Want to raise capital? Here’s an idea…

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  Posted by: The Probe      12th February 2020

Even though things seem chaotic out there at the moment, there will be dental practice owners who remain committed to forging ahead with plans to develop their businesses. A decision to move forward rather than wait out any financial storm – if it comes – shows confidence in your service. This will have a positive impact on existing and prospective patients as well as the talented people whom you would love to come and work with you.

Dentistry is evolving too – if you go to any dental event, the chatter will be about things like digitisation and skill-mix. Patient expectations are sky high
and practice owners need to ensure that they are offering the right treatments at the right price in order to survive and stay ahead of the competition. Treading water is not always the best strategy, even if you are doing well.

But if you want to invest in new equipment, add a room or take on a team member you’ll need the funds to do so. To boost your cash flow, have you considered selling shares in your practice?

The most obvious advantage of selling shares in your practice is that the proceeds of any sale can be funnelled right back in. The capital you make can be used to offer a new treatment, update your premises or buy a fantastic piece of kit that will refine your workflow.  

Bringing in an investor(s) could be the start of a new era that will also see you, as the owner, facing reduced financial risk. In today’s market, you might no longer want to be the sole owner of a practice and/or your circumstances might have changed.

You may think this sounds too good to be true and is actually a kind of Trojan Horse, which will lead to you losing control of the business you’ve worked so hard to establish. But selling or issuing new shares in your practice doesn’t mean you’ll end up a minority investor. If you follow the rules and do things right, this can be fantastic strategy to build on your current success and – hopefully – future-proof yourself against whatever may lie ahead.

Basic rules

Rule number one is to seek specialist financial advice to support you every step of the way. Landsell & Rose has a team of dental accountants who will take a positive, proactive approach and look objectively at any long-term ramifications of selling or issuing new shares to raise capital.

Rule two is, in consultation with your accountant, to set the right price for each share. If you are selling your own shares, and the money is only needed for the business, there is a specific tax treatment and also parts of Company Law that will need to be adhered to.

If you are able to find investor(s) who can also bring a new perspective to both complement and positively challenge yours, this is ideal. With regards to the rest of the dental team, with good communication, they can be secure in the knowledge that a decision to bring in investor(s) has been made to revitalise operations and make improvements that they will all benefit from.

To grow, improve and do things better, you’ll need money as well as fresh ideas. Selling shares in your practice can help you bring in new talent and keep your team motivated, because they’ll know your plans are to expand, not to stand still. If you’ve never considered selling or issuing new shares as a way to raise capital, speak to your specialist dental accountant and you could unlock the door to an exciting future!

 

To find out more, call Lansdell & Rose on 020 7376 9333,

Or visit www.lansdellrose.co.uk


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