Preparing for new financial challenges
Featured Products Promotional FeaturesPosted by: Dental Design 7th May 2022
As we come to the tail end of the pandemic, there’s no denying that its repercussions will be felt for a long time. For business owners, including dental practice owners, this is particularly true, and as the dust gradually settles after what has been a chaotic two years of uncertainty, it’s clear that the road ahead is still going to present some challenges.
2020 saw a historic plummet in the value of the GDP (Gross Domestic Product). While the GDP did recover following this, the Omicron wave of Coronavirus caused another, albeit less severe dip, suggesting that while the threat of the virus may be becoming less severe, its lingering economic damage is still apparent.[i]
So, what are some of the challenges facing small businesses like dental practices in the near future?
Rising costs across the board
It seems that we can hardly look at a newspaper or turn on the news these days without hearing about how prices are on the rise. In fact, inflation recently reached a ten-year high of 5.1% due to a combination of supply chain issues and energy costs created by the pandemic.[ii]
As a knock-on effect, business production costs have been significantly impacted, with record jumps in expenses recorded as a result of higher-priced raw materials, fuel costs and labour wages.[iii] This has translated to the cost of various items increasing, especially if they are made in the UK. As such, any expenditure you make in practice is likely to set you back a little more. Manufacturers are raising their prices, everything from consumables to technology have become slightly dearer, meaning that your regular expenditures and one-off purchases are going to set you back more.
Sales tax attached to items arriving from the EU post-Brexit is also another aspect to consider. Ordering items abroad can now be hit with unexpected charges, so it’s definitely worthwhile being wary if you do tend to order anything for your practices from outside the country, especially as these taxes often aren’t clearly indicated.
Energy bills are another hot topic. With the average global price of gas quadrupling in the last 6 months, energy companies have increased the price cap by £693 in April 2022.[iv] However, this is just for domestic properties and small businesses are not covered by the price cap, meaning that energy bills are likely to be raised by a much higher amount depending on use of energy within practices.[v]
While these rising costs may only translate to minor expenditures for your practice, this doesn’t mean that it won’t impact your business on a wider scale. For example, what about your patients?
Patients may have less funds available
The problem with higher inflation and rising costs across the board is that patients are likely to have less disposable income available for dentistry. This may have a direct impact on how many individuals are likely to opt for more expensive treatments, even if they are the recommended choice for a certain procedure.
This, in turn, will obviously impact your practice income, which in turn could realistically alter any plans you have for the future. These may include any retirement objectives; plans to expand your business or other financial pursuits you want to follow.
Again, the impact rising inflation and cost of living is having on your patients will largely depend on your catchment pool and typical patient list, but it could still make a substantial difference to your practice revenue.
Independent advice to prepare for any challenge
With these financial constraints on the horizon, it’s a smart idea to explore your finances in detail and see if there are any savings to be made. For example, when was the last time you reviewed your insurance policies or your pension agreements? You may be able to save substantial funds by switching to cheaper policies that offer the same perks or by assessing your needs in more detail.
Here’s where the services of independent financial advisers become invaluable. With new financial challenges left in the wake of the of the pandemic to be considered, it’s a smart move to seek advice and feel confident in your finances so that you can make informed decisions. The award-winning team at money4dentists has assisted dentists for decades, helping them to achieve financial goals, streamline their taxes and take necessary steps towards any big changes. As we only work with dentists, our industry knowledge is second-to-none and we can guide you towards making the choices that will give you more financial security and help you to continue to thrive in what is likely to be a tricky road ahead.
Keep on top of change
With inflation and the cost of living rising for all, it makes sense to prepare your finances as much as possible for the future. By seeking independent, tailored advice, you can safeguard your business and still move towards a bigger, brighter future.
For more information please call 0845 345 5060 or 0754DENTIST.
Email info@money4dentists.com or visit www.money4dentists.com
Author: Richard T Lishman – Managing Director of the 4dentists Group of companies
[i] House of Commons Library. Coronavirus: Economic Impact. Link: https://commonslibrary.parliament.uk/research-briefings/cbp-8866/ [Last accessed February 22].
[ii] House of Commons Library. Coronavirus: Economic Impact. Link: https://commonslibrary.parliament.uk/research-briefings/cbp-8866/ [Last accessed February 22].
[iii] The Guardian. UK Businesses Pushed To Raise Prices Amid Record Jump In Costs. Link: https://www.theguardian.com/business/2021/nov/23/uk-businesses-prices-costs-interest-rate-rise [Last accessed February 22].
[iv] Ofgem. Price Cap to Increase By £693 From April. Link: https://www.ofgem.gov.uk/publications/price-cap-increase-ps693-april [Last accessed February 22].
[v] Birmingham Live. Does The Energy Price Cap Affect Businesses? Link: https://www.birminghammail.co.uk/news/uk-news/energy-price-cap-affect-businesses-21837498 [Last accessed February 22].
