A third of dentists expect their business to grow this year
Aileen Boyle, managing director of Braemar Finance, discovers what the mood of the profession is and explores some of the financial considerations when returning to the dental practice.
The dental sector has, without question, been hit very hard by the COVID-19 pandemic. In this column I take a detailed look at the outcomes of the recent (July 2020) independent research Braemar Finance commissioned to see what the landscape looks like for dental practices and the people who work in them.
A question on many people’s lips surrounds reopening – when is a good time?
Not an easy one to answer. But our data suggests that 39% of dentists feel it will take between three to six months before they’re fully operational.
The optimists (29%) are of the opinion it will only take them up to three months. While at the other of the scale, one in 10 are taking the longer view. They think it will take anything up to a year before things are properly back to normal.
Dentists are remarkably positive about their prospects in the coming year. With 31% expecting to expand against only 5% who anticipate contracting; 63% will be ‘staying the same’.
Tempering this positivity is staffing levels. Dentists are almost split down the middle, with 51% of dentists expecting to operate with the same number of staff. While 44% believe they will need fewer people. Only 3% will be employing more.
In addition, just 18% of dentists are of the view they’ll see an increase in revenue in the coming year. A further 6% say they don’t anticipate any difference. Nearly two thirds (62%) of those polled are expecting a decrease of anything between 1% and 60%.
Looking ahead, dentists are fairly evenly split about the prospects for the UK’s economy. A quarter expect a quick path to full recovery. While another 25% think the economy is still declining, with worse to come.
|The economy is still declining – there is worse on the way||26%|
|The worst is behind us but it will be a slow path to full recovery||21%|
|The worst is behind us, but I’m concerned the economy could decline again||21%|
|The worst is behind us, but it will be a quick path to full recovery||25%|
|I don’t think there will be any true economic growth for the foreseeable future||7%|
Impact of the pandemic on dentists’ finances
Dentists’ funding priorities have seen a necessitated shift towards the purchase of additional PPE and practice re-fits. They’re making use of a wide range of finance options. From government schemes to new funding and loan consolidation.
Interestingly, despite the reliance on additional funding, the topic of debt continues to divide respondents with contrasting views about what it means. Almost half (49%) feel it’s part and parcel of running a business. While 46% have the opposite opinion and think it’s a sign of a poorly run business.
Considerations and questions
Looking ahead, there are several considerations and questions (financial and otherwise) that need considering before opening, including:
- Increased costs due to PPE – should practices pass these on or not?
- Many practices have had to install safety measures in practice, like air purifiers/protective screens, adding cost at the time when income has dropped
- Lost time because of guidance stating there must be a fallow period between the last aerosol-generating procedures (AGP) and re-entering the room to clean. Which ultimately means seeing less patients
- New social distancing procedures that elongate the patients’ time in the practice. Reducing the numbers of patients dentists can see in a day
- Having the need for different staff teams who themselves must social distance to minimise the spread of the virus. Meaning potentially having more staff back from furlough than the business can realistically sustain
- The increased cost to practices when they will shortly need to contribute further to furlough costs
- July tax bill – although HMRC is allowing deferral to 31 January 2021, it still needs paying
- Higher unemployment rates impacting disposable income levels of private patients. This could reduce the numbers of those able to afford cosmetic procedures
- Anxiety levels could keep patients away from dentists for fear of contracting COVID-19
- Payment holidays from creditors coming to a close and repayments on loans recommencing
- The annual retention fee of £680 charged by the General Dental Council will be due by 31 December. Although we are aware of dentists’ opinions on this issue.
Dentists have all this to consider while trying to manage patients’ expectations. Patients may see practices re-opening and assume it means they can get an appointment for any treatment straight away!
Stress levels are high and we’re unfortunately aware of some practice staff receiving abuse from impatient patients. This could mean many dentists increasing the number of hours they currently work to make up some of the shortfall.
To help them cope, every dentist who took part in our research relied on at least one coping mechanism to address their mental wellbeing. Ranging from maintaining a routine and remaining organised, to being more flexible and giving themselves regular breaks.
My advice to practice owners is to seek advice and guidance from people they trust. This includes their accountants or financial advisers, who will help practice owners produce reliable cashflow projections. These will assist them with understanding and planning for the levels of support they will need going forward.
This could include accessing CBILS (before the deadline), requesting further payment holidays on existing debts, and consolidating existing borrowing over a longer period. All good aids to ease cashflow difficulties until the worst is behind them.
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