates and repayment plans. Asset finance provides specialized funding for purchasing expensive equipment, allowing for manageable payments over time. Practice acquisition funding facilitates the purchase of existing practices or expansion of current ones, streamlining the transition and attracting more patients. Private funding or partnerships with investors, such as family members or fellow dentists, present alternative avenues for securing funds tailored to individual needs. Understanding these diverse financing options empowers dentists to make informed decisions aligned with their practice’s goals, ensuring growth and success in the long term.

Money Saving Tips for Dentists

How Should a Dental Practice Organise its Finances

A Guide to Asset Finance for Dentists

Traditional bank loans for dental practices

Regular bank loans can be a good way for startup dental practices to get the money they need for different things. These loans come from banks or financial companies and can provide a lot of money to help dental practices with their money needs. One big advantage of regular bank loans is that they’re easy to get. Banks are usually willing to work with dentists to give them the right kind of money for what they need as they (rightly) see the healthcare industry as a safe bet.

This could be money for buying equipment, fixing up the office, getting an existing practice, or just working capital. When you think about a bank loan, it’s important to know about the different kinds. The most common one is a term loan. This means you get a set amount of money and you have to pay it back over a certain time, usually with a fixed interest rate. This helps dental practices plan their money and make regular payments until they’ve paid back the whole loan.

Another kind of bank loan is a line of credit. This gives you a set amount of money that you can use whenever you need it. This can be really useful for dental practices that don’t always make the same amount of money or have costs that change. You only pay interest on the money you use, which can save you money.

To get a bank loan for a dental practice, you have to be prepared. Lenders will look at how well your practice is expected to perform financially, like how much money you make and how much profit you have according to your business plan. You need to have a strong plan for your practice, financial records, tax papers, and any other important papers ready to show the bank.

Even though regular bank loans can be a good way to get money, there are some things to think about. Banks can have strict rules for giving out loans and might need to secure the loan in case things don’t go well. Also, it can sometimes take a while to apply and get approved for a bank loan if you get the business plan or application wrong, so you need to be patient and careful.

So, regular bank loans can give startup dental practices the money they need to grow and run their business. Understanding the different loan options, getting the right documents ready, and being aware of the challenges are important when you’re trying to get a bank loan successfully.

Action Plan

Regular bank loans are a reliable option for startup dental practices to secure financing for various needs like equipment purchases or office renovations. They offer fixed-term loans with predictable payments or flexible lines of credit, allowing access to funds as needed. However, applicants must prepare strong business plans and financial documentation, and be aware of stringent approval criteria and potential delays in the application process. Overall, bank loans provide valuable support for dental practices’ growth and operations.

Equipment financing and leasing options

When you’re running a dental practice, having the right equipment is really important. But buying dental equipment can cost a lot of money, especially for new dental practices that are just starting out. This is where equipment financing and leasing options can be really helpful.

Equipment or asset financing lets you spread out the cost of buying dental equipment over time. Instead of paying a big amount upfront, you make regular monthly payments over a set period. This makes it easier for your practice’s budget. You get the necessary equipment without having to pay a lot of money all at once.

Leasing, on the other hand, gives you the chance to use the equipment without owning it completely. With a lease, you pay a monthly fee to use the equipment for a certain time. When the lease period is over, you can choose to renew the lease, upgrade to newer equipment, or give back the equipment. Both equipment financing and leasing have their pros and cons.

Financing lets you eventually own the equipment, while leasing offers flexibility and the option to upgrade when technology improves. Which option you choose depends on what your practice needs and your money situation.

Before you decide on equipment financing or leasing, it’s important to do some research and compare different banks or leasing companies. Look for good interest rates, flexible payment terms, and reputable providers. You might also want to work with a financial advisor who specializes in supporting dental practices. They can guide you through the process and help you make the best decision for your practice. Getting the right dental equipment is crucial for providing good care to your patients. By looking into equipment financing and leasing options, you can overcome money obstacles and make sure your new dental practice has the tools it needs to do well.

Action Plan

Equipment financing and leasing options provide valuable solutions for dental practices facing the high costs of acquiring necessary equipment. With equipment financing, practices can spread out payments over time, easing the financial burden of upfront costs. Leasing offers flexibility, allowing practices to use equipment without full ownership and providing options for upgrades or returns at the end of the lease term. Before deciding, it’s essential to research and compare providers for favorable terms and consult with financial advisors specializing in dental practices to make informed decisions.

Alternative financing options for squat dental practices

When it comes to getting money for a new dental practice, traditional bank loans might not always be the best choice. But don’t worry, there are other ways to get the money you need to start your practice.

One option is to get help from companies that specialize in giving money to dental practices. These companies know a lot about dental practices and can offer loans with payment plans and interest rates that make sense for the dental industry.
Another idea is equipment leasing. Leasing means you can use the dental equipment you need without having to pay a lot of money upfront. Instead, you make regular payments over time. This is good for new practices that want modern equipment without spending a lot right away.
You could also try crowdfunding. This is a way to ask people online to support your healthcare project. There are websites where you can create a campaign and people who believe in your idea can give you money. This can help you raise money and also let more people know about your practice.
And don’t forget about teaming up with other dentists or investors. Working together with people who have similar goals can bring in money and support for your new practice.

It’s really important to look into all these different ways to get money and see which one fits best for your needs. You might want to talk to a money advisor or someone who knows about dental practices to get advice and make a smart choice.

Action Plan

Alternative financing options cater to the diverse needs of new dental practices seeking funding. Specialized companies offer tailored loans with favorable terms, while equipment leasing enables access to modern tools without hefty upfront costs. Crowdfunding platforms provide opportunities to garner support and funding from backers, and partnerships with other dentists or investors can offer both financial resources and support. Consulting with financial advisors helps practices navigate these options effectively.

Tips for improving your chances of getting financing approval

When it comes to getting money for your new dental practice, there are some important things you can do to improve your chances of getting approved. These strategies can help you get the money you need to start or expand your practice, so you can provide good dental care to your patients.

Build a strong credit history: Lenders often look at your credit history when deciding whether to give you money. Make sure you have a good credit score by paying your bills on time, not having too much credit card debt, and avoiding unnecessary loans. If your credit isn’t great, work on improving it before applying for funding.
Create a detailed business plan: Having a well-prepared business plan shows lenders that you’re serious and knowledgeable. Include detailed predictions about money, research about the market, and clear goals for your business. This will show that you know how to run a practice and handle finances.
Collect important documents: Banks will need various papers to check how stable and trustworthy you are financially. This might include personal and business tax forms, bank statements, financial reports, and legal documents like licenses and permits. Make sure all these important papers are organized and ready to go to make the application process smoother.
Get professional advice: Think about talking to a money advisor or someone experienced in the dental industry. They can give you helpful advice and guidance. They’ll help you understand the details of funding and suggest ways to improve your chances of getting approved.
Explore different funding options: Don’t just stick to regular bank loans. Look into special funding options designed for dental practices, like dental practice loans, equipment financing, or working capital loans. These specific choices might give you more flexibility and better terms for what you need.

By following these tips, you can greatly increase your chances of getting the funding you need to start or grow your new dental practice. Remember, careful planning, a strong credit history, and exploring different funding options are key to boosting your approval chances and setting the stage for a successful dental practice.

Action Point

To improve your chances of obtaining financing for your new dental practice, focus on maintaining a strong credit history, creating a detailed business plan, organizing essential documents, seeking professional advice, and exploring diverse funding options. These strategies will demonstrate your preparedness and increase your appeal to lenders, enhancing the likelihood of securing the necessary funds for your practice’s success.

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Creating a solid business plan to attract lenders

Creating a strong plan is really important if you want banks to give you money for your new dental practice. A well-made plan shows that you’re skilled and committed to making your practice successful. It also helps banks understand your goals, strategies, and how you expect to make money. When you’re putting together your plan, it’s important to include certain important parts that banks look for.

First, explain your mission, which is what your practice is all about. Then, do a careful study of the market to know who your patients will be, who your competition is, and how your practice can grow. In the money part of your plan, give details about how much it will cost to start your practice. This includes things like equipment, supplies, and the place where you’ll work.

Break down how much money you think you’ll make and spend, including how many patients you’ll see, what you’ll charge, and how much insurance will pay you. Talk about what makes your practice special compared to others.

It’s also important to talk about how you’ll get patients and make your practice grow. Explain your plans for marketing, like using online ads, doing virtual events, working with the community, and partnering with other healthcare providers. Don’t forget to talk about your background, education, and experience. Lenders want to know that you have the skills to run a dental practice well.

Lastly, talk about how you’ll pay back the loan and what you can use as a guarantee. Lenders want to know they’ll get their money back. You can include a plan for repaying the loan, expected money statements, and something valuable you can offer as a promise that you’ll pay. By putting together a strong plan that covers all these things, you’ll make a strong case to lenders and increase your chances of getting money for your new dental practice.

Click here to find out more about building a business plan for a dental practice.

Starting a dental practice can be tough, especially when it comes to getting money. But don’t worry, if you follow the right steps, you can overcome these challenges and build a successful practice. Remember to carefully look at your money options, get advice from experts, and think about different ways to get money. By doing these things, you can build a strong foundation for your new dental practice and get ready for long-term success.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

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For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

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Secondary Sources of Finances

Dental Business Guide Podcast Episode | 8th February
Arun Mehra and Nigel Crossman

You can find all episodes of the Dental Business Guide Podcast here.

Exploring Secondary Sources of Finances for Dental Practices in the UK

Running a dental practice is a big job. From buying equipment to hiring staff, it costs a lot of money. Getting money to help your practice grow is really important. There are different ways to get money, like loans from banks or online lenders. In the UK, there are also other ways like getting money from private supporters or investors, or using crowdfunding. Each option has good and bad parts, and we’ll talk about them. You’ll learn about all these choices and how to decide which one is best for your practice. By the end, you’ll know more about how to get money for your dental practice.

Click here to read our article on How to finance a healthcare business.

Introduction to secondary sources of finances for dental practices

When you’re running a dental practice, having a strong financial base is really important. People usually get money from banks as loans, but there are other places to get money from too. These other places can give you more help and flexibility in the UK.

These other places to get money are called secondary sources of funds. They’re different from the usual ways of getting money. They can give dental practices extra money in different ways.

One of these other places is crowdfunding. Crowdfunding lets dental practices ask lots of people for money to help their business. This can be a good way to raise money and get support from the community.

Another way is peer-to-peer lending. This is when you borrow money from regular people or groups, not just banks. There are websites that connect people who want to lend money with people who need it. This helps dental practices get money at good interest rates.

There are also grants and subsidies you can get in the UK. These are like gifts of money from the government, charities, or groups that help certain industries. You can use these grants for things like making your practice bigger, getting better equipment, or doing research.

Looking at these other ways to get money can give dental practices more choices. By using different sources of money, practices can have better chances of getting the money they need. This helps them make more money, grow, and do better things. But, it’s important to read and understand the rules of these other ways to get money so they match what the practice wants and can afford.

Read our article on why you should use a commercial finance broker.

Traditional financing options for dental practices in the UK

When it comes to getting money for a dental practice in the UK, there are a few usual choices. Many dental experts have used these choices for a long time, and they are still good ways to get money.

One common choice is a bank loan. Banks have special programs for healthcare professionals like dentists. These loans have good interest rates and flexible ways to pay back the money, which is helpful for dental practices.

Another usual choice is a line of credit. This is like having an amount of money that you can use for different things, like buying equipment or growing the practice. With a line of credit, you only borrow what you need and pay interest on that.

Leasing is another choice for dental experts. Instead of buying expensive equipment all at once, you can rent it for a while by paying regular amounts. This helps save money and keeps your practice up-to-date with new technology.

Some dental practices might also think about working with other dental experts or investors. This could mean sharing the financial responsibility or getting money from investors who want a part of the practice’s profits.

While these usual ways to get money have worked for most dental practices in the UK, it’s important to look at the terms, interest rates, and how you’ll pay back the money for each choice. Checking out different options and talking to financial experts can help dental experts make good decisions about which choice is best for their needs and goals.

Alternative financing options for dental practices in the UK

When it comes to getting money for a dental practice in the UK, there are more choices than just regular bank loans. Actually, there are other ways to get money that dental experts can think about. They can use these options for different reasons, like making their practice bigger, getting new equipment, or paying for unexpected things.

One option is peer-to-peer lending. This is when people lend money to other people directly. Dental professionals can use this method to get money quickly and maybe at lower interest rates than regular banks. Peer-to-peer lending is a good choice for dentists who might not meet all the strict rules of regular banks or want a simpler process.

Another option is using lending companies that specialize in dentistry. These companies know a lot about dental practices and give loans that fit their needs. They understand the challenges dentists face and can help them with the money they need. These companies also give expert advice and support during the lending process.

Crowdfunding is also a way for dental practices to get money. They can show their ideas to a big group of people through crowdfunding websites and get money from people who believe in their plans. This method gives money and helps build a community of supporters and potential patients.

Dentists can also think about leasing equipment. This means they can use the newest dental equipment without buying it all at once. This can save money, especially if they’re just starting or growing their practice.

In short, dentists in the UK have many options to get money beyond regular bank loans. Trying out these options can give more flexibility, speed, and tailored help for their special needs. Whether it’s peer-to-peer lending, dental-focused lending companies, crowdfunding, or equipment leasing, dental professionals can find the money they need to reach their goals and succeed in a competitive field.

Peer-to-peer lending platforms

Shared lending platforms have become a good choice for dental practices in the UK to get money. These platforms are different from regular banks. They let people who need money connect directly with individuals who want to lend it. This way, dental practices can get the money they need without going through a long and complicated process.

One big advantage of these platforms is that they can offer lower interest rates. Since the lenders are regular people and not big banks, they often give loans with better terms. Also, using these platforms online makes it quick and easy to apply for a loan, saving time and effort.

Moreover, these lending platforms help dental practices reach more potential lenders. These platforms have many individual lenders with different backgrounds and interests. This makes it more likely to find people who really want to help dental practices. This is especially useful for new practices or those with special needs.

When thinking about using these lending platforms, dental practices need to do research and be careful. It’s important to choose a platform that is trustworthy and has a good history of successful lending. Reading reviews, understanding the platform’s terms, and looking at how they approve loans are important steps to pick the right lending platform for a dental practice’s money needs.

In short, shared lending platforms offer another option for dental practices in the UK to get money. With lower interest rates, a diverse group of lenders, and an easy application process, these platforms can help dental practices get money for growing, buying equipment, or other money needs.

Crowdfunding for dental practices

Crowdfunding has become a popular and effective way for dental practices in the UK to get money. In the past, dentists would ask banks or other money places for loans to grow their practice, get new equipment, or start a new one. But now, crowdfunding lets dentists get funds directly from a big group of people who believe in their ideas and want to help them succeed.

With crowdfunding, dental practices can reach more potential supporters, like patients, friends, family, and even strangers who are interested in new healthcare solutions. By making an interesting campaign, dental practices can show what makes them special, explain how they’ll use the money, and offer cool rewards to encourage people to support them.

A great thing about crowdfunding is that it helps build a community with supporters. Dental practices can use this chance to connect with their patients and make a group of people who not only give money but also talk positively about the practice. This can lead to more loyal patients, word-of-mouth recommendations, and a better reputation.

But, it’s important for dental practices to plan carefully when using crowdfunding. A successful campaign needs good research, a clear plan, and a story that makes sense to supporters. It’s also important to set realistic funding goals and be honest about how the money will be used.

In the end, crowdfunding is a good option for dental practices in the UK to get extra money without just relying on banks. By using crowdfunding well, dental practices can get the money they need and also build a strong community of loyal patients. With good planning and a great campaign, crowdfunding can really help dental practices grow and improve.

Dental practice financing companies

When it comes to getting money for your dental practice in the UK, it’s important to look beyond just regular banks. There are other ways to get funding that can really help your business grow. While banks are the common choice, there are also special companies that focus on giving money to dental practices. These companies understand the unique challenges dentists face and have solutions designed just for them.

These dental practice funding companies really know about the dental field. They understand what you need and can give you advice on how to use the money. They offer loans and other types of support that fit exactly what dental practices need, like buying equipment, expanding your practice, or even having enough money for daily operations.

One great thing about these funding companies is that they know dentistry well. They can offer flexible ways to pay back the money, good interest rates, and options that match your goals and needs.

Plus, these funding companies usually make it easy and fast to apply and get approved for the money you need. They might also offer other helpful services like renting equipment, getting insurance, or having a line of credit.

Dentists should take time to research different dental practice funding companies to find the best one for them. You should look at things like interest rates, how you’ll pay back the money, what other people say about the company, and how much experience and help they offer.

To sum up, dental practice funding companies can be a really good way to get money for dental practices in the UK. They understand dentistry, offer tailored solutions, and know how to help dental practices succeed. By checking out these different funding options, dentists can open up new possibilities and make sure their practices do well in the long run.

Do You Know the 3 Main Ways to Raise Finance?

What Tools do you use for your Business?

Understanding Finance to Increase Profits

Exploring lease financing for dental equipment and technology

Lease funding is a smart choice for dental practices in the UK who want to get new equipment and technology without spending a lot of money all at once. This type of funding lets dentists borrow the equipment and pay for it over time.

One great thing about lease funding is that it’s flexible. Dental practices can pick from different options for how long they want to lease and how they want to pay. This helps them manage their money well and use it for other important parts of their practice.

Lease funding also lets dental practices keep up with new technology. Since dental tools are always improving, it’s important for practices to have the latest equipment to give the best care to patients. By using lease funding, dentists can upgrade their equipment as needed, staying at the forefront of dental advancements.

Also, lease funding means dental practices don’t have to spend a lot of money upfront. Instead of using a lot of money to buy equipment, they can use that money for other things like hiring good staff, advertising, or growing their practice.

Lease funding for dental equipment and technology often comes with extra benefits, like tax advantages. Many times, the payments can be counted as an expense, which can lower the amount of taxes the practice has to pay.

When looking into lease funding options, it’s important for dentists to read and understand the lease agreement carefully. Knowing the interest rates, how long you have to pay, and any possible fees will make sure the funding plan matches what the dental practice needs and wants.

In short, lease funding is a good option for dental practices in the UK. It’s a smart way to get equipment and technology without spending a lot upfront. With its flexibility, staying up-to-date, saving money, and possible tax benefits, lease funding helps dental practices improve while also being financially stable.

Read our guide on asset finance for dentists.

Understanding the benefits and drawbacks of secondary financing options

When it comes to getting money for dental practices in the UK, thinking about both main and extra ways is important. While some people might prefer main sources like bank loans or personal investments, there are also other options that can be really helpful.

Before choosing any extra funding options, it’s crucial to understand the good and not-so-good things about them. One option is getting money from lenders or financial places that focus on dentists. These lenders know a lot about the dental field and can offer loans that fit what dental practices need.

The good things about this kind of funding are that these lenders understand dentistry well, which can lead to better loan deals. They might also be more flexible when approving loans because they understand the challenges dentists face, like irregular income or the need for new equipment.

However, there are some things to think about carefully. These dental-focused lenders might have higher interest rates compared to regular banks. They could also ask for stricter terms or things like collateral to get the loan. That’s why it’s really important to read and understand the terms of any extra funding option to make sure it matches what the dental practice wants and can do.

Another extra funding option to consider is leasing or equipment financing. This can be really useful when dental practices want to get expensive equipment or technology. Leasing lets practices spread out the cost over time instead of paying a lot upfront. It also allows practices to upgrade equipment as technology improves, without the pressure of owning it.

But there are some downsides to think about with leasing or equipment financing. Over time, leasing might end up costing more than buying the equipment outright. Also, leasing deals might have specific terms and rules, like how the equipment can be used or what happens if the lease is ended early. It’s really important to think about these things and compare them with the long-term money impact before making a decision.

In short, understanding the good and not-so-good things about extra funding options is really important for dental practices in the UK. Lenders focused on dentists can offer tailored loans but might have higher interest rates. Leasing or equipment financing is flexible but might be more expensive in the long run. By carefully thinking about these factors, dental practices can make informed decisions to get the money they need for growth and success.

Tips for successfully securing secondary financing for your dental practice

Getting extra money for your dental practice can be a big help when you want to make your business bigger, upgrade equipment, or hire more staff. But you need to approach this process carefully to make it work. Here are some important tips to help you get extra funding for your dental practice in the UK:

Make a detailed plan: Before you talk to any potential lenders, take time to create a plan that explains your goals, how much money you’ll need, and how you’ll pay it back. This will show that you’re serious and capable, increasing your chances of getting funding.

Research and compare options: There are different places to get extra funding for dental practices, like regular bank loans, government-supported programs, and lenders that focus on dental funding. Look into each option, compare interest rates, terms for paying back, and any other benefits or requirements.

Keep your credit in good shape: Lenders will look at your credit history to see how reliable you are with money. Make sure your personal and business credit profiles are good by paying bills on time, settling debts, and fixing any mistakes that might hurt your credit score.

Build relationships with potential lenders: Meeting and connecting with possible lenders can be really helpful when you’re looking for extra funding. Attend industry events, join professional groups, and talk to lenders to build trust and understanding. This can help you stand out and maybe get better terms.

Get all your paperwork ready: When you apply for extra funding, you’ll need to provide lots of financial documents, like tax records, profit and loss statements, balance sheets, and predictions of how much money you’ll make. Make sure these documents are accurate, up-to-date, and organized to make the application process smoother.

Seek expert advice: Talking to financial advisors or industry experts can give you really useful information and guidance throughout the funding process. They can help you understand complicated money terms, negotiate terms, and figure out the best funding options for your dental practice.

By following these tips, you can improve your chances of getting extra funding for your dental practice in the UK. Remember, planning ahead, doing research, and building professional relationships are key to finding the right funding solution that will help your practice grow and succeed.

Resources and organizations that can assist with finding secondary financing options

When it comes to finding extra funding options for dental practices in the UK, there are some helpful places and groups that can offer valuable support. These are specialized in helping businesses get more money beyond the usual methods.

One of these helpful places is the British Business Bank, a government organization that helps small and medium-sized businesses grow. They have programs to help businesses, including dental practices, get funding. They work with banks and partners to offer guidance and support for alternative funding options.

Another group that can be really useful is the Dental Business Support Network (DBSN). This group has experts who know a lot about the dental field. They provide business help for dental practices. They’re really good at helping practices figure out the financial side of things, including finding extra funding. Their personalized help can be super useful in finding the right solutions for your needs.

Apart from these special places, it’s important to look into local business support groups and development agencies in your area. These groups often have programs to help businesses get extra funding. They can guide you, give advice, and maybe connect you with banks or investors who know about funding dental practices.

Also, connecting with others in the dental world can be a good way to find more funding options. Joining dental associations, going to industry events, and talking to other dental professionals can give you tips and leads on extra funding that others have used successfully.

Remember, when you’re checking out extra funding options, make sure you research and understand each opportunity and its terms really well. Get advice from professionals like financial advisors or accountants to make sure you make smart choices that match your practice’s financial goals and future success. With the right help and connections, you can confidently explore the world of extra funding options for your dental practice in the UK.

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Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Should You Use Social Media in a Dental Practice?

Dental Business Guide Podcast Episode | 2nd February 2021
George Bellamy and Nikita Kanda

George Bellamy: Welcome to the Samera podcast, I’m George and today I’m with our very own social media manager, you’re a social media manager or…

Nikita Kanda: Social media expert

George Bellamy: Social media expert, Nikita Kanda. Hello, and welcome to the podcast.

Nikita Kanda: Hello, George, How are you?

George Bellamy: I’m very good. Yes, right let’s just dive straight in. So we’re gonna be talking about social media, that’s your forte. So, I’ve been reading up on things you’ve written about social media and whatnot. And really, just to start off with, why should businesses use social media? Why should we even bother? Why not do things organically?

People Want to See What is Real

Nikita Kanda: I think in this day and age, social media is such a big thing that I think if you’re not using it, you’re silly to be honest. I mean, it’s something that you grasp your audience, your viewers, or even you grab sales from it, any sort of business. It doesn’t matter what it is, obviously, we’re talking specifics like dentists and dental businesses, definitely people want to see what’s real nowadays.

So you know, if you’ve got before and after pictures, if you’ve got anything real, videos of your team members and everything, people want to see what’s real. They will straightaway go to search for you on Google.

So I know if I’ve ever wanted to look up a dentist or anything like that, I straightaway go on and look at their social media because I think that’s the time that we’re living in now. It’s just something that everyone is doing and I think you definitely need to have, you know?

George Bellamy: Because 5 or 10 years ago, social media really wasn’t a prominent thing. But as you say, nowadays, it’s just everywhere. You know, I read somewhere once, it’s one in three people in the world have Facebook, or something like that, it’s ridiculous.

Read our article on using social media to grow a dental practice.

Nikita Kanda: It’s just growing on another level, and especially Instagram, Facebook, the two main things, I think it’s just growing, especially for businesses there. I was speaking about this the other day, Instagram for businesses is such a big thing.

Now they actually have made a business account. So you can have a normal account in Instagram, or you can have a business account, which just unlocks so many other features for businesses and just helps you build up your revenue, make more money, get more clients, get more followers, it’s just so much more you can do.

George Bellamy: Right. Okay, so let’s say I’m a practice and I want to start making social media. I don’t have the resources to do all of them. Because I think there’s like Facebook, YouTube, Instagram, Twitter, is Myspace still a thing? No, there’s so many different social media platforms. So which one should I choose? And why, really?

Start With Facebook and Instagram

Nikita Kanda: So if you were to start a dental practice, I definitely think Instagram and Facebook are the two that you should definitely start. It’s just a no-brainer, especially these days. If you’re trying to reach that young market as well, then Instagram is 100%. I’m very, I’m like Instagram pro. I’m like “you have to get Instagram, It’s like the way to go”.

Watch our webinar on using Facebook and Instagram ads for dentists.

And of course, it’s not expensive, it’s free to sign up. So it’s not like you have to be spending money. If you don’t have the money to spend when you do start your business, then it’s something you can do for free. Yeah, I would just say start with a plan though, kind of know what goals you want, what do you want out of it? Start with it with a good business strategy. I would always say start first with: what are your goals?

What Are Your Goals?

George Bellamy: So, which one would you choose? You’re an Instagram advocate so, would you always just use Instagram over everything else then?

Nikita Kanda: Yeah 100%. I think I’d use Instagram over any other social media apps.

George Bellamy: Right. What are the main differences between all three? Like I said, the three main ones are what? Instagram, Facebook and Twitter?

Nikita Kanda: Yeah, I would say that.

George Bellamy: What about snapchat? Do people use that still?

You Don’t Need Snapchat

Nikita Kanda: Snapchat was more of a craze. I think it’s still used but with younger kids now. It’s just more for messaging and photos and just that it’s more about filters and it’s not really something that necessary. I mean, I guess if you’re like a really big brand or a celebrity, it’s good to have such because I guess your followers can watch you but you know, from a business point of view, I don’t really think you need Snapchat.

It’s something that more younger kids use to be honest, but at the moment, Instagram, Twitter and Facebook, yeah, definitely. And also YouTube is another angle if you’re making content creating videos, you definitely would say but Instagram’s more visual.

I think it is great for growing businesses. I think Twitter’s more quick comments it’s like ‘newsworthy’ and then Facebook, I guess every kind of business probably has a Facebook page. So I definitely think it’s got the social aspect but definitely business features as well because Instagram and Facebook are linked now. So if you are setting up an Instagram business page, you will have to have a Facebook page already set up there.

George Bellamy: Right okay. Yeah, that’s interesting.

Which Platform Works For You?

Nikita Kanda: It’s important just to know which platform you think is best for you, and then what will reach your viewers or your followers or your clients.

George Bellamy: So, obviously there’s millions and millions and hundreds of millions, if not billions of Instagram accounts. Would you say that every practice probably has an Instagram? Whether or not they use it or not?

Nikita Kanda: Yeah, I think nowadays, everybody’s got a page, an Instagram page, whether they use it or not. And I mean, you know, some people have done this whole fake followers thing that makes them look like they’ve got thousands of followers. I mean, that’s a whole other episode probably.

But yeah, I wouldn’t recommend doing that because people won’t see you as being authentic. I think that’s one of the main things is definitely be true to yourself. Definitely be authentic, and be real with your followers and people watch it otherwise, they’re not going to trust you, and they’re not going to want to come to you for business.

George Bellamy: Right, so how would you stand out then between everything else? Because obviously, you know, we’re going along with a sense of every practice has an Instagram, how can we stand out? How can we be that one shining object in a sea of black really?

Be Yourself, Be Authentic

Nikita Kanda: Yeah, like I said, definitely be yourself, be authentic, but just see your goals, what you’re trying to achieve, look at your team members, what do your team bring to the table and people want to see that real aspect of it.

They want to see your team being bubbly, having fun and being happy. I think Instagram has also turned into this whole posey-posey lifestyle, show the fast cars and this and that, and this glamorous lifestyle. But I think if you show that you’re real, I definitely think you will stand out.

Engage With Your Followers

But make sure you engage with people, because that’s another thing that a lot of these big Instagram pages of people with thousands of followers don’t do. They don’t engage with their followers, they don’t reply back to them with comments, or they don’t, you know, they don’t talk to them.

So people will feel disconnected in that way and then they might unfollow you in the future because they’d be like, oh, you’re not engaging with us so why do I need to follow you so definitely, I think, get to know people that are following you.

George Bellamy: Right. So okay, so how often should I post an image or a video or something? Would you stick with a schedule? Or is it more or less a sense of just putting things on? Like, would it be good if I put on five photos in one day? And then don’t do anything the rest of the week? Or, you know, What, really?

Commit Yourself Daily

Nikita Kanda: I definitely think it’s a daily thing, you have to commit yourself daily. So every day I would be posting, especially with a new business, every single day post something, even if it’s, you know, one video a day, one picture a day, one advert a day you need to be posting daily like, it is so important.

Because the more you post, the more engagement you’re going to get, the more followers you’re going to get. So I definitely would say start with a minimum, if it’s just you on your own or a small team, start with minimum one hour. But I would say spend a few hours and get a social media manager if you can to just manage all of the accounts, because it’s so important that it’s going out at certain times, certain days as well.

Test to See What Works

I’d say Monday to Friday, think about what you’re going to post there with, obviously Samera Dental Group, every Monday we do a poll, tips every Tuesday, videos on Wednesday, Thursday, live Q and A’s, there are so many things you can do.

But I would set a week where you do it every single day and then you kind of see afterwards, what days am I getting the most engagement, and then you kind of start to see what works. Once you start doing it daily, it really helps you with your insights, and you start gaining all this information of your followers and really helps you for your business to see okay, what’s going to work and what’s not.

Watch our webinar on using marketing to increase profits in a dental practice.

George Bellamy: Okay, that’s pretty cool. So really, it’s just making sure you stick to a schedule. Let me just say how Instagram’s got business pages. Does that come with analytics, so you can see where your posts are on hours of the day and that kind of thing?

Set Up an Instagram Business Page

Nikita Kanda: Yeah, exactly. So that’s really important and I really love this feature, because Instagram business page allows you to see your insights. It allows you to see where in the world and which countries your pictures or videos or content is reaching, how many males or many females it’s reaching. The age bracket is really important as well, because you want to be seeing where is your business and who is it reaching, the age bracket, is it the right age bracket?

If not, then you need to do something about that and yes, it shows you all these minor details, which is really, really important and shows you who’s exited your story of who’s gone back to look at it or your website, who’s clicked on your profile and how many people, there’s so much information you can gain from just an Instagram insights – it’s really useful.

Yeah, it’s really, really good. So I do recommend that you switch to a business profile if you haven’t done so already.

George Bellamy: Yeah, that’s really interesting. So okay I’ve got my schedule sorted now, do I post just photos, just videos or sprinkle a bit of both? Or do I put on a video on like, a certain day of the week, or what really?

Mix Up Your Posts

Nikita Kanda: I’d say, yeah, you mix it up. So you do photos, videos and do some lives, Instagram stories. The stories are different to the actual posts, stories are something that just lasts 24 hours but you tend to get more viewers on a story because it’s a quick view and it comes up on the homepage, the people just always tend to click straight away on the story.

Okay. So I think that’s really important to make sure when you do, what I do is when I post on the actual page itself, I always go and post it on the story as well. So I’ll be like, ‘click this new post’ or ‘click this new blog’ it’s kind of like an ad for this for the page really. Then people that will see it on the story will be like, okay, cool they’ve got something new, a new blog post’s out, let me go on their page and read it. So it’s really, really important that you kind of sync the two.

George Bellamy: Okay, So with social media, I’ve found that people very much don’t want things being thrown in their face. So basically, try and keep things more or less organic, as we’re not trying to gain a following (but you can if you want). So you’re trying to say don’t push. Say ‘follow us’ and don’t push to go on our website because I think that could scare people off in that sense.

Be Smart With Your Response

Nikita Kanda: Yeah, no, definitely. I wouldn’t be pushy with it because again, like you just said it would definitely scare people away and they might follow you and then again they might unfollow you and you want to kind of keep those followers and you want to keep the authentic followers as well.

That’s why I was saying definitely engage with people if they do comment, or they do send you a direct message, I definitely would reply to that. Make sure you’re quite quick with the response as well.

And again, with Google reviews, I mean, that’s another whole podcast, but definitely reply straight away if you can, because it makes them feel that there is somebody there behind that screen that actually cares and takes time. Because a lot of these social media pages, like I said earlier, they’re all about the glitz and the glamour and they don’t respond to people. So I think if you actually have that response and engagement there they feel like okay, this is a trustworthy brand. There’s actually somebody there that takes the time to respond.

George Bellamy: Yeah. Awesome. Okay, what happens if I’m doing a schedule and do my photos, my stories, all that, I’ve got a colour scheme going, you know, the whole shebang. But I’m not getting the following. It’s not really picking up the traction, so what can someone do to try and change that up?

Keep Going – Stick To It!

Nikita Kanda: Yeah, I would say just keep going because the thing is, when you start off on any social media page, you’re not going to get the following straight away. It’s just how it is, you need to stick to it.

Stick to posting every single day, stick to your plan, stick to what you’re doing in your content, keep pushing out even if one person or two people see it. You know what, that one person or two people – in a month’s time it might be 20 people, then it might be 200 people.

So what I would say is just keep doing it because the more you do it, the repetition is key. And I think don’t get put off by, oh, I posted a video and it’s not getting 1000 views. The thing is, with social media, it takes its time, if you want real authentic followers, it definitely takes its time and that’s just what it is.

Give yourself time, don’t just think this isn’t working because one person or nobody’s seen it, it really does take a while. Don’t go by what you see on Instagram, sometimes you’ll see people with 50,000 followers. But if you really look at what I’ve noticed, if I see a dental practice of 50,000 followers, I look on their photos or their content, and they’ve got about, I don’t know 16 to 20 likes, those numbers don’t add up to me. So then they’ve obviously paid for followers. So really don’t believe everything you see is what I’m saying, because it does take time.

Read out article on 5 reasons to use Facebook ads.

George Bellamy: Don’t judge a book by its cover.

Nikita Kanda: Yeah, because Exactly. Because half those followers would be fake and then again, what they’re doing, they’ve probably bought the followers and thought okay, we look cool, because we’ve got 50,000 followers, but really, you’re not getting the engagement and the engagement is key.

I definitely wouldn’t go down that route, I think be authentic. Take your time. Keep repeating, keep posting stuff every single day, spend time on it and it will come, it will definitely come like it just takes a while.

George Bellamy: Yeah. Okay, so how do I gain that following then? Obviously, Instagram and Facebook have those hashtags and that lot? How should I use them? Because obviously some hashtags have got hundreds of millions of uses others have got a couple you know, do I go with the small like the smaller niche type hashtags? Or do I go with the whole filled up wider fetch ones?

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Use Smaller Traffic Hashtags

Nikita Kanda: I would say mix them up, definitely hashtag whatever is relevant to your business. So – ‘dental practice’, ‘dental’, ‘dental hygienists’, ‘dental nurse’, ‘dental business’ all about everything dental, hashtag it and anything else you can think of. Say you did dentistry, visit #dentalbusinesstips.

Okay, it might not have that many posts on it or, you know, it might be like a lower end of the hashtags, but somebody might actually type that in one day and be like, okay, I need some dental business tips, let me type that in and it will come up with yours. It will be the first to come up with because they haven’t been used that much.

So mix it up, use the ones that are quite common, but also make up your own. Also use the ones that you think people wouldn’t use much because somebody will use it. Yeah, it’s just good to mix it all up. And then you will get followers that way with the hashtags.

Also, again, like I said, the more you’re posting, you’re reaching different people, because there’s an explore page on Instagram. So say I’ve been all day clicking on different dental businesses, then in my explore page, it’s going to come up with other dentists or other things that relate to that, what I’ve been clicking on, right kind of relatable posts if you will.

So you know what, you will be seen in loads of different ways. And also ads as well sponsored, and get yourself sponsored on Instagram or ads again, it’s like Facebook ads. That’s a whole other podcast but yeah, that’s definitely something to go with it.

George Bellamy: Okay, amazing. Well, thank you so much for the insight. I’m sure everyone is very appreciative because I am a complete novice when it comes to Instagram. So I have my own Instagram for my Landrover defender has not got the following whatsoever but I might actually start using these tips now so thank you very much.

Read our article on 5 reasons you should use Google Ads.

Nikita Kanda: Oh, I definitely have a quick tip I’ll give is definitely get people that you know, friends, family, whoever to post about your page because the more people that post about it, whoever it is, friends, family, whatever, the more people that post about it, it will get more views, more followers and their followers will want to follow you because they’re seeing it through their page and it just kind of goes in a spiral basis.

George Bellamy: Whole full circle thing really.

Nikita Kanda: Yeah, word of mouth. definitely get people to push it for you, your friends and what not. So definitely, that’s another great tip.

George Bellamy: Superb. Well, that’s right, wrap it up there. Thanks very much for listening everyone and we’ll catch you on the next one.

Nikita Kanda: Thank you.

Our Expert Opinion

“Social media is becoming more important as the generations who grew up with it start making financial decisions. However, it can take a lot of ongoing work to make it work properly as a lead magnet and to convert those leads into patients.

My advice would be to get the team member who uses social media most in their personal life to handle your practice’s platforms. Post blogs, reviews, testimonials, offers and team photos a couple of times a week and use your social media as a touch point. What I mean by that is don’t expect to convert or find leads with your social media (unless you’re paying for ads). I don’t mean you can’t do that with social media – but it does take a lot more work and is harder to get right.

Treat your social media as a reference for leads captured by your website. When leads find your website they’ll read through it but they’ll want more. Your website is the polished, crafted front you show customers. Treat your social media as the behind-the-scenes, real life version where patients can learn more about you and feel closer to you.

They’ll want to see your reviews and testimonials, pictures of the team, reviews etc. They want to see the ‘real you’ so show it to them.”

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How Can Dentists Reduce Their Tax Legitimately?

The Dental Business Guide Podcast Episode | 2nd February
George Bellamy and Arun Mehra

As a dental specialist, it’s essential to focus on providing the best care for your patients. But it’s also important to manage your finances well to ensure your practice remains profitable. One of the most significant expenses for any dentist is their tax bill. Dealing with taxes can be complex, but there are smart strategies that can legally help you reduce the amount of taxes you need to pay.

Let’s discuss some key techniques that dental specialists can use to lower their tax responsibilities. These include taking advantage of tax breaks and deductions and organising your practice in a tax-efficient manner. By following these tips, you can keep more of your hard-earned money in your pocket while still complying with tax regulations.

Click here to read our article on Financial tips for dentists.

The importance of reducing tax burdens for dentists

As a dental specialist, you aim to provide excellent care to your patients and run a successful dental practice. However, along with the rewards of your profession, come the challenges of managing your finances and dealing with various tax obligations. Paying taxes is a necessary part of running a business, but it can often feel like a heavy burden, leaving you with less income to reinvest in your practice or achieve personal financial goals.

That’s why it’s crucial for dental specialists to explore smart strategies to reduce their tax rates. By taking advantage of tax-saving opportunities and implementing effective tax-planning techniques, dentists can improve their financial position and keep more of their hard-earned money.

Lowering your tax rate not only improves your financial well-being but also allows you to allocate resources to areas that have the biggest impact on your dental practice. Whether it’s investing in advanced equipment, expanding your services, or providing comprehensive employee benefits, reducing your tax liability can pave the way for growth and success.

In this blog post, we will explore practical strategies that dental specialists can use to lower their tax rates. From understanding deductible expenses to utilising tax breaks and incentives specifically designed for the dental industry, we will provide you with valuable insights and useful tips to make informed decisions that can positively affect your bottom line.

Remember, it is essential to approach tax reduction strategies ethically and within the bounds of the law. By staying informed and working with qualified tax professionals, you can navigate the complex world of taxes with confidence and discover excellent opportunities to improve your financial situation. So, let’s dive in and explore smart techniques that can help dentists honestly reduce their tax rate and unlock their practice’s full potential.

Action Point

Explore tax-saving strategies like understanding deductible expenses, utilizing industry-specific tax breaks, investing in retirement plans, employing family members, and consulting with tax professionals to effectively reduce your tax rate and enhance your dental practice’s financial health.

Click here to read our blog on 10 Tax-saving tips for vets.

Understanding the unique tax challenges faced by dentists

Dental specialists, like many other professionals, face unique tax challenges that require a deep understanding of the dental industry and its specific tax rules. To handle their taxes well and improve their financial situation, dentists need to know about these challenges.

One major challenge is figuring out which expenses they can deduct from their taxes. Dentists often deal with a complex mix of deductible and non-deductible expenses, such as equipment purchases, office rent, employee salaries, and even continuing education costs. Knowing which expenses can be claimed as deductions is crucial for saving on taxes.

Another big challenge for dentists is managing the tax implications of owning a dental practice. Owning a practice involves various tax considerations, like choosing the best business structure (like sole ownership, partnership, or corporation) and understanding the tax effects of selling a practice. Staying updated on the ever-changing tax regulations is essential to follow the rules and minimise tax obligations.

Retirement planning can also be tricky for dentists due to the physical demands of their profession. Planning for a comfortable retirement is important, and dentists can benefit from knowing about tax advantages linked to retirement savings. These options can help them save for retirement while reducing their tax burden.

Moreover, dental specialists can explore specific tax incentives and credits designed for the dental industry. Taking advantage of tax breaks for investing in advanced dental technology or utilising research and development tax credits for innovative dental procedures can lead to significant tax savings.

Action Point

Dentists face unique tax challenges related to deductible expenses, practice ownership, retirement planning, and industry-specific tax incentives. Understanding these challenges is crucial for managing taxes effectively and improving financial outcomes in the dental profession.

Contact us to find out more

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Utilising business deductions to lower taxable income

One of the best ways for dentists to legally reduce their taxes is by using business deductions. Business deductions are expenses that are necessary for running a dental practice and can be subtracted from your income, which ultimately lowers the amount of taxes you owe.

As a dentist, you have access to various tax breaks. Firstly, you can deduct the costs of supplies and equipment needed for your practice. This includes dental tools, x-ray machines, office furniture, and even the cost of dental materials like fillings and crowns.

In addition to these significant expenses, you can also deduct the costs of running your office. This includes rent or mortgage payments for your practice space, utilities like electricity and water, and even the expense of office supplies like paper, ink, and computer software.

Furthermore, don’t forget about the expenses related to your professional development. Continuing education courses, conferences, and professional memberships are deductible, as they are essential for improving and honing your skills as a dentist.

To take advantage of these deductions, it’s crucial to keep detailed records of all your expenses and consult with a qualified tax expert. By doing so, you can significantly decrease your taxable income and, in turn, reduce your tax burden as a dentist.

Action Plan

Understand Deductible Expenses: Dentists must navigate the complex landscape of deductible and non-deductible expenses. This includes distinguishing between equipment purchases, office rent, employee salaries, and continuing education costs. Knowing which expenses qualify as deductions is essential for maximizing tax savings.
Optimize Business Structure: Owning a dental practice brings unique tax considerations, such as choosing the most advantageous business structure (e.g., sole proprietorship, partnership, or corporation) and understanding the tax implications of practice sales. Keeping abreast of changing tax laws ensures compliance and minimizes tax liabilities.
Leverage Retirement Planning: Due to the demanding nature of their profession, dentists must strategically plan for retirement. Familiarity with tax-advantaged retirement savings options allows for efficient retirement planning while reducing current tax burdens.
Capitalize on Industry-Specific Tax Incentives: Dentists should explore tax incentives and credits specifically designed for the dental industry, such as deductions for investing in advanced dental technology or credits for innovative procedures. Utilizing these incentives can lead to substantial tax savings.
Maximize Business Deductions: By meticulously documenting necessary practice-related expenses, including supplies, equipment, office operations, and professional development, dentists can significantly lower their taxable income. Regular consultation with tax professionals ensures that all eligible deductions are claimed, optimizing tax outcomes.

Incorporating your dental practice for potential tax benefits

If you decide to turn your dental practice into a formal business entity, like a professional corporation (PC) or limited liability company (LLC), you can enjoy several tax benefits that may significantly reduce your overall tax burden. Creating a separate legal entity for your practice allows you to manage and deduct business expenses more efficiently, leading to potential tax savings. By having separate bank accounts and credit cards for your practice, it becomes easier to identify and claim deductible expenses, such as equipment purchases, office rent, employee salaries, and even continuing education costs.

Incorporating your dental practice can also open up additional opportunities for retirement planning. It allows you to contribute more pre-tax money to your retirement savings compared to being a sole proprietor. This helps secure your financial future while also reducing your taxable income in the present, leading to potential tax savings.

Another benefit of incorporating your dental practice is the possibility to take advantage of various business tax breaks and credits. For instance, you might be able to deduct expenses related to professional memberships, professional liability insurance payments, marketing and advertising costs, as well as costs for maintaining and upgrading your dental equipment and technology.

It’s important to note that the specific tax benefits and requirements of incorporating your dental practice may vary depending on your location and the specific structure you choose. Therefore, it is recommended to consult with a qualified tax professional or accountant specialising in dental practices to ensure you navigate the process correctly and maximise your tax savings while staying compliant with all relevant regulations and rules.

Listen to our episode on how dental practices should structure their finances in 2021.

Implementing tax planning strategies to optimise deductions and credits

Tax planning strategies can significantly reduce the tax burden for dental specialists. By taking advantage of deductions and credits, dentists can make the most of available tax benefits.

One effective strategy is to use all eligible deductions. Dentists can deduct various business expenses, such as equipment, supplies, and lab fees. Keeping detailed records and receipts is crucial to prove these deductions during tax filing. Additionally, dentists may qualify for deductions related to office rent or mortgage interest, utilities, insurance payments, and professional memberships.

Another important tax planning technique is to maximise available tax credits. Dentists should explore and understand the credits they may be eligible for, like the Research and Development Tax Credit or the Small Business Healthcare Tax Credit. These credits can significantly reduce tax liability and provide additional financial benefits.

Timing is also critical for tax planning. Dentists can strategically time their equipment or property purchases to take advantage of available tax deductions or depreciation benefits. By working with financial advisors or accountants, dentists can ensure they make these purchases at the most advantageous times for tax purposes.

Lastly, staying informed about changes in tax regulations and rules is essential. Tax codes can evolve, and new deductions or credits may become available. By staying up-to-date, dentists can adjust their tax planning strategies proactively to make the most of any relevant changes.

Tax planning strategies require careful consideration and should be executed with expertise. Dentists should consult with qualified tax professionals who specialise in working with medical professionals. This way, dentists can navigate the complexities of tax planning and legitimately reduce their tax burden in an effective manner.

Read more about tax saving tips for dentists.

Hiring a professional tax advisor with expertise in dental practices

Bringing in a professional tax advisor who specialises in dental practices can be a game-changer for reducing your tax burden as a dentist. These specialised advisors understand the unique tax challenges and opportunities that dentists face, so it might be tempting to handle your taxes on your own or rely on a general accountant.

These experts are well-informed about the dental industry and keep up with the latest tax laws and rules for dental practices. They can find deductions and tax breaks that you might not be aware of, ensuring you make the most of all suitable tax-saving strategies.

A professional tax consultant can also review your financial records, identify potential areas of concern or non-compliance, and help you implement effective tax planning strategies. They can analyse your practice’s finances, find areas where you can optimise deductions, and make sure you follow all tax regulations, reducing the risk of audits or penalties.

Moreover, having a tax advisor who understands the dental business can offer valuable insights and guidance on practice structuring, retirement planning, and investment strategies that can further decrease your tax rate in the long run.

Although hiring a tax advisor may involve some costs, the potential tax savings and peace of mind they provide can far outweigh the expense. By entrusting your tax planning and compliance to a professional with specialised knowledge of the dental industry, you can focus on what you do best: providing exceptional dental care to your patients, while ensuring that your tax burden is legally minimised.

Staying updated on changing tax laws and regulations

As a dental specialist, it’s crucial to stay updated on changes in tax regulations and rules to really reduce your tax rate. Tax laws can change frequently, so it’s essential to be aware of any updates or adjustments that could impact your dental practice. Not following these changes could lead to penalties or missed opportunities to lower your tax bill.

One way to stay current is by regularly consulting with a tax professional who specialises in dental practices. These experts can provide valuable insights and guidance on the latest tax regulations specifically tailored to your profession. They can help you navigate complex tax codes, identify deductions, and make sure you maximise your tax-saving opportunities.

In addition to seeking professional advice, it’s also beneficial to stay informed through reliable sources like government websites, tax publications, and industry associations. These resources often provide updates on tax regulations and rules that may directly affect dentists.

By being proactive and well-informed about changing tax regulations, you can carefully plan your financial decisions, take advantage of available deductions, and ultimately lower your tax rate. Implementing this smart strategy will not only save you money but also ensure that you are in compliance with the law, giving you peace of mind for your dental practice.

We hope you found our blog post about smart ways to lower dentists’ tax bills informative and helpful. Taxes can be a significant expense for dental practices, but with the right strategies, you can legally reduce your tax burden and keep more of your hard-earned money. By following the tips in this article, you can make important financial decisions that will benefit your practice and contribute to its long-term success. Remember, it’s always recommended to consult with a qualified tax professional to ensure compliance with the latest tax regulations and rules.

Action Points

Incorporate Your Practice: Consider incorporating your dental practice into a formal business entity like a PC or LLC to manage business expenses more efficiently and enjoy potential tax benefits. This move can streamline the process of identifying and claiming deductible expenses, allow higher pre-tax contributions to retirement savings, and enable you to take advantage of specific business tax breaks and credits. Consult with a tax professional to navigate this process correctly.
Implement Tax Planning Strategies: Utilize tax planning strategies to optimize deductions and credits, such as fully leveraging eligible business expenses, maximizing tax credits, timing equipment purchases for tax advantages, and staying informed about tax law changes. Collaborate with financial advisors or accountants to ensure strategic timing and compliance.
Hire a Specialized Tax Advisor: Engaging a tax advisor with expertise in dental practices can provide insights into unique tax challenges and opportunities, ensuring compliance and maximizing tax-saving strategies. They can offer tailored advice on structuring your practice, retirement planning, and investment strategies to minimize tax liabilities effectively.
Stay Updated on Tax Laws: Keeping abreast of changing tax laws and regulations is crucial for dental specialists to avoid penalties and capitalize on new tax-saving opportunities. Regular consultation with a tax professional, along with self-education through reputable sources, can help you remain compliant and optimize your financial planning.

By incorporating your practice, implementing strategic tax planning, consulting with specialized advisors, and staying informed on tax changes, you can effectively reduce your tax burden and enhance the financial health of your dental practice.

Check out our other articles, webinars and podcasts in the Samera Learning Centre.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

How Can Dentists Reduce Their Tax Legitimately FAQs

What are some legitimate ways for dentists to reduce their tax liability?

Legitimate ways for dentists to reduce their tax liability include:

Maximizing pension contributions for tax relief.
Claiming allowable business expenses like dental equipment and office costs.
Using capital allowances to deduct the cost of significant assets.
Considering incorporation to benefit from lower corporation tax rates.
Making charitable donations for tax deductions.
Investing in tax-efficient schemes like ISAs.

How can pension contributions lower my tax bill?

Pension contributions lower your tax bill by reducing your taxable income. Contributions to a registered pension scheme are eligible for tax relief, meaning you pay less tax on the amount contributed. For example, higher-rate taxpayers can effectively get 40% tax relief on their contributions, while basic-rate taxpayers get 20%. This makes pensions a powerful tool for both saving for retirement and reducing current tax liabilities.

What tax reliefs are available for dental equipment purchases?

Tax reliefs available for dental equipment purchases include capital allowances, such as the Annual Investment Allowance (AIA), which allows you to deduct the full cost of eligible equipment from your taxable profits in the year of purchase. Additionally, if the cost exceeds the AIA limit, you can claim writing-down allowances to spread the tax relief over several years. These reliefs reduce your taxable income, thereby lowering your tax liability.

Can I use incorporation to reduce my taxes?

Yes, incorporating your dental practice can reduce your taxes. By operating as a limited company, you can benefit from lower corporation tax rates compared to personal income tax rates. Additionally, you can pay yourself a combination of salary and dividends, which can be more tax-efficient than drawing all income as a sole trader. Incorporation also allows for better tax planning opportunities, such as pension contributions and other allowable expenses.

How does claiming allowable expenses affect my tax?

Claiming allowable expenses reduces your taxable income, thereby lowering the amount of tax you owe. These expenses include costs directly related to running your dental practice, such as equipment, professional fees, and office supplies. By deducting these expenses from your total income, you effectively decrease your taxable profit, which results in a lower tax liability. Accurate record-keeping is essential to ensure you can substantiate these claims if needed.

What are the benefits of making charitable donations?

Making charitable donations offers several tax benefits. Donations to registered charities can qualify for tax relief through Gift Aid, which allows charities to claim an extra 25% on top of your donation from HMRC. For higher-rate taxpayers, you can claim the difference between the higher rate of tax and the basic rate on your donation amount, further reducing your tax bill. Charitable giving also supports causes you care about while providing financial benefits.

How do tax-efficient investments help in tax planning?

Tax-efficient investments, such as ISAs, pensions, and certain venture capital schemes, help reduce your taxable income, allowing you to save on taxes while growing your wealth. Contributions to these investments may offer tax relief or exemptions, and the growth of your investments can often be tax-free. These strategies are a key part of tax planning, helping you maximize your after-tax returns and meet long-term financial goals.

Is there a tax advantage to employing family members?

Yes, employing family members in your dental practice can offer tax advantages, provided they are genuinely working and paid a reasonable salary. The wages you pay them are deductible as a business expense, which reduces your taxable profits. However, the salary must reflect the work done and be in line with what you would pay an unrelated employee. This strategy can help shift income to family members who may be in lower tax brackets, reducing the overall tax burden.

How does timing of income and expenses impact tax?

The timing of income and expenses can significantly impact your tax liability. By strategically timing income to fall into a lower tax year or deferring expenses to a higher-income year, you can reduce the overall tax burden. For example, bringing forward expenses before the end of the tax year can increase deductions and lower taxable income. Similarly, delaying income until the next tax year may help you stay within a lower tax band.

What are the risks of aggressive tax planning?

Aggressive tax planning involves strategies that push the boundaries of tax laws to minimize taxes, which can be risky. The main risks include increased scrutiny from HMRC, potential penalties, interest on unpaid taxes, and damage to your reputation. If HMRC deems the strategies to be tax avoidance or evasion, the financial and legal consequences can be severe. It’s important to balance tax efficiency with compliance to avoid these risks.

How can I use capital allowances to reduce tax?

You can use capital allowances to reduce tax by deducting the cost of qualifying business assets, such as dental equipment, from your taxable profits. The Annual Investment Allowance (AIA) allows you to claim up to 100% of the cost of these assets in the year of purchase, up to a specified limit. If the cost exceeds the AIA, you can claim writing-down allowances to spread the relief over several years, thereby reducing your overall tax liability.

What is the role of a tax advisor in reducing my taxes?

A tax advisor helps reduce your taxes by providing expert guidance on tax-efficient strategies, ensuring you claim all available deductions and reliefs, and helping you comply with tax laws to avoid penalties. They can assist with tax planning, optimize your business structure for tax purposes, and offer advice on investments and pension contributions. By staying up-to-date with tax regulations, a tax advisor ensures you maximize savings while remaining compliant with HMRC.

How do home office expenses contribute to tax savings?

Home office expenses can contribute to tax savings by allowing you to deduct a portion of your household expenses, such as utilities, rent, or mortgage interest, based on the space and time used for business purposes. These deductions reduce your taxable income, leading to lower tax liability. It’s important to keep detailed records of the expenses you claim to ensure they are proportionate and justifiable.

What are the implications of using salary sacrifice schemes?

Salary sacrifice schemes allow you to exchange part of your salary for non-cash benefits, like pension contributions or childcare vouchers. This reduces your taxable income, leading to tax savings. The benefit is that you pay less income tax and National Insurance on a lower salary. However, it can also reduce your entitlement to some state benefits, like the State Pension, so it’s important to balance the benefits with potential drawbacks.

Can I claim travel expenses to reduce tax?

Yes, you can claim travel expenses to reduce tax, provided they are for business-related travel, such as visiting patients, attending meetings, or traveling between different work locations. These expenses can include fuel, public transportation, accommodation, and meals while on business trips. However, commuting between home and your regular place of work is not deductible. Accurate records and receipts are essential to support your claims.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult

Dental Accounts & tax

Dental Accounts & Tax: Further Information

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How Should a Dental Practice Organise its Finances

Dental Business Guide Podcast Episode | 2nd February 2021
George Bellamy and Arun Mehra

Money Matters: Organizing Finances for Dental Practices

Running a successful dental practice is more than just providing great dental care. It also involves managing money effectively. As a dentist, you need to keep track of your finances to make sure your practice makes a profit. Handling your money isn’t easy, especially when you have to balance taking care of patients and managing the practice’s finances.

In this article, we will talk about some tips and methods to help you organize and handle your finances better. We’ll cover everything from creating a budget and tracking expenses to looking at financial reports and managing your income. We’ll go through all the important steps to help you understand the financial side of your practice and run a successful dental business.

The importance of organizing finances for dental practices

If you own a dental practice, you’re probably busy with lots of daily tasks like seeing patients, managing staff, and making sure everything runs smoothly. Sometimes, you might forget how important it is to plan your practice’s money.You’re not just the principal dentist, you’re a business owner. Organizing your finances well is highly important for your practice to do well and grow over time.

Being organized with your money helps you understand how your practice is doing financially. You can figure out where you’re making money and make smart decisions that help your practice make more money. It’s like having a strong foundation to manage how much money is coming in, how much is going out, and how to make more.

Also, when your money is organized, it’s easier to follow the rules about taxes and other legal requirements. If you keep good records and clear financial reports, you won’t get in trouble or have problems with mistakes.

Having an organized money system also helps you set goals for your practice, see how well it’s doing, and find ways to make it better. You can make important decisions, like buying new equipment or offering new services, based on what your financial info tells you.

By spending time and effort to organize your money, you can take care of your practice’s financial health and set it up for success in the long run. So, let’s dive in and explore the happy numbers that are waiting for you in the world of organized finances for dental practices.

Action Point

Organizing finances is essential for dental practice owners. It helps you understand your practice’s financial health, make informed decisions, stay compliant with tax and legal requirements, and set goals for growth and improvement. By dedicating time and effort to financial organization, you can ensure the long-term success of your dental practice.

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Setting financial goals for a dental practice

Having clear money goals for your dental practice is really important to make it successful and lasting. When you don’t have clear goals, it’s tough to know how well you’re doing and if you’re improving. When you set money goals, it’s good to think about both short-term and long-term things you want to achieve. Start by looking at what’s happening right now. Check out how much money is coming in, how much is going out, and how much profit you’re making. This helps you understand where you are with money. Also, find out if there are any problems or risks you need to fix.

Next, figure out what you want to achieve with your money in the short term. Maybe you want to make more money, spend less, or earn more profit. Setting clear goals that you can measure and achieve over a certain time (like next month or three months from now) helps you stay on track and motivated. Think about things like getting more patients, how often leads are converted, and how much money each patient brings in. For example, you might want to get 10% more new patients in the next three months or improve how you talk to patients about treatments.

Action Point

Setting financial goals for your dental practice is crucial. Assess your current financial situation, establish short-term and long-term goals, and create a comprehensive financial plan to achieve them. Regular monitoring and adjustments will help ensure the growth and profitability of your practice.

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Besides short-term goals, it’s also important to set long-term money goals that match your vision for your dental practice. These goals could be about growing your practice, buying new and better equipment, or making a certain amount of profit in a few years. Remember, your money goals should be realistic and possible to achieve. While it’s good to challenge yourself and aim for growth, setting goals that are too hard might be setting yourself up to fail. Keep checking and changing your goals as your practice gets bigger and things change.

Lastly, it’s super important to make a big plan for your money to help you reach your goals. This plan should cover how you’ll make money, spend money, pay off debts, and invest. Checking your money regularly and making changes when needed helps you stay on track to reach your goals. When you set clear money goals for your dental practice, you build a strong foundation for success. This helps you make smart choices that make your practice grow and make more profit.

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Tracking revenue and expenses effectively

Keeping a close eye on the money that comes in and goes out is really important for any dental practice that wants to be good at managing their finances. By paying attention to these numbers, you can learn important things about how your practice is doing financially and make smart choices to make more money.

To start with, it’s really important to have a good system for recording and sorting out all the money you get and spend. You can do this using specialist software made for dental practices, or you can work with a professional who knows how dental practices work. Keeping up-to-date financial records means you can make accurate reports that show you how well your practice is doing with money.

When you’re tracking the money that comes in, it’s a good idea to separate it into different parts, like payments from insurance, money from patients, and even income from selling dental products. This helps you see which parts bring in the most money and which parts might need some improvement.

Also, keeping a close watch on all the money you spend is important. Divide your expenses into different categories like supplies, equipment, rent, utilities, and salaries for your staff. This helps you find out if you’re spending too much in some areas and where you might save money.

Checking important financial reports regularly, like statements that show your profit and loss, your financial status, and how money is moving in and out, gives you a good overall view of how well your practice is doing financially. These reports help you see patterns, find any mistakes, and make choices based on facts to make more money.

It’s also a good idea to set financial goals for your practice and keep track of how you’re doing. By setting clear goals, like making more money or spending less on certain things, you can see if you’re doing well and change things if needed. In short, keeping a close watch on the money that comes in and goes out is really important for dental practices to manage their finances well. By using good systems, recording everything correctly, and regularly looking at financial reports, you can learn important things, make smart choices, and work towards reaching your money goals.

Action Point

Effective tracking of revenue and expenses is crucial for dental practices. Use specialized software or professional help for accurate financial records. Categorize income and expenses to identify trends. Regularly review reports for insights and set financial goals to stay on track.

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Implementing a bookkeeping system for accurate financial records

Setting up a system to keep track of your practice’s money is really important for dental offices. This system helps you record the money you make and spend, and it helps you see how well your practice is doing financially. First, you need to choose the right software to help you with your money. There are different options, from easy-to-use programs online to more advanced ones. Think about how easy it is to use, if it works with your other systems, and if it can grow with your practice.

Once you’ve picked the program, you need to set it up right. Put in all the financial information, like what patients pay and what insurance gives you. Sort your spending into categories like supplies, staff salaries, rent, and advertising. This helps you understand your money better and find areas where you can do better. Updating your money records often is important to keep things accurate. Set aside time every week or month to put in new information, check that your bank statements match, and look at your money reports. This routine helps you have the newest info and make good choices based on real data.

Also, think about connecting your money system with other software you use to manage your practice. This can make your money tasks easier and reduce the chances of making mistakes. For example, connecting your financial system with your patient management software can automatically record patient payments, saving you time and effort.

Lastly, it’s a great idea to talk to a professional accountant or bookkeeper who knows about dental practices. They can help you set up your money system, give you advice on best money practices, and make sure you follow the right tax rules for dental businesses. By setting up a good financial structure, you not only keep accurate money records but also learn important things about how your dental practice is doing financially. This knowledge helps you make smart choices, improve how money comes in, and work towards long-term success.

Action Point

Implementing an effective bookkeeping system is vital for dental practices. Choose the right software that suits your needs and integrates with other systems. Set up the program with accurate financial data and categorize expenses. Regularly update your records to ensure accuracy. Consider integrating your financial system with other practice management software for efficiency. Consulting a professional accountant or bookkeeper experienced in dental practices can provide valuable guidance. Accurate financial records enable informed decision-making and long-term success.

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Understanding and analysing key financial ratios

Knowing and understanding important money ratios is really important for dental practices to keep their business healthy and successful. These ratios help you learn important things about how well your practice is doing with money and how healthy it is overall.

One important ratio to think about is the profit ratio. This ratio helps you see how well your practice is turning its work into profit. You can find it by dividing the profit you make by all the money you get. A high profit ratio means your practice is really good at making profit from the money it gets. But if the ratio is low, it might mean you need to find ways to manage costs better or make more money.

Another important ratio is the liquidity ratio. This ratio helps you know if your practice can easily pay its bills and debts. For example, the current ratio compares the money you have right now to the bills you have to pay soon. If the ratio is more than 1, it means you have enough money to pay your bills. If it’s less, it might mean you could have trouble with money soon.

Also, there’s the debt ratio. This ratio helps you understand how much of your practice’s money is borrowed. It compares how much debt you have to how much stuff you own. If the ratio is high, it means you’re using a lot of borrowed money, which could be risky.

Another ratio to look at is the accounts receivable turnover ratio. This ratio helps you know how quickly your practice is getting paid by patients and insurance. A higher ratio means you’re good at getting paid fast. A lower ratio might mean you have problems with how you collect money.

By understanding and keeping an eye on these important metrics, dental practices can make smart choices to make their money situation better. Regularly looking at these ratios helps practice owners find ways to do better, solve money problems, and make sure their business keeps doing well over time.

Action Points

Understanding key financial ratios is crucial for dental practices. The profit ratio shows how well the practice turns revenue into profit. Liquidity ratios measure the ability to pay short-term bills, with ratios over 1 being good. The debt ratio assesses debt reliance. Accounts receivable turnover indicates payment collection speed. Monitoring these ratios helps make informed financial decisions for long-term success.

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Best practices for inventory management in dental practices

Keeping track of and managing the things you use in your dental practice is really important. This includes supplies and equipment. When you manage these things well, it helps your practice be successful. It makes sure you have what you need when you need it, and it also helps you control costs and reduce waste. Here are some good ways to manage your stuff in your dental practice:

Conduct regular audits: Look at your supplies and equipment often to see what you have and if anything is missing or old. This helps you know what you need to order, when you need to order it and what affect that will have on your cash flow.

Categorize and organize: Arrange and put your things in order so it’s easy to find and restock them. Use clear labels and storage solutions to keep everything organized and in good shape.

Set par levels: Decide how much of each thing you should always have based on how often you use them. This helps you avoid running out or even facing a shortage of any items and makes sure you always have enough for your patients.

Establish a reorder process: Make a simple process to order more supplies before you run out. Keep track of what you have and get automatic alerts when things are running low. This helps you avoid last-minute rushes to get more supplies.

Monitor expiration dates: Some dental supplies can expire, and using expired things can be bad for patients and wasteful. Check expiration dates regularly and use things before they go bad.

Utilize technology: Consider using special software or tools that help you manage your supplies. These tools can help you track what you have, make reports, and show you how much you need. They make it easier to manage your supplies.

When you follow these good practices for managing your supplies, it helps your dental practice run smoothly, take better care of patients, and use money wisely. With well-organized and well-managed supplies, you can focus on giving great dental services and make sure you always have what you need for your practice.

Action Point

Efficient inventory management in dental practices involves regular audits, organization, setting par levels, establishing reorder processes, monitoring expiration dates, and utilizing technology. These practices ensure a well-stocked and organized supply system, promoting smooth operations and quality patient care.

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Optimizing insurance billing and claims processing

A big part of making a dental practice successful is making sure insurance billing and claims are done right. Handling the money side of your practice well can lead to more money coming in, less paperwork, and happier patients.

First, it’s important to have a simple and organized system for billing insurance. This means checking if patients are covered by insurance before appointments, coding procedures correctly, and sending claims quickly. This helps you avoid problems with claims and makes sure you get paid properly. Using electronic submission for claims can make this even easier, reducing mistakes and saving time.

Also, it’s crucial to keep learning about the rules and changes in insurance. Regularly updating your knowledge about billing codes and ways to do things right can help you get more money from insurance and avoid problems with following the rules. Using good dental practice software can really help make insurance billing and claims easier. These software tools often have features like sending claims automatically, checking if patients are covered in real-time, and tracking claims. This makes sure you get paid correctly and on time. Also, it’s important to stay in touch with insurance companies. Building good relationships with them can help solve any problems or delays with claims quickly, which is good for your practice and your patients.

Finally, looking at your insurance billing and claims data regularly can help you see how your practice is doing with money. Finding patterns in claim problems, payments that are too low, or claims that were missed can help you fix issues and make sure you’re making enough money. By making insurance billing and claims better, dental practices can have more money, less paperwork, and give patients a smoother experience overall.

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Utilizing technology for streamlined financial management

In today’s digital world, using technology is essential to make money management easier for dental practices. The days of doing everything by hand and using paper records are gone. With the right tools and computer programs, dental practices can make their money tasks much easier, save time and resources, and also be more accurate and efficient.

One of the big parts of money management is keeping track of the money you get and spend. By using accounting software like Xero, dentists can easily record transactions, make money reports, and see how much money is coming in and going out in real-time. This doesn’t just give a good picture of how the practice is doing with money, but it also lets you make quick decisions based on correct and up-to-date information.

Another important technology to think about is digital payment systems. Giving patients the option to pay digitally not only makes things easier for them, but it also makes collecting payments smoother. When you connect online payment systems with the practice’s computer program, you can easily handle payments, keep track of what patients owe, and even remind them to pay. This makes things easier and makes sure payments are made on time. Technology can also help with billing insurance and dealing with claims. By using electronic ways to send claims and keeping track of them, dental practices can reduce paperwork, avoid mistakes, and speed up the process of dealing with claims.

Automatic tools that check if patients are covered by insurance can also help with accurate billing and fewer claim problems. This doesn’t just make the practice’s money situation better, but it also makes patients happier by reducing problems and delays with billing. Additionally, using cloud-based storage and systems to manage documents is a good idea. This helps store and organize money records, invoices, and receipts in a safe and easy way. It gets rid of the need for physical storage and lowers the risk of losing or damaging important documents. With cloud technology, authorized staff members can access financial information from anywhere, making teamwork easier and making sure everyone is on the same page.

To sum it up, using technology is key for dental practices that want to make money management easier. By using computer programs, digital payment systems, electronic claim submission, and cloud-based storage, dental practices can make their money tasks simpler, be more accurate, work more efficiently, and ultimately have more financial success.

Regular financial reviews and seeking professional advice

Checking your practice’s money regularly and getting expert advice are really important steps to understand and manage the money side of your dental practice. As a dentist, your main focus is on giving good care to your patients. But knowing how well your practice is doing financially is just as important. Doing regular money check-ups helps you keep a close eye on how much money is coming in and going out. It helps you find any possible problems and make smart choices to make your practice do better financially.

When you look at financial reports, like income statements, balance sheets, and cash flow statements, you learn important things about how much money your practice is making, how much it’s spending, and how well it’s doing overall. While doing your own money check-ups is important, getting advice from a professional like an accountant or financial advisor who knows about dental practices is really helpful. They can look at your money information, find areas where you can do better, and help you make a good plan to make more profit.

Also, a financial advisor can give you useful ideas about taxes, making budgets, and planning for the future. This helps you make smart choices to pay less in taxes, use money better, and be financially secure in the long run. Remember, staying on top of your practice’s money not only makes it financially healthy but also helps you give the best care to your patients. So, make sure you do regular money check-ups and get professional advice to understand and improve your practice’s money situation and find success in your dental practice.

Handling the money side of a dental practice might seem tough, but with the right plans and steps, you can become great at managing the numbers that make people smile. We talked about things like keeping track of expenses and planning for equipment upgrades, which are important steps to take control of your practice’s money. By using these tips, you’ll make sure your practice is financially stable and ready to grow and succeed. Remember, having a well-organized money system is the key to a healthy smile, both for you and your patients.

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Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult

Dental Accounts & tax

Dental Accounts & Tax: Further Information

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Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Funding Options for Dentists

Asset Finance

Asset Finance is a type of commercial funding that enables you access to vital business assets such as equipment, tools and vehicles or it could enable you to release cash from the value in assets that you already own.

Check out our other articles, webinars and podcasts in the Samera Learning Centre

Asset finance includes:

Hire purchase
Finance leases
Equipment leasing
Operating leases
Asset refinance

An ‘asset’ can be anything that you own, and with a wide choice of alternative lenders across the market, you can find assets in almost anything you own from an iTero scanner to vehicles. In many cases, companies do not have the upfront cash they need which is where asset finance provides a very useful form of commercial financing.

Click here to read our guide on asset finance for dentists.

Acquisition Finance

Acquisition financing is the capital that is obtained for the purpose of buying another business – like an existing dental practice. It allows users to meet their current acquisition aspirations by providing immediate resources that can also be applied to the transaction. Acquisitions and mergers finance is the commercial funding required by a business or sole trader to purchase another business. Businesses usually do not come cheap and, therefore, it is common to need to raise acquisition finance to make the purchase.

Acquisitions can take a number of forms, such as a straightforward business purchase, or a Management Buy-Out.

Click here to read our guide on acquisition finance.

Contact us to find out more

How to Ensure Your Start-up Dental Practice Takes off in a Year

7 Fatal Mistakes to Avoid When Starting a Dental Practice

How Much Can I Raise?

Working Capital Finance

A business’s working capital is the amount of ready cash it has to meet its day-to-day operations and debts. Working capital finance is commercial funding specifically designed to boost the working capital available to a business.

Working capital is calculated by subtracting the total of the current liabilities from the value of the current assets. Businesses that cannot meet their expenses or pay their debts will probably need to raise working capital finance. It is most often used for specific growth projects such obtaining a bigger contract or investing in a new market.

Click here to read our guide on working capital finance.

Tax Loans

Only 2 things are certain in life, and unfortunately, tax is one of them. Taxes are an inevitable cost in any business. Every business is responsible for paying their tax bill however, this can be extremely inconvenient at times. It is normal for a business’ cash flow to fluctuate however, it is imperative that money is put aside to meet tax obligations. This is where tax loans become an ideal way to spread out a tax demand across affordable monthly repayments without becoming a huge burden on your cash flow.

Sometimes, your tax bill can make a serious dent in your business’s cash flow. For this, and other reasons, your business may need to raise commercial funding to cover your tax bill.

Click here to read our guide to tax loans.

Commercial Property Finance

Commercial property finance is the funding raised by a business or sole trader to purchase a commercial property. There are a range of commercial property finance options available to you to individually suit your growth objectives and current financial circumstances, whether you are acting alone as an owner of a small business or as an established limited company.

There are various different channels and methods of commercial funding available to businesses seeking to purchase, expand or refurbish their commercial property.

Click here to read our guide on commercial mortgages for dentists.

Bridging Loans

Bridging Loans are a short-term form of commercial funding used by businesses to ‘bridge’ a gap in their cash flow. They can be useful when you need immediate capital, integrate cash flow or make necessary refurbishments. They are loans that are priced monthly rather than annually, and lenders may lend anything between £25,000 to £25m.

Click here to read our article on The Guide to Buying a Dental Practice

They are commonly used in commercial property financing and can be a very useful way to raise quick, short-term working capital. Bridging loans are one of the most useful and viable options when you need to move quickly to buy a property.

Click here to read our guide to bridging loans.

Join the Buyer’s Advisory Service

If you’re thinking about buying a dental practice and you want to make sure you find the right practice at the best price, contact us today.

We strive to ensure that we find you the practice that matches your precise specifications. Simply let us know what your dream practice looks like and we’ll get to work making that dream a reality.

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Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

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Financial services

Dental Practice Finance: Further Information

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Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Content Writing for Dentists

With millions of articles and blogs being written and published on the internet daily, you need yours to stand out. For your business to succeed, you need your written content to have these three key aspects. You need to write the type of copy that is readable, relatable, and shareable.

Why is content writing so important?

Content writing is an essential part of the web design process. Consistency with creating content is key to determine the growth as well as success of your business. Unfortunately, simply writing a few short blogs about foods that are bad for your teeth will not gain you the exposure or traffic you need for your business.

Quality matters when it comes to content writing. With search engines like Google always only one click away from blacklisting your site for keyword stuffing, quality content is absolutely imperative. It isn’t as easy as stringing a few hundred words together, throwing a few keywords in there and hoping for the best. Coming up with SEO driven, insightful and riveting copy can often be quite a challenge.

Content writing allows your brand to create cohesive pieces of information. It’s quite simple, if your content is not up to standards, then it will not bring in the patients you need through the door. The content you provide has to reflect your company as a brand. The more engaging, reliable and consistent your content is, the more likely it is that someone reading your blogs is likely to book an appointment at your dental practice.

Here are five things that will make your content writing stand out:

Study other writers

If you are going to create good content you need to begin with being aware of what kind of content is already out there. The more you read, the better you will know what kind of content you should and should not write. Keep a special eye out on the type of articles that personally hook you. Doing this also works as a bonus as it may inspire your writing and will also help teach you even more about the topic at hand.

The best thing about doing this is that it will inspire you in more ways than you know, reading good writers will help you become a better one. What draws you in? Pay attention to the way the writer draws you in with their voice and style.

Looking at someone else’s ideas and improving on it will help your website significantly. You should also keep an eye out for what websites rank highly on Google. These are the websites that pop up first after the ads, whatever they are doing, they are doing it right!

Optimising SEO

Search engine optimization is a very big topic and can be the absolute bane of many copywriters and content writers everywhere. The algorithms are always changing and this article will not be a deep dive into all the specifics you will need to know about SEO practices however, it does not have to be a mystery. The most important part of SEO is keywords. SEO best practices are something any content producer should study. Here are a few basics:

Fresh content is critical: Copying another website’s content that is already doing well will never work for you. Original, well written content is what will work best. Be sure to keep all your articles and blogs updated. This includes updating old blogs as well as writing new ones.

Structure is pivotal: The flood of information on the internet has retrained all of us into scanners rather than deep readers. You have probably noticed that yourself, the art of a well curated article is one that is skimmable. Not only that, but placement of subheadings are important for placing SEO-friendly keywords.

Titles will make you: The title of your article is key to attracting people and getting your article seen, read and shared. You want to aim to create a good title with competitive keywords.

You can find out more about SEO for dentists here.

Mix up your words and your jargon

Mixing up your words is hard for any content writer. You won’t realise it but every writer has words they like to use over and over. When we edit our own words, it’s hard to see what your overused words are, but when we use them too often, our writing sounds redundant and the words that you overuse, although you may not notice, Google does and it does not like it.

Using the same words is a habit and is one that is really hard to break out of. We all have our habits, but when it comes to keeping visitors and you audiences interested, vocabulary variety is key!

The web is for everyone, not just dental experts or adults, you don’t know who will come across your content, so make sure your information is easily understandable. Avoid insider language, spell out acronyms on first reference and be sure to explain complex or niche terms. Also provide hyperlinks to other articles to rank higher for SEO, Doing this will also allow readers to get more background information on the topic at hand.

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Marketing and Patient Care in your Practice

Incorporate multimedia

As previously mentioned, your website visitors are unlikely to stay on your page and read the entirety of your article. So, it helps to throw in some pictures or videos that will help explain your article or give the audience more information. It is shown that 90 percent of the information transmitted to the human brain is visual and more people process this visual information 60,000 times faster than text.

When it comes to online blogs and articles, heavy text is usually not what your audience is looking for. Images will help break up the text, making your page easier to read. It is also great for SEO, we recommend having at least one image on each page of your website.

Leave them wanting more

For content writing, good websites tend to end each page with a strong call-to-action. It could be either a way for the reader to contact your business or subscribe. Maybe even an interesting video they should watch? A link to another related blog? This strategy is integral to direct readers to your business and other areas of your website. It also encourages readers to promote your content to their friends, family or social media.

Keep these calls to action succinct, they should all start with action verbs such as ‘share’, ‘sign up’, ‘join’, ‘download’ or ‘watch’. And do not forget to include a hyperlink that will actually allow readers to follow through the action you are asking them to take.

Action Points

Study other writers: Read a variety of content to understand what works and what doesn’t. Pay attention to writers who captivate you and analyze their style and voice.
Optimize SEO: Focus on fresh, original content and proper structure with SEO-friendly keywords. Titles play a crucial role in attracting readers, so aim for compelling titles with competitive keywords.
Mix up your words and jargon: Avoid overusing certain words and vary your vocabulary to keep your writing engaging. Make sure your content is understandable to a broad audience by avoiding insider language and explaining complex terms.
Incorporate multimedia: Enhance your content with images and videos to make it more visually appealing and easier to digest. Multimedia also helps with SEO and keeps readers engaged.
Leave them wanting more: End your content with a strong call-to-action, directing readers to take further action such as contacting your business, subscribing, or exploring related content. Use action verbs and provide clear hyperlinks for easy navigation.

Our Expert Opinion

“I’ve heard a lot of digital marketers in the last couple of years saying content is dead, or that a blog is useless nowadays. Don’t listen to them. Blogs and articles are still just as useful for SEO as they have always been.

We’ve also heard Google saying they will not be penalising AI-generated content. That is true, but I wouldn’t expect it to last. Google don’t mind what is happening with ChatGPT and the other AI software, if it means more useful content then they will be happy. However, a few years from now I don’t see AI-generated content being of as much use to SEO anymore. I think Google are going to care much more about opinion pieces and content then analyses or interprets AI-generated content.

So, keep your blogs and articles coming but remember that users can get the same info from ChatGPT and the like. So, make sure you offer something extra. Expert opinion will become the best thing to have in content. Get your team to give their opinions, their insider knowledge and their experience and get it on the page!”

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

5 Free Ways to Grow a Dental Practice

Do You Want More Patients Through the Door?

Follow these steps to make that happen!

Whether it’s growing your practice even further, gaining the clientele back or getting new patients in – the aims may be different but the rules are still the same.

The pandemic has impacted all our businesses in one way or another. This is not the time to admit defeat. We as dental practice owners need to rethink and revamp our strategies to get more patients through the door. Remember, they are all out there and the need for oral care is now more important than ever, it’s just a matter of promoting your business in the right way to get the patients through your door.

Check out our other articles, webinars and podcasts in the Samera Learning Centre

Here are 5 FREE ways to grow a dental practice.

Before your reputation around town or patient feedback gives your practice some clout, the biggest and most important aspect of your dental practice is your social media channels. Especially with most people staying at home with a lot of time on their hands browsing and scrolling, your social media channels need to speak for your business as a brand.

Most people look at a business’s social media account before making the decision to book an appointment. This doesn’t just mean simply updating your business’s Facebook status once a week. It is important to make yourself known on at least more than one social media platform.

Let’s be frank, a dentist’s Instagram page will not be as popular as an influencer, but continuously putting out good content such as educational facts, get to know the staff posts etc will help you gain a following. Making a first impression on your social media channel is integral to gaining more patients.

Actions: Improve your social media channel homepages right now. Make sure your about section is detailed and engaging, get your best behind the scenes videos and team pictures on there, make your contact details visible and give them options!

5 free ways to grow your dental practice

Click here to learn more about using social media in your dental practice.

2. Email your patient/client list

This is a great way to reach people. Going to the dentist if you are in pain or even for a regular routine check up is usually last on everyone’s list, especially now. Oral health seems to be less of a priority, many are unaware dental practices are even open.

Sending an email or two to remind people about getting their check ups or even updating patients about clinical events, opening times or any regular updates will help ease patients’ mind and their fear of coming to the dentist.

It all ties together, updating social media posts, emails, maybe even a newsletter once a month or two. It helps patients get to know you more than just a dentist they have to see once a year.

Emails work! It has proven to be a great way to reach people. Setting up a newsletter including incentives, offers or discounts can also prove to be very beneficial to getting more patients through the door, old and new- No one likes to miss a good offer!

Action: Create a quick and easy form on your website’s homepage for patients and visitors to easily sign up for offers or newsletters by leaving their name and email address – that’s all you need to ask for. Now start contacting them! Give them updates, send them discounts, let them know about your new services.

5 free ways to grow your dental practice 2

Click here to read more about marketing a dental practice.

3. Optimise for SEO

Optimising your SEO does not have to be a huge ordeal. You can begin with downloading SEO plugins like Rank Math or Yoast for free. Both tools are very simple to use and will help you easily and effectively improve your websites SEO.

Remember, SEO begins with content that is well written. Keywords are also key! Placing them strategically around your content will help you a lot more than trying to add the keyword in every sentence.

For more help and advice on the best ways to market your practice check out our Guide to Marketing a Dental Practice.

Action: Download Rank Math or Yoast and start following the programme’s instructions on each page. Improve the wording and use of keywords, make sure you have subtitles (H2,3,4 tags) with those keywords, improve your meta descriptions, use internal and external URL links, use images and videos on your pages.

5 free ways to grow your dental practice 3

Click here to read more about SEO for dentists here.

Contact us to find out more

4. Optimise for speed

Speed is one of those things that is often overlooked, however this step is extremely crucial. The speed of your website is a huge ranking factor as it is a sign of quality user experience. A site with fast speed will result in better user experience whilst a slower website will result in a poor user experience. Faster sites create happy users and happy users are more likely to visit your site again. Google is getting really big on speed, so this will become more and more important in the future!

Action: Use a free online tool to check the speed of your website. Use lower resolution, size or quality images to make your most important pages faster, download a programme like Lazy Loader to improve speed.

5 free ways to grow your dental practice 4

Click here to read more about creating a website for a dental practice.

5. Create content

Creating consistent and high quality content is an invaluable way to promote your brand and engage with your consumers. Quality content helps attract that right audience to your website and your business. Whether the content is written or content of a different media, starting to write content or making videos for social media is completely free and a great way to broaden the exposure your business gets.

Remember!

Writing about relevant content is an incredibly useful tool to organically increase traffic to your website and your services.

When most people hear ‘content writing’, they think simply writing articles. However, content writing is not just for blog posts. In fact, content writing is important for all different types of content formats, including scripts, web page copy, Youtube video description, social media posts, email newsletters and keynote speakers amongst many others. Simply put, writing is the ultimate foundation for pretty much any type of content that you publish.

Action: Start blogging right now. Create top 10 lists for your patients, give them your top tips for dental care, write articles about their different options for treatments like Invisalign vs traditional braces. Create videos of your team and your practice. Share this all on social media and your website – advertise yourself! The more active you are on your website with high-quality blogs, articles and videos, the better Google will rank you.

5 free ways to grow your dental practice 5

5 free ways to grow your dental practice 6

Click here to find out more about creating content for dentists.

What the Google Experience Update Means for Dentists

Marketing to Millennials for Dentists

Using Marketing to Increase Profits in your Dental Practice

Grow Your Dental Practice with Samera

Join the Samera Alliance buying group today for free to save money on your consumables and assets, increase your profits and grow your dental practice.

Join for free. Save money. Grow your dental practice.

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Samera Alliance

More on Growing a Dental Practice

For more information on growing a dental practice, check out the articles and webinars in our Learning Centre, like our guide on How to Grow a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

A Guide to Tax Loans

Tax bills are a recurring expense for all businesses including dental practices that can often take their toll. This is where tax loans come in and help manage this overbearing expense by helping you take control of your cash flow. They also help ease the costs of taxes by spreading the costs of your tax bill into manageable monthly payments.

The amount of taxation that a business incurs is based on current tax laws that determines their tax liability. Tax liability is the amount of tax debt owed by an individual, business, corporation or any other entity. Tax liabilities are therefore incurred from earning any income from a business, a gain on the sale of an asset, estate or other taxable events.

When a business’s tax liability is due, as a dental practice, they have to ensure that they have enough cash flow at hand to meet the demand of the tax laws in place. Unfortunately owing tax isn’t an easy debt to get out of. A tax bill cannot be put off until the business itself pays the bill. HMRC do not hesitate in issuing penalties for late or non payments. The tax rules are very strict and failure to adhere to them can become very costly for you and your business.

In some instances, late penalties are one of the more tranquil consequences that the HMRC gives out. Penalties for late payment or non payment can have very bad consequences on your business. If you default on your payments for a very long time, the interest of your tax bill increases and so does your fines. This could lead to you having to liquidate a company in its entirety or its assets in order to fully pay HMRC what is owed through your tax liabilities.

It is normal for a business’s cash flow to fluctuate over the different seasons, however, it is imperative that funds are put aside in order to meet tax obligations. However, this is often not always the case. The cash flow may not always be there and unforeseen circumstances do occur to hinder you from being able to pay your taxes. This is where tax loans come in handy for businesses.

VAT and corporation tax payments come around regularly but they can still be a problem if your business does not have sufficient funds. Tax loans are designed to help manage your cash flow. Tax loans can fund personal tax, corporation, capital gains, inheritance tax amongst other overbearing tax bills you may incur. Tax loans allow you to spread the cost of your tax demand into more affordable monthly payments, allowing you to pay your tax bill comfortably.

Contact us to find out more

What is VAT funding?

When quarterly VAT payments are looming for your dental practice and there is limited cash in the business to secure paying this bill, access to additional finance is very useful.

VAT funding enables businesses to pay your quarterly VAT payments over the course of an agreed term (usually 12 months). This will be paid back over a series of monthly payments. This loan provides the liquid funds needed for businesses to settle their VAT bill without provoking any consequences from HMRC. Obtaining this loan will boost the company’s overall cash flow position as well as pay your VAT bills smoothly.

As a business owner, there are a few things that may be worrisome for you. Owing the government funds can unfortunately often be part of that worry. A lot of business owners are not aware of the options that are available to them when they do not have enough working capital to pay the necessary bills.

Businesses try to optimise their profits and strive to have working capital to reinvest and take advantage of business opportunities. For this reason, tax loans are becoming increasingly popular. These loans allow businesses to free up cash flow while meeting the demands of HMRC on time.

Forfeiting a tax payment or paying late is something you must try to avoid at all costs. Owing a debt to the HMRC is not something to be taken lightly. Often those who default on their tax payments are dealt with enforcement actions being taken against them.

Regardless of what your business is, taking out a tax loan can be the financial solution that you need as it will enable you to spread out the cost of your tax bill over the course of a 6-12 month term helping businesses navigate through the costs of tax while avoiding the wrath of HMRC and racking up late payment charges.

Why are tax loans useful?

Tax loans are incredibly helpful and convenient to help pay your tax bill on time. On the one hand, it is in your best interest to stay within HMRC’s good graces by paying all your tax bills on time while on the other, you also want to leave yourself available cash for the essential day to day running of your business. Tax loans help you do both, very comfortably.

Many lenders design your loan specific to your needs, there are loans that are specifically designed to pay tax bills. In some cases, funding a VAT bill can have tax benefits. This is because interest payments are often offset against corporation tax later in the financial year.

Benefits of tax loans

Improved cash flow as well as control of cash flow
Easy, fixed monthly repayments
Flexible repayment terms
Easy quick and simple to arrange
HMRC receive payments directly and on time
Protects existing bank facilities
Keeps your bank funding lines open
Fixed rates
Fast decisions and fast funding
Personal service and dedicated account manager

Many tax loan facilities operate in ways to enable you to receive the funds you need in a simple and timely manner. The main benefits tax loans have to businesses is that this loan will allow their cash flow to remain in their control, lift the weight of their tax bills by spreading out the costs into manageable monthly payments and avoiding any late payment consequences.

How do I apply for tax bill funding?

As a dental business owner, VAT or tax payments can be detrimental to your business profits. Time constraints are very common, especially when it comes closer to the time to pay your tax bills. This is why the process of applying for funding is quite quick and simple.

Unlike many other loans, detailed business plans and security assets are not needed, nor is it necessary to make long winded appointments to discuss the security of your loan. Many processes are flexible and quick with great affordability and transparency.

Tax refund

Loan against tax refund

Taking out a loan against your tax refund is also known as a refund-advance loan. It is a type of secured loan. This means that you need to put up something in this loan to use as collateral. Usually this would mean an asset or an estate but in this case collateral refers to your anticipated tax refund.

Tax refund loans are short term loans that must be repaid when you receive your tax refund. You will often receive this loan as a deposit into your bank account . When you get your tax refunded, it will be deposited into that same bank account and the loan amount will be deducted from the amount given. Interest and other fees will also be deducted from the amount of tax refund given to you.

Pros and cons of tax refunded loans

Here are a few things to consider before you take out a tax-refund loan.

Pros of tax-refunded loans

Fast funding

When you apply and are approved for a ta-refund loan, the funds are available to you as little as 24 hours after you are approved. Usually the time it takes from your tax to actually be refunded to you is a minimum 21 days.

Cons of tax-refunded loans

Fees

Unfortunately getting a tax refund loan may often involve paying interest on said loan. This is not the case with all tax refund loans, there are some lenders that are able to give you an interest free loan. However, even with an interest free loan, there still may be fees you will need to pay, for example, administrative fees that are associated with transferring your refund.

High risk

There are potential risks with this kind of refund loan. The key risk being that the amount of the loan is based on how much you anticipate getting back in the refund. This may not accurately represent how much your tax refund will actually be. There are several factors that could impact that amount you are expected to receive and the actual amount you are given.

An example of this is that if you owe a state debt such as a student loan or back taxes. These debts will be taken from your tax, therefore, your tax refund will be reduced. This will result in you receiving less funds than you had anticipated when taking out the loan.

Tax refund loans

While tax refund advance loans can be a helpful and timely option to get the quick cash flow you need, there are many factors you must keep in mind before you decide to apply for this type of loan.

If you do decide to apply for a tax-refund advance here are a few things we advise:

Proceed with caution:

These loans can often come with a high interest rate and hidden fees.

Read the terms and conditions carefully:

To allow yourself to make the most out of this loan, you must ensure that you fully understand the terms and conditions of the loan and all the costs in their entirety. This includes any contractually included late fees or any prepaid card costs associated with the loan.

Contact us to find out more

How to save money, tax and time in your dental practice

Tax Saving Strategies for Dentists

Money Saving Tips for Dentists

Corporation Tax Loan

Corporation tax is the one of the most important taxes your business, however large or small, will pay. If you are unable to pay your corporation tax bill, you will be hit with penalty charges which will increase the longer you default on your payment and will exceed the overall amount you originally owed, fundamentally resulting in you being in a worse financial situation.

Charges begin from the day your payment is late, the interest of the lay payment will also continue to rack up over time so it is important to meet your payment deadlines.

If you are unable to pay your tax bill because the time for paying your taxes has come at a very inconvenient time for you, then a corporation tax loan would be ideal for your situation. It is an effective way to spread your tax demands across monthly repayments that are affordable for you.

What is corporation tax?

Corporation tax is a tax that all limited companies must pay. It is a tax that is payable against the profits the company makes. A corporation tax bill is based on the level of income a business has earnt through trading. It is the income derived from taxable events throughout the tax year such as asset sales. You are liable to pay corporation tax if your business is a member’s only club, a trade association, a limited company, a trade or housing association, or a group of individuals outside a partnership operating as a business.

The current rate in the UK for corporation tax is 20%. This also applies to any companies you may have overseas but have an office or branch residing in the UK. HMRC usually calculates your corporation tax bill roughly 9 months after the business accounting year comes to an end.

If your tax liabilities are not paid on time, similar to your business tax expenses, there will be penalties issued by HMRC. If your tax bill is quite high, the business itself could be forced to liquidate completely in order to pay your tax bill. The real truth for many businesses is that they sometimes simply are not in a position to be able to pay their bill which is why corporation tax bills can be very useful. It is important to note that HMRC will not send reminders about your tax bill until you are overdue.

This is a difficult situation to be in, especially if your current available capital does not allow you to meet the demanded amount of the corporation tax bill. Ideally, the best option is to set aside funds during the year to meet your tax bill however, It is normal for cash flow to fluctuate over the year based on different activities. This makes it hard to put a large amount of money aside especially when you have unexpected costs to pay. This is why corporation loans are becoming increasingly popular to help regulate cash flow and pay for a business’s tax bill.

Who pays corporation tax?

All limited companies are liable for corporation tax. The tax is also aligned to the financial year of the business. However, there are a few exceptions such as when a new business changes its year end accounting date.

Businesses are bound to pay taxes on any profits the business makes in its financial year. Corporation tax is also due on any money the business makes from investments and any chargeable gains.

Benefits of a corporation tax loan

Corporation tax loans improve a businesses cash flow which is why they are increasing immensely in popularity amongst many different types of businesses. This added stable cash flow allows businesses to take advantage of this added capital to their business to fund unexpected costs or any drops in income.

A major benefit of a corporation taking a loan is the added cash flow to your business. The loan also helps avoid the risk of high and very costly charges for late or non payment of your taxes. The loan itself will improve the flow of your capital, this means that when your next corporation tax loan is due, you will be in a much better position to comfortably pay the bill.

Regardless of the type of business you operate, it is possible for you to qualify to apply and receive a corporation tax loan. The loans have various options that are flexible for you and they will enable you to spread your tax bill over the course of several months. You will have fixed monthly or quarterly payments to repay your loan.

There are a variety of lenders who specialise in commercial finance loans. They are able to design a plan that is flexible and suited to your specific repayment abilities to ensure that you will be able to pay your tax bill comfortably with monthly installments.

Using corporation tax funding allows businesses to avoid the potentially costly HMRC penalties for late or non payments. You can usually get a decision on your corporation tax loan inquiry within as little as 24 hours in most cases.

Where to apply for a corporation tax loan

There are a number of lenders who specialise in finance loans specific to paying tax such as corporation tax loans, which gives you many options to choose from. There are various online comparison tools that will be perfectly aligned to the needs of your business. These comparison tools and websites will also help you filter through different loans that are best suited to you with the lowest interest rates.

Click here to read our article on How to finance a healthcare business.

A Guide to Tax Loans FAQ

What are tax loans for dentists?

Tax loans for dentists are specialized financial products designed to help dental professionals cover their tax liabilities, such as income tax, VAT, or corporation tax. These loans provide immediate funds to pay tax bills, allowing dentists to spread the repayment over manageable installments. By doing so, tax loans help avoid late payment penalties, improve cash flow, and ensure the smooth operation of the dental practice without the burden of large, lump-sum payments.

How do tax loans help dental practices?

Tax loans help dental practices by providing immediate funds to cover tax obligations, such as income tax, VAT, or corporation tax, without draining cash reserves. By spreading tax payments over several months, these loans improve cash flow and allow practices to manage other essential expenses, like payroll and equipment purchases. Additionally, tax loans prevent late payment penalties, ensuring that taxes are paid on time, and help dentists maintain financial stability, especially during periods of fluctuating revenue.

Can I get a tax loan for my dental practice with bad credit?

Yes, you can still get a tax loan for your dental practice with bad credit, although it may be more challenging. Some lenders specialize in providing loans to businesses or individuals with less-than-perfect credit. However, the terms might include:

Higher interest rates: Due to the increased risk, lenders may charge higher interest rates.
Collateral: You may need to provide collateral, such as equipment or property, to secure the loan.
Shorter repayment terms: Lenders might offer shorter repayment periods to minimize their risk.

Working with a lender experienced in healthcare or dental practice financing can improve your chances of securing a tax loan, even with bad credit.

What types of taxes can tax loans cover for dentists?

Tax loans for dentists can cover various types of tax liabilities, including:

Income Tax: Helps dentists pay personal or business-related income tax on time.
VAT (Value Added Tax): Covers quarterly or annual VAT payments for dental practices.
Corporation Tax: Assists in covering taxes due on company profits for incorporated dental practices.
National Insurance Contributions (NICs): Can help pay required NICs for both employers and employees.
Other Business-Related Taxes: Includes any additional taxes owed related to business operations, such as local taxes or payroll taxes.

These loans allow dentists to spread out tax payments, easing financial pressure and maintaining healthy cash flow.

How quickly can dentists get approved for tax loans?

Dentists can typically get approved for tax loans within 24 to 48 hours, depending on the lender and the completeness of the application. Some factors that can influence approval time include:

Lender Type: Specialized lenders may offer faster approval compared to traditional banks.
Application Completeness: Providing accurate and complete financial documentation, such as tax statements and business accounts, can speed up the process.
Credit Check: While some lenders process credit checks quickly, poor credit may require additional review and extend the approval time.

In most cases, fast approvals ensure that dentists can pay their tax bills on time, avoiding late fees or penalties.

What are the typical interest rates on tax loans for dentists?

The typical interest rates on tax loans for dentists can vary depending on several factors, such as the lender, loan amount, and the borrower’s credit profile. Generally, interest rates range from 4% to 12%.

Factors that influence interest rates include:
Credit Score: Dentists with higher credit scores typically qualify for lower rates, while those with bad credit may face higher rates.
Loan Term: Shorter-term loans may offer lower interest rates, while longer repayment terms may have slightly higher rates.
Secured vs. Unsecured: Secured tax loans, where collateral is provided, often have lower interest rates compared to unsecured loans.
Lender Type: Traditional banks may offer lower rates, while specialized or alternative lenders may charge more for faster approval or more flexible terms.

It’s important to compare lenders and terms to find the best interest rate for your practice.

How long can I take to repay a tax loan for my dental practice?

The repayment term for a tax loan for your dental practice typically ranges from 6 to 12 months, depending on the lender and your financial situation. Some lenders may offer flexible repayment terms based on your needs.

Key factors affecting repayment terms:

Loan Amount: Larger loans may come with slightly longer repayment terms.
Lender Policies: Some lenders might offer extended terms, while others focus on shorter repayment periods.
Your Financial Situation: A strong financial profile could allow you to negotiate more favourable, flexible repayment terms.

Repaying over 6 to 12 months allows you to manage cash flow more effectively, ensuring timely tax payments without a heavy financial burden.

Can I use a tax loan to pay both personal and business taxes as a dentist?

Yes, you can use a tax loan to pay both personal and business taxes as a dentist. Tax loans are versatile and can cover various types of tax obligations, including:

Personal Taxes: Income tax or National Insurance Contributions (NICs) that you owe as an individual.
Business Taxes: Taxes related to your dental practice, such as VAT, corporation tax, or payroll taxes.

This flexibility allows you to manage both personal and business tax liabilities without straining your cash flow, ensuring you meet deadlines and avoid penalties.

Are tax loans for dentists secured or unsecured?

Tax loans for dentists can be either secured or unsecured, depending on the lender and your financial situation:

Secured Tax Loans:
- Require collateral, such as dental equipment, property, or other assets.
- Typically offer lower interest rates and more favorable terms since the lender’s risk is reduced.
Unsecured Tax Loans:
- Do not require collateral, making them easier to access for those without significant assets.
- Interest rates may be higher due to the increased risk to the lender.
  
  Dentists can choose between secured and unsecured options based on their credit profile, financial needs, and whether they prefer to pledge collateral.

What is the process for applying for a tax loan for my dental practice?

The process for applying for a tax loan for your dental practice is typically straightforward. Here are the general steps:

Evaluate Your Tax Liability: Determine the amount you need to cover your tax obligations, such as income tax, VAT, or corporation tax.
Research Lenders: Look for lenders that specialize in offering tax loans to dental practices. Compare interest rates, terms, and repayment options.
- Gather Financial Documents: Prepare essential documents, including:
  Tax bills or statements
  Recent bank statements
  Business financial records (profit and loss, balance sheet)
  Personal credit report (if required)
Submit the Application: Fill out the lender’s application form, either online or in-person, providing the necessary documents and information.
Approval Process: The lender will review your application, assess your creditworthiness, and may conduct a credit check. Approval can often happen within 24 to 48 hours.
Receive Funds: Once approved, the funds are typically deposited directly into your account, allowing you to pay your tax liabilities.
Repay the Loan: Follow the agreed-upon repayment schedule, usually spread over 6 to 12 months, to manage cash flow while settling the loan.

This process is designed to be quick, helping you meet tax deadlines and avoid penalties.

Will a tax loan improve cash flow in my dental practice?

Yes, a tax loan can improve cash flow in your dental practice by allowing you to spread out large tax payments over manageable monthly installments. Here’s how it helps:

Avoid Large Lump-Sum Payments: Instead of paying a large tax bill upfront, a tax loan lets you break it into smaller, regular payments, preserving cash for other essential expenses.
Prevent Late Payment Penalties: By ensuring you can pay your tax liabilities on time, you avoid fines and interest charges, which could otherwise strain your finances.
Free Up Capital: With a tax loan, you keep more working capital available for day-to-day operations, such as payroll, supplies, and equipment purchases.
Stabilize Financial Planning: It helps smooth out cash flow fluctuations, especially during periods of lower revenue, by spreading out payments over several months.

In summary, a tax loan offers financial flexibility, allowing you to manage tax obligations while maintaining the cash flow needed to run your practice efficiently.

Can I refinance an existing tax loan for my dental practice?

Yes, you can refinance an existing tax loan for your dental practice. Refinancing allows you to adjust the terms of your current loan, potentially offering several benefits:

Lower Interest Rates: If market rates have dropped or your credit has improved, you may qualify for a lower interest rate, reducing your monthly payments.
Extended Repayment Terms: Refinancing can extend the loan’s repayment period, making monthly payments smaller and easier to manage, which can help improve cash flow.
Better Loan Terms: You may secure more favourable terms, such as flexible payment options or reduced fees, by refinancing with another lender.
Consolidate Debt: If you have multiple loans, refinancing can help consolidate them into one, simplifying payments and possibly lowering your overall interest rate.

Refinancing is an effective way to adjust your financial strategy and better align your loan with your practice’s current needs.

What happens if I miss a payment on my tax loan?

If you miss a payment on your tax loan, several consequences may follow, depending on your lender’s policies. Here’s what can happen:

Late Fees and Penalties: Most lenders will charge late payment fees, which can increase the overall cost of the loan.
Increased Interest: Some lenders may increase the interest rate or add additional charges for missed payments.
Damage to Credit Score: Missing a payment could negatively impact your credit score, making it harder to secure loans or favorable terms in the future.
Loan Default: If multiple payments are missed, the lender could classify the loan as in default, leading to more severe actions, such as legal proceedings or the seizure of collateral (for secured loans).
Negative Impact on Cash Flow: Late fees and penalties can strain your cash flow, further complicating the financial situation for your dental practice.

If you’re at risk of missing a payment, it’s best to contact your lender immediately to discuss potential solutions, such as restructuring the loan or adjusting the payment schedule.

Are there any fees involved in getting a tax loan for dentists?

Yes, there may be several fees involved in getting a tax loan for dentists, depending on the lender. Common fees include:

Arrangement or Origination Fee: A fee charged by the lender to process and set up the loan, typically a percentage of the loan amount.
Late Payment Fees: If you miss a scheduled payment, the lender may charge a penalty fee for late payments.
Early Repayment Fee: Some lenders may charge a fee if you pay off the loan earlier than the agreed term, known as a prepayment or early settlement fee.
Processing or Administration Fees: Fees for handling paperwork and managing the loan account.
Interest Charges: While not a fee in itself, interest is a significant cost associated with the loan, and it may be affected by your creditworthiness or loan term.

It’s essential to review the loan terms carefully and ask the lender about any potential fees before committing.

Is there a maximum amount I can borrow with a tax loan for my dental practice?

The maximum amount you can borrow with a tax loan for your dental practice typically depends on several factors, including:

Your Tax Liability: Lenders often provide tax loans that are directly tied to the amount you owe in taxes, whether for income tax, VAT, or corporation tax.
Your Financial Profile: The lender will consider your dental practice’s revenue, cash flow, and creditworthiness when determining the loan amount.
Lender Policies: Different lenders have varying maximum loan limits, which may range from £10,000 to £500,000 or more, depending on the lender’s criteria and your business size.

To determine the exact amount, consult with a lender specializing in tax loans for healthcare or dental practices, as they can offer tailored solutions based on your specific tax obligations and financial situation.

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Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

A Guide to Bridging Loans

What is a Bridging Loan?

Bridging loans are a short term financing option that are quite different from a standard bank loan. They are often used by property buyers to essentially ‘bridge’ the financial gap between the sale of their current home and the final sale of their next property investment. However, these loans can be very helpful in many ways for businesses to use immediate funds to obtain quick capital for their dental practice, integrate cash flow or make necessary refurbishments. They are one of the most useful and viable options when you need to move quickly to buy a property.

Bridging loans are usually offered between 1-18 months, with the loan repayable in full at the end of the term. An open bridging loan does not have a repayment date, but will still be a short term loan. For example, a 12 month bridging loan must be repaid on the 12th month or before the 12 month period ends. It is in your interest to repay the loan as early as possible in order to save on interest payments.

Bridging loans are very easily accessible and immediate financing which means that they typically have high interest rates and fees.

What is Bridging Finance?

Bridging finance is a kind of commercial property finance which is usually used by companies and sole traders to quickly fund the purchase of a property. Traditional commercial mortgages often take months to arrange. Bridging finance companies can lend money much faster. This type of funding allows clients to obtain immediate funds to complete the purchase of a property or to bridge the gap between selling and buying a new estate. The loan will usually be secured against a charge of the property you are purchasing.

How Much Can I borrow with a Bridging Loan?

The amount that you can borrow is solely dependent on the value and the type of security property that you use. Bridging lenders will quote a maximum loan to value (LTV), this is usually between 65-80%. You are able to get a bigger loan depending on your exit strategy.

Bridging loans are only meant for short term periods, so attempting to get a very large amount of money through a bridging loan without an adequate exit strategy is quite unlikely.

Why is Bridging Finance Useful?

Bridging finance is useful for dental practice businesses because it is a loan option that is fast and flexible. This short term property loan option can be approved and released so quickly that it could be done in a matter of days. In many cases, this is a very valuable asset to obtain in the property industry.

These loans are a highly useful tool for businesses to bridge the gap between two property transactions. Bridging loans are a practical solution for those who need extra time to sustain suitable long term finance.

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What is Bridge Capital?

Bridge capital is temporary funding that helps businesses cover its costs until it can get permanent capital. The repayment terms for bridge capital vary on the individual, but usually payment is made in full when the loan reaches the end of the term. Usually, by this time, the company receives the necessary capital from their investment or a longer term loan. Bridging loans are typically secured on any real estate asset a borrower can offer. This can include commercial or mixed-use properties.

How do I get a Bridging Loan?

Bridging loans are not widely available and are not offered by a lot of high street banks. Bridging loans are usually highly available from mortgage brokers and advisers.

Although bridging loans are generally quicker to arrange than a mortgage, do not make the mistake that they are easier because lenders are less thorough. Lenders still make thorough checks of your current finances, the value or your perspective property and your current home.

How Much do Bridging Loans Cost?

Bridging loans can end up being very expensive because they charge you a range of fees as well as interest. You will be charged monthly interest on your loan. Your lender will not quote the annual percentage rate (APR) as most bridging loans do not even last a whole year.

You will be charged interest on your loan in 1 of 3 ways:

Monthly interest: This is the most common way interest will be added to your loan. You will pay the interest each month, and it will not be added to the balance of your loan. You will pay off the full balance at the end of the term.
Rolled up interest: This is when you pay all of the interest including your original loan, at the end of the term. The interest will be added each month and accumulated this way, however you will just pay the full amount when your term comes to an end.
Retained interest: Your lender will calculate the amount of interest you will have to pay over the time-frame of your term when you first take out your loan. You will borrow the interest amount from the bridging lender when you apply for your loan including your initial figure. This will cover the monthly interest payments for a set period. You will then pay the loan back and the end of the term including the extra money borrowed for interest payments.

Exit Strategies for Bridging Loans

An exit strategy is the term used to explain how the bridging loan will be repaid at the end of the term. A strong exit strategy is a vital part of any bridging loan application. It is having a strong exit strategy that makes the process of the loan application faster and lenders to be more flexible with your requests.

Why is an Exit Strategy Important?

Having a preplanned and strong exit strategy is very important on a bridging finance provider’s checklist. These loans are based on an interest only basis. How you plan to settle the end of your loan at the end of its term is the most crucial part of your loan.

When your term has come to an end, your lender will expect your loan to be paid back in full as agreed. In the case that you are unable to do this, your account will then be put into default. If this happens it could affect your credit record. In order to avoid this situation you will need to resolve the situation as quickly as possible.

Here are a few options for you:

Extend your loan with your lender. This may mean that you will continue to add interest on your current loan if you are near your maximum loan to value. It is also important to note that your lender may not agree to renew the loan. If they do agree, they may charge a higher interest rate in exchange for the renewal.
Refinance to a new lender. This option could get very expensive for you as you will have to restart the process and pay all setup costs again.

Remember that if you do refinance your loan, you still need to consider what your exit plan is for your new loan. Refinancing blindly is a temporary solution, you will just be delaying the inevitable unless you plan a way to properly pay back the loan.

What if I can’t Pay Back the Loan by the End of the Agreed Term?

Bridge loans in their nature are arranged for short term requirements and the lender expects all clients to contractually abide by the terms of repayment within the set time frame agreed.

Bridge loans, like many other loans, are set up with a set plan to arrange how the loan will be repaid. Usually, the lender will not allow the loan to proceed if there are any hesitations about your ability to repay the loan.

When you hit the end of your term, you are expected to repay the loan in full. Acceptable exit methods are usually sale of property or refinance. There are a range of different exit strategies that may work for you.

Loans are a contractual agreement, however, it is inevitable that some loans will overrun the agreed term. The lender will often contact you (the borrower) at least 3 months prior to the end of the agreed term to examine how things are going for you and determine whether you will be able to pay back the loan in time of the agreed term. If the lender believes that it is not likely, they will usually recommend other steps that you can take to ensure that you can get back on track and eventually, you will be able to fully repay your loan.

The lender will obviously want the loan repaid as and when agreed but they will normally work with borrowers who have over run their term only if the borrower is open about their situation and is in continuous regular contact with the lender. This way you and your lender are able to work out a plan to get you back on track together.

We always recommend that when taking out a bridging loan, you opt for the longest term available as many plans can over run the expected timeframe.

How Long Can I Take Out a Bridging Loan for?

The average term for a bridging loan is approximately 6-7 months. In different circumstances, longer terms can be discussed and arranged. It is often dependent on how much your loan is for that your term can be extended.

Are Bridging Loans Regulated?

A bridging loan becomes ‘regulated’ when the loan is secured against a property that is or will be occupied by the borrower. A regulated loan can be secured by a first or second charge, the bridging loan will be regulated by the FCA.

Bridging loans that are unregulated are usually associated with commercial buy-to-let properties.

Can I Get a Bridging Loan Without a Credit Check?

No. Like most other loans, bridging finance involves a thorough check into the finances of the borrower.

Applicants with clean credit history are often more attractive to lenders which results in these applicants receiving favourable rates. However, good credit is not only what lenders look for. There are other aspects and details of your loan that will help you get approved by your lender even though you may have a bad credit history.

Can I Still Get a Bridging Loan if I Have Credit Issues?

Although thorough checks into your credit history will be taken before you take out your loan, bridging loans can still be available to you even if you have a poor credit rating. Your bridging finance is often determined by the security of the property being offered as well as the exit route. Your lender will also take into account the size of your deposit and the assets you put up as security.

A lender’s biggest concern is that having poor credit history will prevent you from repaying the loan at the end of the term. It is highly dependent on what you put up as security and what your exit strategy is. If you have a strong exit strategy such as, to sell the property or another estate, then there is a lesser chance to have an impact on you taking out the loan.

Closed-Bridge and Open-Bridge Loans

What is a closed bridging loan?

A closed bridge loan is for people who have set a fixed date to repay the loan. A closed bridging loan includes a feasible exit strategy as part of the lender’s application. If you are able to produce proof to your lender that you are able to repay the debt as soon as your transaction is completed, then a closed bridging loan is the most effective and sensible option for you. They are defined by the set repayment date and are the most common type of bridging finance option available. Closed loans are usually offered with lower interest rates and have the highest rates of approval.

What is an Open Bridging Loan?

An open-bridging loan differs from a closed bridging loan as an open loan does not require a clearly defined exit route in place to provide to the lender.

Due to the unpredictable nature of repaying an open bridging loan, they are a lot harder to arrange. However, if this is your preferred loan type, it would be in your best interest to be able to provide enough security, so that it is more likely that you are able to be approved for this type of finance.

What is the Interest Rate on a Bridge Loan?

The interest rate on a bridge loan is generally between 1% and 1.5% per month. That being said, there are some lenders who have better rates than others. Because of this, it is always useful to shop around or use the services of brokers in order to get the best possible deal for your loan.

How Much Can I Borrow for a Bridging Loan?

You are usually able to borrow from 80% – 100% of the property value purchase price with bridging loans. It is important to understand that all lenders are different and have different terms. If you are looking to borrow more, you may need to offer additional security in the form of an additional property or several other properties.

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How Much Does a Bridging Loan Cost?

There are four main factors that will impact the cost of your loan and they are:

The term of your loan
The amount borrowed
The lenders agreed interest rate
Start up fees

The general trend with bridging loans is that your costs will generally increase the longer your term is. This is also the case the larger your loan is.

To minimise the cost of your loan, it will help your expenses if you compare the total cost of borrowing the funds, not simply the interest rate and arrangement fees on their own.

There are many fees that are charged in addition to the interest and arrangement fee. Different lenders include their own fees. Here are some common fees charged in addition to your interest rates.

Exit fees
These exit fees are payable on repayment of the loan. There are some lenders that do not charge an exit fee where some others charge from 1 to -1% month’s interest.
Valuation fees
These fees are payable for surveyor’s costs in order to ensure your property is suitable security. Some lenders do not require a valuation.
Legal fees
These fees are to pay lenders own legal costs while they are setting up the loan.
Admin fees
These can also be labelled as asset management fees. These are costs that are payable to the lender as they handle the setup of your loan.

Pros and cons of Bridging loans

Pros of Bridging Loans:

Bridging finance is quick to arrange. Applications can be completed and authorised quickly allowing you to obtain the funds you need quicker than you could with any other type of loan. Many property deals are highly dependent on factors that are rapidly changing within the business. Being able to obtain funds quickly can be a major attraction.

Bridging loans allow you to complete a property transaction that would otherwise not be possible.

You are able to get funds up to 100%. Usually the most you are able to borrow is 80%, however, provided the security put in place is sufficient, lenders will allow you to borrow up to 100%.

Often with bridging loans there are no monthly repayments, this allows the loan to raise capital for your business where cash flow is tight, while you have assets that can pay back the loan.

Cons of Bridging Loans

Your home / property you put up as security is at risk if you do not keep up repayments on a bridging loan.

There are usually several fees which you will have to pay which makes bridging loans more expensive than traditional mortgages. These fees include an arrangement fee, broker fees, valuations fees and sometimes even legal fees, before you are able to take out your loan. If you are borrowing for a long period of time, the interest charges are a lot more expensive than a standard loan.

As most loans are short term, if you have issues with your repayment method, you could potentially face major issues. Failure to repay your loan at the end of the term could have major repercussions. It could lead to your property being repossessed.

When Would you Need a Bridging Loan?

When a buyer pulls out on an investment into your property, your finances on the offer of your next home and potential deposits could be put in jeopardy. A bridging loan will be able to tide you over until your home is back on the market and is under offer again.

Bridging finance allows you to buy a second property before selling the first.

As long as you can provide your lender a valid exit strategy, the money you obtain for a bridging loan can be used for a variety of business reasons from providing your business with working capital to covering cash flow issues.

Auctions: Bridging loans allow you immediate funds when you are bidding for properties at an auction.

Bridging loans could also be used if you wanted to buy a property with a short lease. You could use the loan to buy the property, then add value by extending the lease. This would also provide a valid exit strategy.

Refurbishment projects: You can use residential bridging loans for cash flow to refurbish a property before full capital is available.

What is a Commercial Bridging Loan?

Commercial bridging loans are similar to residential bridging loans, they are used when there is a gap in financing that needs to be filled quickly.

For a commercial bridging loan, the overall use of the property has to be more than 40% commercial. This means that retail units with residential flats on top or at the back have to occupy more than 40% commercial space of the property.

The exit strategy for residential bridging loans usually include landlord or landlord companies to refinance the loan into a buy-to-let mortgage. This is usually done after the loan is used for renovations to make the property more attractive or suitable for rental.

For commercial units that are bought specifically by using a commercial bridging loan, the exit strategy usually involves selling or refinancing the property on to a conventional commercial mortgage after buying or refurbishing the property.

What is a Bridge-to-let Loan?

This type of bridging loan is specifically aimed at the buy-to-let market. The loan is used to secure a property that is fully intended to rent out without having a basic mortgage organised. This loan would be based around your ability to obtain 100% rental income. This means that your potential rental income should equal your payments.

You can use this type of bridge loan for both residential and commercial properties. The exit strategy would be to refinance the property on to a conventila buy-to-let mortgage and gaining capital by renting the property out either in part or fully.

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Defaulting on your Bridging Loan

With all bridging finance, you have to put up security therefore, defaulting on your loan will not only affect your credit score, but will also put your asset at serious risk. Even though bridging loans are able to be authorised quickly, all lenders are very thorough with background checks and legal rights.

There are a variety of legal options your lender has at their disposal in order to compel you to pay what is owed to them. This not only includes the right to your security asset but could also include county court judgments, or statutory demand letters which would ultimately force your company into liquidation.

Breaching the Terms of your Bridging Loan

Bridging loans have many terms and conditions that are different to standard mortgage loans. A lot of lenders are at liberty to insert their own terms and conditions which is why it is imperative to read the fine print carefully before signing all contracts to understand the fees, repayments, charges and when they are all due.

Click here to read our article on How to finance a healthcare business.

A Guide to Bridging Loans FAQ

What are bridging loans for dentists?

Bridging loans for dentists are short-term financing solutions used to cover immediate cash flow needs or fund a specific purchase, such as property or equipment until long-term financing is secured.

How do bridging loans benefit dental practices?

Bridging loans provide quick access to capital, allowing dentists to take advantage of urgent opportunities, like purchasing new equipment or securing a property, without waiting for longer-term financing to be approved.

How quickly can I get a bridging loan for my dental practice?

Bridging loans are typically approved and funded quickly, often within a few days, depending on the lender and the complexity of the application.

What can bridging loans be used for in a dental practice?

Bridging loans can be used to fund property purchases, practice expansions, equipment upgrades, or to cover temporary cash flow shortages while awaiting long-term financing or the sale of an asset.

Are bridging loans secured or unsecured for dentists?

Bridging loans are usually secured loans, meaning you will need to provide collateral, such as property or equipment, to secure the loan.

What are the interest rates on bridging loans for dentists?

Interest rates for bridging loans are typically higher than long-term loans, ranging from 0.4% to 1.5% per month, depending on the lender, loan amount, and the value of the collateral.

How long can I take to repay a bridging loan?

Bridging loans are short-term loans, with repayment terms typically ranging from 6 to 12 months, although some lenders may allow extensions based on your needs.

Can I use a bridging loan to buy property for my dental practice?

Yes, bridging loans are commonly used by dentists to purchase property, either for a new clinic or an expansion, especially when quick financing is needed to secure the purchase.

What is the difference between a bridging loan and a traditional loan for dentists?

Bridging loans are short-term, fast-access loans meant to cover immediate needs, while traditional loans are typically long-term with lower interest rates and longer repayment periods. Bridging loans are also often secured against assets.

How do I apply for a bridging loan for my dental practice?

To apply for a bridging loan, you’ll need to provide financial documents, information about the asset being used as collateral, and details about how the loan will be repaid. Lenders typically process applications quickly, especially if the paperwork is complete.

Can I extend the repayment term of my bridging loan?

Some lenders offer extensions on bridging loans if needed, but this may involve additional fees and higher interest rates, so it’s important to plan for repayment within the agreed term.

Are there fees associated with bridging loans for dentists?

Yes, bridging loans often come with arrangement fees, valuation fees, and legal fees. Be sure to understand the full cost of the loan before committing.

Can bridging loans help with cash flow issues in a dental practice?

Yes, bridging loans can help cover short-term cash flow gaps while waiting for longer-term financing or the sale of an asset, ensuring your dental practice operates smoothly.

Do I need good credit to get a bridging loan for my dental practice?

While a good credit score can help secure better terms, bridging loans are often based more on the value of the collateral than on credit history, making them accessible to dentists with less-than-perfect credit.

Is there a maximum amount I can borrow with a bridging loan for my dental practice?

The amount you can borrow depends on the value of the asset used as collateral. Lenders typically offer loans up to 70-80% of the asset’s value.

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Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

A Guide to Commercial Mortgages

The world of commercial loans for dental practices is now more varied than ever. Commercial property finance has many different variants, sometimes making it quite difficult to understand.

There are different platforms that each suit different projects. The usual issue is finding out which one best suits your dental business needs.

Here is our guide to understanding all there is to know about commercial property finance.

What is commercial property finance?

Commercial property finance is the money that an individual or company obtains in order to fund the purchase or the development of a property. It is very rare for a company or an individual to always have the cash means ready to purchase a commercial property. Therefore, needing to raise money is common, especially in these cases, from a bank or other lender.

Commercial property finance can additionally be used for business expansion (adding more practices) or improvements to a property or even to help with relocating the business.

A commercial property is one that is primarily used for non-residential purposes. For example, dental practices, surgeries, offices, factories, retail stores and restaurants. Properties that can be used either fully or semi commercial.

A fully commercial building is a building that is wholly used for commercial purposes. A semi commercial building is one that is used for both commercial and residential purposes. For example, a dental practice with flats above it.

There are different types of commercial property finance. Commercial finance was formerly known to come from mainstream lenders, usually banks, but now, there are many alternative modes of finance available too.

Each type of building in the commercial property market is made up of five main categories.

These five categories include:

Offices
Retail (Stores, shopping centres, shops)
Industrial (Warehouses, factories)
Leisure (Hotels, pools, cafes, sports facilities, restaurants)
Healthcare (Medical centres, dentists, hospital, nursing homes)

A commercial mortgage is any loan secured on a property that is not your residence or intended for residential purposes.

Why will I need a commercial mortgage for my dental practice?

Commercial finance ensures that your dental business, regardless of size, are able to thrive and hit their targets, rather than miss out purely because they aren’t able to generate enough revenue to expand.

A dentist might seek commercial finance when a point of growth is impending. Sometimes the obstacle in the way of expanding your dental practice is funding, that is where commercial loans come in handy.

There are a number of reasons as to why a company or sole trader may wish to raise commercial property finance. A few key reasons that may need to take out a commercial property loan are if you experience growth in your company, through staff or inventory, or you have purchased new equipment or you may need to extend your commercial property.

You may even need a loan in order to purchase a completely new property. Commercial finance allows a way to essentially provide working capital for dental practices.

Better access to commercial finance has paved the way for small dental practices to generate capital through these loans. If your surgery or office has become run down or needs a renovation, you may also need to raise commercial property finance to fund this. There may be cases where you need to build extensions to an existing property or grow your property portfolio.

When these purchases or improvements cannot be funded by existing assets, you may need to consider raising commercial property finance.

Commercial loans can be used for more than just buying your business a new home, it can also be used to:

Develop new property
Develop existing property
Extend current premises
Buy land
Commercial developments and projects

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When will I need a commercial mortgage?

There are a number of reasons why a dentist or dental practice owner may wish to raise commercial property finance. If you experience growth in your company, perhaps your staff or inventory has grown or you have purchased new equipment, you may need to extend your commercial property. You may even need to purchase a completely new property.

If your surgery or office has become run down or needs a renovation, you may also need to raise commercial property finance to fund this. There may be cases where you need to build extensions to an existing property or grow your property portfolio,

When these purchases or improvements cannot be funded by existing assets, you may need to consider raising commercial property finance.

How much can I borrow for a commercial property?

Commercial property loans are used to help raise funds for many purposes, such as buying estate for your business. The minimum amount for a commercial property finance deal is usually £150,000 and has no maximum figure. Provided you have all the requirements your lender needs when you are applying for the loans you should have no issue sourcing the funds you need to make your purchase.

When are commercial mortgages used?

Commercial mortgages generally take over very large amounts that business loans do not allow for. For these kinds of large amounts needed for commercial mortgages, lenders need security in order to reduce risk to themselves.

What security will I need to provide to the lender?

The main form of security that lenders like for you to provide is property types which are suitable for the lender such as residential or a commercial property.

The lender will usually require a legal charge over the property put down as security that the finance is being raised for. Depending on the sum of the loan, some lenders consider additional security to support the loan. This could mean that you will be able to borrow up to 100% of the purchase price of the property in question.

Commercial Mortgages Key Features

Commercial mortgages are similar to regular mortgages in many ways, but there are a few key features that make them slightly different.

There are usually no fixed rates for commercial mortgages. Your rate will be dependent upon how much your loan is and how long you wish to pay it back – amongst other factors your lender will decide on.

You will usually pay a higher interest rate on commercial mortgages rather than regular residential ones as these types of mortgages are of high risk to lenders. However, due to this high risk you usually need to provide a property as collateral which will allow your lender to give you a better interest rate, as you have put down security.

If you have a bad credit score you may still be able to apply for a commercial mortgage. However, you may have to pay a higher interest rate in order to make up for the high risk you are to the lender.

Mortgages are a type of secured loan in which the property itself is often used as security/ collateral by the lender, this means that if you default on any payments, you may lose ownership of the property in question.

Deposits for commercial loans or mortgages can be quite hefty. So before you apply for your commercial loan you need to ensure that you will be able to pay both the deposit and monthly installments comfortably.

Lenders prefer to invest in someone who they can be assured will pay them back timely, including interest. If you have not got a lot of experience in trading, many investors / lenders will see that as a high risk. When you have markers that identify yourself as high risk such as lack of experience in trading or a low credit rating, lenders may request for personal guarantees to further ensure that they will not be losing their money.

Types of commercial finance

There are several types of commercial finance, the benefits and disadvantages of which depends on your needs and situation.

Real estate loans are never one size fits all. There are various types of loans that have very different terms, rates and uses. The type of commercial loan you need to get depends on the goal of your loan and how it will be repaid. Loans are broken down into different categories from lenders. Here are some of the more common options on the market.

Refinance loan

As a dental business owner, you can take advantage of available lower interest rates through commercial real estate refinancing loans. There are various additional fees and costs involved when you are refinancing which can make this option more costly for you. However, when you do a cost benefit analysis, they are usually quite minimal in comparison to your overall savings through lower monthly repayments and less cumulative debt (to banks/ lenders).

Refinancing can boost your profit flow through improvement or expansion of commercial properties. It can also help to pay off any pending expenses you may have.

Property Development Finance

Property development finance is usually used to cover development and building costs, refurbishment costs, but can also be used to purchase a property before renovation. Terms will vary depending on your situation and requirements. However, it is common for lenders to fund up to 70% of development costs over a 24 month term.

Property Portfolio Finance

If you have a number of properties in your portfolio, perhaps you own several offices or rent out several apartments, it is likely that you have several, unrelated outgoing loan payments covering all of your properties. Since handling several different loan payments schedules, you may wish to consolidate all your commercial property loan payments into one payment. Property portfolio finance can make it easier for developers and landlords to manage their outgoing debt payments.

Hard money loan

Hard money loans exclusively come from private investors. These investors will be willing to take lending risks based on the value of the commercial property itself rather than the person they are investing in. Banks base their lending on many factors of the business owner themself including their credit score to base their judgement on getting repaid.

While most commercial loans are made to be long term, especially because of the large amount of money being loaned, hard money loans count as short term financing. They have brief loan terms from just 6 to 24 months. People often turn to hard money loans due to urgency of their situation, which often means that the interest rates of the loan are very high. It can range from 10-18% interest along with costlier up-front administration fees and deposits.

Bridge loan

A bridge loan is a short-term loan, usually up to one year. These types of loans also have a short approval time which makes them extremely useful when you need immediate funding. It allows the client to meet existing obligations as they provide immediate cash flow.

Bridge loans are preferable for short term investments for commercial renovations or construction. Bridge loans are also known to have relatively high interest rates and usually need a form of security.

Term loans (long term fixed interest commercial mortgage):

These loans are the most standard types of loans you can get. These usually come from a bank or lender and they work similarly to a home mortgage as they carry fixed rates and monthly or quarterly repayment schedules including a set maturity date.

A term loan usually lasts between 1 and 10 years. When you apply, you need to assess how much money your business needs and how long you will take to repay the commercial loan.

Short-term loans

Short term business loans are best for when you need smaller amounts of money that are typically able to pay back within 18 months or less. As these loans are smaller, they have a faster approval process than term commercial loans. Short term loans can even be approved after one day!

These types of loans are best and most useful for handling emergency repairs, restocking inventory and meeting payroll, amongst a variety of other necessary costs.

Commercial real estate loans

Commercial real estate loans are for borrowing large amounts of money and have the longest length. These types of loans are for lending very large amounts of money and will help expand your business when you need to buy a new property, such as a warehouse or a secondary office. They are also secured by the property that your business is buying.

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Equipment loans

This loan refers to buying an expensive piece of equipment or other assets for your business. Equipment loans are able be secured by the asset itself, therefore, your business will not have to put up any other forms of collateral.

Line of credit

With a commercial line of credit, the lender approves your business for a maximum borrowing amount, such as £10,000. After your business has been approved you can then borrow up to this amount whenever you would like. After you repay the funds, you are able to borrow up to this same amount again. This is not a one time loan, line of credit gives you the option to borrow at your convenience.

Commercial mortgages

A commercial mortgage is simply a mortgage used to purchase a commercial property. They are available to both limited companies and sole traders. Commercial mortgages tend to last for around 25 years and can fund up to 75% of the mortgage. The terms of the mortgage will depend on several factors, such as the profitability of the business.

Types of Commercial mortgages

There are three main purposes that commercial mortgages can be used for:

Owner-occupied

Commercial mortgages for owner-occupiers either means that a company wants to purchase the current premise in which they operate in or they want to buy a new property to move into.

Residential buy-to let

A common scenario for commercial mortgages is the purchase of an estate in order to be let out residentially. This is usually used by professional landlords as well as buy-to-let limited companies that are essentially set up for the same purpose.

Commercial buy-to-let

You can use commercial mortgages for commercial buy-to-lets as well. This means you may want to buy a warehouse in order to let it out to another business to use it for commercial use not residential. This type of mortgage is very similar to residential buy to let, however, the lender will look at various more factors as it can be more difficult to rent out commercial properties to residential properties.

Advantages of commercial property finance

A key advantage of commercial property finance loans is that you will be able to continue to have sole ownership of your dental practice. You will be able to get a large amount of money for your business without having to give up any equity. Obtaining a commercial loan is not bringing in an investor who will invest in your practice in exchange for a percentage of it. Your money will be upfront, and you will usually have to repay your borrowed money with monthly payments including interest.

While interest rates on commercial loans are higher than most loans due to the large amount of money, anything that you pay in interest on your loan will be tax deductible.

Commercial property finance loans usually extend over a long period of time. This gives you a number of years to pay back your loan. Often lenders are more flexible with the repayment schedule to suit your needs.

Commercial loans have a fixed repayment schedule that is suited to you and how much you are able to pay back monthly. There is no risk of unexpected increase of this repayment. The only increase added to your loan will be interest.

The immediate benefit of a commercial property finance loan is that your dental practice will immediately obtain the money it needs to expand. This enables you to invest in your commercial property immediately, allowing you to substantially build your capital. Property value increases over time, therefore, when your property gains value, your business’ capital will also increase.

Commercial mortgages have fixed monthly repayments. As the repayment schedule is divided over a long period of time, your repayments are designed to be manageable for you, even if your loan is a large amount. This means that your loan will enable you to plan and grow your business accordingly, enabling you to structure the finance of your business with certainty.

When you buy an estate with additional space, there is potential for rental income. You are able to monetise that space by renting out the surplus space in order to generate more income. Subletting any extra space in the property should be done after obtaining lender permission first.

Disadvantages of commercial loans

A key disadvantage for commercial property finance is that a substantial amount is needed for a deposit on a commercial property loan.

As the property you invest in will be solely yours, all maintenance, developments and general upkeep costs of your practice will need to be taken care of by you. Unfortunately this can often end up being very costly.

Property prices are continuously fluctuating and can sometimes affect the value of your property which can result in reduced capital. This could also affect your finances and future borrowing capabilities.

If you have a variable rate mortgage on your commercial property, then any rise in interest rates will result in your monthly repayments becoming more expensive for you.

Types of commercial real estate

Apartment buildings

Apartment buildings are classified as commercial real estate if they have five or more living units. Any buildings that have four or fewer units inside are classed as a residential property.

Retail buildings

Retail buildings are any buildings that are selling goods. This includes stand alone shops as well as larger commercial properties such as malls and shopping centres that have multiple stores inside the property.

Office buildings

Office buildings are usually the most sought after when they are up for sale, they are also usually the most expensive. Most office buildings are located in urban business districts, which makes them prime locations, which is why they are so expensive. The further your property is from the commercial business district, the further down the prices go.

Medical facilities

Medical facilities include dental practices, GP doctor surgeries, hospitals (with large staffs and 24 hour, round the clock care), surgical centres, urgent care clinics (walk ins) and nursing homes (long term accommodations).

Hotels and resorts

This category includes hotels and luxury resorts as well as casinos, big corporate chains and independent ins.

Land developments

Land development refers to commercial real estate developers. This is turning raw, empty land into a space for future construction. If this is done correctly, there is a lot of potential for a significant financial return.

How do commercial loans work?

If you choose to go for a commercial loan, you need to understand that you will need to pay back the loan over time as well as interest. Before your lender will invest in your business venture, whether it is a private lender or a bank, they will need to see proof that your business will be able to make its repayments.

In order to increase your chance of getting a commercial loan, prepare documents of your income and revenue in order to support your application. Your financial statements, profit and loss margins, will help your lender be drawn to you as a successful low risk client. You may even need to value your assets to use as security to put as collateral to ensure you receive your loan.

How long does it take to secure a commercial loan?

Smaller loans are usually easier to obtain. If you have a good credit history and have all the necessary financial documents ready for your loan to get approved, it is able to get approved within a matter of days.

For a larger commercial loan, your application may take a lot longer. It could range from a couple weeks to a couple months. It is highly dependent on the amount you want to borrow and the length of the term. For a very long term loan, the lender often would wish to perform extensive examination of your financial records to confirm the financial viability of your business over the term of the loan. Loans of very large amounts often require security as well as a deposit.

What type of security do I need for commercial property loans?

The most common things that are offered as security for commercial loans are vehicles, property and shares. The property you put up for collateral could be your business premises or your personal property. Many traditional lenders accept only these options as types of security.

The asset you put up as security acts as protection for the lender against a potential loss if your business falls through or your are default in your payments. The assets you put up for security compensate for the unreturned borrowed money.

Contact us to find out more

A Guide to Inheritance Tax

How to Finance a Squat Practice

How Should a Dental Practice Organise its Finances

How to avoid funding your business from personal assets

Commercial loans are one of the most efficient ways to fund a particular project, business venture or acquisition. You can get this loan on the simple basis of your business plan and how likely your business is to succeed. You do not need to put your personal assets in the mix to fund your estate.

With a commercial loan it is also simply just borrowed money with interest added. Commercial loans allow you to fund your business with a loan without having to get an investor or partner to share your business with minimising your profits. The only personal assets that should be involved are the ones that you put up for security with your lender.

What is bridging finance?

Bridging finance is a type of commercial property finance which is used by companies and sole traders to quickly fund the purchase of a property. Traditional commercial mortgages can take months to arrange. Bridging finance companies can lend money much faster. The loan will usually be secured against a charge of the property you are purchasing.

How much can I borrow?

It is highly dependent on the type of property being purchased, you can borrow up to 85% of the purchase price or valuation for residential properties. You can borrow up to 80% if you are purchasing a commercial property.

Should I compare business mortgages?

Comparing different mortgage deals will help educate you on the different types and terms there are out there. There are often people and websites who will be able to compare for you to ensure the best and cost effective solution for your business.

Alternatively, use a commercial finance broker to do that hard work for you!

Click here to read our blog on How to finance a healthcare business

Business Loans for Healthcare Businesses

Book a consult

Financial Services

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

A Guide to Working Capital Finance

What is working capital

Working capital is the amount of available money a business has at its disposal for its day-to-day operations and expenses. Working capital is not the same as the overall value of your dental practice. It is not calculated by adding up everything the business owns.

Working capital is the cash or cash equivalents your dental practice has, or can raise in a year. Working capital is calculated by subtracting the value of the business’s liabilities from its assets. It is essentially the amount of money left over once a practice pays all its standing debts.

If your dental practice is unable to meet its debts with your existing assets, you may need to apply for working capital finance.

Working capital reflects the short-term financial health of your dental practice, as well as its ability to conduct regular operations. Without adequate working capital, your practice will be unable to meet its everyday obligations.

For instance, staffing costs, rent on the premises, marketing and taxes should all be covered by the business’s available cash – its working capital. Ant given business should not need to sell off long-term assets or borrow money to meet these responsibilities. Its ability to do so is dictated by the amount of working capital.

Working capital represents the liquid cash which isn’t tied up in its long-term assets.

The most common definition is; the difference between the business’s current assets and its current liabilities.

Working capital vs cash flow

Although they are similar, related concepts and are often confused, working capital and cash flow are not quite the same thing.

Your dental practice’s cash flow is the amount of cash that moves through the business over any given period. It is the amount of money that your business can generate. Cash flow does not take into account your liabilities. Working capital, on the other hand, takes into account all your current liabilities, as well as current assets.

A working capital ratio is a representation of the financial health of your dental practice as a business overall. It is a broad picture of your business’s ability to pay off debt in the short-term. Cash flow is more concerned with the cash that can be generated. This means you could have a weak working capital but a strong cash flow. Your business is generating a lot of money, you just owe nearly as much as you make.

Therefore, even with a strong cash flow, low working capital can make it difficult to pay your debts off on time. If this is the case, you may benefit from raising working capital finance.

How to Calculate Working Capital.

Working capital is the amount left over once your dental practice has met all of its financial obligations. Working capital can be calculated with one fairly simple equation.

That equation is: current assets minus current liabilities equals working capital.

The number left over is the amount of ready cash that a business could feasibly spend without having to sell off long-term assets or borrow money from a financial institution. It can often simply be the value of the entire inventory of your dental practice added to the current bank holdings.

For example, lets say your business has £10,000 in a business bank account, a customer owes £1,000 and the business’s inventory totals £10,000. Your business has current assets totalling £21,000.

Let us also assume that the business owes £15,000 in total, spread across suppliers, debts and tax bills.

Once the business has paid off its £15,000 current liabilities from its £21,000 in current assets, there is £6,000 left over as working capital. Although the business could raise more money by selling off more long-term assets, this £6,000 is the amount it can liquidise within a 12 month period. Therefore, the entire dental practice has a working capital worth £6,000.

Current Assets

Current Assets vs Fixed or Long-term Assets

Current assets are not to be confused with the long-term assets of a business. Long-term assets are the assets that your dental practice will expect to keep for longer than 12 months, which could include a lot of necessary dental equipment. They are essential parts of the business that cannot just be sold off to pay the tax bill. They also include assets that cannot be sold off for liquid cash in a year.

They are sometimes known as fixed assets.

Although a piece of heavy machinery or a company car is an asset to the business, it is not included as a current asset in the working capital calculation as it cannot be quickly sold off for cash. It would also disrupt the day-to-day business operations to do so.

Long term assets include items such as land & property, machinery & vehicles and intangible, soft assets such as copyrights and patents. Inventory will usually be included as a current asset, since it can often be expected to be sold in 12 months. However, heavier pieces of inventory may not be included and will have to be judged individually.

Current assets, on the other hand, are the assets which can be, or will be expected to be, sold off or otherwise liquidised within a 12 month period.

Examples of current assets include:

Cash and bank balance

Most businesses have some form of account with a bank or similar financial institution. Most also have some form of ready cash available. This could range from a small petty-cash stash in the office to a locked safe containing thousands of pounds. These are immediate, liquid cash which can be instantly used to fund business operations.

Inventory

Certain pieces of inventory are often considered current assets. Whether inventory items will be listed as a current asset or not depends on whether it can be sold off for liquid cash within a 12 month period (or before the end of the business cycle).

For instance, a warehouse full of food can be reasonably expected to be sold within a 12 month period. Therefore, it is a current asset, since within a year you know that your business will exchange those foodstuffs for liquid cash.

However, the heavy machinery that the business used to process or harvest that food may not be expected to be sold off within that same 12 month period. Therefore, it would usually not be included as a current asset. Likewise, the property your business owns may be its most valuable long-term asset. However, you are not going to sell it off to pay a quick bill. Therefore, it is not considered a current asset.

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Accounts Receivable

Accounts receivable are the bills owed to your business (but not yet paid) for goods or services already rendered. For example, if you sell a customer a car and the deal includes them not having to pay any money for the first 6 months, you have an account receivable. This can often include long term dental services that can be billed at the end of a treatment.

Although you do not have the money in your business’s bank account at the moment, it is owed to your business. You may not be able to call it in earlier, but you know that it will be in your bank account in 6 months – unless the customer defaults!

As long as accounts receivable are expected to be paid within a 12 month period, they are considered current assets.

Marketable securities.

Your dental business’s marketable securities are the debts and securities that you can expect to redeem or trade in with a 12 month period. If they are not redeemable within that 12 month period they are considered a fixed asset. They are financial instruments which can be easily liquidated into their market value in cash in one year..

Examples of marketable securities include things such as Government bonds and treasury bills, certificates of deposit and stock.

Prepaid expenses

Prepaid expenses are the expenses paid by the business before a good is received or a service is rendered. For example, leasing a piece of equipment or office space, or even insurance payments are considered prepaid expenses.

Prepaid expenses are considered current assets if they are expected to be completed within 12 months. If your business leases a piece of equipment for less than 12 months, it is considered a current asset. If it is leased for longer than 12 months, it will be considered a fixed asset.

Since the expense has already been paid, this means other working capital can be used for business operations. If you prepay £12,000 for 12 months rent at £1,000 a month, that £1,000 still shows up on the balance sheet. However, since you have already paid it, you essentially have £1,000 extra as working capital.

Current Liabilities

Current liabilities are the financial obligations a business has that it is expected to pay back within a 12 month period. These are the debts that a business needs to pay back within a year, in other words, the business expenses. Debts that you are not expected to repay within that year are not considered current liabilities, they are known as long-term liabilities.

Current liabilities are normally paid off using the current assets. Most businesses will have several current liabilities owed at the same time to suppliers and creditors. Most of the everyday costs of operating a business are paid monthly or as needed, and are therefore considered current liabilities. For instance, utility payments for the offices or warehouses, materials and supplies or business loan repayments.

Examples of Current Liabilities

Accounts payable

Accounts payable are the debts owed by your business for goods or services that have been already received or rendered. They are the outstanding invoices to your suppliers and vendors that are due to be repaid within 12 months.

Any debt that is due within that period is considered a current liability. Debts that are not expected to be repaid in a year will not be listed on your balance sheet as current liabilities.

Accounts payable will cover debts such as supplier invoices, utility bills and invoices from external companies such as legal and marketing services.

Short term debt

Short-term debt, otherwise known as operating debt, are the short-term financial obligations your business has. Operating debt usually takes the form of short-term loans from a high street bank or another financial lender. They can also be issued as commercial paper.

These debts are normally taken out to cover short-term operating costs of the business, such as supplies, bills and invoices. If the debt is expected to be paid within 12 months, it will be considered a current liability.

If you have debt with a loan term of 10 years, that is considered a long-term debt. However, in that final year, it will appear on the balance sheet as a current liability since it is due within 12 months.

Dividends payable

If your dental practice has shareholders who are paid dividends, they may be included are current liabilities on your balance sheet. Once it has been decided that a certain amount should be paid in dividends to the shareholders, they are considered current liabilities until they are paid.

Accrued expenses

Accrued expenses are the expenses which the business knows will have to be paid within a year. They are listed as expenses on the balance sheet but have not yet been paid. Therefore, they are considered current liabilities.

Accrued expenses can cover a range of different payments. For instance, accrued expenses could cover interest payments, including interest for long-term debts, payroll and tax.

Working capital ratio

It is common for a dental business’s working capital to be expressed as a ratio, the working capital ratio. This is a numerical expression of the financial health of the business. A healthy working capital ratio would be between 1.2 and 2.0.

Working capital ratios are calculated by dividing your business’s current assets by its current liabilities. For example, let’s say your business has current assets totalling £750,000 and your current liabilities come to £500,000. We divide the two and get a working capital ratio of 1.5.

If the same business’s liabilities raise to £650,000, the working capital ratio changes to about 1.15. This business is approaching negative working capital, i.e. having more in liabilities than it does in assets. This business may need to apply for working capital finance to pay its debts.

However, if the liabilities fall to £250,000, the working capital ratio is 3. Although it may appear at first sight that the higher the ratio the better, this is not necessarily the case. With £500,000 more in assets than it does in liabilities, this business has an excess of working capital that it should be using to grow the business.

What can cause changes to working capital

A dental practice’s working capital is affected by a wide range of different factors. You can expect your working capital number or ratio to change almost daily.

The most obvious are times when you makes large short-term purchases or sales for your practice. Purchasing new inventory or office supplies will cause your working capital to decrease by increasing the current liabilities. Likewise, selling off property or inventory will increase your working capital ratio by increasing current assets.

The ratio will also change due to long-term assets and liabilities changing in status. For example, a 25 year mortgage is a long-term asset until the 24th year. In that final year the remainder is expected to be paid within a 12 month period, therefore making it a current liability.

There are also instances where customers default on their debts and you may not be able to bring in the accounts receivable that you had planned on. Changes to markets may also mean that your inventory is subsequently valued at less than you purchased it for. This reduces its value and creates a discrepancy with the balance sheet.

If your practice is struggling to pay its debts, whether this be due to an increase in the liabilities or a decrease in the asserts, you may need working capital finance.

When you will need Working Capital Finance

Working capital finance loans are those loans taken out by any business including dental practices to cover short-term expenses. They are not taken out to cover purchases of long-term assets or investments such as property. Businesses apply for working capital finance loans when their current assets and cash flow cannot cover necessary short-term payments.

For instance, a business may take out a short-term working capital loan to cover expenses such as payroll, tax payments, interest payments or inventory purchases.

In a perfect world, all businesses and dental practices would use their own liquid cash or cash equivalents to cover these expenses. However, if a business has a weak cash flow or insufficient working capital in the form of current assets, they may choose to borrow the money to make payments in the form of working capital finance.

Alternatively, businesses may not wish to relinquish any of their current assets to pay liabilities and may prefer to borrow money to do so.

Businesses that experience a high degree of seasonality in their operations, for instance hospitality companies or businesses based in a tourist-centric region can often benefit from working capital finance. If they are unable to cover expenses in their off-season, a working capital loan can allow the business to make necessary purchases.

Dental practices looking to grow quickly, or in the process of doing so, may also apply for working capital finance loans.

Contact us to find out more

Asset Finance for your Practice

Managing Cash Flow to Keep Your Dental Practice Going

Financial Tactics During a Cash Flow Crisis

Options for Working Capital Finance Loans

The term working capital loan is essentially an umbrella term for any short-term business support loan used to cover business expenses like payroll and tax.

As such, there are several different types of loans and methods of financing that can raise the working capital required to make important purchases and payments.

Options for raising working capital finance include:

Commercial Loans

Commercial loans are perhaps the most common form of working capital finance. These are simply commercial loans that have been received from a financial lender such as a high street bank.

Any loan that is intended to be used to make short-term purchases, as opposed to long-term investments, can be considered a working capital finance loan.

Equity Finance

Many dental practices choose to use equity financing to fund short-term payments. Equity finance is when a business sells part ownership of the business itself in the form of shares in exchange for capital.

Although you can raise a lot of quick capital with equity financing, you will lose at least some control over the operations and strategy of the business.

Equity finance can be raised in a number of ways. For instance, venture capital investors or business angels will purchase shares in exchange for capital. Similarly, you can float the business publically and offer shares out to the wider public.

Mezzanine Finance

Mezzanine is a hybrid form of financing that acts as a middle ground between traditional commercial loans and equity finance. Mezzanine finance takes the form of a normal commercial loan that is guaranteed with business equity.

In other words, you receive a loan in return for regular payments with interest. If you are unable to meet these payments, the lender has the right to receive payment in the form of equity. You will give up part ownership of your business to the lender if you are unable to repay in full.

Overdrafts

It can be possible to obtain a business overdraft from certain banks and sources of alternative lending.

Overdrafts of your dental practice are, in effect, a form of unsecured loan. However, being unsecured does limit how much you can borrow. You will need to demonstrate a strong credit history and ability to repay loans on time to be able to secure meaningful funding in this way.

However, should you be able to do so, overdrafts can be a good way to quickly raise short-term capital.

Revolving credit facilities

Revolving credit facilities can be another way to raise short-term working capital finance for business growth and necessary payments and are similar to overdrafts. A revolving credit is essentially a line of credit offered to businesses from banks and other financial lenders.

A certain limit of credit will be agreed upon between the business and the lender. The business in question, i.e. your dental practice can proceed to then borrow anything up to this limit at any time. Interest is charged on the outstanding debt until it is paid.

Revolving credit facilities are ongoing agreements between creditor and debtor, they are not a fixed loan amount like a traditional commercial loan.

Revolving credit facilities can be a great way to regularly and reliably raise short-term capital.

Invoice finance

Invoice financing is a way for dental businesses to free up working capital that is currently tied up as a current asset in the form of outstanding invoices.

When businesses sell to customers, this is often done so on credit. This is especially true for larger businesses who do not expect customers to pay immediately or for big dental treatments that are paid in instalments or after the treatment has been completed to its end. Instead, the customer is issued an invoice and they pay on or by an agreed upon date.

However, since the goods or services have already been purchased, their value is now tied up in that invoice. Until the invoice is paid, that value is absent from the business.

Invoice financing is a way to free up that working capital by selling the invoice to an invoice factoring company. These companies buy the invoice for a charged percentage. The owed business can then be paid the value of the invoice quicker than if they had waited for the customer to pay on the due date.

This frees up working capital that would otherwise be tied up as a current asset.

Asset Refinancing

Asset refinancing is a way for dental businesses to free up working capital that is currently tied up in their long-term assets which many dental practices usually have in spades. Through asset refinancing, your business can gain access to some of the cash value of the asset without having to sell it off.

Refinancing allows you to borrow money against equity in the asset. This means that you can borrow money against assets you do not fully own. Your loan will be valued against the value of your equity.

When you refinance an asset, you transfer ownership of it to the lender. However, you still maintain the use of it and the lender does not take it away. Once the loan has been fully repaid, full ownership of the asset is returned to you or at least your portion of equity is returned to you.

If you are unable to repay the debt, the lender takes full control of the equity you laid against the loan.

Asset refinancing can be a great way to gain access to value currently tied up in your fixed assets, whilst still keeping them in the business.

Merchant cash advances

Merchant cash advances are a relatively new method of accessing working capital finance. Merchant cash advances allow businesses to borrow money valued against their average monthly profits. The loan is then repaid as a percentage of revenue each month.

If a business makes lots of transactions using a credit card, merchant cash advances allow lenders to forward money based on the monthly credit card takings. This makes them a great option for retail businesses that have a good cash flow but not that much in the way of valuable assets.

If your business made £10,000 last month, lenders will usually agree to lend you the same amount. You usually cannot borrow more than you make in an average month as you will be less able to pay the loan.

Once the money has been advanced, the balance is paid back each month as a percentage of revenue.

Government support

In certain cases and in certain healthcare industries (including dentistry), you may be able to apply for government support to help cover working capital finance for your dental practice.

Many local councils offer financial support and advice to local businesses. It is worth contacting your local council to find out what support and signposting services they offer. You may qualify for a grant or loan directly from them. In other cases, they may direct you to external organisation who may be able to help.

The UK Government is also currently offering help with working capital finance to exporting businesses. The Export Working Capital Scheme aims to help businesses who are operating in the UK but exporting goods outside of the nation by assisting access to working capital finance.

The UK Government will guarantee up to 80% of risk to the lender to help fund pre and post shipment costs.

Click here to read our blog on How to finance a healthcare business.

A Guide to Working Capital Finance FAQ

What is working capital finance for dentists?

Working capital finance for dentists is a short-term loan designed to help dental practices cover day-to-day operational expenses, such as payroll, utilities, supplies, or equipment purchases, without straining cash flow.

How does working capital finance benefit dental practices?

Working capital finance helps maintain a healthy cash flow by providing immediate funds to manage operational costs, allowing dentists to focus on growing their practice without worrying about short-term cash shortages.

What can working capital finance be used for in a dental practice?

It can be used to cover routine expenses like staff salaries, rent, utility bills, dental supplies, or minor equipment purchases, and even marketing expenses to grow the practice.

How quickly can I get approved for working capital finance?

Approval for working capital finance is often quick, with many lenders providing decisions within 24 to 48 hours, depending on the lender and your financial profile.

What are the repayment terms for working capital finance in a dental practice?

Repayment terms for working capital finance typically range from 6 to 24 months, offering flexibility based on the loan amount and the specific needs of the practice.

Are there any collateral requirements for working capital finance?

Working capital finance can be either secured or unsecured. Secured loans may require collateral, such as equipment or property, while unsecured loans do not but may have higher interest rates.

What interest rates can I expect for working capital finance?

Interest rates for working capital finance vary based on the lender, loan type, and your creditworthiness, typically ranging from 6% to 15% annually.

Can I use working capital finance for dental practice expansion?

Yes, working capital finance can be used to support growth initiatives like hiring additional staff, expanding services, or marketing efforts to attract new patients.

What is the difference between working capital finance and a business loan?

Working capital finance is a short-term loan designed to cover immediate operational expenses, whereas business loans are typically larger, long-term loans used for major investments like property or large equipment purchases.

How do I apply for working capital finance for my dental practice?

To apply, you’ll need to provide financial documents, including profit and loss statements, cash flow records, and your business’s credit history. Many lenders allow you to apply online for faster approval.

Can I use working capital finance if my dental practice has bad credit?

Yes, some lenders specialize in offering working capital finance to businesses with poor credit, although the terms may include higher interest rates or require collateral.

Are there fees associated with working capital finance for dentists?

Yes, there may be additional costs, such as arrangement fees, processing fees, or early repayment charges, depending on the lender.

Can working capital finance improve cash flow in my dental practice?

Yes, by providing quick access to funds, working capital finance helps manage cash flow more effectively, ensuring you can meet expenses like payroll and supplies without dipping into reserves.

Is working capital finance a good option for seasonal dental practices?

Yes, working capital finance is an ideal solution for dental practices with seasonal cash flow fluctuations, ensuring they can cover expenses during slow periods and repay the loan when revenues increase.

How much can I borrow with working capital finance for my dental practice?

The loan amount depends on your practice’s financial health and the lender’s criteria, but it typically ranges from £5,000 to £500,000, depending on your specific needs.

Business Loans for Healthcare Businesses

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Financial Services

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

A Guide to Start Up Finance

Your knowledge of the dental industry itself as well as the knowledge, skills, and the energy you put into your dental practice, are all vital components to enable your business to be successful. However, the success of your dental start up is also dependent on your funding.

Having the right start up finance is crucial if you plan for your start up business to succeed.

Startup loans from Banks

For many dentists starting out on their own with their own practice, especially ones that have equity that can be borrowed against (e.g. a house), a bank loan might seem like the most logical option for you.

If a business opportunity presents itself to you as a dental associate, but the only thing you need is a substantial cash injection in order to take it up, then there are many banks offering various options of unsecured and secured start up loans. It is worth remembering that banks are strict about lending to start ups so be sure to be fully prepared when applying for one.

Don’t be afraid to shop around (or use a commercial finance broker). You may have been with the same bank for years, but that does not mean that they will be available to provide the best deal for your business loan. Look at what every bank has to offer you, they all offer different perks and terms while taking out loans and some may be better than others, which is why it is best to shop around and find what is best for you.

Banks such as Barclays are ready to explore different loan alternatives that are right for you if your business plans prove to be viable. If you are approved for a loan up to £100,000, you will usually have the money within 48 hours of signing the paperwork, giving you the means necessary to take your business to the next level.

These types of startup loans are helpful if you need a quick and straightforward way to finance your business. Most banks give you a fixed rate for the life of the loan so there is no need to worry about any sudden changes in interest rates. Repayments are spread over the course of 1 to 10 years.

Click here to read our article on 5 Reasons to Use a Commercial Finance Broker

Government-backed startup loans

There are many government grants and loans available to small businesses and dental start ups, helping save money, lower start up costs and helping small enterprises grow. Government backed start up loans are not the same as grants. It is important to note that with government loans, you will have to pay all the money back, often including interest.

These loans differ from small business bank loans as they are personal loans for business purposes. They are also unsecured loans which means you do not have to put up any assets or estate as security to receive the money.

Borrowers can access between £500 and £25,00, payable over one to five years at a fixed 6% interest per annum.

Government supported start up loans are available for entrepreneurs looking to start a business. The scheme itself is designed for individuals over the age of 18 who have a viable business plan, but no access to capital to fund their ideas.

A start up loan is a type of finance that is specially designed to help new businesses that have been trading for less than 24 months. A start up loan is in its basic form a type of personal loan except it is solely for business purposes and is also backed by the government. The loan is available to individuals looking to grow a business in the UK. The scheme can provide loans to businesses in every sector.

When you apply you are usually paired with a dedicated and skilled business advisor who will support you throughout your application. If your application is successful, the loan comes with the option of 12 months free mentoring.

How much does it cost to start up a business in the UK?

Unfortunately, there is no whole figure that we can give you to determine how much money you will need to finance your start up business in the UK. Costs can vary greatly depending on the location and industry you want to get into, amongst many other factors; all of which you need to consider before you begin.

Once you have the answer to the location and industry and you have a viable business plan, it is important to figure out whether you have access to the start up finance that you will need to not only get your business started but also keep it running.

The Office for National Statistics (ONS) disclosed that less than half of the UK businesses that started up in 2011 were still going five years later. The two main reasons for the high rate of business failure is due to unexpected costs and poor budgeting. So here are a few of the most important costs you will face and have to be prepared for when raising start up finance.

More often than not these are costs that some people may class as ‘hidden costs’. These are some of the costs many dental practice owners forget to factor in when first starting up their practice henceforth giving them financial trouble further down the line.

Business and Legal advice

Many new business owners do not realise that they need to factor in professional business and legal advice to their start up finance before beginning their new venture, especially when the start up is in the healthcare industry.

It is worth researching what kind of fees you will need to pay for these services and also consider how much money you will need to set aside on legal advice and accounting services. All of which services are vital to many businesses, including any start ups.

There are many solicitors and accountants that will give you a free consultation, this allows you to pre-plan and budget for the fees that you will need to pay them in the future. If you expect your finances to be particularly complex, it may be a good idea to pay an accountant a retainer fee so you can consult them whenever you need advice.

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Business Premises

Unless you are planning to run your dental practice from your home, you will need to find yourself business premises. There are usually very few new businesses and start ups that will already own their own premises. It is more common to lease or rent from a commercial landlord. Therefore, you will often need to consider commercial property costs when applying for start up finance.

Commercial leases often operate on a quarterly rather than monthly basis, especially those for retail premises. This payment method means that instead of facing a smaller bill every month, you are faced with a hefty bill every three months. This can end up being quite a big expense for many new businesses and is one of the main reasons retail businesses run into financial difficulties therefore, it is imperative that you plan for these expenses beforehand.

Read more about commercial property financing here.

Company incorporation

You might want to set up a limited company, depending on your circumstances. Doing this directly through Companies House is relatively quite cheap. However, most people choose to use an intermediary firm to complete the paperwork.

The process in itself can start at less than £10 for basic online services but usually can run up to hundreds of pounds, especially if you choose to use a registered office.

It is also important to note that The Companies Act requires company directors to provide their ‘usual residential address’ to Companies House. It is important to note that if you do choose to provide your home address, this will be on public record. Another option would be that you could choose to use an address hosting service with a solicitor or formation agent however, this will often incur another fee.

If your business is in need of an office space rather than retail premises a good option for you may be serviced office leases. These leases offer you shorter agreements, ability to pay monthly, as well as a lot more freedom and scalability. Serviced leases do include business rates, which can be an added financial burden over a regular lease.

It may now seem that working from home will be the cheapest option for you but even while working from home, there will be setup costs. These will include computer equipment, office furniture and the addition to your monthly utility bills as you will be at home most of the day.

Marketing

Marketing is one thing that many new businesses overlook as an expense when raising start up finance. To make sure that your new venture receives the attention and cash flow it needs to get off on the right foot and succeed. You need to make sure that people know about your business and what it offers.

Old fashion techniques such as word of mouth won’t help you drive sales in the way you need them to take your business off the ground in the first couple months of your business. You need to ensure whatever marketing option you decide, it gets the message out there and makes people know about your business and what it offers.

There are various types of marketing available to you and the costs of each varies considerably. Online marketing such as PPC is one of the most effective types of marketing in this day and age and many online marketing techniques are fortunately quite cheap while many offline marketing methods such as billboards and direct mail involve big initial outlays.

However, there are also quite expensive online marketing techniques to also keep in mind such as social media ads and influencer sponsorships that are proven to be very effective marketing techniques.

An example of a cheap effective way to market is to optimize your website to make sure that you are well placed in search engine results. This is a very low cost but highly effective way to generate business.

There are so many businesses that do not allocate enough budget towards marketing and that is usually the fund that gets cut when when start ups are strapped for cash. You may think that dentistry is an service that is always need needed and will therefore always provide revenue, unfortunately with so much dental competition out there, marketing your dental practice and dental services is mandatory for your dental practice to succeed, sometimes this means hiring marketing experts to help.

It is important to note that you may be right with thinking that your money will be better spent with tangible aspects of your business that seem more important such as buying stock, leasing an office or buying equipment. But, your business venture will struggle to attract customers and make money unless you make them aware of your business to begin with. This is why you should think very carefully before you cut your marketing spend.

Remember, you need to spend money to make money!

Equipment, stock & tools

If the business you are trying to start up is a retail business, stock is most likely to be one of your biggest expenses. However, if your business is a dental practice, you will need to set aside funds for equipment that you will need. Most suppliers will offer you 30 days credit, some will even offer more depending on the circumstances. You can take this credit period and use it to your advantage to help ease any cash flow problems during your first month of business. You may also want to put off buying stock until the last possible moment to ensure you make the most of your credit period.

The amount you spend will depend on the nature of your business. Regardless of whether your business is in the retail sector, or the healthcare dental industry, it is important that you shop around first to ensure that you get the best deal from suppliers.

Again, regardless of the sector that you are operating in, tools and equipment is necessary for all businesses, even if it is just a computer and some desks, and they can be a big upfront expense that you will need to consider and budget for in your start up finances.

Business travel

Often, travelling comes with starting your own business, dentistry doesn’t necessarily require many flights and long road tips but while you are travelling for meetings to seeing clients, it is important to factor travel costs into your business expenses, remember, you are able to claim back any deductible costs in your tax bill.

Business travel includes the costs of public transport, or maybe even buying a commercial car or van. If you are buying a new vehicle for business purposes, remember that you need to include all these associated costs in your cash flow plan. Buying a new vehicle is a big financial spend that is accompanied with other expenses such as fuel, road tax, insurance, breakdown cover and loan repayments; to name only a few.

Business Insurance

For most businesses, you will need insurance from the first day you begin operating. Without it, you may risk hefty financial expenses if you are ever in the unfortunate position that something goes wrong. Business insurance isn’t always very expensive, but it is important to get the right type of insurance to cover your business just in case.

The main types of insurance to consider are public liability insurance, emperors liability insurance, and professional indemnity insurance. There are also other insurance options available to you that can protect your assets such as tools and equipment as well as your premises.

What is a business plan?

In the simplest form, a business plan is essentially a map of your business that outlines the journey of your business venture, your goals and specific details on how you plan to achieve all the goals you have set. Do not get caught up with the idea that a business plan has to be a long, formal document as if it is some type of essay that will get graded.

Maybe that was the way it was once upon a time but, that just isn’t the case anymore. You don’t need the business plan to be excessively long with big words that make you sound fancy and smart. Your plan needs to be succinct, to the point and you need to make sure that whoever is reading it understands that you have thought of every possible expense, and every single small subset that will potentially be part of your business.

At its heart, a business plan is just a plan of working out how your business will actually work and become profitable. It will also include clear steps of how you’re going to make it succeed.

To be clear, in your business plan, especially for start ups, you need to define your business goals. From the beginning, establish clear objectives with actual, realistic, measurable results. Link high-level goals and initiatives that are realistic and achievable to upcoming work, show how the work you will do will deliver value. The sole purpose of your business plan is to help break any uncertainty in the reader’s mind about your potential business. Including aspects such as sales projections, expense budgets and carefully thought through milestones.

It will help to include how you have articulated the foundational elements of your business strategy. Visualise where your company is headed and base it solely on real numbers and statistics. As mentioned earlier, you need to set budgets and add financial data to your plans. Estimate revenue, costs and projected business value. These figures will allow you to make better, more informed expense decisions and report investments in a meaningful and accurate way.

It will become pretty obvious to certain people that you don’t know how much money you need and when you need it if you haven’t categorically laid our projected sales, costs, timing of payments and expenses on your business plan. Whether you need to convince friends and family to invest in your new venture or investors and banks, these numbers need to be included to ensure that you are someone who is worth investing in.

For start up companies, the business plan should be focused on explaining what the new company is, what it is going to do and how it is going to accomplish the goals you have set out. The most important aspect that your business plan needs to include is why and how you are the right person to achieve your goals.

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Starting a business with poor credit history

Accessing capital is necessary for business ideas that are looking to grow and become profitable. Usually, start-up loans or line of credit is the most usual, traditional and obvious place to find the funding that you need but many new businesses find themselves knocked back from funding applications because of their poor credit history. The first step you need to take is to know whether you have a poor credit history or bad business credit.

Firstly, it is important to understand that having bad credit is not the same as having no credit at all. If you have no credit history, lending becomes lightly simpler for you. You just need to demonstrate that you have a viable business plan for your dental practice that is worth investing in. A poor credit rating can affect your ability to get a start up loan from mainstream lenders, such as banks. Luckily, here are various alternative ways to secure a business loan as well as repair your bad credit history so finding funding in the future is easier for you to obtain.

A start up loan usually means that you have no previous trading history.

Can I qualify for a small business loan with bad credit?

YES!

While poor credit will hinder your chances of securing start up finance with many traditional lenders, it does not end your quest for funding. Having bad credit history means that you need to change who you go to get your financial capital from, it doesn’t put you out of the game for good. There are still plenty of start up finance options available to you now more than ever, even if you have a bad credit history. You need to be mindful that while some lenders will still lend you money, due to your credit history extra security may be needed to put in place as collateral as well as higher interest rates.

Who lends to start up businesses?

There are many different kinds of lenders who will help fund start up dental practice; both traditional and more contemporary lenders are now available to suit your individual needs best. It’s a great time to be a start up right now because, thanks to online lending companies and a pledge from the UK government to support small businesses, there are so many options available to you beyond traditional high street banks for start up finance.

Where can I get start up funding?

There are a few different options available to you other than tradition banks to help fund your startup. Here are a few:

Banks

A bank loan is capital that you borrow from a bank over a fixed amount of time. Applying for start up finance through a bank is still the most traditional way to obtain a loan to help start up your business. These loans can be secured or unsecured, depending on your circumstances and business plan, both options may be available to you.

Bank loans protect your cash flow from the impact of large purchases and help your business get off the ground with fixed monthly repayments. Banks are no longer like robots with cue cards reading off a script to decide whether you are worthy of a loan or not. Most banks look at your business plan, your previous relationship with them (E.g debit/credit accounts) as well as you as an individual and give you a personalised quote from that. In most cases you can find out whether you are likely to even get approved before you apply.

Remember, an amazing business plan is not just pivotal for you to create a clear vision for your practice but is instrumental if you are to win funding from the bank. Ensure you provide as much information as possible about how the money will be used.

A huge benefit from borrowing from banks is that you retain full equity in your company and the bank does not have a say in how it is run. Most banks also offer complete applications that can be carried out online and if you are approved, you can receive the funds immediately during working hours.

Government scheme

The government start-up loans scheme has already lent for £100 million in funding start ups. This scheme not only gives money to these businesses, it also understands that being an entrepreneur may mean that you lack some necessary business experience to help your company become profitable which is why the scheme pairs applicants with a Delivery Partner.

This individual who you are paired with is accompanied with the skills necessary to help the start up business become approved and as successful as possible. This individual will help in creating a business plan and will continue supporting the business even after the application process. Those of whom are granted the loan will be paired with another individual who will become their mentor to guide them as they start their business. As this is a loan, not a grant, the loans must be paid back within five years, often with interest.

Crowdfunding

Crowdfunding is becoming an increasing popular way to raise capital for start up funds. If you are unfamiliar with crowdfunding, simply it is a way for businesses to get small amount of funding from a lot of people to raise the funds they need rather than traditionally borrowing a large sum from one or two lenders.

By listing on crowdfunding websites such as kickstarter or indiego.com, your proposal can be seen by masses from hundreds to thousands each of whom can pledge as much or at little money to your business as they want. Essentially it’s similar to donating however, crowdfunding is not a catch-free capital.

Equity based crowdfunding means that in return for someone’s investment you trade equity in your business and there is also reward based crowdfunding where you have to offer something to your investors in return for their investment, this could be anything from free tickets to your launch event or sending them your product for free to try.

Loans from not-for-profit lenders

There are organisations that provide an alternate source of funding. Dental businesses can apply for up to £25,000 in funding and similar to the government start up loan scheme, individuals will be paired with an experienced mentor/ business advisor who can help them with their application as well as any further guidance needed.

Peer to peer lending

Peer-to-peer lending is another fairly new way to obtain the funds you need for a startup. It is similar to crowdfunding where there are a number of investors on an online platform that you can reach. The majority of these peer-to-peer lenders have online loan applications and also have loan calculators so you can set the loan amount and term that suits you best and you can see beforehand what your monthly repayments will look like.

After you have applied to peer-to-peer lending for start-up funding you can find out if your application has been successful, with most lenders, within as little as 24 hours. If your application is successful, your loan will be posted on their website where investors will be able to pledge if they would like to invest. The funds will then be released to you and you’ll start monthly repayments.

Click here to read our blog on how to finance a healthcare business.

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A Guide to Acquisition Finance

What is Acquisition Finance?
How to raise acquisition finance
What is a “No-Money-Down” Opportunity?
Acquisition Finance and Closing Costs
What is a management buy-in (MBI)?
Business Acquisitions Often Use Multiple Sources of Funding
Funding a Management Buy-In
MBIs and private equity
What is BIMBO?
What is a Management Buy-Out (MBO)?
What are the differences between MBO and MBI
Finance operations
What is a leveraged buy-out?
Reviewed By:

What is Acquisition Finance?

Acquisition finance is the capital that is obtained for the purpose of buying another business.

Obtaining acquisition finance is a vital part of the natural cycle of many businesses. It is often necessary to require acquisition finance when a dental practice has successfully started up and grown its client base to a point when it is then time to grow the business by purchasing another practice. It then needs to raise funds in order to complete the transaction.

By acquiring another company, a smaller company can increase the size of its operations and benefit from the economies achieved through the purchase. An acquisition can help your dental practice in many ways. For example, it can help your dental practice: move into a new market segment, increase the client base, expand, gather knowledge, and improve their output. However, these opportunities often come with big expenses. Bank loans, lines of credit and loans from private lenders are all common choices for acquisition finance. Other types of acquisition finance also include start up loans (government funded), debt security and owner financing.

The business market is always changing and has gone through many significant changes over the last decade however, the biggest changes within the dental industry have occurred within the last year due to the pandemic. There are now various new lenders available for acquisition finance, new deal structures and new lending criteria.

How to raise acquisition finance

There are many ways to finance dental practice purchases. Most purchase transactions are structured using some of these methods. It is perfectly viable to only use only one method if that is sufficient enough for you however, in many cases, some of these options are used in conjunction to finance a business acquisition. The methods you chose will be the ones that best suit your needs and business transaction.

Using your own funds

To use your own cash reserve is one of the simplest ways to finance a business acquisition. These funds can come from your savings, estate income or home equity.

Although using your own funds is a very effective debt free way to complete the purchase, it is uncommon for an individual to acquire a business using their funds alone for the purchase. Instead most buyers use their personal funds in combination with business loans or with seller financing. The large personal funds of an individual or company can work as leverage to them allowing them to purchase larger, more established dental practices.
Government loan

Another option to source acquisition finance is to get a loan or grant that is certified from the UK government, available dental practices as well as many other businesses and industries. These loans are often referred to as start up loans with the intent to help your dental businesses grow. Unlike a business loan, this loan is an unsecured personal loan. They are government backed loans and charge a fixed rate of 6% per year. The term to repay the loan can range over a period of 1 to 5 years. The advantage of this type of loan is that there are no application fees and no early repayment fees either.
Bank loan

Getting a conventional loan such as a term loan from a commercial bank to raise acquisition finance can often seem like the easiest option to fund your practice purchase, but it can be very difficult. Usually, as a rule, banks lend funds against existing assets rather than against business plans. Therefore, to get a loan from a bank, you usually must have substantial assets and a good credit history at the least. For most conventional borrowers, the best option available to allow them to get the funds they need is to get a bank loan guaranteed by their existing assets.
Leveraged buyout (LBO)

A very common financing structure to buy a smaller dental practice is a leveraged buyout. Leverage buyouts are the acquisition of another company using a significant amount of borrowed money in order to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. In a leveraged buyout (LBO), there is usually a ratio of 90% debt to 10% equity.
Seller financing

Another common way to source acquisition finance is to ask the seller themselves to provide financing. In this case, the seller provides you with a loan that is amortised over a period of time. The proceeds that you retain from the business will be the funds that allow you to pay back the loan. Business buyers like seller financing because it is a lot easier to obtain than conventional financing, with the bonus benefit that it can also be cheaper.

On average, sellers are usually willing to finance 30% to 60% of the agreed upon sale price. There are very few sellers that will finance more than that. However, it is highly dependent on what type of buyer you are. If you are a strong buyer with substantial assets as well as a large down payment, then there is a chance that there will be a seller that will be willing to finance a higher percentage.

Like any other type of finance, the seller will only provide financing for you after they have done their due diligence on you. Your credentials such as your credit, assets, business plan and experience will all be assessed before you will be provided any funding. Experience within the dental industry itself is vital, having experience being a dental practice owner will work very well in your favour.
Assumption of debt

There are two common ways to acquire a business. You can either purchase the assets or the stock. Buying the assets ensures that you the only thing you are purchasing are the assets themselves without any of the ‘bad liabilities’ for example, future lawsuits. However, if you buy the stock, you get all the assets of the company, its liabilities as well as all the risks involved.

Most asset purchases involve the transfer of some assets and liabilities. This point is important because part of your payment to the seller may be the assumption of existing business debt. This process can sometimes get complicated, as you often need the approval of the debtors before assuming the debt.

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What is a “No-Money-Down” Opportunity?

There are often entrepreneurs who look to acquire businesses for “no money down.” This means that these entrepreneurs are hoping to get 100% external lender or seller financing. To clarify, for all intents and purposes, these transactions do not exist.

From a seller or lender perspective, they would need a pretty big incentive to be giving someone 100% financing.

While some transactions could meet this criteria, the odds are as likely as winning the lottery. In other words, “possible, but not probable.” It’s best to prepare yourself to put a substantial amount of money down.

Acquisition Finance and Closing Costs

It is important to remember that getting financing for your dental practice usually increases your closing costs. These closing costs will include your contribution to the purchase of the business and will directly come from you, the buyer. The size and type of business you are looking to acquire is heavily dependent on the amount you need to budget for closing costs. The costs vary but as a rule it is best to budget at least 10% of the purchase price for closing costs however, if you are able to allow for 20%, that would put you in a much better position.

What is a management buy-in (MBI)?

A management buy-in (MBI) is the acquisition of a business by a management team or individuals external from the current company on sale.

MBIs usually require external funding from banks, private lenders or private equity investors. After these investors contribute to the acquisition of the company, they will be entitled to a share of the profits if the company becomes profitable.

A management buy-in team often competes with other purchasers to buy the company. The competitors often vary but it is usually in the best interest of the company to allow an internal acquisition (MBO) rather than external (MBI) to take place.

After the acquisition goes through, the buying managers may replace the current board of directors with their own representatives. An MBI can vary from 100% acquisition of a business to a majority controlling stake in the company.

The process of MBI

The first step that will need to be taken is that an external team will need to gather all the necessary information about the company it intends to purchase. This includes an in depth market analysis of the company as well as its buyers, products, suppliers, sellers and its competitors.

An important part of this step is to find out about any other competing buyers who are interested in purchasing the target company; many dental practices for sale often have a lot of competitive buyers. Once this step is completed, the external management will begin negotiating appropriate selling prices with the vendors.

Advantages of Management Buy-Ins

In the case that the current owners and management team of the practice in question are not able to effectively manage the company, then an MBI can be a convenient win-win situation for both buying and selling parties. The new management will be able to offer new insights into growing your practice further and may also have better knowledge and experience which they can use to revitalise the company.

Having experience and knowledge of the sector of the company you are looking to acquire will benefit you immensely, this is why many associate or principle dentists succeed exponentially when they move on to being practice owners. This knowledge will enable you stand out and make you appear to be a great candidate amongst competitors if you have that experience and knowledge behind you.

New management will bring new contacts and opportunities for a company, often bringing in new management and ideas to a dental practice will help revive it and bring new clientele.

A new management regimen may also motivate current employees as well as bring in ‘new blood’ especially within heath care practices. The change of management could change the entire company morale and client/ patient experiences, particularly if the company is performing poorly.

Disadvantages of Management Buy-Ins

The reason that an MBI is needed is usually because management lacks the financial power to buy a business outright, which is very common. This usually means that if management do decide to buy, then they might require additional financial help. This typically comes from a bank or private equity fund, which then introduces additional debt to the company and spreads equity thinner amongst investors.

Debt repayments can reduce profits significantly, they also reduce the money available to pay dividends to shareholders.

Many investors tend to want to exercise some level of control over the company. In turn, this results in management having to give up some control over the company for investors to be able to have their say.

Man with credit card borrowing money online

Although having new management can help change things in a company for the better, it can sometimes also have the adverse effects. The new management may fail to bring the necessary growth of the company that was expected by their arrival.

As new management comes in, a management style change is inevitable. In some cases, existing employees do not appreciate the change. It could decrease morale and make them feel demotivated creating further problems down the line.

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What Profitable Dental Practices Do Right

Understanding Finance to Increase Profits

How Should a Dental Practice Organise its Finances

Business Acquisitions Often Use Multiple Sources of Funding

It is common to use more than one source of acquisition finance to purchase a business, a lot of the time it is necessary. In addition to the funding needed to acquire the company, partners may want to include a line of credit or a factoring line to handle cash flow after the sale closes. There are other ways that you can potentially structure the transaction depending on the nature of the business and its assets.

Funding a Management Buy-In

Most MBIs are financed through a combination of debt and equity. There are other sources such as deferred loans that could also be used.

Equity will typically comprise ordinary shares and redeemable preference shares. The investors and management of a company will usually subscribe to shares in the holding company in a typical private equity transaction and its subsidiary will act as the bank debt.

The cost of a complete management buy-in is comparable to what it would cost to buy the entire company. It is very rare that a management team will have the funds without needing external funding to aid them in buying a company.

Acquiring such businesses does produce high costs, however it may be assuring to know that lenders may be sympathetic to new owners. You should aim to invest in a dental practice that is already performing successfully as you can avoid the costs and risks of setting up a new venture in its entirety. By taking over a practice that is already operating successfully, you can avoid the liabilities and costs that may come when taking over a business.

There are a few ways to deal with these costs after a price has been agreed. Usually to fund the transaction, it requires a combination of debt and equity derived from either the buyers, seller or financiers and can be agreed in numerous ways. Many of these funding sources can also be used in conjunction with one another.

Buyer contribution

These are funds that come from the management team themselves. Usually they are required to put up their own personal funds initially to prove their commitment to the transaction. The buyer’s contribution can be raised by selling assets or gaining a second mortgage on an estate that they own.

Asset Refinance

Putting up the assets of the company such as premises and stock or dental equipment (x-ray machines) can generate a high level of funding. Using the leverage of these assets of the company to buy the company itself can prove to be particularly effective especially to businesses with large investments in property. A re-mortgage on a commercial property can raise considerable finance for a business and an additional benefit is that the costs can be spread over 20 years.

Vendor Loan

The vendor themselves can help provide acquisition finance to fund the transition if they choose to donate a sum of their equity as a loan to the company, this will eventually be repaid to them at a future time.

Private equity

Although private equity firms may be able to advance acquisition finance for an MBI transaction, they may also be at liberty to impose strict terms and conditions attached to their financing. These could involve them controlling how certain parts of the practice should be run.

Business Loans:

There are business lenders who may be able to offer acquisition finance as unsecured loans that are repayable over the course of three to five years. A larger amount of money would then be transformed into a secured loan which necessary security of assets from the business would be to be added.

MBIs and private equity

A vast majority of buyouts are financed by private equity. MBIs will almost certainly involve private equity. MBIs usually always involve a private equity backing because they represent a higher risk to an investor than a MBO.

It is common for a private equity loan to involve a loan component as well. Private equity funds invest money in an MBI in return for a proportion of the shares in the company.

It is important that management teams are aware that private equity funds may have different goals. Private equity backers have the sole intention to make a return on their investment, usually in three to five years. This contrasts to management, they tend to hold a longer term view as this could potentially be their entire career.

Private equity backers like many others, will also want to conduct extensive due diligence before making an investment.

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What is BIMBO?

A BIMBO is a buy-in management buyout, It is a form of leveraged buyout (LBO) where both incoming and existing management are involved in acquiring a company. The existing management represents the buyout portion while the new management represents the buy-in portion.

What are the disadvantages of BIMBO?

In order for BIMBO to work, new and existing managers must be able to get along. It is natural for new managers to have new ideas and plans that they wish to implement right away while existing managers will try to maintain their business like they always have. These differences between managers can often cause a lot of friction. This can often result in many complications. Pronounced conflicts between managements will distract from the core business and will result in inhibiting profits.

The disadvantage of BIMBOs is that they usually involve an increase of debt of a company. Management needs to ensure that after the acquisition of the company, the fundamentals of the business are adequate enough to service the debt acquired and not cause any further financial stress for the company.

What is a Management Buy-Out (MBO)?

A management buy-out (MBO) occurs when the management team of a dental practice collectively uses their own assets to buy all or a significant amount of shares in the company they work for. The buy-out is usually achieved through each member’s own funds, however it is common for individuals to require external financial aid from banks or private investors. This could further entitle external parties to a share in the companies profits, should the company make any gain.

Why do MBOs happen?

Often MBOs occur when a shareholder is about to retire or give up/ sell their shares. This gives the management team the perfect opportunity to become shareholders within the same company.

MBOs are usually a quicker and more efficient option for maintaining a business than to sell the business to a third party. It is also in the best interest of the business itself as the management team already knows the business well, this ensures that they will be able to take over the dental practice completely and continue its growth.

Having an existing management take over requires less time to conduct due diligence, and it presents a relatively low risk path to owning the said business. The current management understands what the company needs to be successful going forward.

Advantages of MBOs

The process of an MBO offers advantages to all parties involved. In particular, it allows for a smooth transition of ownership with little impact on the continuity of the business itself; the dental practice can resume its business continuously as normal.

The management knows the company already, this reduces the risk of failure or unanticipated problems that an MBI acquisition would usually have.

Current employees are less likely to have a problem with the acquisition change of the company as the status quo is likely to be maintained during the takeover.

If the company was to be sold through a third party, management may not wish to continue with the business therefore an MBO might prove to be the only mutually acceptable sale route that would benefit the company.

Disadvantages of MBOs

Management usually lacks the financial power to buy the company outright. This means that a third party seller may be harder to attract. If management decides to buy in then they usually require additional financial funding from banks or private equity funds. This extra funding is typically needed in MBO acquisitions.

Although it is needed, the extra funding needed for MBOs introduces debt to the business and spreads equity a lot thinner amongst investors.

Debt repayment affects the books significantly! The repayments may also hinder the company’s ability to pay dividends to shareholders.

The more equity is spread, the more likely it is that investors want a more controlling say in the company, resulting in management depleting their control in the company in the future.

MBOs need a lot of working capital to allow the company to be successful in the future. For an MBO to be sustained, the company will need strong fundamentals. This means that the practice itself will need to generate adequate profits on a day to day basis to sustain itself as it develops and provides adequate return for stakeholders, as well as being able to support ongoing capital expenditures.

What are the differences between MBO and MBI

The main difference between a buy-out and a buy-in is that the management is external to the company. Simply, this just means that during an MBI, there will be a lot more due diligence required than an MBO.

Usually, it is thought that the management that is internal to the company will be advantageous as these employees are already experienced and well versed in the company’s affairs. While a management taking over that is external to the company, will usually not be as informed as an MBO offer would be.

Although there are character differences between MBOs and MBIs, the legal structure between the two types of acquisition are usually very similar.

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Finance operations

Unfortunately, obtaining acquisition finance to buy the business is just the beginning. You will still need to ensure that you have enough funds to effectively operate the business successfully once you acquire it. It is common that people will need additional operational funding however, it can be very difficult to try to get funding immediately after purchasing the business. To ensure you have the funding that you need, it is best to negotiate it while you are negotiating the purchase.

This section discusses common ways to finance operations.

Line of Credit

An effective way to access acquisition finance is by using a business line of credit. This revolving facility allows you to borrow the money as and when you need it and it can be paid down as your cash flow improves. Although qualifying for line of credit can be very challenging, it is one of the most flexible ways to finance the operations of a business.

Self-Funding

One of the easiest ways to finance operations is to use your own cash reserve. This reserve can initially fund your acquisition however, it should eventually be financed by the cash flow of the business. Rather than paying suppliers and shareholders immediately, you can also improve your cash reserve by paying your suppliers on net-30 or net-60 day terms.

Invoice Factoring

Lastly, one of the more common reasons businesses experience cash flow problems is due to their cash reserves running low. This problem is common for companies that sell to commercial clients. This setback can seriously impact operations.

The solution to improve your cash flow is by using invoice factoring. It is easier to get than other types of funding and can work well with corporate acquisitions. This solution finances your slow-paying invoices as well as improving the overall cash flow of your business.

What is a leveraged buy-out?

A leveraged buyout, commonly referred to as an LBO, is a type of transaction that companies use to acquire other businesses. Through LBO the business is purchased with a combination of equity and debt. The company’s cash flow is the collateral used to secure and repay the borrowed money. Essentially the buyout is funded with debt.

The deal is structured so that the target company’s assets and cash flows are used to pay for most of the acquisition finance cost. The purpose of an LBO is to allow a company to make the acquisition they want without having to commit a lot of capital to it.

Advantages of a Leveraged Buyout

The main advantage of a leveraged buyout is that the buyer gets to spend less of their own money.

An LBO can also lower a business’ taxable income, so the buyer will see tax benefits that they have never previously had.

The buyer will see a bigger return on equity than any other financing buyout scenario as they are able to use the sellers assets to pay for the financing costs rather than their own.

An LBO can improve a company’s market position and even save it from failure.

For the seller, a key advantage of an LBO is the ability to the company even if it is not at its peak performance. As long as it still has a cash flow it can be sold.

Disadvantages of a Leveraged Buyout

From a buyer’s perspective, LBOs have some risks. The main disadvantage is that there is a very slim margin for error, if the company is not able to pay the debt, they will get no return at all.

If the returns of the acquired company do not exceed the debt financing costs or the cash flow is not sufficient enough to handle the high interest rates exacted by the LBO, there is a high bankruptcy risk. LBOs are especially risky for companies in highly competitive markets.

LBOs have high fixed costs of debt. Often LBOs result in having to downsize a company.

LBOs are not appropriate for firms with high growth prospects or high business risk.

Click here to read our article on How to finance a healthcare business.

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Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

A Guide to Asset Finance for Dentists

Asset Finance for Dentists – Webinars and Podcasts

What is Asset Finance?

Asset finance is the funding raised by a company to either purchase or hire assets. Dental practices all require some kind of asset in order to operate. Whether this be general office equipment, specialised machinery or even furniture.

In many cases, companies do not have the up front cash required to purchase these assets, especially since most of the necessary equipment can be quite expensive. This is especially true of start-up businesses that have not had time to build up reserves of capital.

It is also true of more established businesses that are experiencing cash flow issues, or maybe wish to purchase extremely expensive equipment.

Fund the Purchase with Asset Finance

In these circumstances, many dental businesses will approach commercial finance providers to attempt to source asset finance to fund the purchase. Asset financing can work in a number of ways and the terms of the loan will vary depending on the provider.

For instance, the asset finance provider may provide you the money to buy the asset outright. On the other hand, they may prefer to buy the asset themselves and then loan the asset to your company.

At the end of the loan term the asset could become property of the borrowing company. On the other hand, the asset finance company may wish to keep the assert themselves once the loan term is completed.

Asset Finance vs Asset-based Finance.

Asset finance is similar to, but not to be confused with, asset-based finance. Asset finance is the money raised by a business to purchase or hire equipment for the company. However, asset-based finance refers to the security put up against a loan as a guarantee.

Asset-based lending is often used by companies which need short-term lending to alleviate problems in cash flow, such as payroll issues, and to keep the business running on a day-to-day basis.

Secure a loan using an asset

Asset-based finance is a method commercial finance lenders use to guarantee their investments. Asset-based finance is, in essence, a process whereby a lender will secure their loan using one of the company’s assets.

Lenders will usually use assets such as specialised equipment or machinery, company vehicles, any property the company may own and even accounts receivable.

These assets are used to guarantee the loan repayment. In other words, if the borrowing company is unable to pay back the loan in full or on time, the asset-based finance lender will seize the asset (or assets) and sell them in order to recuperate their loss.

Asset and Asset-based Finance Together

Asset finance and Asset-based finance can also be used in tandem. If you are a start-up dental practice with minimal working capital, or perhaps an established practice struggling with liquid capital or cash flow problems, you can use asset-based finance to purchase equipment.

In these cases, businesses use the asset itself which they are borrowing to buy as the collateral. For instance, you may be a dentist opening your first dental practice and you need to purchase expensive x-ray machines.

What do you do if you don’t have tens of thousands of pounds lying around to buy it?

You would use asset-based finance to raise the money you need to purchase the machine. However, the lender is also using that x-ray itself as the collateral asset. This means that if you are unable to pay back the loan, the lender will seize that x-ray and sell it on to recoup the loan.

Contact us to find out more

What is an asset?

To understand asset finance it is important to understand what an asset is. An asset is essentially any piece of property owned by a business, not including land or a building.

The assets a business owns will vary from company to company and industry to industry.

Most businesses will need general office supplies such as desks, chairs, IT equipment and even smaller items like stationary. A dental surgery will have dentist chairs, special lighting and a lot of specialist equipment. These are considered business assets and can be purchased using asset finance or asset-based finance.

Company vehicles can also be purchased using asset finance. These vehicles could be large lorries and trucks used to haul heavy goods or equipment around the country. They could also be small private cars intended solely for business related travel.

Industry-specific companies will also need to purchase specialised machinery and equipment for their day-to-day operations and these are often incredibly expensive.

For instance, a dentist’s private practice will need surgical chairs, the medical equipment and general office supplies.

However, there will be incredibly expensive, specialised machinery such as x-ray machines, scanners and digital imagery equipment, machinery for manufacturing dentures, implants and retainers and much more!

Durable, Identifiable, Moveable and Saleable

That is not to say that lenders will fund any product you tell them you wish to purchase. Generally speaking, to be eligible for asset finance, an asset must meet criteria known as the DIMS criteria.

DIMS stands for – Durable, Identifiable, Moveable and Saleable. These criteria are used by asset finance lenders to determine whether the asset being purchased is suitable for asset financing and, thus, a safe investment for their money.

Assets eligible for financing are often split into 2 categories. Hard and soft assets.

Hard Assets

Hard Assets are those assets which are durable and have a good resale value at the end of their term with your business. Hard assets are most often used as security against asset-based finance due to their high resale value.

In other words, if you fail to pay the debt, hard assets will be able to pay it off instead. Hard assets include items such as heavy machinery and vehicles.

Soft Assets

Soft assets are those assets which have a greatly reduced resale value at the end of their lease term. Due to this fact, soft assets may require additional security on the part of the borrowing party to lower the risk of the borrower, and thus secure the loan.

Soft assets include things such as IT software and medical equipment which cannot be reused.

Very few businesses, especially newer start-ups, will be able to raise the funds themselves necessary to purchase this much equipment. Established dental practices will a healthy client base will find it easier to fund new equipment with their cash reserves.

However, expensive equipment can eat up entire emergency cash reserves and it may be advisable to borrow the money instead to protect the day-to-day running of the business.

Vehicle Finance

Vehicles are a very common asset purchased through asset financing. Vehicles are expensive but necessary aspects to many businesses. However, it can be difficult to raise enough money to buy one, let alone an entire fleet.

Most vehicle dealerships will offer their own payment structures and schedules. However, it may be more economical to purchase the vehicle outright using an asset financing company and paying them instead.

This is because asset financing companies are usually more flexible on the kind of loan terms they can offer.

Asset finance can make a lot of sense when purchasing vehicles for several reasons. Firstly, businesses have the option to purchase expensive assets without having to raise the full amount first.

Additionally, since many asset finance terms mean that the finance company retains ownership of the vehicle, companies are protected from maintenance fees and depreciation.

Why use Asset Finance?

Asset financing is used by all kinds of businesses but is especially helpful for dental practices as it helps aid the purchase of necessary equipment for their operations. Limited companies, social enterprises, charities and sole traders are all eligible to apply for and secure asset finance.

Historically, asset financing was mostly used by larger companies. However, in recent years the threshold for the amount that can be applied for has lowered.

Borrow money to buy an asset

There are a multitude of reasons why a company or sole trader may use asset finance to grow their business. The simplest reason for most businesses is that they cannot afford to buy the asset outright.

The more expensive assets such as specialised heavy machinery, cutting-edge technology and vehicles can be almost impossible to purchase in one lump sum for many businesses.

This is especially true of newer start-ups and small to medium enterprises (SMEs). Without the large reserves of capital that the more established businesses have, it can be extremely difficult to fund the early purchases of necessary equipment.

Spread payments over a number of months

In these situations, it might make more sense to apply for asset financing. This spreads the cost of the asset over a more manageable term.

Instead of paying out a large lump sum, asset financing allows you to spread the payments out over several months. This allows you to better plan and budget your company’s cash flow.

Save capital for an emergency

Even if your company, or you as a sole trader, have the cash available to purchase an asset, you may still wish to apply for it via financing. One of the reasons for this is, simply, that you may need that money for other things.

The asset in question may be essential to your business however, purchasing it immediately with your only available cash reserve is not essential.

Why give up your rainy day fund or disrupt your company’s cash flow when you can apply for asset financing and spread the cost?

What happens if you purchase a new company car with your reserve of capital and the next day your first company car breaks down.

Now you’re back to only having one car. Only this time you don’t have that rainy day fund to get it repaired.

However, if you had purchased or hired the new car on asset financing, you’d still have the ready cash to take the broken car to the garage!

Contact us to find out more

Advantages of Asset Financing.

There are several advantages to using asset finance to purchase or loan equipment, as opposed to using your own capital.

Reduce upfront costs

Using asset finance reduces the upfront costs incurred by your business by spreading the payments for the asset over a period of months.

This helps to keep your business’s cash flow stable by splitting the cost into smaller lumps, instead of incurring one large payment.

Plan your financial year

Since these payments are then fixed, it makes it easier for you to budget and plan your year financially. Spreading the cost also frees up your business’s capital to be used in other areas of growing the business.

If you’re purchasing a high-value hard asset, you can also benefit from using the asset itself as security for the loan.

Secured loans

As we mentioned earlier, you do not need to put up additional security for the loan in many instances. This is especially true of expensive, hard assets.

Instead of putting up extra collateral for the asset, you simply hand the asset over to the lender in the eventuality that you cannot make the payments.

You don’t pay for maintenance

Another great advantage of using asset financing is that any servicing, maintenance or repair costs that need to be undertaken during the life of the asset are incurred by the provider.

This protects your business from sudden, unforeseen costs when things break down or go wrong.

Using asset-based finance can also allow your business to secure better loan terms than they otherwise would.

Secure better terms than traditional lending

Using your company’s assets to secure a loan with an asset finance provider can help you secure far better terms (for instance, in terms of interest rates or payment structure) for a loan that you would from a high street lender such as a bank.

Don’t pay for depreciation

Most assets suffer some level of depreciation during their lifetime – in other words, a reduction in their value. This is true for everything from machinery to vehicles.

Since most companies and individuals will not pay full price for an item that is second hand, you will not be able to recuperate the full value of an asset.

A common saying is that a car loses around 10%-20% of its value the second you drive it off the lot. In many cases, the asset purchased via asset financing is in fact owned by the commercial finance lender.

The lender purchases the asset and then leases it to the business. Therefore, the loss in value is in fact incurred by the lender, not your business. As the actual owner of the asset, they actually suffer the loss in value.

Disadvantages of Asset Financing

Despite its advantages, there are some drawbacks to using asset finance that must be highlighted.

If you cant pay, they’ll take it away

Firstly, the most obvious drawback is that you will lose the asset should you be unable to make your payments, which if happens, will be an obvious hinderance to your day to day dental practices.

Whether you have purchased the asset and have simply borrowed the money to do so, or your lender has purchased the asset and you are leasing it from them, you do stand to lose the asset in the eventuality that you cannot meet the loan terms.

You may not own the asset

Similarly, since many asset finance structures mean you do not actually own the asset, you do not always have full control over its usage. This can mean that modifications may need to be approved by the lender.

This also means that if you need to raise some quick cash for your business, you will not be able to sell the asset on.

Therefore, the asset does not provide quite as much financial security than it otherwise would have if you had bought it yourself.

It’s not a short-term fix

On top of this, asset financing is primarily used as a long-term solution for cash flow issues when it comes to purchasing assets. Short-term asset financing is incredibly rare.

Most agreements are termed for at least 1 year. If your business is looking for short-term financial assistance then asset finance would not be a workable option in most circumstances.

You may need extra insurance

Lastly, although any servicing or maintenance work that is covered by the agreement will be funded by the lender, not all such repair work will be covered.

If your asset is damaged in a way that is not covered in your agreement, your business will incur the costs of any work that needs to be done.

You may need to buy additional insurance on top of your loan payments to protect against this.

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Different types of Asset Finance

Generally speaking, asset finance is split into 3 categories; Hire Purchase, Finance Lease and Operating Lease. However, there are several other types of asset finance alongside these.

Hire Purchase

Hire Purchasing in asset finance is an agreement whereby the borrowing company pays for the asset in instalments over time and retains the option to purchase the asset at the end of the term.

In other words, you hire the asset until the end of the loan term when you then purchase it.

During the loan term period, the asset finance company will have ownership of the asset. Until the loan has been fully paid off, your company will only be hiring the asset.

Terms can usually last between 1 and 5 years and it is common for a 10% deposit and the full VAT to be paid upfront. Once the loan has been paid off, your company will have the option to purchase the asset outright.

Under some hire purchase agreements you can show the asset on your balance sheet at the beginning of the loan term.

There are several benefits to using Hire Purchasing for asset finance. Firstly, it allows your business to purchase necessary equipment and supplies without the need to pay huge amounts upfront.

Since you are spreading the cost of the asset over a 1 – 5 year loan term, you can avoid unnecessary disruptions to your company’s cash flow.

You can also often benefit from fairly low (10% is quite common) deposit payments. Additionally, the loan is secured against the asset itself. You will very rarely require any added form of collateral to guarantee the loan.

Finance Lease

A finance lease agreement is a type of asset financing whereby the asset finance provider purchases the asset outright and then leases it to the borrowing company.

This differs from hire purchasing in that the borrowing company never gains full ownership of the asset, they only ever rent it. Once the asset is returned to the asset finance company, it is either sold off or leased off again.

Finance lease agreements usually last from 1 to 5 years. During this time, the borrowing company will have full control and responsibility for the asset.

Unlike hire purchasing, where the asset provider is liable for maintenance and servicing, the borrowing company is liable under a finance lease agreement.

In other words, the borrowing company takes on all of the risks of owning the asset, alongside all of the rewards i.e. usage.

Finance leases usually cover the usable life of the asset. At the end of the loan term, there are generally 3 options.

Return the asset to the asset finance company.
The borrowing company enters into a second lease arrangement
The asset is sold off and proceeds split between both parties.

Operating Lease

An operating lease is a business contract hire which allows companies to lease an asset for just part of its usable life.

Whereas finance leases last for the economic lifespan of the asset, operating leases only last for a fraction. This means that there is much greater resale value at the end of the lease period.

Since they are shorter term leases, operating leases allow businesses to loan assets for shorter periods of time. This makes them good options for companies who need to regularly upgrade equipment or who only need quick usage from an asset.

The shorter loan term also means that the borrowing company takes on none of the ownership risks associated with the asset. All servicing and maintenance costs and responsibility rests with the asset finance provider.

Another advantage is that since the asset appears as a rental on the business balance sheet, it can be offset against company profits.

At the end of the rental agreement, the asset provider will take back ownership of the asset. This can either then be re-hired in a second loan agreement or loaned out to a new company.

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Dentist and Dental Associate Expenses Guide

Secondary Sources of Finances

Bank and Asset Finance Provider List

Asset-based Refinancing

Refinancing is a process businesses can use to raise capital against their assets, using them as security. Businesses can sell their assets to a refinancing company for a lump sum.

The refinancing company then loans the asset back to the original owners. The business then pays back the lump sum (plus interest) by effectively renting the asset back from the refinancers.

Refinancing is used by businesses who are rich in assets that need to raise quick liquid capital. By refinicaning against their assets, they can raise money without losing the use of their equipment.

Most assets with a high value can be used as security to refinance. Since the loan terms depend purely on the value of the asset, the company’s financial situation and credit history will rarely affect the loan terms.

Balloon Finance

A Balloon Loan is one that allows the borrowing company to pay back a large lump sum as part of their payment schedule, usually towards the end of the loan term.

Smaller monthly payments are made, as per a regular loan agreement. However, Balloon Loans include a much larger amount at the close of the term.

Balloon Loans allow companies to keep their initial deposit and monthly payments lower than they otherwise would be. By paying off the majority (or at least a large portion) of the loan towards the end, you can keep initial costs down.

This makes balloon financing a great option for businesses that have limited capital initially, but are confident of raising enough to pay a larger amount at a later date.

Balloon Financing is a great way for start-ups and early-stage businesses to purchase the assets they need to grow their business.

Click here to read our blog on how to finance a healthcare business

Annual Investment Allowance

The Annual Investment Allowance scheme allows businesses to claim back tax relief against assets they have purchased. If the assets qualify for the scheme, you can claim back 100% of the value of the asset in tax relief.

It is important to note that you may need to pay tax if you then sell the asset after claiming Annual Investment Allowance.

You can claim Annual Investment Allowance on most assets purchased, such as heavy machinery.

However, some assets cannot be claimed. You cannot claim AIA on company cars and other vehicles, assets gifted to the business or items purchased before or for reasons other than usage in the business.

The Annual Investment Allowance amount can change from year to year so it is advisable to contact your accountant or check the UK Government website here.

Annual Investment Allowance can only be claimed during the period in which you purchased the asset.

If the asset has been purchased in a hire purchase agreement, you can claim for as yet unmade payments before you actually start using the item. It is important to note that you cannot claim on interest payments.

Join the Samera Alliance Buying Group

The Samera Alliance is our growing network of dentists, practices and leading industry suppliers, designed to help you save money, grow your profits and build a better dental business.

You’ll also get better rates and terms for a wide range of services like HR, IT, utilities, insurance, legal services and much more!

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Business Loans for Healthcare Businesses

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Financial Services

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

11 Top Tips to Manage your Cash Flow in a Crisis

A cash flow crisis can be caused by any number of factors. Disruptions to supply lines, a reluctant customer base or increased expenses.

In the midst of a global emergency such as the Covid-19 crisis, all of these factors can strike at once.

With a cash flow crisis looming for many small businesses, these top tips should help mitigate some of the risks and help manage the cash flow in your business.

Borrow money

One of the simplest ways to manage problems with cash flow in your business is to borrow money to cover the shortfall.

As long as your business has the required credit, you can borrow emergency funds in the form of a short-term loan from a number of different lenders.

You may need to secure your loan with business assets. Consumers are constantly being warned not to panic buy. Similarly, you as a business should not panic borrow!

Always shop around for the best price and seek expert advice when you need it so you get the best deal you can.

Although borrowing money can be a good way of covering unforeseen emergencies, it is not a sustainable fix if you have a prolonged or systemic cash flow problem.

If your cash flow problem is on-going and not caused by sudden, external changes, borrowing money will only delay an inevitable crisis.

Action Points

During periods of financial instability, small businesses often face cash flow crises due to disruptions in supply chains, hesitant customers, or increased expenses. Amid global emergencies like the COVID-19 crisis, these challenges can intensify. To manage these risks, businesses can consider borrowing money through short-term loans, provided they have the necessary credit. However, while borrowing can address immediate needs, it’s not a long-term solution for sustained cash flow issues. It’s crucial to compare offers, seek expert advice, and explore other strategies to mitigate risks and safeguard business operations.

Apply for a Bounce Back or CBILS Loan

If your business cannot avoid cash flow issues, you may need to obtain a loan to inject some cash into the business.

Although there are several avenues you can try, the UK Government are currently offering 2 loan schemes to struggling businesses – Bounce Back loans and the Coronavirus Business Interruption Loan Scheme (CBILS).

Coronavirus Business Interruption Loan Scheme (CBILS)

The CBILS was launched by the UK Government to provide financial support to small to medium enterprises who have been negatively affected by the Coronavirus and subsequent lockdown.

The scheme is only open to businesses based in the UK with an annual turnover of up to £45 million.

Under the CBILS, businesses can apply for support loans up to a value of £5 million.

However, to be eligible for support your business must prove that it would be financially viable if it were not for the current circumstances regarding COVID-19 and that it has been negatively affected by the virus and lockdown.

You will also need to prove that your business was not classed as a ‘business in difficulty’ on December 31st 2019.

CBILS loans are currently being offered through the normal lending channels.

You can apply by approaching your usual lending platform, such as the high street banks. Over 50 lenders currently participate in the CBILs, and this includes the main retail banks.

Bounce Back Loans

The Bounce Back loan scheme was recently introduced by the UK Government following criticism of the CBIL Scheme. Businesses have struggled to obtain funding under this scheme for a number of reasons.

One of the main reasons for this has been the information and documentation required, as well as the financial checks, to obtain the loan. Many businesses are being rejected for funding through the CBILS.

In response, the Bounce Back loan scheme has been launched as a simplified and quicker way for businesses to secure emergency funding.

Through the Bounce Back Loan Scheme, businesses can apply for funding between £2,000 and £50,000.

The UK Government will guarantee 100% of the loan and you will not be required to pay any interest, or make any repayments during the first 12 months. Loan terms will be offered at up to 6 years.

Small to medium enterprises who are based in the UK and have been negatively affected by the pandemic are eligible to apply.

Like the CBILS, the Bounce Bank Loans Scheme is being offered through the regular financial lending channels, such as the major retail banks.

Action Points

If your business is facing cash flow issues, consider applying for a loan through the UK Government’s schemes – Bounce Back loans and the Coronavirus Business Interruption Loan Scheme (CBILS). CBILS offers support loans of up to £5 million to UK-based businesses with turnovers up to £45 million, provided they demonstrate viability without COVID-19 impacts. Meanwhile, Bounce Back Loans offer simplified, faster funding between £2,000 and £50,000, with the government guaranteeing 100% of the loan and a 12-month interest-free period. Both schemes are accessible through regular lending channels, including major retail banks, and aim to provide relief to small to medium enterprises affected by the pandemic.

Contact us to find out more

Seek investment capital

Similarly to borrowing money, you can seek investors who are willing to buy equity in your business.

Although this differs from borrowing money in that your business does not take on debt, it does mean that you will be giving up some level of control or ownership of your business – depending on how much capital you raise.

It is important to remember that you are in effect taking on a business partner. It is essential that you find the right partner to invest in your business!

Do not rush into any agreements, do your research on your potential partner and understand that this partnership may be permanent.

Action Plan

Consider seeking investment capital as an alternative to borrowing money, where investors purchase equity in your business. While this avoids accruing debt, it involves relinquishing some control or ownership. Choose investors carefully, as they become long-term partners in your business. Conduct thorough research and ensure alignment of values and goals before committing to any partnership agreements, as they may be permanent.

Get paid quicker

Solving a cash flow crisis does not necessarily mean getting more money into the business.

You can also alleviate cash flow problems just by streamlining the flow of money within the business.

By making processes smoother and more efficient, you can more effectively move money through the business and ensure you have a steady cash flow.

One way to do this is to speed up how money flows into the business.

If you do not already have some form of online payments set up for your customers, you need to provide this functionality as soon as possible.

Not only do most consumers expect online payment as standard nowadays, instead payment can ensure you are not waiting on customers or banks for money you have earned.

You can also start requesting deposits for payments. If you already request deposits, you may also think about increasing the amount.

Charging deposits means you get some instead, ready cash into the business for a product or service – even if it is not the full amount!

Another way to speed up payments is to send your invoices earlier and more frequently than you would otherwise do.

Sending invoices immediately after services rendered decreases the amount of time you spend waiting on payment.

You can also negotiate to send incremental invoices over a period of time, rather than a final invoice upon completion of the service or product.

This will allow you to keep up a smaller, steady stream of funds within the business.

Action Points

To improve cash flow, streamline processes for faster money movement. Offer online payments, request or increase deposits, and send invoices promptly. Negotiate incremental invoicing to maintain a steady cash flow. These strategies ensure a consistent flow of funds and mitigate cash flow challenges.

Pay money slower

Another way to improve your cash flow is to delay money leaving the business.

If you have regular expenses then you may need to think about renegotiating the payment structures you currently have in place.

If, at the moment, you pay for a particular service monthly, you may be able to revise this to a quarterly payment structure.

This can help buy time by letting you keep much needed money within the business until absolutely necessary. Do not pay bills and invoices until they are due.

Paying early may earn you goodwill (and you can use this to negotiate a better payment schedule), but it will not help you in a cash flow crisis.

Contact your utilities providers (such as electricity and internet) and see if you can negotiate a better deal. Remember, most businesses want your business.

If you let them know you are thinking of moving to a competitor, they will usually try to get you a better deal to keep your custom. Try it out!

Action Point

Delaying outgoing payments can help preserve cash flow. Renegotiate payment schedules to pay expenses less frequently, such as switching from monthly to quarterly payments. Avoid paying bills before they’re due, as this drains cash unnecessarily. Negotiate better deals with utility providers by leveraging competition. Holding onto funds longer ensures greater financial flexibility during cash flow challenges.

Ask for a payment holiday

Another way to reduce your monthly outgoings is to ask for a payment holiday from your lenders. This can include any financial institution to whom you currently owe monthly payments, such as your banks.

Some banks are currently offering 3 month holidays on certain loan terms, others are even offering 6 months!

Of course, whether or not you can agree to a payment holiday will depend on your bank and your loan term.

However, many banks and financial lenders are being fairly generous and understanding at the moment so it is certainly worth trying!

You can also try asking for a payment holiday from your landlord. Again, whether or not you can get your landlord to agree to a deferred payment will depend on your landlord and your ability to negotiate.

Like the banks, some landlords are being generous at the moment so it is worth contacting them and seeing if a deal can be reached.

For instance, you may offer to pay monthly instead of quarterly to ease cash flow. Alternatively, you may ask to pay smaller amounts each month and agree to make up the balance when lockdown ends.

It may be a long shot for some, but it is worth everyone trying!

Action Plan

Requesting payment holidays from lenders and landlords can ease financial burdens during tough times. Many banks offer three to six-month breaks on loan repayments while negotiating with landlords for deferred rent payments or adjusted schedules is also helpful. Proposing alternative payment arrangements, like monthly rent installments or partial payments with future settlement plans, may be advantageous. Though results vary, exploring these options can provide much-needed financial relief.

Explore alternative supply chains

Whilst you are trying to renegotiate prices with your suppliers for a better deal, you may also want to think about exploring different supply routes.

To take the Covid-19 crisis as an example; if some of your supplies come from China, you may want to think about finding an alternative source.

Not only do socio-political crises have huge impacts on trade and supply, consumers may also be put off by the idea of their goods coming from an affected region.

Try to make sure your products and resources are brought in via safe, stable and affordable supply chains.

Increase prices

Another obvious way to improve cash flow is to increase the cash. One of the easiest ways to do this is to increase your prices for goods and services.

Naturally, a lot of small businesses are wary of increasing prices for fear of driving away customers.

This is especially true of newer businesses. If you have a reliable and returning customer base, you may be surprised at how many are willing to accept a price increase.

If your customers appreciate your business and what it offers, they will be willing to pay a little bit extra.

You can also make a big deal about lowering your prices again once the problem has subsided! You could also offer a VIP or Gold Service option for your services or products.

By offering a little bit of exclusivity to your services, a small percentage of consumers will be willing to pay a large price for the VIP treatment.

Make sure you do your research into your competitors. Do not price yourself out of the market and keep your business competitive.

Action Point

Exploring alternative supply chains can mitigate risks during crises like Covid-19, ensuring stable access to resources. Increasing prices, albeit cautiously, can boost cash flow, with loyal customers often accepting moderate hikes. Offering premium services at higher rates and promoting eventual price reductions post-crisis can attract select clientele. However, competitive pricing adjustments are essential to maintain market competitiveness.

Cut expenses

A quick, easy win for solving cash flow problems is to cut unnecessary expenses. It is essential that you regularly review your business expenses even in times of calm.

In times of crisis, it is doubly important. There is no business out there that does not have unnecessary expenses. If you can find them and cut them, you can save yourself a lot of money.

Conduct a review of every single penny your business spends. Ask yourself; do I need to spend this money, or do I need to spend this much money?

Cutting expenses doesn’t have to mean ceasing entire initiatives. Saving a small percent in several areas can result in a huge savings.

Cutting down on lighting and heating when not being used, decreasing office supply wastage, limited employee expenses – a small reduction in several key areas can free up vital cash.

Try replacing costly measures with cheaper alternatives For instance, video meetings work just as well as face-to-face meetings without all the added costs like travel and refreshments.

Action Point

Trimming unnecessary expenses is vital during financial challenges. Regularly evaluate all expenditures, identifying and eliminating non-essential costs. Even small reductions across multiple areas can accumulate into substantial savings. Consider cost-effective alternatives, like video meetings instead of in-person gatherings, to further curtail expenses while maintaining productivity. Prioritizing efficient resource allocation is essential for safeguarding cash flow and bolstering financial resilience.

Sell non-essential assets and reduce inventory

Most businesses own assets and most assets are necessary for the day-to-day running of the business. However, there will almost certainly be assets in your business that are non-essential and can raise much-needed funds.

Take a full inventory stock of your business. Include everything the company owns and sort everything into essential and non-essential items.

Take a look at your non-essential list. Some of these assets you will be able to do without completely. In these cases, your best bet is to simply sell them.

You may end up selling for less than you bought the item. Although you want to try and get the best price you can, your goal is to free up cash, not turn a profit.

If your business involves selling large quantities of items, you may need to think about reducing your inventory.

Make sure you factor this into your stock flow management to ensure you do not face a shortage of essential materials and goods. Try and keep as small of an inventory as possible to ensure your cash is not tied up, immobile in your stock.

Action Point

Consider selling non-essential assets to generate much-needed funds during financial challenges. Conduct a thorough inventory of your business assets and distinguish between essential and non-essential items. Items deemed non-essential can be sold to free up cash, even if it means accepting a lower price than their original purchase value. Additionally, evaluate your inventory levels and consider reducing them to prevent excess cash from being tied up in stock. Maintaining a lean inventory ensures liquidity and agility in managing your business finances.

Contact us to find out more

Do a Cash Flow Statement

The best way to manage your money is to keep track of it and know exactly where it is at all times.

It is essential that you know exactly how much money is being brought into the business each month and, more importantly, where it is all going.

The most efficient way to do this is to create a cash flow statement. By listing out every expense your business has, you will find it far easier to manage your money.

Cash flow statements allow you to better identify where the majority of your money is going and the best areas of the business to make savings.

You may find that you are spending more than you thought in areas of the business you hadn’t considered, or in areas that could afford to be underfunded for a few months.

Cash flow statements allow you to plan your budget, identify when you may need additional capital in the business and keep track of exactly how much money the business has.

By properly using a cash flow statement, you will be able to keep cash flow shortages to a minimum.

Action Plan

Craft a cash flow statement to monitor your business finances closely. This tool helps track cash inflows and outflows, providing valuable insights into spending patterns. By detailing expenses, you can identify areas to cut costs and prioritize expenditures. Use the statement to plan budgets, forecast capital needs, and maintain financial clarity. With diligent oversight, you can mitigate cash flow gaps and optimize resource management.

Download our cash flow statement template for free below:

samera_finance_Cashflow_Forecasting_Template Download

How to use the cash flow template

By clicking the link below, you can download our template for a cash flow statement. With a few adjustments, this template can be adapted to be used by almost any business.

The template is currently filled in with example information to illustrate what a finished forecast may look like. Please feel free to delete these numbers and replace them with your business’s own figures.

To calculate your business’s incoming cash, please fill in the ‘CASH INFLOWS’ section with your gross turnover (including VAT), your standing debtors and the value of any furlough receipts you may have received from HMRC. Cells labelled ‘other’ have been left blank for you to include any other revenue streams.

To calculate your business’s outgoing cash, please fill in the ‘CASH OUTFLOWS’ section with your standing creditors and the various expenses currently listed. Again, cells labelled ‘other’ have been included for you to add any additional expenses you may have.

The forecast spreadsheet will then show you the net movement of your business’s in-comings and outgoings. By also entering in your starting bank balance, the forecast then shows your business’s cash balance at the end of each month for the next year.

Action Point

Download the template.
Replace example numbers with your business’s figures.
Enter cash inflows and outflows.
Review net movement.
Input starting bank balance.
Determine cash balance for each month.

Financial Tactics During a Cash Flow Crisis

Managing Your Cash Flow in a Crisis

How Should a Dental Practice Organise its Finances

Managing Cash Flow: Conclusion

As the effects of the Coronavirus crisis are felt throughout the world’s economy, businesses across the globe will feel the pinch. Cash flow will become problematic for all manner and size of business, so it is essential to be prepared.

Making small savings in several areas can result in a huge saving across the business.

Additionally, planning your cash flow with a cash flow template can help you identify and avoid problems before they happen.

If you are experiencing unavoidable cash flow issues, you may benefit from applying for one of the Government-backed support schemes.

Using these tips, you can try to save as much money as possible while ensuring the smooth operation of your company.

Check out our other articles, webinars and podcasts in the Samera Learning Centre

Join the Samera Alliance Buying Group

The Samera Alliance is our growing network of dentists, practices and leading industry suppliers, designed to help you save money, grow your profits and build a better dental business.

You’ll also get better rates and terms for a wide range of services like HR, IT, utilities, insurance, legal services and much more!

Find out more

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

Book a consult

Financial services

Dental Practice Finance: Further Information

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Free Templates for Financial Documents

Applying for finance from a lender can be a complicated process. There can be so many hoops to jump through, i’s to dot and t’s to cross that it can be a daunting task.

We have tried to make raising finance as easy as possible for you.

Below you will find a list of all of our free, downloadable financial document templates.

From cash flow forecasts to business plans, we have drawn together a selection of free, downloadable financial document templates to help you when creating the most important documents for your business.

If you are applying for finance from a lender, using these financial document templates can help make sure your business’s documents contain all the vital information, are formatted correctly and give you the best chance of being successful in your application.

Download Our Free Financial Document Templates:

Cash Flow Forecast Template

How to use the Cash Flow Forecast

This Cash Flow Forecast can be utilised by any business to help plan and manage their monthly expenditure and income, better enabling you to maintain a budget and keep control of your working capital.

samera_finance_Cashflow_Forecasting_Template

Debt Structure Template

Use this free debt structure template to help manage and document your business’s standing debts.

Many commercial finance lenders will require information on your business’s standing debts to assess your application for financial support in the form of a debt structure document.

This template allows you to list and document:

Lender
Facility type
Secured against
Initial amount borrowed
Amount outstanding
Term remaining
Monthly outgoing
Interest rate (and other fees)

business-continuity-plan-template-samerafinance

Business Plan Template

Please download and use this free sample business plan template. Business plans are essential to the good running of a business. They allow business owners to set out their goals and document how they intend to achieve them.

Creating an accurate and detailed business plan is also an important step in raising commercial finance for your business. The vast majority of commercial loan companies will require a detailed business plan as part of your application process.

This business plan example template has been created with a dental practice in mind and is intended to show what a finished article may look like.

This template lays out the Executive Summary and the Narrative sections. Financial and appendices are not included here.

business-continuity-plan-template-samerafinance

Business Continuity Plan

Please download and use this business continuity plan template to help your business plan and document how it will deal with an unforeseen crisis, such as the COVID-19 pandemic.

This template has been filled in with a dental practice in mind to show what a finished article may look like. Please feel free to download and replace the information with your business’s own details.

This plan lays out what issues will arise in a crisis, what contingency plans need to be implemented, how they will be implemented and who is responsible for it.

Download Business Continuity Plan Template

Useful financial document templates during COVID-19

Letter to Landlord Template

If your business is struggling to make rent payments, you may be able to negotiate a payment holiday with your landlord.

Of course, this will vary from landlord to landlord but many have been willing to defer rent payments to allow businesses the chance to room to breath.

If you could benefit from a rent payment holiday then please download this template letter requesting a postponed rent payment.

Email-to-Landlord

Asset Finance and Loans Provider List

Please download this list of asset finance and business loan providers to find out what kind of assistance they are currently providing to struggling businesses as a result of COVID-19.

This list also documents the best contact details for each financial lender, as well as details on the financial documents they will need to be provided with an application or request.

Asset-Finance-Business-Loans Download

Commercial Loans for Healthcare Businesses

Book a consult

Financial Services

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Refinancing During COVID-19

Can refinancing help your cash flow?

It has always been difficult for business owners to predict when issues will arise in their operations. What’s more, they are usually on the lookout for internal issues that crop up within their own business.

However, in the last few months, all businesses have been hit by a global issue that has occurred outside of their business through no fault of their own. Not only that, but the impact itself has been absolutely huge across the board.

The important thing now is how businesses face this issue and deal with the challenges it raises.

So what should I do?

Having worked through 3 recessions, a global meltdown and now COVID-19, the advice is act now, not later.

It is essential that businesses plan for their immediate and long-term futures through detailed and thought-out business plans and cash flow strategies.

You need to look at your assets and decide what is essential to your business and what is surplus to requirements.

Click here to find out more about Asset Finance.

So how do I do that?

Review your past business
What assets do I need and what don’t I need
What can I change in my costs
What can I change in my income

So, what does this all mean?

Obtain up-to-date management information on what your business has been doing and complete the accounts for the year early. Where did custom come from in terms of sales channels and market demographics? What services or products were in demand? Was demand seasonal or dependent on external factors?
Review your previous plans for buying. Do you need that new car this year? Do you need some new equipment to deal with the changes? Are you going to need more supplies or inventory?
What costs can you change? Review your outgoings and find the reasonable savings that can be made.
Can I change my income. Can you raise your prices? What can you offer to make your returning customers convert or purchase more often? What products or services can you upsell to them?

Your accountants and/or business advisors will be able to help in providing management and accounting figures. It is important that you use accountants and advisors who have experience in your industry.

You need to look seriously at what you intended to buy. Do you need it now, is it essential to your business operations? How were you going to finance this or were you buying this cash? How does your plan to purchase affect your cash flow projections? What do you need going forward to deal with social distancing etc.

Review all your costs. You will not be able to change a lot of them. But most businesses will be able to make some savings in some areas – and these can add really up!

Business Tips in an Economic Crisis

How to Deal With Your Bank in a Cash Flow Crisis

Dental Practice Valuations

Cash is King

An incredibly old phrase but one that is true in times of trouble – if you have cash you can usually weather a downturn.

The cost of finance

Finance costs feature in most businesses, either to assist with acquisition or to assist with growth projects, existing equipment purchases and future purchases.

This is one cost that most people do not look at once they have taken the finance. However, circumstances change so these should be reviewed regularly.

Are you paying too much for your goodwill loan?

What rate and payment are you making on asset finance?

Could you restructure your borrowing to make it more cost-effective?

Review your own home mortgage as well, make sure you are getting the best rate!

Questions we are asked to help with

I have short term debt that I took to cover a cash flow issue last year which is expensive, can I refinance? Yes
My business acquisition/start-up loan has a high interest rate, can I refinance the goodwill now? Yes
Can I buy my premises? Yes
Is my asset finance rate competitive? Can I change? Yes
I have lots of asset finance, could I change this to a goodwill loan at a lower rate? Yes

These (and a lot more) are asked during normal times. Looking forward, you may need to finance new equipment, cover a period of reduced income or make changes to your practice.

We are happy to have a discussion with you about your needs and whether any changes can be made that will reduce costs.

Action Plan

Act Early: Plan for both immediate and long-term business strategies, including cash flow management.
Asset Review: Assess your business assets to identify essential needs versus surplus, potentially freeing up resources or identifying refinancing opportunities.
Cost Management: Examine and adjust costs where possible, focusing on essential spending to maintain operations efficiently.
Income Adjustment: Explore opportunities to adjust pricing or enhance offerings to boost income, considering customer conversion and upselling strategies.
Financial Review: Regularly review finance costs and explore refinancing options to ensure they remain cost-effective, including loans, asset finance, and mortgages.

Click here to read our blog on How to finance a healthcare business.

Surviving a Financial Crisis

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

Book a consult

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

COVID-19 and the Healthcare Industry: What has Changed?

We are all aware of the challenges and issues that COVID-19 has thrown up for businesses with its impact on cash flow, income and costs. Businesses are having to change the way they work and deal with clients, customers and suppliers. Additionally, they are having to consider the costs of this, as well as the costs of purchasing additional equipment, whether that be PPE or equipment to facilitate new ways of working.

Lenders have been besieged with applications form their client base for CBILS and Bounce Back Loans and they have had to deal with an ever-changing lending criterion introduced to them by a third party.

Governments have reacted to the challenge with financial packages, tax deferments and furlough schemes unheard of in our lifetime.

What about commercial finance brokers?

But what about the Brokers, how has this affected them?

Aside from the obvious impacts in some firms of furloughing staff, suddenly there’s no more hot desking, suddenly there’s working from home and Zoom calls instead of meetings. What other challenges are they facing and what challenges are yet to appear?

With some lenders closing their doors to new business and others dealing with a large client base seeking assistance – how has that affected brokers?

Our experience of this is that it has been more difficult (but not impossible) to place business, especially in the property market, as firms reduced capacity and some changed lending criteria. The good thing is that is now being reversed, with valuers starting to go out again and firms opening and now, in some cases, increasing their lending criteria.

Action Point

COVID-19 has challenged commercial finance brokers to adapt to remote work, navigate tighter lending criteria, and find ways to place business amid changing market conditions.

COVID-19 and the healthcare industry

In the healthcare market, most clients have put purchases on hold. The good news is that they are on hold, not cancelled, and these will proceed now with the sector returning to work.

If we look at the dental sector as an example, the period for which dental practices have been closed has, in some cases, proved useful for the dentists. It has allowed them time (which they generally do not have) to review and reflect on what they want from their careers and whether they want to buy, sell or start up a practice.

For us as Brokers, this has resulted in a high number of enquiries and conversations around what they can obtain in the way of finance, and a lot of conversations around the steps required to start a practice.

Action Point

The COVID-19 pandemic has led many in the healthcare sector, especially dentists, to pause and reconsider their career paths, resulting in increased inquiries about finance options for buying, selling, or starting a practice.

Samera continues to raise finance for healthcare.

We at Samera worked with 6 clients last year to set up squat dental practices, providing them with guidance as to what they needed to do to be successful. This has enabled them, with the assistance of bounce back loans, to weather the crisis. Since the pandemic, we have now started working with another 4 clients to establish squats.

Completions on business purchases have continued and enquiries regarding new purchases have been slow but are now picking up quickly, with several new purchases now ongoing.

So, overall things are good. The main challenge to brokers at present is the focus of the lenders. For a long period while dealing with CBILS and bounce back loans, the major healthcare lenders were focused on dealing with their customer base and the applications they were receiving from them to assist them with their cash flow issue.

Most lenders are now open for new business but one or two are still not able to deal with non-banked applications, as their credit teams are still dealing with the Covid issues. This will change over the next few weeks and business will be returned to normal.

Action Point

Samera has successfully assisted six clients in establishing squat dental practices last year, and four more since the pandemic, utilizing bounce-back loans to navigate the crisis. Business purchases continue, with a resurgence in inquiries and ongoing transactions, signaling a positive trend. The main challenge for brokers is lender focus, with many initially preoccupied with CBILS and bounce-back loans. Most lenders are now open for new business, though a few are still adjusting, expecting a return to normal operations soon.

What are the challenges going forward?

So, what will be the challenges going forward? Will lenders have the same appetite for the healthcare sector that they had pre-Covid 19? Will the impact of social distancing, the need for new equipment and the constraints put on time bring a big change to the market?

The sector will always be needed, demand will be high and over the past few years has been growing substantially. New entrants to the market due to the demand and profitability of the sector will always be there. Once businesses adapt to the new way of working, they will again be successful.

Related Webinars

Dental Valuations 2.0

COVID 19 Update and Essential Leadership Skills

7 Business Actions Every Dental Practice Must do in a Lockdown

Review your business

What is needed is a review of how you work in healthcare and what you need to go forward. Do you need to borrow to buy new equipment, fund changes to your business premises, whichever part of the sector you work in? Businesses need to work with their accountants and advisors to gauge the impact on their business and act now to ensure they can deal with those changes.

Brokers have the contacts within the banking industry to assist businesses and ensure that they get the right finance in the right structure. Use the experience of the brokers, especially those with extensive banking experience, as they know how the lenders think and what they need.

Action Points

Adapt and Invest: Healthcare businesses must adapt to new operational standards post-COVID-19 by investing in necessary equipment and modifying premises to comply with health guidelines.
Strategic Planning: Conduct a thorough review of business operations with the help of accountants and advisors to gauge the pandemic’s impact and prepare for future changes.
Secure Financing: Utilize the expertise of brokers with banking experience to secure financing for essential investments, ensuring the business can adapt and grow in the new normal.

Click here to read our article on How to finance a healthcare business.

Surviving a Financial Crisis

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

Book a consult

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Managing Cash Flow to Keep Your Dental Practice Going

The storm isn’t coming – it’s here.

Businesses across the world are facing cash flow problems, and there are some tough decisions ahead!

In this webinar, Arun and Nigel discuss your options for managing cash flow in a dental practice.

Money Saving Tips for Dentists

How Should a Dental Practice Organise its Finances

Top 10 Tips to Help You Cut Small Business Expenses

Further Information on Accounts & Tax

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

Book Consultation

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Using a Commercial Finance Broker

Introduction to commercial finance and its importance
The role of a commercial finance broker
Benefits of using a commercial finance broker in the UK
Access to a wide range of financial products and lenders
Expertise and industry knowledge
Time-saving and convenience
Tailored financial solutions for your business
Navigating complex financial processes and requirements
How to choose the right commercial finance broker in the UK
Using a commercial finance broker

Starting and growing a business costs a lot of money. For most business owners, getting money and managing it can be really hard. That’s where business finance brokers come in to help. In the UK, a business finance broker can help you understand the complicated world of money. They can connect you with many ways to get money and give you advice that’s right for your business. In this blog post, we’ll talk about why it’s a good idea to work with a business finance broker in the UK. They can help you get money, give you expert advice, and make deals with banks that are better for you. We’ll also explain what makes business finance brokers different from other money advisors and how they can open up money opportunities for your business.

Introduction to commercial finance and its importance

Money plays a big role in making businesses successful. Whether you’re a small startup or a well-established company trying to get bigger, having the right financial help is really important to reach your goals.

Business finance means special money services and products made just for businesses. These can be things like loans, credit lines, using your assets to get money, factoring your invoices, leasing equipment, and more. Unlike regular personal money stuff, business finance focuses on giving companies the money they need for things like starting new projects, growing, buying equipment, managing money coming in and going out, and paying bills.

Business finance is super important because it helps businesses bridge the gap between the money they have right now and what they need to grow. So, whether you need money to launch a new product, buy another business, or invest in research and development, business finance is there to help.

One great thing about business finance is that it’s flexible. Unlike personal money options that can be strict, business finance can be customized to fit the specific needs of each business. This means that businesses can get the right funding that matches what they need, which keeps them financially stable and helps them grow.

But, dealing with the world of business finance can be tricky for companies. This is where business finance brokers come in.

A business finance broker acts as a middleman between companies looking for money and the banks or financial institutions that provide it. They really know the business finance market and have a big network of lenders, so they can find the best financial options for their clients.

By choosing a business finance broker in the UK, companies can open up lots of financial opportunities they might not find on their own. These brokers can help figure out how much money a business needs, show options from different lenders, negotiate deals, and ultimately get the best funding deals.

In short, business finance is super important for companies that want to grow and succeed in today’s competitive world. With the help of a reliable business finance broker in the UK, companies can discover a world of financial opportunities and make sure they have the money they need to achieve their goals.

The role of a commercial finance broker

When it comes to understanding the complicated world of business finance, having a knowledgeable and experienced professional by your side can make a big difference. That’s where a business finance broker comes in.

A business finance broker acts as a middleman between companies looking for funding and the banks or financial institutions that provide funding options. Their job is to understand the unique financial needs and goals of their clients and then connect them with the most suitable banks and financial products available in the market.

One of the main advantages of working with a business finance broker is their extensive network of lenders. These brokers have established relationships with various banks, credit unions, private lenders, and other financial institutions, giving them access to a wide range of funding sources. This means they can help you explore multiple funding options and find the best fit for your business.

Additionally, business finance brokers are well-versed in the different types of funding available, such as business mortgages, business loans, asset finance, invoice financing, and more. They have in-depth knowledge of the lending rules, terms, and conditions for each option, allowing them to provide expert guidance and advice tailored to your specific situation.

Contact us to find out more

Another important aspect of working with a business finance broker is their ability to negotiate on your behalf. They understand the intricacies of the lending process and can use their expertise to secure favorable agreements, potentially saving you money in the long run. Moreover, brokers can help streamline the application and approval process, ensuring that all necessary documentation is in order and increasing the likelihood of a successful funding outcome.

In summary, the role of a business finance broker is to simplify the complex world of business finance and provide businesses with access to a wider range of funding options. By leveraging their expertise, industry connections, and negotiation skills, they can help you unlock financial opportunities and make informed decisions that align with your business goals.

Click here to read our article ‘Why was my business loan denied?‘

Benefits of using a commercial finance broker in the UK

Using a business finance broker in the UK can bring many advantages that can greatly improve your financial opportunities. Whether you are a business owner seeking funding for expansion or a property developer looking for support for your next project, a business finance expert can be a valuable partner in dealing with the complex world of money.

One of the big benefits of working with a business finance expert is their knowledge and experience in the field. They specialize in understanding the complexities of the financial market and have extensive networks and connections in the industry. This means they are well-equipped to find the best funding options for your specific needs. They can analyze what’s available, evaluate different loan products and lenders, and provide you with personalized recommendations that align with your goals.

Another advantage of using a business finance broker is the time and effort they can save you. Researching and comparing various loan options can be a time-consuming and overwhelming task. A broker, on the other hand, can handle all the hard work for you. They will gather the necessary information, complete the paperwork, and negotiate with lenders on your behalf. This allows you to focus on running your business or managing your investments, while the broker takes care of the funding process.

Additionally, business finance brokers often have access to exclusive deals and rates that may not be readily available to individuals or businesses. Their connections with banks and financial institutions can provide you with access to better agreements, potentially saving you money in the long run. They can also provide valuable insights into the current market trends and help you make informed decisions about your financial strategy.

Moreover, using a business finance broker can improve your chances of getting approved for a loan. These experts have a deep understanding of the lending criteria and requirements of different lenders. They can help you prepare a competitive application that highlights your strengths and addresses any potential weaknesses. By presenting your case in the best possible light, a broker can increase your chances of securing the funding you need.

In summary, choosing to work with a business finance broker in the UK can bring a range of benefits to individuals and businesses seeking financial opportunities. From their expertise and industry connections to the time and effort they can save you, partnering with a broker can simplify the funding process and enhance your chances of success. If you’re looking to unlock financial opportunities and navigate the complex world of money, teaming up with a business finance expert is a wise choice.

Click here to find out more about bridging loan finance.

Did You Know?

Regulatory Oversight: In the UK, financial brokers are typically regulated by the Financial Conduct Authority (FCA). Make sure the broker you choose is authorized and regulated by the FCA. You can verify this information on the FCA’s official website.
Independence vs. Tied Brokers: Some brokers are independent, meaning they can recommend products from a wide range of providers, while others are tied to specific financial institutions or companies. Consider whether you prefer an independent broker who can offer a broader selection of options or a tied broker who specializes in a particular area.
Samera is an independent broker.
Commercial finance brokers arranged over £100 billion in loans and other forms of finance for UK businesses in 2022. (Source: National Association of Commercial Finance Brokers)
The average value of a commercial loan arranged by a broker is £250,000. (Source: National Association of Commercial Finance Brokers)

Access to a wide range of financial products and lenders

When it comes to understanding the complex world of business finance and finding the right financial solutions, it’s crucial to have access to a wide range of financial products and lenders. This is where a business finance expert in the UK can be incredibly valuable.

Unlike traditional banks or lenders that often have limited options, a business finance broker has a vast network of lenders and financial institutions at their disposal. This means they can provide you with access to a diverse range of financial products tailored to meet your specific needs and requirements.

Whether you’re seeking a business mortgage, business loan, asset finance, or any other form of funding, a broker can help you explore multiple options and find the most competitive rates and terms available in the market. They have established relationships with various lenders, including mainstream banks, specialized lenders, private investors, and alternative finance providers.

By working with a business finance broker, you can save time and effort that you would otherwise spend searching for suitable lenders on your own. They will do the hard work for you, using their expertise and industry connections to present you with a well-organized list of options that align with your financial goals.

Additionally, a broker can provide valuable insights and guidance throughout the funding process. They possess a deep understanding of the lending landscape and can assist you in selecting the most appropriate financial product for your specific business needs. Their expertise can also improve your chances of securing funding, as they can help you prepare and present strong aspects of your business to lenders.

In summary, choosing to work with a business finance broker in the UK gives you access to a wide array of financial products and lenders. This enables you to explore a broader range of options, secure better terms, and ultimately unlock the financial opportunities that are best suited for your business.

Click here to read our article ‘How Much Can I raise?’

Expertise and industry knowledge

When it comes to finding financial opportunities, having the right knowledge and industry expertise can make a big difference. This is where a business finance expert in the UK can really help. These professionals understand the complexities of the financial world and keep up with the constantly changing market.

By choosing a business finance broker, you gain access to a wealth of knowledge and experience that can be valuable in dealing with the complex world of money. These experts have a deep understanding of various industries and can offer valuable insights tailored to your specific needs and goals.

Whether you need funding to start a new business, expand your current operations, or invest in new ventures, a business finance broker can provide expert advice and guidance. They can help you identify the most suitable funding options available, whether it’s a traditional bank loan, alternative lending solutions, or government-backed programs.

Moreover, business finance brokers have established connections with a wide network of banks and financial institutions. This means they can leverage their relationships and negotiate on your behalf to secure the best possible terms and rates for your funding needs. Their industry knowledge allows them to understand the subtle details of different lenders and their specific requirements, ensuring a smooth and efficient funding process.

In addition to their expertise, business finance brokers also stay up-to-date with the latest market trends and regulations. This ensures that you receive accurate and timely information that can impact your financial decisions. They can advise you on any changes in lending rules, interest rates, or government schemes that could affect your funding choices.

In summary, choosing a business finance broker in the UK gives you access to a wealth of expertise and industry knowledge. Their ability to navigate the financial landscape, connections with lenders, and capacity to navigate complex funding options make them a valuable partners in unlocking financial opportunities for your business.

Click here to read our article on ‘How to make sure your loan application is successful’.

Time-saving and convenience

When it comes to finding money opportunities for your business, time is precious. As a business owner or entrepreneur, your time is really valuable, and spending it on figuring out the complicated world of business finance can be overwhelming and take up a lot of time.

That’s where a business finance broker in the UK can be a game-changer. By choosing to work with a professional broker, you can save valuable time and enjoy unmatched convenience throughout the whole process.

A business finance broker acts as your trusted advisor, guiding you through the complexities of various financial products and lenders. They have extensive knowledge of the market, access to a large network of lenders, and the expertise to match your specific business needs with the right financial solutions.

Contact us to find out more

Instead of spending countless hours researching different banks, comparing interest rates, and filling out numerous applications, a business finance broker streamlines the entire process for you. They do the hard work, conduct thorough research, and provide you with personalized options that align with your financial goals.

Moreover, a broker can often expedite the approval process, as they understand the requirements and preferences of different lenders. This means you can access the funds you need more quickly, enabling you to seize time-sensitive business opportunities and drive your growth.

The convenience provided by a business finance broker goes beyond saving time. They can also handle negotiations on your behalf, ensuring that you secure the most favorable agreements. With their expertise and industry connections, they can often secure better interest rates, flexible repayment options, and higher loan amounts than you could obtain on your own.

Furthermore, a business finance broker can offer personalized guidance and support throughout the entire funding journey. They can help you navigate complex paperwork, decipher financial jargon, and provide valuable insights into the best strategies for managing your business finances.

In summary, choosing a business finance broker in the UK offers significant time-saving benefits and unmatched convenience. By entrusting the task of securing financial opportunities to a professional, you can focus on what matters most – running and growing your business – while having confidence that you are making informed financial decisions.

Click here to read our guides on managing your cash flow.

Tailored financial solutions for your business

When it comes to handling the money side of your business, one solution doesn’t fit all. Every business has its own unique financial needs and challenges, and finding the right solutions can be a daunting task. That’s where a business finance expert can make a big difference.

A business finance broker in the UK specializes in understanding the financial landscape and the specific requirements of businesses in various industries. They have the expertise and knowledge to assess your situation and goals, and then create financial solutions that are specifically designed to meet your needs.

Whether you need funding to start a new business, expand your operations, invest in new equipment, or manage cash flow, a business finance broker can guide you through the available options and help you make informed decisions. They have access to a wide network of lenders and financial institutions, allowing them to find the best possible deals for your business.

By working with a business finance broker, you can save valuable time and effort that would otherwise be spent researching and comparing various financial products and services. They will do the research for you, presenting you with a range of options that align with your business objectives. This personalized approach ensures that you receive the most suitable financial solutions that address your specific challenges and help you unlock new opportunities for growth.

Moreover, a business finance broker can also provide valuable support and guidance throughout the application and approval process. They understand the complexities of financial paperwork and can help you prepare the necessary documentation to improve your chances of securing funding. Their experience and industry connections can also expedite the approval process, allowing you to access the funds you need more quickly.

In summary, choosing a business finance expert in the UK offers your business the advantage of tailored financial solutions. With their expertise and access to a vast network of lenders, they can help you navigate the complex financial landscape and find the best possible options for your unique needs. By partnering with a business finance broker, you can unlock financial opportunities that will drive your business forward and ensure its long-term success.

Click here to read our guides on different types of finance solutions.

Navigating complex financial processes and requirements

Understanding complex financial processes and needs can be a challenging task, especially for businesses in the UK seeking financial opportunities. This is where the expertise of a business finance broker becomes crucial.

Business finance brokers are specialists who focus on helping businesses with their financial needs. They have a deep understanding of the intricate processes and requirements involved in securing funding or managing financial transactions. From securing loans and mortgages to negotiating lease agreements and restructuring debt, a business finance broker is well-versed in the complexities of the financial landscape.

One of the main advantages of working with a business finance broker is their ability to navigate the maze of regulations and paperwork that often accompany financial transactions. They stay up-to-date with the latest industry trends and regulations, ensuring that businesses are compliant and well-informed at the same time. This expertise can save businesses significant time and effort, allowing them to focus on their core operations.

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Moreover, business finance brokers have access to a vast network of lenders and financial institutions. This network enables them to identify the most suitable financial opportunities for each business’s unique needs and circumstances. Whether it’s securing competitive interest rates, finding flexible repayment terms, or exploring alternative funding options, a business finance broker has the connections and experience to negotiate favorable deals on behalf of their clients.

Additionally, the financial landscape is constantly evolving, with new products and opportunities emerging regularly. A business finance broker stays up-to-date with these changes, ensuring that businesses are aware of the latest financial options available to them. By providing tailored advice and guidance, they help businesses make informed decisions that align with their long-term financial goals.

In conclusion, navigating complex financial processes and requirements is a daunting task for businesses. By choosing a business finance broker in the UK, businesses can benefit from their expertise, industry knowledge, and extensive network of lenders. With their guidance, businesses can unlock financial opportunities and pursue sound financial decisions that contribute to their growth and success.

Click here to read our article on ‘Secondary Sources of Finance.’

How to choose the right commercial finance broker in the UK

Choosing the right business finance broker in the UK is crucial to unlock the financial opportunities your business needs. With so many options available, it can be overwhelming to figure out which broker is the best fit for your specific needs. However, by considering a few key factors, you can make an informed decision and secure the expertise and support necessary for your financial success.

First and foremost, when selecting a business finance broker, assessing their experience and expertise in the industry is important. Look for a broker with a proven track record of successfully helping businesses obtain suitable financial solutions. A broker with deep knowledge and understanding of the UK business finance market will be better equipped to navigate the complexities and find tailored solutions that align with your unique requirements.

Moreover, consider the broker’s network and connections within the industry. An established broker will have strong relationships with lenders, financial institutions, and other key players in the market. This network can provide you with access to a wider range of funding options and increase your chances of securing favorable terms and rates.

Transparency and trust are also important considerations when choosing a business finance broker. Ensure that the broker is transparent in their communication, providing clear and comprehensive information regarding fees, terms, and conditions. A reputable broker will prioritize your best interests and maintain open communication throughout the entire process.

Furthermore, it is essential to evaluate the level of personalized service and attention you will receive from the broker. A reputable broker will take the time to understand your business goals, financial situation, and specific needs. They will then tailor their approach, offering customized solutions that align with your objectives and help you achieve long-term financial success.

In conclusion, seek testimonials and reviews from previous clients to gain insight into the broker’s reputation and customer satisfaction. Positive feedback and recommendations can provide confidence and trust in your decision-making process.

By carefully considering these factors, you can choose the right business finance broker in the UK, ensuring you have a trusted partner who will help you unlock the financial opportunities your business deserves.

Click here to book a consultation with one of our commercial finance brokers.

Using a commercial finance broker

So, why should you be using a commercial finance broker to help you raise finance for your business? Because they give you the best chance of getting the best deal on the market.

Commercial finance brokers have the contacts and know-how to ensure that your application is as likely to succeed as possible. Hey know exactly how banks want applications to be formatted and what they want them to include. They know a good business plan when they see one and they know a viable investment opportunity when they see one and they know a bad loan deal when they see one. A commercial finance broker can help make sure your loan application is more successful than if you had applied on your own.

If you need help with your loan application, or if you want to make sure you are getting the best possible price on the market for your loan, contact us today! Our brokers have a network of contacts throughout the UK’s financial institutions to make sure your business is getting the best funding at the right price.

Frequently Asked Questions, Commercial Finance Broker

What is a commercial finance broker, and how can they benefit my business?

A commercial finance broker acts as an intermediary between businesses and lenders, helping you find the most suitable financing options for your specific needs. They benefit your business by leveraging their network of lenders, negotiating better loan terms, and saving you time by comparing various financing options. Brokers can also provide expert advice tailored to your industry, such as dental practices, and assist with long-term financial planning to ensure you secure the best funding at competitive rates.

Why should dental practices use a commercial finance broker?

Dental practices should use a commercial finance broker to access tailored financing options suited to their unique needs. Brokers can help secure competitive loan terms, compare multiple lenders efficiently, and save time in navigating complex financial products. They also provide expert advice and can assist with both short-term capital needs and long-term financial planning, ensuring that dental practices secure funding that aligns with their growth and operational goals.

How do finance brokers compare different loan options for businesses?

Finance brokers compare different loan options for businesses by evaluating key factors such as interest rates, repayment terms, loan amounts, and fees. They assess the financial health and goals of the business to identify the best loan structure. Brokers use their network of lenders to find tailored solutions, ensuring competitive terms and minimizing costs. By analyzing the total cost of borrowing and the suitability of various loan products, brokers help businesses make informed decisions.

Can a broker help improve my chances of securing business funding?

Yes, a commercial finance broker can improve your chances of securing business funding by presenting your application to lenders in the most favorable light. Brokers understand lender requirements and can help ensure your financial documents, business plan, and credit history meet those criteria. They also have access to a wide network of lenders, giving you more options and potentially better terms. Their expertise and negotiation skills increase the likelihood of a successful loan application.

What fees do commercial finance brokers charge?

Commercial finance brokers typically charge a fee based on a percentage of the loan amount secured or a fixed fee for their services. These fees vary depending on the complexity of the financing deal and the size of the loan. Some brokers may charge upfront fees, while others are compensated once the loan is successfully secured. It’s important to clarify the fee structure with your broker before engaging their services to ensure transparency.

How does a broker save time in securing financing?

A broker saves time in securing financing by leveraging their expertise and network of lenders to quickly identify the best loan options for your business. They handle much of the legwork, from comparing loan products to preparing the necessary paperwork, which simplifies the process for you. Brokers also streamline communication between you and lenders, speeding up the approval process and reducing the administrative burden.

Can a broker negotiate better loan terms for my business?

Yes, a broker can negotiate better loan terms for your business by leveraging their relationships with multiple lenders and understanding market rates. Brokers know how to present your financials to lenders in a way that minimizes risk and maximizes favorable terms such as lower interest rates, longer repayment periods, or reduced fees. Their expertise allows them to secure terms that are often better than what you might achieve negotiating on your own.

How can finance brokers assist with long-term business growth?

Finance brokers assist with long-term business growth by securing financing options that align with your expansion goals, such as loans for new equipment, practice expansion, or mergers. They help businesses plan for future financial needs by identifying funding sources that offer flexibility, manageable repayment terms, and competitive rates. Brokers can also provide ongoing financial advice, ensuring that businesses have access to capital when needed, without overextending themselves financially.

What types of business loans can a commercial finance broker find?

A commercial finance broker can help secure various types of business loans, including:

Term loans: For large purchases or expansion.
Working capital loans: To cover day-to-day expenses.
Equipment financing: Specifically for purchasing or leasing equipment.
Business lines of credit: Providing flexible access to capital.
Commercial property loans: For buying or renovating business premises.

Brokers can also assist with specialized loans, such as practice acquisition loans for dentists or other healthcare professionals.

How do brokers tailor financing solutions for dental practices?

Brokers tailor financing solutions for dental practices by understanding the specific needs of the practice, such as equipment purchases, practice expansion, or working capital. They assess the practice’s financial health, revenue streams, and growth potential to match the most suitable loan products. Additionally, brokers can negotiate favorable terms like lower interest rates and flexible repayment options, ensuring the financing aligns with both short-term operational needs and long-term growth goals of the dental practice.

What should I look for when choosing a commercial finance broker?

When choosing a commercial finance broker, look for:

Industry experience: Ensure they have experience in securing loans for dental practices.
Wide lender network: A strong network provides more financing options.
Transparent fees: Clarify the fee structure upfront.
Reputation and reviews: Check client testimonials or case studies.
Tailored solutions: The broker should offer customized financing options based on your specific business needs.

Can brokers access lenders not available directly to business owners?

Yes, brokers often have access to lenders that are not directly available to business owners. They work with specialized lenders, private investors, and institutions that may not market their services to the general public. This wider network allows brokers to present financing options that business owners might not find on their own, often with more favorable terms or tailored solutions for specific industries, such as dental practices.

Which industries benefit most from using finance brokers?

Industries that benefit most from using finance brokers include:

Healthcare and Dental Practices: For equipment financing, practice expansion, and acquisition loans.
Construction: To secure project financing and equipment loans.
Retail and Hospitality: For working capital and property loans.
Manufacturing: To fund machinery purchases and operations.
Real Estate: For commercial property loans and development financing.
Finance brokers offer specialized knowledge and access to lenders tailored to these industries, providing more competitive terms and financing solutions.

Can a broker help with both short-term and long-term financing needs?

Yes, a broker can help with both short-term and long-term financing needs. For short-term needs, they can secure working capital loans, lines of credit, or bridge financing to cover immediate expenses. For long-term goals, brokers assist with loans for practice expansion, equipment financing, or commercial property acquisitions. Their expertise ensures the financing options are tailored to the practice’s timeline and financial strategy, helping manage both immediate cash flow needs and future growth.

How do brokers simplify the loan application process?

Brokers simplify the loan application process by handling much of the paperwork and coordination with lenders. They gather the necessary financial documents, prepare the application, and present your business in the most favorable way to lenders. Brokers also streamline communication between you and potential lenders, reducing back-and-forth and ensuring that the application process moves smoothly and quickly. Their experience helps avoid common mistakes that can delay or complicate approvals.

Do brokers help businesses understand loan terms and conditions?

Yes, brokers help businesses understand loan terms and conditions by explaining the details of interest rates, repayment schedules, fees, and any other contractual obligations. They ensure that you fully grasp the implications of the loan, helping you make informed decisions about the financing option. Brokers also clarify any complex terms and advise on the long-term financial impact, allowing you to choose the most beneficial and affordable loan for your business.

How do finance brokers assess the best financing options for a business?

Finance brokers assess the best financing options for a business by evaluating the company’s financial health, including cash flow, creditworthiness, and growth potential. They analyze the specific needs of the business—whether it’s for short-term working capital or long-term expansion—and compare loan options across various lenders. Brokers also consider factors like interest rates, repayment terms, and loan conditions to tailor solutions that align with the business’s financial goals and operational requirements.

What’s the difference between using a broker and going directly to a lender?

The main difference between using a broker and going directly to a lender is that brokers offer access to multiple lenders, providing a wider range of financing options and potentially better loan terms. Brokers handle the legwork, comparing loan products and negotiating on your behalf, whereas going directly to a lender limits you to their specific products. Additionally, brokers can tailor solutions to your needs, simplifying the process and saving time.

Can using a commercial broker lower the cost of business financing?

Yes, using a commercial broker can lower the cost of business financing by helping you secure better interest rates, more favorable repayment terms, and reduced fees. Brokers have access to a wide network of lenders and can negotiate on your behalf to get competitive deals. Additionally, they help you avoid costly mistakes and identify the most suitable financing options for your specific needs, ultimately reducing the overall cost of borrowing.

How do brokers ensure that dental practices get the best loan deals?

Brokers ensure that dental practices get the best loan deals by leveraging their extensive network of lenders to compare multiple financing options. They tailor loan solutions based on the specific needs and financial health of the practice, such as expansion, equipment purchases, or working capital. Brokers also negotiate favorable terms, including lower interest rates, flexible repayment schedules, and reduced fees, ensuring the loan aligns with both short-term and long-term business goals.

Our Expert Opinion

“I cannot stress how important it is to have a commercial finance broker to help you. But not all brokers are equal, you need someone who understands you, your industry, your financial situation. A good broker will find you a deal, a great broker will get you many deals and then help you evaluate the best option available to you.”

Arun Mehra FCA

Samera CEO

You can book a free consultation with Arun here.

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Reviewed By:

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Why Was My Business Loan Denied?

How to make sure a business loan application is successful

Why was your business loan application denied?

If you have recently applied for a business loan and your application was declined, it may feel insulting or demeaning, but the first thing you need to understand is that it is nothing personal. There are several potential reasons for having a business loan denied.

It is important to note that there are many lenders out there with different lending conditions which means that if you get rejected for a certain reason by one lender, you may get accepted elsewhere because a different lender has different loaning options. There are various options that are available to you in order to improve your chances of getting approved the next time you apply.

There are many reasons as to why you may have had a business loan denied, the good part is that it is not at a lender’s discretion to explain why. Usually, you will receive what’s called an adverse action letter from the lender explaining the reasons why you were rejected for a business loan.

There are usually two main factors that lead to lenders denying business loan applications, these are predominantly problems with credit and problems with income.

Here are some of the reasons you might have had a business loan denied.

Poor credit history

Lenders primarily look at your borrowing history which is reflected through your credit scores. This is because lenders want to know if you are able to pay back the loan, seeing a solid history of borrowing and repaying will put the lenders at ease to know that their loan will be repaid back to them.

However, if you have not borrowed much in the past, your lack of credit history may lead to your loan being declined or if you have experienced complications with repaying loans in the past.

Brief credit history

The length of your credit history is important to show your creditworthiness to lenders. They need to be able to see that you have an established history with credit products. No history does not reflect a good history. No history means nothing to base the fact that you will be a responsible borrower.

If you keep up responsible habits such as consistently paying off your bills with a credit card or any other form of credit, in time your score will reach its full potential. This can help reduce the chances of having a business loan denied.

Bankruptcy

Bankruptcy will affect your credit rating therefore making it quite difficult for you to get a loan from many lenders. It is also against the law to borrow more than £500 from any lender without telling them that you are bankrupt until you are discharged from your bankruptcy.

Insufficient/unverified income

Lenders look at your work, investments, and other sources of income in order to assure them that you will be able to repay the loan. With some loans, lenders are required by law to calculate your ability to repay the loan through your income.

Even if you have a good credit history, if the numbers do not add up in the end, lenders may decline your loan for that reason. Either because you don’t earn enough to repay the loan or your income cannot be verified with the information you have provided.

Debt-to-income ratio

This ratio is the comparison of how much you owe each month to how much you earn. Most lenders use your own debt-to-income ratio in order to determine whether you will be able to handle the repayments after the approval of your loan. You may see your business loan denied if the numbers add up and it looks like your business will not be able to handle any new debts.

Collateral

With some loans, you are able to personally guarantee the loan with your lender by essentially pledging a personal asset as collateral that is valued at the same amount of the loan. If you have a poor or brief credit history as well as no collateral, the chances of getting approved for a loan are much lower.

Contact us to find out more

Do You Know the 3 Main Ways to Raise Finance?

How to Make Sure Your Loan Application is Successful

Obtaining Loans After COVID-19

Too many credit inquiries

You may think that applying for several loans at once with different companies may increase your chances of getting approved, but think again. When you apply for more than one loan or credit within a short period of time, it negatively impacts your credit rating. There is no limit or rule to determine how much credit you can apply for or the number of applications you wish to make however, there are consequences to your credit rating if you are making multiple applications for credit.

Making multiple loan applications also makes it seem like you are desperate for money which does not sit right with a lot of lenders, the argument is that, if you look like you need the loan so badly, you may struggle to repay it. As this will also reflect badly on your credit rating, it will make it difficult for you to receive credit or loans in the future as with any loan that you apply for, the lender will complete a credit check.

Change in income

The figure on your pay check every month does not affect your credit score. But lenders look at your income to determine whether that income will be sufficient enough to repay the loan. Therefore, affecting your eligibility for certain new credit accounts.

Recent late payments

You may be very responsible when it comes to paying your monthly credit card bills and you may have done it for years, slowly building up your credit score, but you had an off month and out of nowhere you accidentally miss a few payments. Unfortunately this can affect you pretty badly. The higher the score, the harder it falls when something occurs to hurt your credit rating. This, in some cases, can hurt your loan application more than consumers who had poor credit to begin with.

Foreclosure

Usually, for conventional borrowers, there is a waiting period of typically seven years after a foreclosure for the borrower to be eligible for another loan. For mortgage loans, the waiting period is a minimum of three years until you will be able to apply for a mortgage, this is three years from the time that the foreclosure case has completely ended.

Other issues

In some instances, you can have a business loan denied for less obvious reasons. This could include mistakes such as submitting an incomplete application, or perhaps a problem with your business model.

Action Points

Credit Challenges: Issues with poor credit history, brief credit history, or bankruptcy can lead to loan application denial. Lenders assess your borrowing and repayment history to gauge reliability.
Income Verification Problems: Insufficient or unverifiable income may result in loan rejection. Lenders need to ensure your income is adequate for loan repayment.
High Debt-to-Income Ratio: If your monthly debt obligations compared to your income are too high, lenders may doubt your ability to manage additional loan payments.
Lack of Collateral: For loans requiring collateral, not having sufficient assets to secure the loan can lead to denial.
Excessive Credit Inquiries: Applying for multiple loans in a short period can negatively impact your credit rating and make you appear desperate for credit, which is a red flag for lenders.
Income Stability Concerns: Any recent changes in income or employment can affect loan eligibility, as lenders look for stable income for repayment assurance.
Recent Payment Delinquencies: Late payments, especially recent ones, can significantly impact your credit score and loan application, regardless of a previously good credit standing.
Foreclosure History: A recent foreclosure can impose a waiting period before you’re eligible for certain types of loans, affecting your loan application.
Application Errors or Business Model Concerns: Incomplete applications or issues with your business plan can also be reasons for loan denial.

I’ve had a business loan denied – What do I do next?

Having a business loan denied can be disappointing and frustrating but the good news is there are some steps that you can take to get your application reconsidered.

Find out why you were rejected

You need to find out why you were rejected in the first place and also have a lawful right to know. Most lenders will be more than happy to explain why you were rejected and what is required from you to be reconsidered. You have the right to ask the reason behind the rejection within 30-60 days and the lender will be required to inform you the reasons. It is important to note that failure to meet “minimum standards” is not an accepted reason, it has to be a more specific, concrete reason.

It may be a bit soul-crushing reading through a list of why you did not meet a lender’s requirements, but more often than not, it is all about the numbers. The rejection is not personal. You can view the specifics and amend them or change aspects of your lifestyle or business to ensure that next time you will get approved.

Look for errors in your application

You need to thoroughly check through your application, double-check that you have not forgotten to report any source of income or accidentally embellished an additional zero to any numbers.

Review your own credit score

It does not harm your credit score for you to check your own credit. It is a good idea to check in periodically on your credit score to see what is affecting it in a positive or negative way. You are entitled by law to get a free credit report, that way you can see what the banks can see.

Request reconsideration

If you have noticed an error in your application that can be corrected or suspect that you just barely missed the mark to qualify for the loan, it is worth calling the lender to discuss your case. This conversation should be a formal discussion, not you begging to be approved for the loan. How you act affects your image with lenders, go through all the points clearly that you have to get your loan reconsidered and accept whatever their response may be.

In conclusion, these steps might help you convince a lender to reverse their decision as well as improve your application. Unfortunately there is no guarantee however, there are other options out there for you.

If you have had your business loan denied or you have concerns over your application, contact us today, Our team can help make sure your loan application has the greatest chance of success. We can also advise you on the best alternative funding options for your business if you cannot secure a bank loan.

Action Plan

Identify Rejection Reason: Request the specific reason for your loan denial from the lender, as understanding this can guide improvements.
Review and Correct Application: Double-check your application for accuracy and completeness.
Assess Your Credit: Check your credit report for errors or areas of improvement.
Seek Reconsideration: If an error is found or circumstances have changed, formally request a loan reconsideration with the lender.
Consider Alternatives: If still unsuccessful, explore other funding options suitable for your business needs.

Check out our other articles, webinars and podcasts in the Samera Learning Centre.

Frequently Asked Questions Business Loan Denied

What are the most common reasons for business loan denial?

Business loans are commonly denied due to several factors, including:

Poor credit history: A low credit score signals financial risk.
Insufficient collateral: Lack of assets to back the loan.
Weak cash flow: Inability to demonstrate consistent revenue to repay the loan.
Incomplete documentation: Missing or incorrect financial records.
New business status: Startups often face rejection without a proven track record.
Strengthening these areas can improve approval chances.

How does poor credit history affect loan approval?

Poor credit history negatively impacts loan approval as it signals financial instability to lenders. A low credit score indicates a higher risk of default, making lenders hesitant to approve loans or offering them at higher interest rates. Lenders prioritize applicants with strong credit histories, as it reflects responsible debt management and timely payments. Improving your credit score before applying for a loan can significantly boost your chances of approval and help secure better loan terms.

Can weak cash flow lead to loan rejection?

Yes, weak cash flow can lead to loan rejection. Lenders rely on cash flow to assess your ability to repay the loan. If your business cannot demonstrate consistent, strong cash flow, it signals higher financial risk, making lenders reluctant to approve the loan. Improving cash flow by managing expenses and increasing revenue is key to strengthening your application and improving your chances of loan approval.

What role does insufficient collateral play in loan denial?

Insufficient collateral can lead to loan denial because lenders use collateral as security in case the borrower defaults on the loan. Without adequate assets to back the loan, lenders perceive a higher risk, making them less likely to approve the application. Collateral reassures lenders that they can recover their funds, even if the business struggles to meet its repayment obligations. Increasing your collateral or opting for unsecured loans may help in such cases.

How does an incomplete business plan impact loan approval?

An incomplete business plan can significantly impact loan approval because lenders rely on it to assess your business’s viability and potential for growth. A strong business plan outlines your goals, financial projections, and how you plan to use the loan. Without detailed information, lenders may see your business as risky, which can lead to loan denial. Ensuring your plan is thorough and clear can improve your chances of securing funding.

Do new businesses face higher loan rejection rates?

Yes, new businesses often face higher loan rejection rates due to limited financial history and lack of proven revenue. Lenders typically prefer businesses with a track record of profitability and established cash flow, which reduces the perceived risk. New businesses may also struggle with lower credit scores or insufficient collateral, making it harder to meet lending requirements. Strengthening a business plan and improving financial documentation can help improve approval chances.

Why is thorough documentation important for loan approval?

Thorough documentation is crucial for loan approval because it provides lenders with a clear picture of your business’s financial health, stability, and ability to repay the loan. Key documents like financial statements, tax returns, and a detailed business plan help demonstrate transparency and reduce perceived risk for the lender. Missing or incomplete documentation can raise concerns and lead to loan rejection, so it’s important to provide accurate, comprehensive records.

How can I improve my credit score to get a business loan?

To improve your credit score for a business loan, focus on paying off outstanding debts, making payments on time, and keeping your credit utilization low. Regularly review your credit report for errors and correct any inaccuracies. Reducing personal and business debts can also boost your creditworthiness. Building a solid credit history over time will strengthen your financial profile, increasing your chances of loan approval.

What is the impact of outstanding debt on loan approval?

Outstanding debt can negatively impact loan approval because it increases your debt-to-income ratio, signaling to lenders that your business may have difficulty managing additional financial obligations. High levels of debt suggest a higher risk of default, making lenders less likely to approve your application. Paying down existing debts and maintaining a healthy credit utilization ratio can improve your chances of securing a loan.

Can inconsistent financial records result in loan denial?

Yes, inconsistent financial records can lead to loan denial because they raise red flags for lenders, making it difficult to assess the financial stability and reliability of your business. Inaccurate or incomplete financial statements, tax returns, or cash flow reports suggest poor financial management, which increases the risk for lenders. To avoid this, ensure your financial records are accurate, up-to-date, and well-organized before applying for a loan.

How can I strengthen my business’s cash flow for loan approval?

To strengthen your business’s cash flow for loan approval, focus on improving revenue by increasing sales or finding new income streams. Manage expenses effectively by cutting unnecessary costs and renegotiating vendor contracts. Implement efficient invoicing practices to ensure timely payments from clients and maintain adequate cash reserves. Additionally, use financial software to track and optimize cash flow, ensuring stability and reliability in your financial reports, which can reassure lenders of your ability to repay loans.

Does a lack of industry experience affect loan decisions?

Yes, a lack of industry experience can affect loan decisions. Lenders view industry experience as a sign that you understand the market and can effectively manage the business, which reduces the risk of default. Inexperienced business owners may struggle to prove their ability to handle industry challenges, making it harder to secure loans. To improve your chances, you can strengthen your application with a solid business plan, a strong management team, or mentorship from industry experts.

What are the key financial documents required for a business loan?

The key financial documents required for a business loan typically include:

Profit and Loss Statements: To show income and expenses.
Balance Sheets: To demonstrate assets, liabilities, and net worth.
Cash Flow Statements: To highlight your business’s liquidity and ability to repay the loan.
Tax Returns: Business and sometimes personal returns for 2-3 years.
Financial Projections: To show future revenue and growth potential.
Bank Statements: To verify cash flow and account history.

How does a lender assess business risk during the application?

Lenders assess business risk during the loan application process by reviewing key factors like:

Financial Stability: Examining cash flow, profit margins, and debt levels.
Credit History: Checking both personal and business credit scores.
Industry Experience: Evaluating your knowledge and track record in the field.
Collateral: Determining available assets to secure the loan.
Business Plan: Assessing future growth potential and strategy.

These factors help lenders gauge the likelihood of loan repayment.

How can I reapply after being denied a business loan?

To reapply after being denied a business loan, first address the issues that led to the denial, such as improving your credit score, strengthening cash flow, or providing more collateral. Review your financial statements, ensure your business plan is detailed and comprehensive, and gather all required documentation. It’s also beneficial to work with a financial advisor or lender to identify areas for improvement before reapplying.

Can applying for too many loans hurt my approval chances?

Yes, applying for too many loans within a short period can hurt your approval chances. Each loan application triggers a hard inquiry on your credit report, which can lower your credit score. Multiple inquiries also signal to lenders that you may be in financial distress, increasing your perceived risk. To improve your chances, space out applications and focus on strengthening your financial profile before reapplying.

Does personal credit score affect business loan decisions?

Yes, personal credit scores do affect business loan decisions, especially for small businesses or startups. Lenders often evaluate the owner’s personal credit history to assess financial responsibility and gauge the likelihood of loan repayment. A low personal credit score can signal higher risk, leading to potential loan rejection or higher interest rates. To improve your chances, work on building both personal and business credit.

How can I address lender concerns in my reapplication?

To address lender concerns in your reapplication, start by reviewing the reasons for the initial denial and resolving any issues, such as improving your credit score or increasing cash flow. Ensure that your financial documents are accurate and updated. Strengthen your business plan by adding detailed projections and outlining clear strategies for growth. You may also offer additional collateral or a larger down payment to reduce risk for the lender. Working with a financial advisor can further refine your application.

Why is having a strong business plan crucial for loan approval?

A strong business plan is crucial for loan approval because it provides lenders with a clear understanding of your business’s goals, financial projections, and strategies for success. It demonstrates your ability to repay the loan by outlining your revenue streams, growth potential, and risk management plans. A well-prepared plan reduces the perceived risk for lenders, improving your chances of securing the loan with favorable terms.

What are the best ways to prepare before applying for a business loan?

To prepare before applying for a business loan, follow these steps:

Review Credit Scores: Ensure both personal and business credit scores are strong.
Organize Financial Documents: Gather profit and loss statements, tax returns, and cash flow records.
Create a Solid Business Plan: Include financial projections, goals, and strategies.
Improve Cash Flow: Demonstrate consistent revenue and financial stability.
Address Existing Debts: Reduce outstanding liabilities where possible.

Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Business Loans for Dentists

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Top 10 Tips to Help You Cut Small Business Expenses

Running a business costs money. Even with less expensive technology and marketing tools, somehow costs still manage to add up and unfortunately, these costs can continue to increase regularly. To help keep your profits up, you need to be able control your expenditures effectively and cut a few corners to help you save that extra pound here and there to decrease your overall expenditure. Here are ten ways to cut small business expenses.

Start saving

Remember when our parents used to tell us to make sure we are saving at least half of our allowance, it is the same for business! It can be hard to think about putting money away while you have consistent cash flowing in and out.

But a good tip to try to save some money is to reserve a third of profits every month into a hard to reach bank account. This can then be used for an end of year tax bill for your dental practice or in the event you need cash for an emergency. This savings account can be your saviour when you have unexpected expenses, it will act as a surplus of cash sitting there without you having to rely on a loan.

Action Point

Saving money is essential for businesses, just like it is for individuals. While it may seem challenging to set aside funds when cash flow is consistent, it’s crucial for financial stability. A helpful strategy is to allocate a portion of profits, such as a third, into a separate savings account each month. This reserve can serve as a buffer for unexpected expenses or end-of-year tax obligations. By building up savings, your dental practice can avoid reliance on loans and have a safety net for emergencies.

Get points

When making big expenses, try to pay as much as you can on a point accumulating credit card. Cards such as American Express or British Airways Miles give you rewards when you spend with them. American Express points transfer into money while continuous spending with a BA card can convert points into miles and allow you to save on business trips.

Remember to be sure to pay your monthly bill so you don’t end up racking up any extra charges. No matter what sector your company is in, every business, including dental practices, has expenses. So, you might as well be earning while you are spending.

Action Point

Maximize rewards by using point-accumulating credit cards for significant expenses, like American Express or British Airways Miles, but ensure timely bill payments to avoid extra charges, benefiting dental practices and other businesses alike.

Minimising Taxes

Keeping the taxman at bay is one of the most important tips we could ever give you. Minimising your tax bill can be the most beneficial way to improve your business expenses. Taxes are the one expense that cannot be avoided, but minimising them is a great way of working around this issue. This means maximising all your available business deductions in order to reduce your tax liability.

Action Point

Maximize available business deductions to reduce tax liability, effectively minimizing expenses and improving overall financial health for your dental practice.

Keeping track

The best advice we can give you is that when you stay on top of all your expenses and payments, you have control over your cash flow which is the best position you can be in. Even if you are slightly lacking in profits, the control you have over your outgoings will help you get on a path that will allow figures to get higher.

You should also get into a habit of keeping track of all business expenses, that means every single one including keeping receipts. An expense that is often overlooked is vehicle mileage. If you are serious about cutting your expenses then you need to record the mileage you do for business purposes.

Action Point

Maintaining meticulous records of expenses and payments empowers you to control cash flow, paving the way for improved profitability, while diligently tracking every business expense, including often overlooked items like vehicle mileage, is crucial for effective cost management.

You can download a free cash flow forecast tool here.

Make the most of your time

It is important to know the value of your time and to make sure you are using it efficiently. Many business owners swap time in an effort to save money. An example of this is when you are driving an hour to pick up supplies and stock to save on a £10 shipping cost.

By doing small things like this you are essentially saying your time is worth less than £10 an hour! Not to mention the fuel costs included. The hour you wasted driving could have been utilised in a better way for you to earn more money than the money you didn’t save, but lost in that hour. Efficiency leads to more productivity and profit. And it all starts with knowing your goals, being organised and having a plan.

Many successful entrepreneurs begin their day with a morning routine that sets the day for productivity. Having a schedule and routine will help you time manage your life to keep you productive and efficient.

Finally, delegating and outsourcing. The weight of your entire business should not rest on your shoulders. There are ways to delegate and outsource certain jobs that do not have to be done by you. In order to improve efficiency, outsource certain business practices to a third party specialist.

It might seem like hiring an outside vendor will increase your costs, however, in the long run, delegating specific tasks to specialists can save you money and generate even better results by leaving you time to do what you do best. There are also cost effective ways to do this such as using apps and websites such as upwork or automation tools that can help you take care of your business needs while you have the time to focus on what you do best in your business.

Contact us to find out more

How Should a Dental Practice Organise its Finances

11 Top Tips to Manage your Cash Flow in a Crisis

Financial Tips for Dentists

Switch to the cloud

For many businesses a great way to reduce capital costs and ongoing IT related expenses is to switch to cloud computing. Cloud computing will help your business thrive by optimising costs and improving efficiency. With cloud computing, the need to purchase and maintain expensive ongoing software updates and servers on site is diminished.

The cloud allows you to always have the latest versions of business applications and your cloud provider will be able to take care of most data recovering issues, hence freeing your business from worrying about the implications and expenses of complex IT disasters.

Action Point

Transitioning to cloud computing not only reduces capital costs and ongoing IT expenses but also enhances efficiency by providing access to the latest software versions without the need for expensive on-site servers, while cloud providers handle data recovery, alleviating concerns and expenses associated with IT disasters.

Avoid interest charges

This is one of the most important tips we can give you. Before embracing small business financing options for your dental practice, or any sort of credit, you need to calculate the interest rates that you are going to accumulate. Every pound that you pay in interest is a pound that will not accrue to your net earnings. Before venturing to find any kind of capital that will incur high interest, try tapping into friends and family favours for interest-free start up capital!

A great tip is to pay off your highest loan rate first. So any short term rate, high debt that you may have such as credit cards or short term loans, always pay this off before you land yourself in hot water. Otherwise, you will be accumulating higher and higher costs and interests which will result in you eventually paying out more than what is coming in. Staying on top of these costs will allow you to keep on top of profits and manage costs effectively.

Action Plan

To maintain profitability and manage costs effectively, it’s crucial to avoid interest charges by prioritizing the repayment of high-interest debts, such as credit cards or short-term loans, and seeking interest-free startup capital from friends and family before resorting to small business financing options, as every pound paid in interest detracts from net earnings.

Raise fees

Raise your fees routinely. A 10% increase in fees can lead to a much larger increase in profits if your overheads are remaining constant. So always look at your prices on a very regular basis as this can make a huge impact on the profitability of your business.

Consider setting up a premium or VIP service in your business. A small percentage of your customers will be willing to spend a lot on a premium or exclusive service. Even a handful of customers paying for VIP products or services can result in a large profit.

Action Plan

Regularly reviewing and raising your fees, even by a modest percentage, can significantly boost profitability, especially if overhead costs remain stable, while offering premium or VIP services to a select clientele can generate substantial profits from a small customer base.

Pay invoices early

There are many vendors that offer small discounts to clients that pay invoices ahead of schedule. It is these discounts that add up at the end of each month showing you how much you can save. As long as paying early does not impact your cash flow negatively, it usually makes financial sense to do so and also gain personal credit with the vendors knowing that you are a standup customer.

It is also very important to remember to always get free quotes for any big capital item you purchase as prices vary greatly amongst distributors. And you should do the same for small supplies that you do every month such as materials. Price Match products at least once annually. You will be surprised how much you will be able to save from comparing costs.

Action Plan

Paying invoices early can lead to significant savings through vendor discounts, while obtaining free quotes for capital items and price matching small supplies can further reduce costs and improve financial efficiency.

Click here to read our article on Dentist and Dental Associate Expenses Guide

Cut costs

When you shop around to find deals you will be surprised at the difference in rates for the same products from different suppliers and providers. As a small business owner you are always looking for ways to optimise your resources and cut material costs, here are a few suggestions on how to cut small business expenses:

When it comes to wholesale supply costs, every penny saved is essentially a penny earned. If you are running a business that regularly makes a lot of wholesale supply purchases, getting the best deal on supplies can make a huge difference with your outgoings. As a business owner you need to be constantly monitoring supply costs and checking for discounts as well as alternative lenders with better prices.

You can also cut advertising costs as there are now more potential customers online now than ever before. Advertising does not have to be expensive, you can start by simply creating an online presence through social media or a website. Direct email is another highly effective low-cost marketing solution. Publicity is free and a great low-cost way to build your credibility. Other great cost effective options include cold calling, carrying business cards and asking for referrals.

Insurance is an expense that no business can evade, you cannot afford to avoid spending money on insurance. However, increasing your deductible is one way to reduce your premiums. Just be sure that the amount of your deductible is not higher than what your business can afford if you have to make a claim. If you are a member of a professional organisation or a big company, you may be able to take advantage of group rates.

Action Point

Cutting costs through strategic monitoring of supply expenses, leveraging discounts, and exploring alternative suppliers, alongside adopting low-cost marketing methods and adjusting insurance deductibles, can significantly improve a small business’s financial health.

Click here to read our articles on Samera learning centre

More on how to cut small business expenses

In conclusion, within every business in our uncertain economy, every penny counts, even the smallest percentage off an entire invoice will save you money. The biggest aspect of managing your spending is managing your time.

As your business grows, understanding things like operating costs and cutting any unnecessary costs is going to become more and more important. Operating costs will allow you to take an in-depth look at how your expenses are impacting your profits. Once you start cutting unnecessary costs you can start boosting profits.

You can find more tips on how to manage your cash flow here.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

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Dental Accounts & tax

Dental Accounts & Tax: Further Information

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Reviewed By:

Arun Mehra

Samera CEO

Arun, CEO of Samera, is an experienced accountant and dental practice owner. He specialises in accountancy, financial directorship, squat practices and practice management.

Obtaining Loans After COVID-19

How hard is it to get a loan in a post-COVID world? Are the banks still lending?

The answer is – YES! The banks are still lending, you just need to make sure your application is is as good as it can be.

Click here to read our blog on How to finance a healthcare business.

How to Make Sure Your Loan Application is Successful

Do You Know the 3 Main Ways to Raise Finance?

How Much Can I Raise?

Business Loans for Healthcare Businesses

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How to Make Sure Your Loan Application is Successful

Bank and Asset Finance Provider List

Funding Options for Dentists

A Guide to Asset Finance for Dentists

Click here to read our articles.

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We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

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Dental Practice Finance: Further Information

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Why First Impressions of Your Practice Matter

Why would you want to purchase new equipment or undertake refurbishment work at your dental practice at this moment in time?

The look and feel of your practice can have a big impact on your patients’ view of the service that they may receive, as soon as a client enters your premises, they are forming an opinion of your practice.

Enhance the Patient Experience

A modern practice with the latest equipment such as 3D Scanners and 3D Printers will enhance the patient experience and speed up the treatment times. Being able to show your clients x-rays while still in the chair and talk through the process will allow you to start introducing new, higher-end services into the practice.

Why-first-impression-of-dental-practice-matters-1

Stay Ahead of the Competition

Staying ahead of local competition can make you stand out and give you a unique selling point. What better way to market your practice than by showing your newly refurbished surgery or the latest piece of technology that you have purchased that will improve upon the already high level of service that you offer?

Why-first-impression-of-dental-practice-matters-2

Make Use of Space

You may have reached the maximum capacity within your surgeries and need to convert unused space into a treatment area or, due to the new restrictions, you need another room to maintain your existing activity levels.

The number of patients that you can see on a daily basis has an impact on your practice turnover and growth. If you can increase your patient appointments and the types of services that you offer it can have a real impact on the business profit margins.

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Invest in your business

Investing in your business with items such as equipment can have a positive effect on patient perception, the services that you offer and ultimately the profits.

So how can you finance the equipment?

Asset finance is normally the preferred option. By using Asset Finance you can usually structure a facility over 3-5 years. This will assist you in managing business cash-flow and providing you with a regular monthly payment plan, instead of paying a large lump sum up front and perhaps putting pressure on your bank account.

Samera Finance are experienced healthcare brokers with a banking background. We have access to many asset finance providers. It’s always best to explore the market and see what is available rather than just approaching a single lender.

Action Points

Upgrade Equipment: Invest in the latest dental technologies like 3D Scanners to improve patient experience and treatment efficiency.
Compete Effectively: Stand out by refurbishing your practice and incorporating advanced technologies to offer unique services.
Expand Services: Use available space to increase treatment areas, boosting patient capacity and service variety.
Smart Financing: Utilize asset finance to manage costs effectively over time, maintaining healthy cash flow while expanding your practice’s capabilities.

Why-first-impression-of-dental-practice-matters-4

Please contact us directly if you wish to explore your options:

Dan Fearon	Nigel Crossman
Commercial Finance Broker 07718655245 [email protected]	Head of Finance 07715668267 [email protected]

How To Market A Dental Practice

How to Grow Your Dental Practice with Google PPC

How AI will Change Running a Dental Practice

Why-first-impression-of-dental-practice-matters-5

Why First Impressions of Your Practice Matter FAQ

Why is the first impression crucial for a dental practice?

The first impression is crucial for a dental practice because it sets the tone for the patient’s entire experience. A welcoming and professional environment—both in-person and online—helps build trust, reduce patient anxiety, and encourage loyalty. Elements like the cleanliness of the reception area, the friendliness of staff, and the practice’s overall appearance create a lasting impact. A positive first impression can also lead to more referrals, higher patient retention, and improved overall satisfaction.

How does the practice’s exterior affect patient perceptions?

The exterior of a dental practice significantly influences patient perceptions as it is often the first physical point of contact. A well-maintained, clean, and professional-looking exterior reflects the quality of care and attention to detail within the practice. It helps establish trust and confidence before patients even step inside. Elements like clear signage, accessible parking, and an inviting entrance can create a positive initial impression, making patients feel more comfortable and welcomed.

What impact does staff demeanor have on new patients?

Staff demeanor plays a critical role in shaping the first impressions of new patients. Friendly, professional, and attentive staff help create a welcoming atmosphere, reduce patient anxiety, and build trust. Positive interactions, such as clear communication and empathetic care, make patients feel valued and respected. On the other hand, unfriendly or indifferent staff can deter patients and harm the practice’s reputation, potentially leading to lower patient retention and fewer referrals.

How can interior design boost patient comfort?

Interior design can significantly boost patient comfort by creating a calming, welcoming atmosphere. Comfortable seating, soft lighting, and warm color schemes can help ease patient anxiety and make the environment feel more inviting. Well-organized spaces, clutter-free waiting areas, and the thoughtful placement of décor, such as artwork or plants, contribute to a serene experience. Modern, clean designs also convey professionalism and attention to detail, enhancing the overall perception of the practice’s quality.

Why is having a clean, inviting reception area important?

A clean, inviting reception area is crucial because it creates a positive first impression, setting the tone for the patient’s experience. It conveys professionalism, attention to detail, and a commitment to hygiene—key factors in building trust with patients. A well-organized, aesthetically pleasing space helps reduce patient anxiety and fosters a welcoming atmosphere, encouraging comfort and confidence in the care they will receive.

How does a dental practice’s website contribute to first impressions?

A dental practice’s website is often the first point of contact for potential patients, making it crucial for creating a strong first impression. A clean, professional, and user-friendly website builds trust and reflects the quality of care patients can expect. Features like easy navigation, clear contact information, online booking, and informative content demonstrate reliability and convenience, encouraging patients to engage with the practice. A poorly designed website, on the other hand, can deter prospective patients and harm the practice’s image.

What role does hygiene play in patient impressions?

Hygiene plays a crucial role in shaping patient impressions at a dental practice. A clean and sanitized environment reassures patients about the quality of care and safety, building trust and confidence in the practice. Visible cleanliness in treatment areas, waiting rooms, and restrooms signals a commitment to high standards and patient well-being. Neglecting hygiene can lead to negative perceptions, damaging the practice’s reputation and deterring potential patients.

How should dental staff be trained for optimal first impressions?

Dental staff should be trained in communication, professionalism, and patient care to create optimal first impressions. Training should emphasize friendly, attentive interactions, clear communication, and empathetic listening. Staff should be equipped to handle patient inquiries and concerns calmly and efficiently. Additionally, providing ongoing education on patient service, including body language, tone of voice, and maintaining a positive attitude, ensures staff consistently make patients feel welcomed and comfortable from their first visit.

How can technology improve patient experience from the start?

Technology enhances patient experience from the start by streamlining processes like online appointment scheduling, digital patient forms, and automated reminders, making interactions more convenient. Tools like virtual consultations, mobile apps for tracking treatments, and real-time communication platforms improve accessibility and engagement. These tech-driven solutions not only save time but also reduce patient anxiety, creating a more personalized and seamless experience from their first interaction with the practice.

What are common mistakes that hurt first impressions?

Common mistakes that hurt first impressions in a dental practice include unwelcoming staff, poor hygiene, and cluttered or outdated waiting areas. Neglecting the practice’s exterior, such as poor signage or lack of parking, can also create a negative impact. Additionally, long wait times, unorganized scheduling systems, and a poorly designed website can frustrate patients, leaving them with a bad first impression before they even enter the practice.

Why is patient communication key to making a good first impression?

Patient communication is key to making a good first impression because it helps build trust, reduces anxiety, and shows that the practice cares about their needs. Clear, empathetic, and timely communication—whether during booking, at reception, or in the dental chair—ensures patients feel understood and valued. This sets a positive tone for the relationship, making patients more likely to return and recommend the practice to others, ultimately boosting patient satisfaction and loyalty.

How can a professional-looking practice brochure create a positive impact?

A professional-looking practice brochure creates a positive impact by showcasing the quality and professionalism of your dental practice. It reflects your brand, provides key information in a visually appealing way, and helps potential patients understand your services. A well-designed brochure can highlight your expertise, build trust, and leave a lasting impression on patients, ultimately driving engagement and encouraging them to visit your practice.

What role does branding play in patient perception?

Branding plays a vital role in patient perception by shaping how they view your dental practice’s professionalism, trustworthiness, and quality of care. Consistent branding across your logo, website, signage, and marketing materials creates a unified image that patients can easily recognize and trust. Strong branding can differentiate your practice from competitors, build patient loyalty, and establish credibility, making patients feel more confident in choosing your services.

How can digital marketing enhance the first impression of a dental practice?

Digital marketing enhances the first impression of a dental practice by increasing visibility, credibility, and engagement. A well-optimized website, engaging social media presence, and positive online reviews showcase professionalism and build trust with potential patients. Targeted ads, informative blogs, and SEO strategies can attract more visitors and create a strong initial connection. Digital marketing helps ensure that patients’ first interactions with your practice online are positive and encourage them to book an appointment.

Why should your practice use social proof, such as reviews, for a strong first impression?

Using social proof, like patient reviews, creates a strong first impression by building trust and credibility for your dental practice. Positive reviews and testimonials reassure potential patients of the quality of care they can expect, influencing their decision to choose your services. They provide authentic, third-party validation that can significantly boost confidence, especially for new patients. Highlighting strong reviews across platforms like Google, social media, and your website helps set a positive tone before patients even step into your practice.

How can lighting and color schemes influence patient mood?

Lighting and color schemes significantly influence patient mood by creating a calming and welcoming environment. Soft, natural lighting can reduce anxiety, while bright, harsh lighting might increase discomfort. Similarly, soothing color schemes like blues, greens, and pastels promote relaxation, whereas bold, intense colors may cause unease. Thoughtful use of lighting and color helps create a comfortable atmosphere, improving the overall patient experience and making the dental practice feel more inviting.

What should a dental practice’s online presence convey to potential patients?

A dental practice’s online presence should convey professionalism, trustworthiness, and patient-focused care. It should be easy to navigate, provide essential information like services, location, and contact details, and showcase positive patient reviews. The website should be visually appealing, mobile-friendly, and optimized for search engines to attract potential patients. Engaging content such as blogs, videos, and FAQs can further enhance credibility, helping build trust and encouraging patients to book an appointment.

Why is a modern and efficient booking system vital for first impressions?

A modern and efficient booking system is vital for first impressions as it simplifies the appointment process, offering convenience to patients. Features like online scheduling, instant confirmations, and reminders demonstrate that your practice values patients’ time and makes their experience seamless from the start. An easy-to-use, streamlined system reduces frustration and ensures patients can quickly and confidently book appointments, reflecting the professionalism and efficiency of the practice.

How does offering amenities (like Wi-Fi) create a welcoming atmosphere?

Offering amenities like Wi-Fi creates a welcoming atmosphere by making patients feel more comfortable and valued during their visit. It enhances convenience, especially for those waiting for their appointment, allowing them to stay productive or entertained. Providing free Wi-Fi shows attentiveness to patient needs and reflects the practice’s commitment to creating a modern, patient-friendly environment, which can positively impact overall patient satisfaction and first impressions.

How can you continuously improve patient first impressions?

To continuously improve patient first impressions, regularly update the practice’s aesthetics, such as cleanliness, decor, and technology. Train staff on effective communication and service. Actively seek patient feedback to identify and address areas for enhancement. Modernize tools like online booking and check-in systems for a smooth patient experience. Keeping the atmosphere welcoming with amenities and ensuring a patient-centric approach will help maintain and improve positive first impressions.

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

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Financial services

Dental Practice Finance: Further Information

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Reviewed By:

Nigel Crossman

Head of Commercial Finance

Nigel is a former banker and head of commercial finance at Samera. He specialises in raising finance, negotiating deals and structuring finance applications for healthcare businesses.

Dan Fearon

Finance Manager

Dan is a former banker and the head of our dental practice sales team. He specialises in asset finance for healthcare businesses and dental practice sales.

Financial Tactics During COVID-19

With the Coronavirus pandemic causing lock downs across the world, businesses in almost all industries are struggling to stay afloat. It is more important than ever that businesses are pro-actively working to save money and protect themselves financially.

With many businesses unable to to open their doors and trade, it can feel like there is very little to be done except wait for lock downs to lift.

Now is not the time to to wait, now is the time for action.

In this webinar, we’re taking a look at some of the financial tactics and strategies that businesses need to be considering at the moment to survive lock down.

Refinancing During COVID-19

How to Deal With Your Bank in a Cash Flow Crisis

Business Tips in an Economic Crisis

More Financial Tactics During COVID-19

11 Top Tips to Manage Your Cash Flow During COVID-19

It is essential that you properly plan and manage your cash flow to be able to pay your bills and grow your business. Use these tips to help manage and mitigate any cash flow issues you may be experiencing.

Read the blog.

Financial Templates

We have tried to make raising finance for your business as easy as possible for you. With that in mind, please feel free to download these templates for vital financial documents that you will need to raise and manage finance in your business.

Download the templates.

Surviving a Financial Crisis

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

Book a consult

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Dental Valuations 2.0

In this webinar Arun discusses the valuation of UK dental practices and how he believes they have fallen by up to 40% due to the current COVID 19 crisis.

Sell your Dental Practice with Samera

If you’re thinking about selling your dental practice then Samera can help make sure that you find the right buyer and the best price for your business. If you want to get the best price possible when you sell your dental practice, you need to build the value and grow the revenue to ensure you get the best return on your investment.

Book your free consultation to find out how you can grow the value of your practice before you sell.

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Sell a dental practice

More on Selling a Dental Practice

For more information please check out the articles and webinars in the selling a dental practice section of our Learning Centre, like our guide on How to Sell a Dental Practice in 9 Steps.

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Dentistry In 2020: The Year Of Collaboration

On the 17^th March, 2020, my wife Smita closed her private dental practices, like many, due to COVID 19. Just before she left her Wandsworth practice, the telephone rang, and it was somebody wanting to buy her successful private dental practices.

Metaphorically, the paint had not even dried, yet someone had the gall to say “I know dental practices are struggling right now, would you like to sell yours?” – Unbelievable.

Smita being Smita, was shrewd enough to find out who the buyers were and understand their cunning plan, and once she had gathered enough information, she let rip.

It’s safe to say they won’t be calling soon again.

Since then, I have heard from other clients experiencing similar stories too.

Why?

Well there are well financed investors, sitting on cash, ready to invest into dentistry, during COVID 19. They are seeking fearful scared dentists wanting to make a rushed exit during these troubled times.

Some of you may be tempted, but before you do, hold fire.

If your practice was struggling, or you were planning to retire soon pre COVID 19, fair enough, it may be an opportunity to exit, but if your practice was growing and flourishing it’s pretty likely you will be taken to the cleaners.

Post COVID 19

The very recent survey carried out by the BDA highlights the concerns of dentists of the financial viability of their dental practices post COVID 19. Many feel they may not be financially viable by the time the lockdown has ended.

In contrast, in the last few years, investors have been piling into the Dental market (globally) and its pretty likely this will continue, even in a new era of dentistry.

No doubt, infection control procedures will change, and funding will be required to make the necessary changes, but once the lockdown ends, I expect it’s going to be busy in dental practice. People still need dentists, not cruise holidays, so whilst the type of dentistry you may be doing will differ, there will be a need and expect demand to be strong.

So why would you sell a successful business, just because of a 3-6 month sabbatical? You wouldn’t unless you were getting top dollar.

I would urge you to resist the temptation to sell at a discounted price, just to get out of dentistry. The vultures are out to try and obtain a deal, but it’s important you hold your ground, and come back strong once you re-open, as you will re-open.

Working Together

As someone who has been entrenched in dentistry for almost 20 years, as an advisor, but also co-owner of clinics, the goal for me has been to help dentists improve their businesses through offering a better patient experience.

Whilst selling your successful practice maybe a short-term fix, I propose an alternative arrangement whereby independent dentists work in collaboration to overcome the challenges they face.

You don’t need to sell the practice you have worked at for many years, just because this temporary though significant break in business has occurred.

You can maintain your autonomy, brand, team culture while collaborating with others and outsource the parts of your dental practice that would benefit from scaling.

For example, a dental collaborative could be formed whereby all the owners retain ownership of their practice and they outsource certain services for a fee including:

Supplies at reduced rates due to economies of scale
Accountancy and payroll services at reduced rates due to economies of scale
Marketing support (including websites) at reduced rates due to economies of scale
Continuing education

Then in the future, when it does come to selling your practice, if all of the owners have opted in to a collaborative sale , the exit multiple they achieve on sale would be considerably higher than if they sold now, or alone in the future.

Such an approach ensures dentists retain control of their own businesses, develop them the way you want to, and ensure the team culture is protected and the level of patient care you have created is maintained – all very valuable. We want you to retain your autonomy and stay in the driving seat. Right now, it might seem like an easy option to just sell and drive off into the sunset . But at what price ?

Collaboration

Today’s changing Dental landscape requires independent practice owners to evolve. By working together, not in competition, in such a scenario outlined, allows such practices to offer the services they desire, whilst creating real value in their business.

Now is NOT the time to exit, now is the time to come together.

The Numbers ALWAYS Tell The Story – Safety In Numbers

An alternative way to look at this is through the numbers. In the current market, an opportunistic buyer may offer a low-ball price, say 3x EBITDA (cash profit), whilst prior to the crisis this may have been nearer 5-6x.

Translated into hard numbers, for example. A dental practice with an EBITDA of £200,000 may now be achieving a price of say £600,000 (3x EBITDA), but if they can ride out this period of uncertainty and rebuild, the value can go higher maybe up to nearer £1.2m (6x EBITDA).

However, by collaborating in such an arrangement I have detailed above, prior to COVID 19 a group of dental practices would routinely sell for multiples in excess of 10X EBITDA (£2m for a £200,000 EBITDA practice), so the question has to be, do you sell yourself short now, or ride out the wave and build your business to achieve a much higher multiple in the future? Groups of practices will always attract a much higher multiple!

The larger the collaboration (the number of practices), the higher the value.

Grow Your Dental Practice with Samera

Join the Samera Alliance buying group today for free to save money on your consumables and assets, increase your profits and grow your dental practice.

Join for free. Save money. Grow your dental practice.

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Samera Alliance

More on Growing a Dental Practice

For more information on growing a dental practice, check out the articles and webinars in our Learning Centre, like our guide on How to Grow a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

COVID-19 Business Update and Next Steps to Take

COVID 19 Update and Next Steps Download

Surviving a Financial Crisis

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

Book a consult

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Tax Avoidance Promoters Targeting Returning NHS Workers

HMRC has recently released warnings to returning NHS workers regarding tax schemes currently being offered to some.

Workers returning to the NHS to assist with the current COVID-19 crisis are, in some cases, being offered access to tax avoidance schemes, and HMRC is strongly warning against joining any such scheme.

How to tell if you have been offered a tax scam

There are several ways for you to tell if a scheme you have been offered is a tax avoidance scam.

Contact Samera directly and we can advise on whether a tax scheme you have been offered is legitimate, or an avoidance scam.

HMRC have guidance on their website to help you understand what these scams look like: https://www.gov.uk/guidance/tax-avoidance-promoters-targeting-returning-nhs-workers-spotlight-54

Citizens Advice also have information on their website on how to spot a scam: https://www.citizensadvice.org.uk/consumer/scams/check-if-something-might-be-a-scam/

Surviving a Financial Crisis

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

Book a consult

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

COVID 19 Update and Essential Leadership Skills

In this webinar I discuss the current situation for Dentists regarding COVID 19 plus the Essential Leadership Skills required!

Click here to read our blog on How to finance a healthcare business.

COVID-19-Update-and-Essential-Leadership-Skills-v2 Download

Managing Your Cash Flow in a Crisis

Financial Tactics During a Cash Flow Crisis

7 Business Actions Every Dental Practice Must do in a Lockdown

Surviving a Financial Crisis

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

Book a consult

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

7 Business Actions Every Dental Practice Must do in a Lockdown

In this webinar recording, Arun discusses 7 Actions all Dental Practice Owners must now do in this downtime.

7 Actions Webinar Slides Download

Click here to read our article on How to finance a healthcare business.

Surviving a Financial Crisis

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

Book a consult

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How to Deal With Your Bank in a Cash Flow Crisis

In this webinar, Nigel and I discuss how to handle your banks in a cash flow crisis and what you need to be thinking about.

Click here to read our article on How to finance a healthcare business.

Money Saving Tips for Dentists

Financial Tactics During a Cash Flow Crisis

Financial Tips for Dentists

Surviving a Financial Crisis

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

Book a consult

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.