When it comes to dentistry you have definitely come to industry experts here at Raising Finance. If you believe you have a future career in the dental industry in the UK, you’re in luck! There are a growing number of opportunities for starting a dental practice here in the UK.
Our intimate and extensive knowledge of the dental sector means that we are able to give you the best financing options based solely on your unique circumstances in order to achieve your career ambitions.
While routine services like cleanings and fillings are always in demand, cosmetic dentistry is also widely getting more popular. As demand grows, so does the annual salary for a dentist. The industry itself is expected to grow by 16% from 2020-2022.
Buying a dental practice is one of the biggest decisions that a dentist is likely to make and can be a stressful time for all parties involved. The various aspects involved from creating a great business plan to determining the prime location as well as many other legal and personal factors, must be carefully taken into consideration before taking the plunge.
There are several rewards and stresses that are associated with buying a dental practice depending on whether you want to go down the private route, the NHS route or a mixture of both. This is why we are here to lessen any burdens on you when it comes to financing your own dental practice.
How to start a dental practice in the UK
Opening up your own dental clinic is an exciting aspiration and starting up a successful dental practice from scratch is a very possible business endeavour. However, it requires an important set of skills that unfortunately not everyone has. We will guide you through all the stages that you need to go through to enable you to open a successful dental practice.
There is a substantial difference between buying an existing dental practice and starting your own practice from scratch. Call us for a free consultation and will we guide you through the pros and cons that come with starting your own dental practice.
When starting your own practice there are many different aspects that you need to consider that will substantially affect your business. These include the location of your business, the type of services you offer and how to attract patients who may already have their own local dentist, amongst a whole range of other considerations you will have to think about.
Writing a Business Plan
The most crucial aspect of your entire endeavour of starting your own dental practice is the planning stage which entails writing a thorough business plan.
Every owner envisions opening a successful dental practice, but you need an actionable plan to get you there, which often includes needing to apply for additional funding. This is where your business plan comes into play. You need to create your vision on paper by describing your business, goals and by addressing all your finances.
As you create a business plan it is imperative to start to put all your figures together. You need to understand your own finances before you are even able to convince an external body of your finances and future projections. In particular, also knowing what your overheads will be. More often than not, once you open your practice, your payroll will most likely be your biggest expense. So it would be a good idea to not bring on too many people at the beginning. In addition, you should start with a few basic services and treatments to keep costs low until you gain a bigger customer base.
Financial planning especially for the first year is needed in your business plan to show that you can account for projections of the coming years as well as the profits and losses that may occur.
What does a start up dental practice need to fund
Finding the right insurance
Every business needs insurance, but the needs of a dental practice are especially unique. While you are looking for the optimum location for your practice, you should also look into the price that your insurance will cost and budget it into your business plan. It would be best to talk to an insurance agent about the kinds of policies you will need not only for your business but also the different types of medical insurance that you will need.
Location, Location, Location!
Picking the best location for you may take some time. Location is key for many businesses, but especially for dentists, you want a location that is generally quite visible for your potential patients, centrally located and in an area that your target market would be in.
There will always be a prime location for your business that may just be out of your price range. It is okay to understand that price matters and will play a vital role to the location you choose. In the larger sense, it is better to wait for the right location as it heavily impacts how much business your practice will get. It will be much better for you, in the long run, to wait for the best location suited to you to come round rather than to open your business sooner in a more remote location.
After finding a location
Here are the specific steps you need to take before physically setting up shop.
- Find a location that you want to work in
- Find a property within said location that can be converted or one that already has D1 use
- Obtain a change in planning to D1
- Ensure the lease you have is for 15 years within the Landlord and Tenant Act or if freehold, a valuation will be required in due course
- Draw a plan of the premises and obtain a quote for the refurbishment
- Prepare at least 3 years of projections. This should preferably be done by an accountant and should include cashflow and profit and loss
- Prepare a thorough business plan
- Lastly, you need to obtain the finance you need to make your business plan a reality
How much does it cost to start a dental practice?
We can’t give you a specific quote on how much it will cost because in truth, it depends on various factors. These include:
- The location of your site
- The building you’re going to need to acquire for the practice
- What type of equipment you’re going to be putting into the practice
- How many surgeries you are going to be putting into the practice as well as waiting rooms
- How much the building work is going to cost
So, the cost will vary and differ greatly between any two circumstances. You can easily spend anything from £80,000 to £100,000 and quite easily maybe even more in some cases. But you need to make sure that you have a budget and a business plan that will forecast future trajectories. These forecasts will help you to make an efficient plan to repay all the money you’re going to need to start up your own dental clinic.
The most important thing you need to do before you even start preparing for building work is planning and budgeting for how much it is going to cost.
Dental practice financing in the UK
Buying or beginning your own dental practice is not a cheap process. Whether it is for property, assets or acquisition, the chances are that you will need to raise finance to purchase your dream practice.
You will be able to get lending from many different mainstream lenders to buy a dental surgery, but it is imperative that you show good management of income, evidence of savings and prove your credibility with those lenders. Acquiring a dental practice involves a large financial investment, so a comprehensive due diligence process is absolutely essential. It is also important to work with specialists along the way such as a dental solicitor, a commercial financial broker, and professional dental accountants, in order to minimise any risks.
Starting your own dental practice in the UK:
Marketing your business
In this day and age, every business needs a website and an active social media presence. A Facebook business page is not really enough. A website will help you in more ways than you know, it will help you attract new patients, increase recognition of your dental practice and act as your primary marketing tool.
Being a good dentist comes first. That’s what will make you have a loyal following and ensure that you have continuous patients coming through the door. That being said, you can have the best dental skills in the world, but if no one knows that you are open, then you will never get the chance to show your skills which may mean that you will not have much success when it comes to actually opening a dental practice.
Before you open your doors you need to be sure that you have a marketing plan in place. This will help you immensely when it comes to driving customers through the door. Marketing will give you the exposure your business needs to succeed. For the first three years, you’ll need to devote five to seven percent of your profits to consistent marketing for your practice.
Apply for necessary permits and licenses
One of the final things you need to do when opening a new dental practice is to make sure you have all the necessary permits and licences that are required to practice dentistry in your area. It may be a good idea for you to consider joining certain professional memberships that may benefit your practice. Be sure to research this part thoroughly and leave a sufficient budget and time before opening to obtain the required licences.
Financing options for your new dental practice in the UK
Whether your dental practice is NHS or private, we can help secure the tailored finance your business needs to grow and succeed.
Commercial mortgages for dentists
We can help you find the right mortgage product to suit your needs. Whether you are remortgaging or buying a new site.
Acquisition financing will allow you to gain capital specifically for the purpose of buying your new dental practice. We can guide you through the best cost effective ways to do this and mentor you through how it will affect you and your business.
Dental equipment is expensive, you need to think about all aspects that you will need to finance such as chairs, X-ray machines, you name it, it all comes with quite a hefty price tag. Asset finance assists you with spreading the cost of repayment of equipment over time. This eases the financial stress and allows you to avoid the need to buy the equipment that you desperately need outright. Asset finance means that your practice can continue to deliver the highest quality of dental services without compromising on price.
There are many reasons as to why a business loan would be a great financing option for you. These types of loans are one of the best ways to secure working capital. You will need this type of capital to keep day to day operations consistent in your practice. There are two types of business loans available to you, secured and unsecured. Secured is a longer term lending based on the security of your business assets or unsecured which is a flexible, alternative finance solution, usually for smaller amounts.
What will financial lenders assess
Getting qualified for a loan can be a daunting experience. While the process itself is non-binding because the information you provide has not been verified.
Lenders look for a few key aspects of your application in order to confirm whether you are a worthy lender. These aspects include:
Credit history and activity have a major impact on loan approvals and will heavily influence whether you get approved or not. It is also important to know that the lowest rates available are usually only obtainable by borrowers with high credit scores.
Lenders use your credit scores to assess the reliability of you as a borrower. It will help them assess the risk being taken when providing you with financing.
In addition to looking at your credit score as an indicator, they often review your payment history which they consider to be a strong indicator of the likelihood that you will make timely repayments in the future.
Lenders often use a debt-to-income ratio that compares the amount you earn to the amount to owe. This is to ensure that you will not be over extended with your new loan repayment. Debt-to-loan limits vary depending on what type of financing you need and the type of lender you go to.
In order to apply for a loan your lender will need to review your income, the same can also be said for your employment history for most types of financing that you will apply for. Not having steady work or a steady source of income for the last two years could impact your eligibility of getting approved for financing for your dental practice.
Lenders will often call your current employers and verify your salary. If you are self-employed, lenders will look at the adjusted gross income on your tax return to assess if your business is making any profit.
Depending on what type of financing you need for your dental practice, you may need to secure your loan with assets to put up as collateral in case you default in any repayment on your loan.
Funding a dental practice in the UK with Raising Finance
Call us today to take the stress of finding the right financing option for your own dental practice! Here at raising finance we specialise in financing specifically for dentistry. Our experience and our contacts throughout the UK will be able to provide you with a range of options that suit your business needs best.
We have decades of experience in the healthcare sector helping individuals like you fund the future of British businesses.
Contact us today for a free consultation on how to start or scale up your business!
See how much you can raise
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