Chances are you became a dentist to help people and enjoy a comfortable life for yourself and your family. The profitability of your practice can vary month-to-month and without the right CPA, it can be difficult to know how your practice is performing, when to invest and save, how much your taxes are going to be, and if you can afford to make “big” purchases. Maybe you want to buy a home, a new car, a boat or vacation home… or even more likely, new equipment and technology for your practice.
Do you find yourself asking your CPA or business advisor if you can afford to make certain purchases but not getting much of answer in return? Then this blog is for you.
You want predictability as a business owner, right? Engage Advisors brings predictability to our clients. We partner with dentists in a very unique way. We focus on the “nuts & bolts” of running your practice day-to-day. How can you make good business decisions and run the practice effectively? Our simplified financial reporting system specifically designed for dentists will allow you to make the right decisions at the right time, without leaving yourself exposed financially.
One of the first things a dentist can do when preparing for a big purchase is to implement the Profit First method of cash flow management. Engage Advisors is the exclusive home of Profit First for Dentists, and we have everything you need, including a free webinar (REGISTER HERE) to get your practice up and running with Profit First with your next deposit.
Have a dedicated discussion with your CPA about the asset(s) you are hoping to purchase. It’s important to set an appropriate budget and fund your operating account, retirement account(s), owner’s pay, and profit accounts respectively. A good dental CPA will know how to maximize the tax code for your benefit.
Next:
Speak to your significant other
Are you both on board? This is a great situation for a third-party (CPA/Business Advisor) to get involved and help bridge communication and planning. It’s important to be on the same page with your life partner. We encourage communication and clarity!
Set realistic expectations
Big purchases have ancillary costs associated with them. Maintenance costs, accessories, etc. A seasoned dental CPA will have a good idea of what expenses to expect with a major purchase. If your purchase is of a personal nature (i.e. a home, car, etc.) then consider fuel costs, maintenance, insurance, etc. Having a thorough and complete financial scope of your commitment is the only way to move forward!
Life events on the horizon
Do you have a child getting ready for college? A daughter with a wedding coming up or a parent that may need to be put in a care facility in the next few years? These are all important considerations. What events can you see coming that you will need cash for? It’s also a good idea to have some money set aside for the things you can’t see coming.
Priorities of your life
If you buy this now, what happens later? Can you still retire on time? Are your kids going to be able to go to college where they want to? Are you comfortable with the impact this is going to have on you and your family in the long run?
Profitability Assessment
This is where our “nuts & bolts” approach really starts to shine! Are there processes you could optimize within the practice? Efficiencies you are missing? Is your marketing mix right? Is your website working? By working with hundreds of dental practices across the country, we can help you maximize profitability. Most dentists see a tremendous change by simply implement Profit First.
Conclusion
If you are making a big purchase this year, if you want more clarity in your practice, or if you’re tired of paying for advice you aren’t getting, chat with us now at EngageAdvisors.com. You can reach your goals and live the life you want while enjoying less stress, less tax, and more profit. It all starts with a quick, easy chat! We are available 24/7!