Practice Expansion Financing Basics

usbank

Practice remodels and build outs are a great way to enhance patient experience, workspace functionality and design aesthetics. Oftentimes remodels and build outs are also a necessity to manage growth, expansion or a new practice location. There are many factors to consider when planning a practice remodel or build out – one to consider early on is practice financing.

As a commercial banker, there are two numbers I look at going into every practice remodel or build out – cash flow and project cost. These numbers are not mutually exclusive. Together they represent the feasibility and financial practicality of a practice remodel or build out.

Cash flow analysis is something a good banker, CPA or practice consultant can help you with. A quick way to look at cash flow is to take total annual income divided by total annual debt servicing, taxes and living expenses. This number needs to exceed 1.0 to be considered cash flow positive.

Project cost will ultimately be determined by a construction bid and any equipment or furniture that will be purchased.

Once your cash flow and project cost are determined and validated through credit underwriting, you are ready to begin the work. During the remodel or build out period, the approved financing is disbursed in stages to your vendors, contractors or as reimbursements for out-of-pocket expenses. These distributions continue throughout the remodel or build out until the work is completed, at which point the sum of the distributions, minus any interest paid, are converted to a term loan.

Practice remodels and expansions are some of the most rewarding projects I work on with dental professionals. These projects can also be quicker and easier than expected with careful planning and a holistic view of the process.

Practice Philosophy

sunset_dental

Dear Patient,

We understand that choosing a new dentist and dental health team can be a challenge, leaving you feeling somewhat uncertain. Let us welcome you and share some insights about what we do for our patients. The philosophy guiding our practice is as follows:

“Our purpose is to help people achieve the highest level of dental well-being and in so doing, to enhance the quality of their lives.”

In other words, we help you be or become as healthy as you choose.  Instead of just telling you how healthy you ought to be, we will try to help you understand your choices about dental health and then let you make a free and informed decision. Your first choice in this regard is how you would like to begin with us. There are five levels on which people may choose to be seen in our practice:

  • Level 1…URGENT CARE: People in crisis or with an emergency problem such as pain, swelling, or bleeding that need our immediate help are at this level. We see urgencies immediately, whenever possible.
  • Level 2…REMEDIAL CARE: People who choose this level of care desire treatment only when something breaks or becomes uncomfortable. Generally people at this level expect a limited type of examination, focusing on obvious problems. They usually want to correct immediate problems with as little effort and cost as possible.
  • Level 3…SELF-CARE: Patients who choose this level of care want a thorough examination and take an active part in the treatment and prevention of present and future disease problems. However, they usually choose repair solutions that are short range in nature.
  • Level 4…COMPLETE DENTISTRY: Patients at this level are similar to people described in level 3. They choose to have a thorough examination. However, they decide on a MASTER PLAN to formulate a long-term treatment plan for health and repair. These patients are very concerned about treating the causes of dental disease, not simply the effects. These patients want all dental treatment provided to be completed in the most lasting fashion possible.
  • Level 5… LOOK YOUR BEST: People in this group are in level 4 as far as dental health is concerned, but also want to look their best at all times. They know that their smile is one of the first things others notice about them and want to put their best foot (face) forward.

 

We hope these levels of care make sense to you. It is not uncommon for people to begin at one level and progress to another over time. We are here to help you discover and decide at what level you are most comfortable. Thank you for the opportunity to serve you and provide you with the best dentistry appropriate for you.

 

 

To YOUR health,

 

 

Dr. Hans Skariah, Jodie and Gloria

Promenade Court Dental

Managing Liabilities with a Smart Insurance Plan

aurochs

For anyone trying to protect a lifetime of savings while providing for an uncertain future these are probably familiar terms. The notion of needing protection from the impact of a car accident or a fire at home is something most of us learn with the purchase of our first vehicle and house. We tend to become better acquainted with life insurance with marriages, the arrival of children, or estate planning. Over time comes the acknowledgement that sometimes people become sick and need extra care that can rapidly deplete assets, leading to a desire for education on disability and long term care coverages.

Are these the only liabilities that can, or should, be insured against?

The best answer to this question is a resounding – it depends!

Entrepreneurs and business owners know that financial risk comes both from personal circumstance, as in the above examples, and from professional duties. Sometimes insurance is an important part of business financial strategy. A key person policy, insuring the life of a founder or important executive, is oftentimes the best way to manage business continuity in the event someone critical to the business dies unexpectedly. This coverage can allow the surviving spouse or beneficiaries to be bought out, even during times of cash shortfall within the business itself.

What if I don’t own a business? Do I need more than the basics like life, auto, etc?

Unfortunately it’s often not always that simple. Even if your needs don’t extend beyond things like term and permanent life insurance there are special circumstances that require additional planning to manage.

Consider a private individual who has accumulated some valuable artwork, a classic car and a small yacht and intends to leave them to heirs upon death. When included in the value of the estate these treasured items may inadvertently trigger estate tax consequences, forcing the disposal of these family treasures or other assets to cover the tax bill. While estate taxes aren’t a current liability for someone still alive they have a nasty habit of becoming very real at a time when those who pass on can do the least about them, unless proper steps have already been taken.

I am healthy and take good care of myself; do I really need to worry so much?

Those who are healthy and have a family history of longevity face what is commonly known as longevity risk.

It’s counter-intuitive to think that living too long is a risk, but for most of us the reality is that it is entirely possible to outlive our savings. With life expectancies rising and medicine advancing by leaps and bounds this is a particularly pressing concern, even for those with less than healthy habits or genetic history.

Fortunately there are proven methods for insuring against outliving your money. Annuities are known as a common way to provide income for life, but these are provided by a variety of companies and have menus of benefits that aren’t necessarily intuitive or easy to navigate. For this reason the purchase of something as important as an annuity is best managed through a comprehensive insurance plan that provides robust solutions that take into account all both the obvious and less apparent risks in life.