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. I discussed financing the purchase of a dental practice in the first section of this book, and I do not want to repeat myself. However, there are some points that it’s worth mentioning, including how important it is to work with professionals and to have personal and practice finances in order.
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 vital to do so when growth and further purchasing is required.
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. I’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.
Being prepared to apply for financing
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.
More on Financing the growth of a dental practice or group
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