Private practice profits jump
Recent statistics from the National Association of Specialist Dental Accountants and Lawyers (NASDAL) show a number of interesting trends.
In particular, my eye was caught by the main finding in relation to private and NHS practices.
Profits in private practices were almost the same as in the average NHS dental practice.
For the last eight years private practice profit has lagged behind NHS, at times markedly so.
In 2008/09 the difference was more than £30,000.
But in 2012/13, well before the recent upturn in the economy, the figure for private practices was £124,086 compared to £125,958 for NHS.
NASDAL commented: ‘NHS practices have experienced a modest increase in fee income but a significant increase in overheads and as a result have seen a continued downward trend in profitability.
'By contrast, private practices have enjoyed the first increase in profits since the financial year 2007/8.’
Private practices, like many small businesses, have suffered greatly in the recession, but they now appear to be faring better ‘due to the flexibility that private principals have to adjust fees, activity levels and costs’.
Ian Simpson, who is responsible for the statistics added: 'Although fee income for a typical private practice has continued to fall, these practices would appear to have become leaner, reduced their costs and increased profit.'
It is the control over your own destiny that makes private practices attractive to some dentists.
It also appears that patients appreciate and are prepared to pay for a personal service from a practice team that values their attendance.
Another significant statistic, I felt, was that income for associates is showing a ‘modest increase’, on average a rise of £743 or 1.1%.
Even so, their net income remains at just over half that of the practice owner.
There is a strong incentive to move from associate to owner.
Earlier this year John Grant, a dental specialist lawyer and NASDAL member, described a 'feeding frenzy' by young dentists anxious to get on the practice owner ladder.
I am no expert in accountancy or business, but it seems to me that the successful private practice will continue to be small, but giving highly personal care to its patients.
Increasingly though, it looks as if the successful NHS practice will be larger and maybe spread over multiple sites to take advantage of economies of scale and the different skills of those who work within it.