It is a given that financial advisers need to be primarily concerned about how much disposable cash or income a prospective client has available to invest in a financial plan.
Whilst this is entirely understandable and logical, it can present a significant barrier to many dentists who are currently investing significant amounts of money into their practice or home. It could also be that the practice is providing insufficient income to cover all the various financial needs.
The DFA Proposition
This is where the DFA proposition bridges the gap. We don’t ask you how much you can afford. Instead, we create an inclusive holistic financial plan which is fully costed, much in the same way as you would produce a patient treatment plan. Then, we agree a realistic timescale for the practice to provide the necessary funds to move the plan forward.
Just like the treatment plan, we will not be attempting to solve every issue all in one go. We will often prioritise the least important issues being put off for one or two years – sometimes longer if necessary. The most important factor is that we have now established the required output from the practice to achieve all your financial needs and goals within an established time frame.
It would be fair to say at this point, in many cases, the practice will not provide those funds unless changes take place. We have years of experience working with many, many practices and we know all the changes that can be made easily without major expense. Many of them are not obvious, but once implemented, we can achieve significant increases to the net profit of the practice meaning that in time we can achieve the three primary objectives below:
- The practice must produce sufficient income to cater for all current and future business and personal cash flow requirements.
- The practitioner/s are able to create the above within a realistic time frame to allow sufficient time for business planning, family and leisure.
- Any financial plan, once agreed, must provide a high level of predictability and peace of mind whilst including a well organised, timely and well-funded exit plan.
The above, in our view, are essential if a practitioner is to have a sustainable work/life balance that is not detrimental to their health or relationships. Where absolutely necessary, we can refer to specialists as required who can deal with major issues, unusual, but typically involving HR of technical management/business or marketing problems.
- We evaluate every financial system within the practice;
- We identify and establish financial processes that are making a profit and those that aren’t.
- We establish how much turnover is required to cover existing expenses and then …
- We ultimately establish how much turnover/profit is required to make the necessary changes.
Below is a non-exhaustive list of the common items we can investigate:
- Expenses and costs
- Client numbers
We have a reference bank of client’s accounts and have created benchmarks against these. We will analyse your accounts and establish where your practice succeeds and where we may need to consider some changes. We can also use benchmarks for patient numbers, private and NHS fees and the general trends of these with respect to profitability.
We will draw up a list of priorities for the changes you need to consider and the best plans of action to take these forward.