1. Rob Walsh
Profit, tax & Accounting
for buyers, sellers and owners
rob.walsh@cvag.co.uk
Clear Vision Accountancy Group Limited
1 Abacus House
Newlands Road
Corsham Wiltshire
SN13 0BH
www.clearvisiondental.co.uk

2. About Clear Vision
• Accountancy and business advice to
dentists and specialists
• Started working with dentists in
2001 – helped a squat orthodontic business
to win the ‘Practice of the Year’ at the Private
Dentistry Awards in 2005
• Won AVN Accountancy Firm of the
Year Award 2011 - 2012
• Author of ‘The Business of
Dentistry’ - shares the nine steps it takes to
create a successful dental business

3. 4 take-aways
• Your numbers = MORE PROFIT
• Business STRUCTURE...
• TAX SAVINGS...
• SPEED matters...

4. Due Diligence
• Patient numbers
• Recalls
• Large treatment plans
• Marketing costs
• Work sent to specialists
• Reception manner
• Employees length of service
• Enquiries to reception
• Mystery Shopper exercise

5. 1. MORE PROFIT...
1. How many active patients do you have?
2. What is your exam recall rate?
3. What is your hygiene recall rate?
4. What is your hygiene concentration rate?
5. Do ALL of your patients know about ALL of
your services / treatments?
6. What is your treatment conversion rate?
7. What is your marketing ROI?
8. What is your profit per month per service?

6. Hygiene concentration rate - example
No. of active patients (private) 1000
90% of active patients (private) 900
who should see the hygienist
No. of active patients seeing hygienist 450
Potential patients to see hygienist 450
£
Therefore 2 x 30 mins per year 105 per hour
Cost per hour 35
Profit per hour 70
Potential profit 450 patients x £70 31,500 per annum

7. Benchmarking (Sole Owners)
Fees £1m £1m £300k £300k
Profit £40k £350k £60k £130k
Net profit % 4% 35% 20% 43%
Why?

8. Your business model
YOU – role of MD
90% margin
YOUR PATIENTS
Hygienists (UDAs – Associates
Therapists £6 to £42 – average £22) Specialists
66% margin 50% margin?
Supported by team and business systems

9. Specialists / Associates / Hygienists
1. Are you paying 45% or lower for associates?
2. Are you paying 45% of lower for specialists?
3. Are you using sliding scales for associates &
specialists?
4. Are hygienists paid by %? Be careful of high
value hygiene work e.g. whitening
5. Are you paying hygienists on an hourly rate?
Even for FTAs, even for gaps?

10. Specialists
For example:
Implant per month referred £2,500
x 12 months = £30,000
Take a % e.g. 40% = £12,000 x 10 years = £120,000
OR:
Do the crown e.g. £900 fee per crown = £10,800 x 10
years = £108,000

11. Hygienists
Typically £90 - £130 per hour charge
Cost £25 to £35 per hour
Average £105
Cost £35
Profit £70
66% gross profit

12. Opportunities
• Associates / Hygienists - % of pay
• Associates / Hygienists - wage ratio -
materials / lab fees
• OHDs high
• Staffing
• Expansion – hours / rooms
• BEWARE:
– Rent
– Lease
– Freehold purchase - SIPP

13. Financials
• Look at net profit
• Add back one off costs
• Add in
– New costs
– Rent / interest
– Marketing
• Who is doing the work?

14. Prepare a business plan
• From financials:
– Drawings
• Personal expenditure plan
• Tax
– Funding and pay back
– Cash prediction – to assess affordability
– Sensitivities on turnover
• Vision, business plan required
• Key areas of strategy

15. 6 ways to grow a dental business
• Increase fees
• Existing services to existing patients
• New services to existing patients
• New patients
• Buy a list
• Increase UDA / UOA contract

16. 2. STRUCTURE...
Your dental business
2. Sole trader
3. Partnership – GDC Partners
4. Expense sharing partnership
5. Limited liability partnership
6. Limited company

17. Incorporation – THE POSITIVES
1. Potential to save tax
2. Goodwill payout - enhanced personal reward
3. Limit your liability
4. Create a corporate structure
5. Easier, cleaner exit route
6. Team motivation
7. School fees through business (could be
beneficial)
8. Use bank funding received on goodwill to pay off
debts or improve your personal assets

18. Incorporation – THE NEGATIVES
1. Need more time to maintain efficient records
2. Statutory requirements to be met
3. Prepare an Annual Return to the GDC
4. Transfer your NHS contract to a Limited Company
5. HMRC may question the valuation
6. Be careful of superannuation on incorporation &
income protection policies

19. 3. TAX SAVINGS on incorporation
Real life TAX SAVINGS:
• Husband and wife partnership
• Net profit £120,000
• Incorporated business
• Goodwill value £520,000
• Will save nearly £100,000 in tax over 10 years

20. Tax on sale of business
Share sale Limited company
10% of proceeds of shares Sell goodwill assets
Gain of 20%
Then extraction of cash at 10%
10% 30%

21. Proactive accountants –
what does this mean?
Not just year end accounts!
2. Tax plan
3. Advice on set up
4. Advice on structure:
• Limited company
• Partnership
• Sole trader
5. Use of spouse tax bracket
6. Accounts started within 6 – 8 weeks of year end
7. Use of Accounts finished within 20 working days
8. A financial forecast to achieve your personal goals
9. Management accounts to ensure you know what profit per month you are
achieving
10. Discussing the figures so growth areas can be examined
11. Annual goodwill valuation (FOC) after accounts completed
12. Communication. Communication. Communication

22. 4. SPEED matters...
Example 31 March year end:
• Tax planning will take place Feb or early March
– Enterprise Investment Scheme
– Venture Capital Trust
– Film Schemes
– Enterprise Zone Trust
• Accounts prepared by mid May
• Tax liability calculated by end May

23. 4. SPEED matters...
1. Timely information...
2. Cash planning...
3. A financial forecast...
4. Regular management accounts...
PLUS...
7. Goodwill valuation every year..
8. Communication...

24. Your offer
•Phone call
•2 hour Dental Business Review
•Complimentary basis
•One to one
•No sales pitch
Complete offer sheet to book your FREE phone
call

25. Follow Clear Vision…
• On the web: www.clearvisiondental.co.uk *
*Download first two chapters of
‘The Business of Dentistry’ for FREE
• Via our blog:
www.clearvisiondentalblog.co.uk
• On Twitter: @CVfordentists for
news, views and added value downloads

26. Clear Vision clients make a difference…
At Clear Vision, we believe every business has the
power to change lives, by integrating giving
into its everyday business activities.
When we finish a set of accounts, a tax return, or
a consultancy project, we donate a goat
to a Kenyan family via the global
‘Buy1Give1’ initiative – www.b1g1.com.
Could your practice integrate giving into
its everyday activities too?

27. Rob Walsh
Profit, tax & Accounting
for buyers, sellers and owners
rob.walsh@cvag.co.uk
Clear Vision Accountancy Group Limited
1 Abacus House
Newlands Road
Corsham Wiltshire
SN13 0BH
www.clearvisiondental.co.uk