Wealth Management Services

May 15th, 2013 10:04am
Amber Banks

When planning ahead for your future, wealth management planning should be a part of your blueprint.  Often times, dentists think that if they do not have significant wealth today, then they don’t need wealth management services now.  But as a dentist, you need to consider all aspects of wealth management planning and what it means to you today and in the future. 

  • Paying off student loans
  • Paying down business debt
  • Insurance (life, disability, etc.)
  • Buying your first home
  • Protecting your credit
  • Budgeting your personal finances
  • Creating emergency funds
  • Planning for paying income taxes

Part of your Tomorrow Plan should also involve your retirement needs.  There are various aspects of your retirement planning, but here are a few more to be considered:

  • Integrated investment advising
  • Goal planning and financial planning, including creating your “Roadmap,” an integrated plan to guide you through your wealth building years to reach your Tomorrow Plan
  • Company Retirement Plan services

Within these services, your advisor should help you set your goals for today and tomorrow but most importantly, your advisor will help you implement your plan.  You will also want to have your plan reviewed and updated over the years.  As life changes, your financial plan will change.  You will need to contact your financial advisor to make sure they are aware of what is happening in your life.  Any change may impact your financial plan and in order to meet your needs and reach your goals, you plan will need to be updated.

Veros Dental can help you achieve your Tomorrow plan — call us to find out how we can help you reach your Tomorrow – today!

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Choosing a Company Retirement Plan for Your Practice

May 12th, 2013 6:51pm
Adam Decker

There are numerous options when it comes to setting up a retirement plan for your office.  The decision making as to what type of plan is right lies largely in your specific situation and purpose for having a plan.  Do you want a plan to create an additional benefit for your staff?  Or is your motive primarily for personal tax savings?  How much will you target to contribute each year?  Do you want to commit to a plan for a long period of time, or would you prefer flexibility from year to year?

The first step in determining the ideal plan for your office is goal setting.  Identify the answers to questions such as those above to frame the mission of your plan.  The next step is to put together an employee census.  For this purpose, a census will include the name of each employee, their annual compensation, their annual hours worked, their age and their state date.  The census allows various plan scenarios to be contemplated with actual data.  These scenarios can then reflect costs, potential tax savings, employer contribution expenses, and other items necessary to help perform a useful cost benefit analysis.

For a dental office, there are usually four general possibilities for the type of plan to set up.  However, under each, there can be multiple options for how they are set up.  There can often be flexibility in determining eligibility, contribution levels, requirements of employee participation to receive benefits, and other options.  The most frequently used options are:

  • SIMPLE IRA
  • SEP IRA
  • 401(k)
  • Defined Benefit Plan

Again, within these different types of plans, many additional options are possible.  Some include employer contribution paired with employee deferral capabilities.  Others are employer contribution-based only.  SIMPLE and SEP IRAs can be administered fairly easily and the practice can do in-house or outsource, whereas 401(k) and Defined Benefit Plans typically require a third party administrator.

If you are considering a retirement plan for your office, first work to identify your goals.  If you want to then use a professional to help you identify the plan that best suits your needs, be sure to find one that is objective and not looking to sell you a product or a particular type of investment.

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Coordinating Your Financial Plan With Your Practice

May 3rd, 2013 9:40am
Amber Banks

Understanding the financial health of your practice is key to your success.  As a dentist, you need to comprehend and look at the overall big picture of everything associated with you personally and at the business level.  Your personal and business financial plan should be looked at collectively.

Practice Value

You don’t want to rely solely on the sale of your practice as your retirement, but it is definitely a piece of the puzzle that should be considered.

Cash Flow

Too often, dentists will keep too much cash in their practice.  You should evaluate a healthy cash flow amount to keep in your practice at all times and then talk with your advisor about plans for the excess cash.  You may choose to “sweep” the excess cash into a liquid account to which you have access without many/any limitations.  But it would avoid the practice from having too much cash on hand.

Retirement

Having an idea as to when you want to retire or slow down is good to know sooner than later.  You may have to be more aggressive in saving and planning if you want to retire at age 55 vs. 65.  You will need to plan ahead for this type of goal.  You also need to consider and strategically plan for your transition plan out of your practice.  There is much to do to prepare for a practice sale — so plan ahead and map our your transition plan.

Company Retirement Plan

Taking advantage of a company retirement plan (401(k), SIMPLE, IRA, SEP, etc.).  As an owner, there are significant retirement savings of which you can be taking advantage (depending upon how your plan is established).  It’s very important for you to fully understand your plan and all that it entails to ensure you are taking full advantage of all aspects of your retirement plan.

Insurance

Make sure you are not underinsured (life, disability, etc.).   I recommend you have an advisor review this for you at various points throughout your career to ensure you are not underinsured.  As life and your practice changes, you may need to adjust your insurance some along the way.

Get your spouse involved and make sure you have a similar plan in mind or you both are on the same page.  It’s critical for both of you to be educated and in line with the long-term plan.

Make sure you are comfortable with your financial advisor.  You want to work with a team who has your best interests in mind and will be an advocate to help you create and achieve your Tomorrow plan!

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Your Checklist to Personal Financial Planning Basics

April 27th, 2013 12:05pm
Adam Decker

Personal financial planning is often an area avoided or a planning item that is delayed by most dentists for numerous reasons.  Often the debt carried from student loans, practice acquisition, practice start-up and getting through school leads to an outlook of, “I need to deal with these debts first, then I’ll have capital to do something with.”  However, personal financial planning should take place even before graduation, but at the very least, shortly thereafter.  Here are the basic tenants of kicking off a financial plan.

  1. Gather Data.
    Where are you now?   As simple or as complex as it may be, knowing from where you are starting is critical.
  2. Are you protected?
    A review of your insurance coverage is imperative.  Disability, life, and property coverage should be sufficient to protect you and your assets.  Without these in place, any plans implemented would be severely set back in an unfortunate circumstance.
  3. Establish estate documents.
    At a minimum, have a basic living will, medical power of attorney, and power of attorney executed.
  4. Set and identify big picture goals.  
    To create a plan, you have to know where you are going!
  5. Create a roadmap.  
    Now that you’ve identified where you are now and where you want to go, the roadmap will tell you how to get there.  This is the heart of your financial plan.
  6. Make things automatic.  
    Once the roadmap is created, make everything automatic.  The beauty of EFTs, auto transfers and electronic check writing is that everything can be done without you thinking about it.

Steps 1 – 5 of this checklist involve some time, decisions and action.  However, once you invest in yourself by going through this process, it can maintain itself by making things automatic.  In fact, there is a whole book, The Automatic Millionaire by David Bach, written on this simple by powerful tactic.

There are many ways to complete steps 1 – 5. Books, seminars, and professionals all have processes, systems and guides to take you through this process.  Whether you want to be hands on, outsource it all, or be somewhere in between, something exists to help you.  If you have questions on what approach is best suitable in your situation, we’d be happy to talk with you about it!

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Associateship Successes

April 9th, 2013 2:40pm
Amber Banks

While you may encounter many challenges with an associateship position, your experience in an associateship will also bring you many successful experiences that you can carry with you as you head into practice ownership!

We reached out to some dentists we know and here’s what they told us about the successes they had during their associateship:

  1. Finding the Right Fit
    An associateship will provide you with the opportunity to find a practice that will line up with the practice style and procedure mix you desire.  Not only did you find that this practice was the right fit for you, but you found a great fit with the senior dentist too.  We always recommend you do something together outside of the practice setting – even if it’s just having dinner — to determine if you will be able to work closely together.  Are you compatible with each other?  It’s important to get to know each other to ensure this will be a successful relationship.
  2. No Unknowns
    The dentists we “surveyed” said their best experiences were when there were no “unknowns” with their associateship.  For example, the details of the associateship were outlined well and there was no hidden agenda.  Another said their attorney reviewed the contract and was able to point out a few items that were easily discussed with the senior dentist.  The details of the contract and the reality of what happened were in synch and it turned out to be fair for both parties.  When associateships fail, often times someone feels the arrangement wasn’t fair.  It’s key for both parties to feel it’s fair and that both will benefit from the relationship.  Another success one dentist found was that the compensation was reasonable and all expectations were in writing.
  3. Busy Schedule
    One dentist commented that the opportunity was provided to work on larger cases and not be backed into a routine of hygiene checks.  Another mentioned that there were enough patients to support both doctors.  Patients were allocated fairly between the senior dentist and the associate and allowed them to enhance the skill set of the associate.  The team was open to the idea of an associate coming in and they treated the associate equally with the senior dentist.
  4. On-the-Job Observation
    One of the benefits of being “on-the-job” is being able to see how an office is ran, not only from the clinical side but the business side as well.  One dentist we talked to received the opportunity to learn the different techniques and ways of doing things aside from how they were taught in dental school.  They found this very beneficial!  Working along side a senior dentist allows you the opportunity to ask their opinion on certain situations, which made it easier to transition into dentistry vs. starting out on their own right out of school.

Taking the time from both the senior dentists and the associates’ perspective to outline the expectations and details of the opportunity, as well as discuss the terms, scheduling, and procedure mix brings a great learning opportunity to the table and should limit the challenges to enhance the opportunity for success!

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Associateships: Negotiating with Confidence

April 2nd, 2013 9:20am
Adam Decker

When you sit down to negotiate an associateship position, the key to negotiating is feeling comfortable and confident in your ability to talk it through. The two most important things to bring to the conversation are: 1. an awareness of the market and 2. your goals for the associateship. Knowing these two areas well will enable you to weigh the options so you can negotiate effectively.

To ensure you have a solid understanding of the expectations for the position, here is a list of five questions to ask. You should also answer these for yourself beforehand to determine your ideal position.

1.  Will you be expected to bring in new patients, manage the staff, market, etc?

2.  Will you have a leadership role and be able to assist in making decisions and being available to the team if the Senior Dentist is not?

3. Will you be an employee or independent contractor?

4.  What will your compensation be?

5.  Is there intention for you to buy the practice at some point?

Awareness of the Market

First, having a solid grasp of the market will give you the ability to read the situation and gauge how much room there is for negotiation. If you are in a market where the competition is high, there will likely be a greater demand for the position and less room for negotiating. In a situation like this, you run the risk of losing the opportunity if you try to increase the compensation amount or change the terms of the associateship. If you aren’t sure how many others are applying, it is a good idea to ask. By having a decent understanding of the current market, you are better prepared to read the situation and act appropriately.

Know Your Goals

Next, you should go into the negotiation with a good understanding of your current situation. For starters, do you have the luxury of waiting for the best opportunity or do you need to secure the first position you are offered? You should know what your goals are for an associateship and what your ideal position would look like. Are you hoping to get experience bringing in new patients or are you simply looking for experience treating patients? Are you looking for an opportunity to work with a practice you can eventually acquire or are you set on one day opening your own practice? Knowing your goals ahead of time will help ensure that you aren’t setting yourself up for a bad situation. If an opportunity sounds less than ideal and you have the luxury of time, then you may want to negotiate the terms to fit your goals.

Having confidence in your ability to read the situation and knowing both your situation and the practice’s expectations are key to a successful negotiation.

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