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What To Expect From Your Career In Dentistry

Dental Career Planning - Dental CPA

Your school debt is almost paid, your practice is busy and, for all intents and purposes, successful, and you are now at a point in your career where you are beginning to build equity in your practice. This is truly a great moment for you as a professional and as a dental practitioner. But be forewarned. At this point in your career, you are likely making some serious money – which means you are probably itching to spend a little (or a lot) of it. This is the fork in the road that will determine much of your future happiness.

Owning a dental practice can be very rewarding as long as you remember that you’re entering an endurance race – not a sprint. So, if you’re looking for a “get rich quick” scenario, opening a dental practice is probably not for you. If you want a fulfilling career that, albeit challenging, can be incredibly fulfilling, read on.

Getting to know the four stages of a typical dental career will help you measure your own success and will help motivate you to make the best choices for your practice, especially during the first few years. And don’t forget to download The Business Side of Dentistry: Tips and Tools for Dentists for more insight into the dental profession.

The Dental Practice Career Cycle

  1. Slow And Steady Wins The Race

Owning a dental practice is just like owning any other small business. You must be mindful of all your new entrepreneurial responsibilities. Managing employees, establishing internal controls, negotiating with vendors and even generating a marketing plan are essential to running a productive and successful business. Unlike your friends who opted to pursue MBAs, your background in these disciplines is limited. It’s also likely that you will find yourself at an economic disadvantage because, unlike your business school cohorts, you have astronomical debt.

Read: Dentistry: It’s Not All White Coats and Drills

The American Student Dental Association states that, according to the American Dental Education Association, the average dental student graduates with upwards of $241,000 of student loan debt. This total has not only increased more than 66 percent in the last decade, it greatly exceeds the average student loan debt nationwide. Therefore, as nice as it would be to spend your paycheck on luxury items, avoid the temptation. Your long-term success will be measured by how well and how quickly you can pay down your debt. Get started as soon as possible. It will be worth it.

  1. Build A Solid Foundation With A Sound Financial Plan

Your school debt is almost paid, your practice is busy and, for all intents and purposes, successful, and you are now at a point in your career where you are beginning to build equity in your practice. This is truly a great moment for you as a professional and as a dental practitioner. But be forewarned. At this point in your career, you are likely making some serious money – which means you are probably itching to spend a little (or a lot) of it. This is the fork in the road that will determine much of your future happiness.

You can either choose to spend it on vacations, homes, cars and the like, or you can start developing saving habits that will set you up for later in life. Frankly, this is an optimal time to develop a financial plan and start putting a set amount of money into a retirement instrument every month. Whether it’s a stock portfolio or a 401(k), developing a steady financial plan is critical. That’s not to say that you can’t buy some really nice things along the way – just make sure you have a nice nest egg waiting for you when you are ready to start your retirement.

  1. Put The Pedal To The Metal

There comes a time, usually in your early to mid-50s, when the kids are through school, your business and student loans are paid off, you are paying for equipment upgrades from your cash flow and your financial plan is beginning to bear fruit. This is the point on your career timeline where you set your sights on what you want out of retirement and revise your plan to make sure it happens.

There are things to consider at this point in your life and there are tools to help you make informed decisions. At this stage, many dentists find themselves yearning for more control over their free time and less pressure at work. They aren’t yet ready to retire, but would love to slow down and smell some of the roses they’ve planted. Working with a business valuation or succession planning professional can help you streamline your future goals while ensuring that there will be no major surprises along the way.

  1. You’ve Worked Hard, It’s Now Time To Play Hard

It’s been a long, exciting road – but you wouldn’t have had it any other way. As we round the corner to stage four of your career as a dental practice owner, you can finally sit back and relax. If you took the time to plan ahead, your mind, body, spirit and bank account are ready. Now the only thing left to do is to pass the torch to a good, young dentist and take your leave. You’ve earned it.

Have questions? Email the Bright Dental CPAs at Rea & Associates for answers. And don’t forget to download your free copy of The Business Side of Dentistry: Tips and Tools for Dentists and get to know more about what you will encounter as a new dental practice owner.

By Ryan Dumermuth, CPA, CFP (Mentor office)

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ID Thieves Don’t Discriminate, Health Professionals Are At Risk

ID Theft and Refund Fraud - Dental CPA

Health professionals are at risk of identification theft and refund fraud. This compilation of resources offered in this Rea & Associates resource will help you through the next steps to reclaiming your identity if you have been targeted.

What has become abundantly clear over the last several years is that it doesn’t matter who you are, where you live or how you make a living – identity thieves do not discriminate. While tax refund fraud has been around since 2008, the size and scope of the scam has ballooned since then. Fast forward to 2013, and we find that the rapid escalation of this particular scam claimed a jaw-dropping $5.2 billion, according to the United States Government Accountability Office.

Locally, business owners continue to steadily report instances of identity theft and tax refund fraud to local law enforcement as well as to their financial advisors. From our perspective, we continue to see more instances of refund fraud than in previous years, particularly among healthcare professionals, which is a trend that is only expected to get worse.

Read: How To Recover From Identity Theft & Refund Fraud

Is It Too Late For You?

You probably won’t even know that you’ve been a victim of tax refund fraud until it’s too late. Some taxpayers will learn about the breach after receiving a letter from the IRS or from their state’s taxation department. It’s also likely that your accountant will be the first one to make the discovery when they try to file your tax return and receive a notification that the name and Social Security Number of their client – you – has already been used.

Here’s where it gets tricky.

Once it’s been discovered that you have been victimized, the burden is on you to prove your identity to the IRS to obtain the tax refund that is rightfully yours. The good news is that once you are able to prove that you are who you say you are, the IRS will happily release your money. But the bad news is that the entire process can take a lot of time and can be confusing to navigate.

Rea & Associates recently released a compilation of documents and resources from a variety of sources to help victims recover from Identity Theft & Refund Fraud, which can be an overwhelming task in itself. The steps victims must complete include:

  • Filing a report with the local police
  • Filing a complaint with the Federal Trade Commission
  • Contact one of the three major credit bureaus to place a “fraud alert on your credit records.
  • Respond immediately to any IRS notice by calling the number provided
  • Complete the Identity Theft Affidavit

You don’t have to go through it alone. Your financial advisor can help you through the steps and can communicate with the IRS on your behalf. Your advisor can also determine the validity of documents and phone calls if you have further concerns.

IRS Calling? Don’t Buy It

In addition to stealing your federal and state tax returns, some scammers are going the extra mile to harass their victims to pay “back taxes” that they don’t actually owe. It’s important to remember that the IRS will never contact you by phone or in person. The first correspondence you will have with the IRS will always be in the form of a letter – not a phone call. Last year, more than 1,000 taxpayers collectively lost about $5 million after scammers called to demand payment to settle their debt with the IRS. Failure to pay, the scammers warned, would result in jail time and driver’s license revocation.

For additional guidance, click here to read How to Recover from Identity Theft & Refund Fraud: A Compilation of Documents and Resources and get access to valuable information about what you should watch out for and how you can recover. For more information or for help claiming your tax return, email the Bright Dental CPAs at Rea & Associates.

By Alan Hill, CPA (Mentor office)

 

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Buying An Established Dental Practice? Master The Changeover

Dental Practice Transition - Rea & Associates - Bright Dental CPAs

Are you thinking about buying an existing dental practice? The retiring dentist is a great resource and can help facilitate a smooth transition.

Are you a recent dental school graduate? Do you have plans to take over an existing dental practice – one with an established client base, ideal location and new equipment? While this may seem like a great way to streamline your career, don’t be fooled – transitioning ownership of an existing practice requires much more work than hanging your degree on the wall.

For instance, the patients currently being served by the practice may be loyal – just not necessarily to you. Furthermore, the owner you are planning on buying out has likely spent years engaging with the community, establishing his reputation and creating partnerships with other businesses and organizations. Your purchase price probably doesn’t include the price of those contacts and relationships. So, while you may not have to build your dental practice from scratch, you still have a long way to go before you can consider yourself to be an “established” dentist.

The good news is that you don’t have to go through this journey alone.

Download: The Business Side Of Dentistry: Tips and Tools For New Dentists

How To Master The Transition Phase

  1. 5-Star Introductions

You never get a second chance at a first impression, which is why your introduction strategy should be seamless. Consult with the retiring dentist about the best way to make this introduction to the existing clientele and community leaders. Will the initial introduction come from the retiring dentist or from you? Is it necessary to follow up with the client to provide additional information? Sometimes a simple letter is the best way to make to make a first impression, just remember that this piece of correspondence is incredibly powerful. Therefore, consider hiring a professional to write it for you. Just don’t forget to include your hand-written signature.

  1. Employees Are Ambassadors

This transition will not only affect you, the retiring dentist and clients of the practice, it will also deeply impact current employees, many of whom are uncertain of their new role in the practice. It is important for you to be open and upfront with the men and women who will make the transition with you. Consider creating a communications plan and try to answer as many questions presented to you by the employees as possible. You should expect clients to question your employees about the transfer and their feelings about the move and you – their new boss. If you create an environment of safety and transparency, employees are likely to feel better about the transition and will be more apt to positively represent the practice.

  1. Business Ownership Is Not a 9-5 Job

As a business owner, your responsibilities reach far beyond implementation of the technical skills you learned in school. Now, in addition to patient files, you have to balance the books, onboard new employees and become a networking pro. You will soon find out that the most opportune moments are the times you are outside of the office where you can mingle with the community. One of the best ways to target your efforts is to get involved in your local Chamber of Commerce or other business-friendly organizations or clubs. This is a great way to make valuable connections while building your client base. But remember to be choosy about which groups you join. Every membership requires a commitment of time and there are only 24 hours in a day.

  1. Stick To An Advertising Budget

Advertising is a powerful tool when it comes to making people aware of the significant changes occurring within your newly purchased practice. But it can also be incredibly expensive. Not only should you prepare a solid advertising and marketing plan, you must be vigilant when it comes to sticking with that original plan. Ad buys ad up and if you aren’t taking care to strategically target the audience you reach, you could just be throwing money away – a luxury you just can’t afford. Before the first ad rep knocks on your door asking for your business, do your homework and stick to your budget. Oftentimes, media outlets are willing to negotiate.

  1. Rainy Day Fund

Hopefully you conducted a thorough inspection of the equipment prior to your closing date, but even so, it’s good to be over-prepared. Whether your equipment was purchased one year ago or ten years ago, make it a point to set aside some cash to protect against hardship and losses that could result if something were to break. The last thing you want is to diminish productivity, quality and employee satisfaction. This kind of hardship can leave a lasting blemish on your practice’s reputation. Make an effort to put a plan in place to save for any upgrades that may be needed in the foreseeable future.

  1. You Own The Business, But Who Owns The Patient Records?

In addition to your typical buy-sell agreement, you contract should specifically spell out who owns, and who is responsible for, the practice’s receivables, debts and patient records. According to the American Dental Association, this matter may be handled in one of three ways:

  • Retiring dentists keeps original records, buyer gets copies.
  • Buyer keeps originals, retiring dentist keeps copies.
  • Buyer keeps originals and grants access to retiring dentist in the event of need.

If you are considering the pros and cons of transitioning into the small business owner role, be sure to know what, exactly, that role entails. The e-book, The Business Side Of Dentistry: Tips and Tools For New Dentists, provides new dentists with insight into building a business team, deciding on insurance plans and even the business cycle of a typical dental practice. Email the Bright Dental CPAs at Rea & Associates to find out what else you should know before purchasing an established dental practice.

By Alan Hill, CPA (Mentor office)

 

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Rea & Associates, Inc. | Bright Dental CPAs | 7201 Center St, Mentor, Ohio 44060-4858
phone + 440-266-0077