Dental Articles

Key Steps To Managing Your Financial Profile II

By |August 6th, 2014|

Pay Bills On Time

NEVER make late payments!  Making timely payments is one of the most important and possibly among the easiest things you can do to improve your credit record.  Set up automatic payments from your bank if necessary to make sure payments on credit cards and installment loans are made on time. This not only ensures a better credit score, but helps you avoid late fees and penalty interest rates as well.

Key Steps To Managing Your Financial Profile

By |August 6th, 2014|

To establish and grow your practice to its full potential typically requires periodic financing. To ensure you can qualify for a loan and get the best rates available, it’s critical to have a strong financial profile – and the single most important thing you can do to improve your financial profile is manage your credit score.  Here’s how:

Understand Your Credit Score

Your FICO credit score distills all the information in your credit report, producing a single number that lenders, employers, landlords and others use to determine your credit worthiness.  Scores range from about 300 to 900, with the vast majority falling in the 600-700 range.  A score below 620 indicates “high risk” and could make financing difficult to obtain, while a score of 750 or above may qualify for the best possible rates.

The key factors influencing how a credit score is determined are shown below in order of significance:

Past delinquency:  The FICO formula assumes that people who have failed to [...]

Strategic Success: Common Traits Among Top Practices

By |August 5th, 2014|

There is no “one-size-fits-all” or “easy to- implement” secret to success for dental practices. However, I do see commonalities in the strategies of top practices. These practices have 15% to 20% annual growth and maintain above average profitability. Here are their common traits, along with strategies I’ve seen that have worked well for my dental practice customers.

To read the full article, click here Strategic Success: Common Traits Among Top Practices

Expand With a Second Practice For Real Growth

By |June 20th, 2014|

As a dental practice owner you continually look for ways to grow your business and expand on your success.  But have you considered literally expanding your practice by opening a second location?  Assuming your current practice is well grounded with a solid patient base, good management practices and steady cash flow, expanding to a second location can be one of the most dramatic and effective ways to build business success as well as create options for long-term security.

Build Your Business Assets

Just as buying a second home increases the value of your assets and provides profit opportunities for the future, expanding your practice to a satellite location provides several advantages in building your business.

Be aware of the downsides

By |June 18th, 2014|

Naturally, as with any investment, there are inherent risks in purchasing a business property, as well as predictable headaches that come with dental practice ownership.  For example, if the real estate market loses value over a long period of time after your purchase, or the character of the neighborhood changes for the worse, you risk losing equity and your practice may suffer.  Also, making a real estate purchase may require a large cash down payment that could be otherwise put to immediate use in growing your practice.  And of course, as a property owner you bear all the inconveniences and costs associated with property ownership, including maintenance and repairs, property taxes and impacts of zoning regulations.

But be aware that despite the various disadvantages, many dentists have made the leap to commercial property ownership in less favorable markets than the current one and realized significant success over time.

Know The Key Players In Your Loan Process

By |June 11th, 2014|

When you apply for financing for a dental practice purchase, startup, or construction project, you are engaging not only your lender but a whole group of specialists who bring the loan to fruition. Understanding the roles of the players who create and deliver the loan package can help you gather the appropriate information and more easily navigate the financing process. So who are the players in the loan process?
Read the full article here: Know The Key Players In Your Loan Process

Tax advantages of ownership

By |May 28th, 2014|

Real estate property owners enjoy tax advantages unique to ownership, including the ability to write off mortgage interest as well as depreciate the value of any owned buildings over a 39-year period on a straight-line basis.  Both of these types of deductions reduce overall taxable income, saving cash flow that can be reinvested in the business. When these tax write-offs are combined with Section 179 deductions for purchasing equipment, the small business owner has a meaningful toolbox sponsored by the IRS for decreasing their tax burden and offsetting the inherent costs of property and business ownership.

Why Now is the Right Time to Buy

By |April 29th, 2014|

There are several key reasons why now is an excellent time to invest in commercial real estate.

Property prices have bottomed.  As with the residential market, commercial property values seem to have bottomed out.  In most markets today, a typical mortgage payment is equal to or less than a rent or lease payment.  At today’s CRE prices, you can retain more of your cash flow or acquire much more real estate for your investment than you might have just five years ago – all while investing in your future growth.

Abundant inventory.  In addition, commercial properties are currently available in abundance in most markets, providing an excellent opportunity to secure a prime location at a very reasonable price.

Rates at historic lows.  While business property rates will never be quite as low as those for residential properties, they are nevertheless mimicking the housing market with rates that are now at historic lows for commercial real estate. Your CRE loan today will cost [...]

Building a Foundation for Growth

By |April 23rd, 2014|

Owning your dental business property, along with your practice, has the unique advantage of laying a broader foundation for future growth. The three most significant advantages to owning your business real estate are:

Control.  When you own the business property as well as the practice, you have complete control to develop, operate and modify the building to your needs as the practice evolves, and as zoning regulations allow.  You are no longer at the mercy of your landlord’s guidelines for space modifications, and can adapt your building infrastructure to accommodate future developments in dental technology.  This gives you maximum flexibility to build the practice you want with the building and equipment enhancements you need.

Stability.  When you own your own property, whether a home or a business, you enjoy greater long-term stability in the costs associated with the property. You can more easily project the annual costs for your practice investment according to your mortgage contract, insurance and estimated property tax, [...]

When To Choose a Lease

By |April 15th, 2014|

For new dental practitioners who are uncertain of future space needs and want to ensure maximum cash flow as they grow their business, leasing may be a wise option.  In general, it’s far less costly up front to lease commercial space compared to a real estate investment, making leasing a better choice for those who lack equity as only one to two months lease value is typically required as a security deposit on a leased space.   A lease arrangement can also free up cash that can help fund the growth of your practice through equipment purchases or marketing.  In addition, practitioners with lease arrangements will not be tied to the responsibilities of property ownership, such as onsite maintenance and tenant rentals, and can focus more fully on their practice and patients.

However, there are also significant disadvantages to leasing that need to be carefully considered. Most importantly, with a lease arrangement you are not investing in your own future.  You [...]