Paid in full?

Careful thought needs to be given to finding the right system for paying associates, warns Bob McTear.

Under the new General Dental Services (GDS) contract, payments to dentists should become much simpler because the monthly amount will be calculated simply by dividing the annual contract value by 12.

In April, all non-PDS, NHS dentists will receive their normal payment under the old GDS contract and it is likely that there will also be some run-off payments into May and June.

The first payment under the new GDS contract will be made on 2 May, with subsequent payments on the first working day of each month. Associates can therefore expect to receive an extra payment in early May assettlement of their share of the first new GDS payment.

At Humphrey and Co, we are suggesting that payments to associates be deferred to protect both the principal and the associate. The annual contract is based on each dentist achieving their target Units of Dental Activity (UDAs).

Obviously UDAs will not be performed evenly each month – some dentists will be ahead of their target, others will be behind. Were associates to leave the practice without fulfilling their contract or fail to reach their annual UDA target, there would be financial implications, because once an associate has left it would be very hard to recover money from them.

So we are advising our clients to be cautious. Our concerns are based on the importance of principals and associates having a good understanding – making sure both sides are happy with the payment system is vital to the working relationship. We are therefore suggesting two possible methods of paying associates.

By far the simplest method – and probably my preferred option – is for principals to continue to pay associates in arrears. This would entail a two-step process:

• Pay associates at the end of April based on their March FP17s as usual

• At the end of May, pay associates their portion of their new contract value (after their usual deductions) received on 2 May plus their portion of any run-off payments received in May.

This method means associate payments will continue to be made about a month in arrears, leaving funds in hand to correct problems if the contract is not fulfilled.

Practices with good payment systems could pay associates on the UDAs they carry out. The thing to avoid here though is overpaying your associates – it’s good for their bank balance but not yours. You are unlikely to be paid for over-achieving the UDA target and you do not want to encourage your associate to achieve the annual target in only six months!

If you use this method we suggest you place a limit on the monthly UDAs to be paid. Any surplus can be carried forward and paid in a month when UDAs are low. Whichever method you choose, make sure it is covered in the associate’s contract and that everyone concerned, including the practice manager, is clear about the arrangement. Making sure the payment system is fair to all concerned is an important step in generating the positive working environment, which will be essential in the coming months.

Bob McTear is a senior partner at accountancy firm Humphrey and Co and a member of the National Association of Specialist Dental Accountants (NASDA). To find out more about Humphrey and Co or NASDA, go to www.nasda.org.uk.

An online presence

James Goolnik explains why even dental practices must bring their business to the web.

Many practice managers dwell over whether their businesses should have a website. In my opinion even dental practices, which invariably do not sell products online, must have a professionally designed website. But how many dentists actually consider the importance of technology outside their practice?

The internet offers a wealth of instant and up-to-date information. Dental practices can use this mass medium and reap instant benefits from an online business presence. A web site can be used to promote your practice and even screen patients.

Before jumping on the band wagon however, a number of issues must be considered so that your new website fulfils your expectations.

Here are my top tips to create an effective and professional online presence.

1. Stick to your budget

Website prices and design costs vary considerably and are based upon the amount of content and graphics required. Calculate your budget and stick to it. Basic websites offering limited interactive functions start from about £400. More bespoke website design services start from £2,000.

2. A memorable domain name

Most one or two word domain names have already been sold, but try and find one that is short, memorable and easy to spell. Ensure that whoever hosts your website offers excellent 24-hour telephone support and remember to renew your domain name every year.

3. Attractive website content

Discuss with your website designer the overall image you want for your business. Buying graphics from stock is a cheaper and perfectly acceptable option, but there is always the chance that the same images are being used on another website. Professional photography will guarantee exclusive rights to images that you decide to use.

Take professional advice over the level of content of your website, particularly with graphics: too much information will make it harder and slower for visitors to find the information they are seeking.

Choose a site design that is easy to navigate and ensure you have considered your content and layout thoroughly in order that everything you want is included. Whilst every dental practice’s website will differ in content, the following should always be included:

• Practice contact details

• Map with directions

• Treatments offered

• Details of practice

• Prices

• Patient testimonials.

4. A clear message

One of the most important factors you must consider when designing a website is continuity. Decide on an image you want to project and stick to it. You may already have a practice logo, literature and stationary.

At every point of contact with clients, including your new website, ensure that you maintain this image. A well-designed and easy to navigate website will encourage and attract high-end patients and will prove to be well worth the effort.

5. Finding your website

Finally, let your clients know about your new website once it is up and running. Ensure that the website address is printed on all of your practice stationary and literature, andmake sure you promote the site in free local directories and search engines.

As a full member of the British Academy of Cosmetic Dentistry (BACD) you can list your practice on their official website, which can be viewed by anyone who visits the BACD site (www.bacd.com).

A competitive advantage

With the next step in the reform of NHS dentistry looming, practice managers must devise effective competitive strategies in order to surviv...

NHS dentistry is facing its biggest shake up in 50 years. Under increasing pressure to improve both productivity and raise the level of patient care, practice managers are charged with identifying new ways to gain a competitive advantage over rival practices. Customer satisfaction and practice profitability are undoubtedly linked closely to product and practice quality.

In 1980 Michael E Porter, a professor of business administration at Harvard Business School and a renowned leader in management thinking, introduced a model of sustainable competitive advantage. The Porter model suggests that the state of competition in an industry depends on five basic forces and that the strongest force determines the profitability of an industry.

By analysing these forces and predicting their interaction in the future, Porter argued that managers can position a business to capitalise on the opportunities and mitigate risk. Under pressure to devise new business strategies, dental practice managers would be well advised to consider established business strategies like Porter’s Five Forces model.

The five forces that Porter suggests drive competition are:

• Threat of new market entrants

• Threat of substitute products

• Bargaining power of buyers

• Power of suppliers

• Positioning of the current competition.

The five forces model should be used as a tool by practices to assess the value of dentistry as an industry and the competitiveness of a practice within dentistry.

How easy or difficult is it for new practices to enter the dental industry? The financial cost and experience needed to establish a successful practice is a highly-restrictive barrier to entering the industry. The biggest threat to existing practices comes in the form of practice associates who, disillusioned with their own career and with the necessary resources at hand, attempt to establish their own practice. And in light of recent reports indicating that the industry could soon be 5,000 short of NHS dentists, securing patients would not be a restraining factor.

How easy could dentistry be substituted? The threat of substitution to dentistry at macro level is negligible, but the situation at practice level is clearly different. Clinicians offer a range of options for each

treatment that are artificially constrained by government regulation.

From April 1 the restrictive fee-per-item structure ends and the opportunity to substitute materials and procedures will begin. Dentists will be free to utilise techniques that they feel offer clinical benefits to clients and deliver higher profits to the business.

How strong is the position of the customer? The most powerful of Porter’s five forces is undoubtedly the power of the customer. The current fee-per-item structure controls the price of dentistry in the UK. Instead of over 400 prices for different items of treatment, from April 1 a simple system of three bands will be introduced.

Primary care trusts will be empowered with local control of resources of dentistry. Patients will be in a far stronger position to influence competition within dentistry. Patients also tend to be price sensitive when purchasing products that are undifferentiated, expensive relative to their income and when quality is not important.

How strong is the position of suppliers to the dental industry? Susceptible to the fortunes of the industry, the relatively few suppliers that do exist protect both the industry and patient’s interests via reasonable pricing and ploughing resources into research and development and lobbying.

Does strong competition between existing practices exist? Rivalry within dentistry is intense due to the fragmented nature of the industry. Differentiation exists in the form of NHS and private practice. Private patients shop for alternative treatments and are receptive to different levels of customer service. If a practice focuses resources on negotiating with a PCT to provide income it should adopt a different approach to one focusing on its customers for income.

The wise business strategist will analyse the current macro and micro environment and predict future industry circumstances. The April 1 changes will open the door for dentistry as an industry to increase profitability.

Individual practices are challenged with developing strategies that will enhance their competitiveness. Analysis of models on sustainable competitive advantage, including Porter’s Five Forces model, are recommended. Practices that fail to adopt new and tailor-made strategies and simply accept a PCT contract cannot and should not expect to benefit from the new opportunity.

My advice to practice managers is be clear who your customer is – the PCT or the patient. Product differentiation is the key here. In the case of PCT’s, managers must establish and deliver exactly what the individual trust wants and tailor your product accordingly. And with over 720 varied PCTs in the country, you cannot assume that you know the answers without asking the questions.

Alternatively, if your customer is the patient, can you explain why they should use your practice as opposed to a competitor? A practice must invest in new products and enhanced services which delight the customer. Comfortable offices, modern equipment and customer-focused staff add no direct clinical benefits, but are vitally important to the customer and fundamental prerequisites to a successful practice.

Only when a manager views its practice as a business and understands its patients as customers can a strategy of sustainable competitive advantage be implemented. Delivering customer value and satisfaction is the only route to success. Rudimentary analysis of the individual patients’ needs, wants and ability to pay will highlight an enormous amount of latent opportunity. The job of the business sales team is to satisfy this opportunity profitability.

Up to speed

Steve Brookes, VT trainer at Woodview dental practice in Northampton, tells Julie Ferry what he’s looking for from vocational dental pract...

What are the main attributes you’re looking for in potential vocational dental practitioners (VDPs)?

The most important thing for us as trainers is for our VDPs to show a willingness to learn. They also need to have the ability of reflective learning, so if they do a filling and it goes wrong, they should then look over it and question why it went wrong rather than sticking the same filling in over and over again.

Hand in hand with this goes being open to constructive criticism. They need to be able to take it well and not get sulky about it. Finally, they have to be able to go into a practice that is running smoothly and fit in with the team.

What do VDPs learn during their Vocational Training (VT) year?

The whole idea of the scheme is to bring VDPs totally up to speed with everything, so they are fully trained and aware of all of the areas in dentistry. They have lots of different training days to go to where they experience a whole range of things. They get hands-on experience of endodontics, minor oral surgery skills and much more. You name it and we cover it during the course.

One of the things that I do with my group is have a few presentations each year from the defence organisations. I believe it is very important for VDPs to know about this area of dentistry because they are particularly vulnerable to it in their first few years out of dental school.

VDPs are notorious for having a good time. How do you ensure they keep a balance between work and play?

Well, my scheme visits Chicago for a dental conference every year, which a lot of the other schemes don’t. We go for a whole host of reasons: first, it is good fun and second, it is good for the VDPs to see how dentistry works in another country. We hear so much about how fantastic American dentistry is, that it is good to actually see it for yourself.

The group have to attend lectures and the trade show and so they come back with a lot of CPD from that. In terms of working with them as a group, they are definitely a different bunch when they come back from Chicago to when they went. You get to know them a lot better and they tend to treat me as an adviser on a much more equal basis. Consequently you get much better dynamics in the group, which contributes to a better educational environment.

What advice would you give to final students that are apprehensive about their VT year?

You have to get onto a good VT scheme and work at a good practice with a good trainer. The best thing you can do is speak to people at your university who know the VT schemes well and get some feedback and advice from them.

When you are looking at different positions try to speak to the current VDP who is leaving the practice. With my practice I insist that anyone I offer a place to must speak to the VT in the practice when I’m not there to get a real idea of what the job is like. If the trainer at the practice you want to work for is funny about that then I suggest you walk away and find another position.

Do you notice any problems or gaps in VDPs knowledge?

Everyone is different. Some VDPs are fantastic whereas others will be less proficient. As the years have gone by I have noticed that graduates generally get a lot less clinical experience and as a very wide rule, I don’t think they are as good at taking teeth out. They have quite a lack of experience of some of the more advanced restorative work. For example, many have very little bridge experience and haven’t done a great deal of endo work.

Do you think VT will carry on in the future?

That is a very difficult question as it is going through so many changes at the moment. There are a few problems with VT. Firstly, it’s a brilliant system but it costs the government a lot of money. Secondly, it isn’t mandatory across the whole of Europe. That means that dentists can come from Europe and go straight into practice without doing VT, which some British graduates find unfair.

I think we’ve come to a crossroads now as the Committee for Vocational Training has gone, the Dental Vocational Training Authority is about to be disbanded and the whole structure and working of VT is being moved down to individual Primary Care Trusts. The responsibility for the curriculum will come down to each postgraduate dental dean.

There is also a big move in some parts of country to change VT to a General Professional Training (GPT) model, where you have to do two years training. They already have this in Scotland, as well as a competency test at the end, which Wales are now looking at introducing.

In England there is no formal assessment or qualification exam at the end of VT and this may be another thing that changes. It seems like it is either the beginning of the end for VT or the start of a new beginning.

So what does a VT year involve?

• Vocational training involves spending a year in an approved practice, working on a standard contract under the supervision of a trainer

• VDPs who successfully complete training are allocated a VT certificate and number that allows them to work independently in the NHS.

• New graduates can also undertake VT in the CDS (Community Dental Services) or in the armed forces under a scheme run by the DDA (Defence Dental Agency)

• VDPs spend four days a week in practice and one day on day-release at the study day course. They also have a weekly tutorial with their VT trainer

• VDPs do not take a final exam. They are assessed during their training, using a ‘professional development portfolio’ that they complete throughout the year. The portfolio then goes to the post-graduate dental dean who decides whether they have satisfactorily completed VT

• There are around 70 VT schemes in the UK. Intake occurs twice a year; once in summer and once in winter. Each of the 15 deaneries (regions) publishes a list of its available schemes and these can be acccessed on the DVTA website.

For more information, visit www.bda-dentistry.org.uk or www.dvta.nhs.uk.

Picking your practice

When choosing your first post, watch out for the sales patter and have your checklist at the ready, says Dental Protection.

At some stage after graduation, many dentists will find themselves looking for a new practice and there will be many to choose from. But as with checking out rooms to rent, a property to buy or simply a piece of equipment at a dental exhibition, don’t forget that you’ll be talking to sales people who are working hard to make the whole deal look and sound particularly attractive.

Choosing a practice is an important decision. It will directly impact on your happiness and wellbeing, and your income as you start to repay any student debt. You will spend more waking hours in your surgery than you will at home or in your bed, so take your time, think carefully and choose wisely.

Find out as much about the practice as you can. Remember, practice literature can be very revealing! Key points to look out for include:

• Where is it?

• How long has it been established?

• What sort of area is it in?

• How many dentists and how long have they (each) been there?

• Are they partners/associates/VDPs etc?

If it seems promising, arrange a visit during surgery hours to get a feel of the practice when it’s busy. You also need to be able to meet the practice team – in particular, any existing associates, the reception/administrative staff and (if possible) your future nurse.

A visit after hours when the practice is closed will not allow you to form a rounded impression. Allow enough time to check out the immediate area – ask the local pharmacy or nearby shops about the good dentists in the area. Check the practice entry in the local Yellow Pages - what does it say to you?

At this stage in your career you may not have been round too many different practices, so here are some practical tips to help ensure that what you see is what you get.

New practice checklist

• How many patients are there?

• As a performer, what terms are the practice offering you and can you have a copy of the contract?

• What sort of contract does the practice hold with the PCT – is this likely to change?

• What is the patient split? Adults/children, NHS/private, private/capitation?

• Where will your patients come from?

• The appointment book. How many patients are booked in per day? Is it busy or are there gaps? (This is important if you are taking over from a departing associate). How many new patients? Is the appointment system organised or chaotic?

• What are the arrangements for emergencies and out-of-hours cover?

• What are the arrangements if you need to take time-off outside the holiday period defined in the contract? (For example, illness.)

• Infection control policy. Does the practice have one? Is there a central sterilisation area? If so, ask to see it.

• Staff training. Who goes on courses, and how often?

• X-ray equipment and processing facility. Check out the quality of any recently taken X-rays. Who takes them?

• Laboratory standards. Ask to look at any crowns/dentures waiting to fit.

• Are there adequate facilities for children and the elderly?

• Patient information. How actively is the practice promoting its services?

• Computerisation. What’s electronic and what’s manual and why? How long has the system been used? Will you be trained to use it?

• Working environment. Be sure to spend plenty of time in the surgery where you are likely to be working.

Remember, get a feel for the practice and don’t be rushed. Taking your time now will avoid any regrets later.

Dental Protection members can obtain advice on this and any other issues via the helpline 0845 608 4000.

Full mouth reconstruction

Rob Muirhead shows how to perform a full-mouth reconstruction of a heavily worn and broken down dentition with Cerec 3D.

Since detailing a full arch Cerec reconstruction case carried out in one day in a previousDentistry article (April 2004), I have carried out many similar cases. Not every restoration has been a Cerec as in that case, but many have been at an increased vertical dimension.

I would like to share with you another reconstruction case at an increased vertical dimension, to get across how easy it is to do with a good working knowledge of occlusion and a Cerec 3 machine.

The real beauty of this treatment is its simplicity. With no complicated communication with a highly skilled and expensive lab utilising articulators and so on, you can reduce hassle and recalls for the patient and reduce chair time.

The treatment is consequently less expensive and more easily affordable for the patient, resulting in a greater acceptance of treatment. It is also very profitable for the dentist as it is very time efficient, and does not result in any lab bills.

Case study

‘Jim’ was a new patient with a very broken down dentition with severe attrition of the anteriors. He did not arrive requesting treatment for this. I guess in retrospect his teeth had been steadily disintegrating for a long time and he was just accepting it as simply a part of the ageing process. But, always on the look out for these satisfying and enjoyable cases, I suggested a full mouth reconstruction and he went for it.

Treatment plan

• Step 1: Mount some study models on a ‘Denar’ articulator in centric to decide which teeth to restore and how. Some would need Cerec restorations and some would need composite, while other teeth might just need simple composite build-ups or a little judicious grinding.

• Step 2: Splint therapy with a CRA to reduce inflammation of the TMJs, as there inevitably would be in a grinder like this patient. Also, it was necessary in order to make sure he could tolerate an increased vertical dimension.

• Step 3: Once splint therapy had been completed an initial appointment was booked to restore and build up the posteriors at the increased vertical dimension as well as to create canine guidance. From studying the mouth, radiographs and mounted study models, a morning/afternoon session was deemed suitable for this.

• Step 4: The treatment involved carrying out two Cerec restorations and three composite restorations as well as two small composite build ups, all with centric stops. I left him this way with anterior guidance coming from his canines also.

• Step 5: Two days later, a whole day was booked to carry out four Cerec crowns on his upper incisors, six Cerec veneers, and to make sure everything was equilibrated with canine and anterior guidance. Two weeks later a short appointment was required to check equilibration and tidy things up if necessary.

Everything went according to plan with the exception of our decision to do a Cerec restoration instead of a composite on the 7 , which we carried out on the last appointment.

The upper incisors were stained and glazed in a furnace after milling, while the lower veneers were simply shaped and polished after placement as is normal with posterior Cerec restorations. Cerec blocks are made from a dense ceramic which enables them to be polished very nicely; allegedly, ‘as good as a glaze’.

Obviously, care must be taken not to over-heat the teeth but this is easier when polishing multiple units. I use ‘ceraglaze’ diamond impregnated rubber cups from Prestige Dental (0800 591175) which I find brilliant. Shaping the lower makes the creation of perfect anterior guidance very simple.

The patient was very happy with the result and there have been no problems. His jaw is nice and loose and his teeth come together with a satisfying ‘clack’ indicative of an equilibrated dentition.

Slow but safe

Experimenting with periodontal therapies is simply too risky these days. What we need instead, says Dr Ian Peace, is a step-by-step approach...

I was watching a fascinating series on television about the

pioneers of surgery a while ago and was amazed at the

discussions on the development of transplant surgery.

What soon became clear was that the pioneers of transplant surgery were willing to take risks on the outcomes of treatment to learn, and eventually provide a form of care that now benefits so many people. Many of the early patients would have died without this care, so the overall risk to them of having the treatment was limited, perhaps even justified.

But I am not sure such surgical experimentation would be allowed in today’s ethical and medico-legal climate. We now have to take things very carefully, step by step, which makes mewonder where the next medical leap will come from.

In the field of periodontal therapy this issue brings a dilemma. As patients demand more exotic treatments from us our skill levels must be such that we know what treatments are available and can deliver them.

Clearly we do not want to make mistakes but often one of the most effective ways to learn something is by doing it – in the knowledge that if we do make any mistakes we can learn from them. Yet in our growing culture of blame and subsequent litigation we dare not make mistakes, even honest human ones.

So how else do we learn and therefore progress in the field of clinical excellence and innovation? How do we learn the clinical and surgical skills necessary to perform periodontal therapies and implant surgery in a risk-free way? I think the answer is slowly and under guidance from people who know what they are doing.

The first step is to gain a full understanding of the scientific and clinical principles underpinning any therapy. By learning about and understanding the biological principles, classifications and natural history of periodontal diseases we can develop and institute appropriate treatment plans.

By understanding the theory and then developing the clinical skills we can then provide treatments based on those underlying principles. It will also allow us to identify suitable cases for referral.

But we must still be able to accept minor – hopefully reversible – mistakes occasionally and learn from them. Above all, we must all be professional and carry out only those procedures that are within our competence.

We must push the boundaries of our skill levels and

competence bit by bit. We may not make immediate leaps

forward but we will be developing skills slowly and safely that will ultimately benefit patients while keeping our

credibility intact.

Financial times

When is it best to seek advice on financial planning? As soon as possible, says Anne Alexander, who also explains what the main forms of inv...

A junior colleague recently asked me when she should start seeking financial advice – should she speak to an adviser early in her career or wait until she has accumulated some savings? It is question many people ask. I have worked in the financial services industry for more than 20 years and, having been an independent financial adviser for many of those years, I have met and managed the funds of people who have saved and those who have not. As you can imagine, the savers look forward with confidence to retirement while the non-savers do so with fear and trepidation.

As dentists, you will know that regular check-ups are essential to maintain oral health. The same is true of your finances. So my answer to when to seek financial advice is the earlier the better.

The starting point for any financial adviser is to create a profile of you, the client. This is done by collecting information about your personal circumstances and current financial situation. From this profile a financial plan is created to help you achieve your desired lifestyle – allowing for any disasters, of course, that may arise. Your adviser can then make recommendations as to how to use your finances.

They will cover your assets, investments, liabilities and income. The way you spend your money is also a vital aspect of the analysis, so a review of your short- and long-term expenditure will help establish the plan’s robustness.

‘Wealth management’ is not just about investing available cash in pensions or, indeed, any single source. Its primary function is to make the best use of available assets given the restraints of liquidity and tax efficiency. It is also about putting these assets to the best possible use, as and when opportunities arise and when needs must. Investment is a means to an end. It is about using your capital to create more money, either through income or capital growth.

The long-term capital growth and income associated with investing in equities has, on average, outperformed returns from the investments that rely on interest rates. Over periods of sustained economic growth, investors in equity-based investments have seen their capital increase substantially. Also, equity-based investments have proved to be a good defence against inflation. There are four main aspects to increasing capital growth.

Inflation protection

Inflation is normally the most serious threat to the long-term capital value of savings. Inflation protection is usually achieved with asset-based investments, which historically have offered the best prospect of growing income and capital.

Spreading them thin

You can protect your investments by spreading them across various investment vehicles such as unit trusts, investment trusts, and open-ended investment companies and managed funds of insurance companies, all of which are widely diversified. Full-time fund managers have sources of market information, resources and investment skills that few individuals can match.

Importance of time

One of the most fundamental aspects of any equity-based investment is that of time. While a particular fund’s past history should not categorically be taken as read, the long-term overall performance has to be seen in the context of short-term fluctuations.

And while excellent short-term gains can sometime be made, the fundamental principle of any equity-based investment is to accumulate good quality capital growth over a period of time, not one or two years but five to if necessary.

Attitude to risk

Any investment capable of capital growth also has the potential for capital loss. The extent to which you are prepared to expose your capital to risk is an important factor in determining potential growth. So before you make any investment decision you should consider the level of risk you are willing to take.

When building an investment portfolio, inflation, risk, the time scale of the investment and the tax element all have to be considered. Achieving a balance between the four is essential and none of them should be considered in isolation.

With the relevant importance of each factor likely to change over time, regular reviews of your financial affairs are essential, so seek independent financial advice. Also, while the reduction of tax – or indeed its avoidance – is important, the tax element is probably the most distorting of these factors and should not be allowed to dominate the investment decision.

Remember that while a particular investment may look impressive; it is unwise to ‘put all your eggs in one basket’. The best philosophy for prudent fund management is to split the funds between different types of investments, not only to achieve the ultimate goal of good quality growth but to mitigate risk factors as well.

Allocating assets

Different types of assets, such as equities or bonds, behave in different ways. The first step in forming any investment strategy is to achieve the right balance between the major asset classes. This ‘asset allocation’ is fundamental to meeting your investment goals in the medium and long term. In fact, asset allocation can be as important as the choice of individual funds themselves.

As dentists, you are eligible for membership of the NHS pension scheme, so this is the first port of call for your disposable income. As a member of this scheme you will be entitled to pension benefits at retirement which depend on your length of service and salary.

Regular savings

In the dental industry, where remuneration is high, your pension will form a substantial part of your retirement income. But will it be enough to maintain your standard of living at the level of income you enjoyed during your career?

One starting point here is simply to save regularly. To make this tax-efficient you could consider using your Individual Savings Account (ISA) allowance. With an ISA you can save up to £7,000 in a tax year (6 April to 5 April) and not pay tax on the income you receive from the plan or the gains it achieves. This is an excellent way to save.

ISAs can be split into two components – a Mini ISA and a Maxi ISA. Any ISA can be made up of an investment in cash, or longer-term investments such as stocks and shares. In each tax year you can invest either in one Maxi ISA, which can include all of these types of investments, or two Mini ISAs – one for cash and one for stocks and shares.

There are two types of Mini ISA – a cash ISA, and a stocks and shares ISA – and you can open each ISA with a different ISA manager if you wish. The amount you can invest in each tax year is fixed – up to £3,000 in a cash ISA and £4,000 in a stocks and shares ISA. But you cannot invest in more than one Mini cash ISA or more than one Mini stocks and shares ISA in the same tax year. This would be a good starting point for regular monthly savings.

A Maxi ISA can include both cash and stocks and shares. Whichever way your investment is split, it counts as one Maxi ISA, so you can open only one Maxi ISA in each tax year. The total amount you can invest is £7,000 a year and you can invest up to £3,000 of this in the cash element. By using your ISA allowance on an annual basis you have the scope to build a substantial fund for retirement or, before then, use it to help fund such things as school fees. I have found this to be a great source of providing tax-efficient income for clients, particularly at retirement. When pension levels bring them into the higher-rate tax bracket, tax-free income of any sort is very welcome.

Investment trusts

You could also consider investment trusts. These are public limited companies whose shares are listed on the London Stock Exchange. Investment trusts enable you to spread your risk by holding a wide range of investments in hundreds of companies.

Each investment trust company employs fund managers who use specialist research facilities to help them decide which shares to buy, when to buy and when to sell. The managers keep abreast of investment opportunities in stock markets in London and around the world. They are accountable to the directors of the investment trust company who in turn are accountable to the shareholders.

Because of their structure and because their costs are low, investment trusts have particularly good long-term potential for growth. This makes them ideal investments when planning years ahead. I often recommend regular and lump-sum investments in unit trusts as part of a financial portfolio. Unit trusts are investment vehicles which pool contributions from their investors and the total fund is then managed by specialist fund managers, whose task it is to manage the ‘investments’ of the fund to make investment profits. These profits increase the value of the fund, increasing the value of each investor’s share. Of course if the fund suffers losses then the value of investors’ shares falls, as does the price of the units.

In general, unit trusts invest primarily in equities and often specialise in a particular sector or geographical area. Dividends are paid to unit holders that reflect the dividends received on the underlying investments. The dividends are liable to income tax and are subject to the same tax treatment as dividends on direct share-holdings. The unit trust does not itself pay tax on its capital gains, but on encashment any gain made by the investor is subject to capital gains tax (CGT), under normal CGT rules, including the annual exemption and taper relief.

Direct equities

Most reputable financial advisers have good working relationships with firms of stockbrokers and, where

appropriate, give advice on the investment of direct equities as a means of building an investment portfolio.

One of my main reasons for recommending a portfolio of investment trusts, equities, unit trusts and OEICs is that by placing funds in such holdings my clients have scope to use their CGT annual allowance in years to come by way of disposals of these holdings, which makes this an efficient investment vehicle to consider within an overall investment portfolio.

It is a common feature of tax planning, that individuals should, where possible, aim to use their CGT annual exemption (£8,500 for 2005-6) because it cannot be carried forward and, if unused, is just wasted. Married couples have even greater scope to make tax savings because more than £16,000 worth of gains can be realised without a tax liability on jointly owned assets – clearly a beneficial feature and one that could be exercised in years to come.

What I have discussed here is only a small area of investment planning and does not take into consideration the many areas or types of investment vehicles. But what I hope I have been able to highlight is that financial planning should not just be dealt with at retirement but should be considered throughout your career to take account of accumulating wealth, ensuring sufficient life/protection cover, inheritance tax planning, investment planning, mid-career planning and retirement planning.

When seeking advice, however, look at your overall financial position so that your adviser has a clear picture of your financial affairs, aims and objectives. This makes for prudent and efficient financial planning, as it looks not only at your immediate needs but your long and short term needs too. Perhaps you should think about arranging your own financial check-up soon.

Anne Alexander is associate director and head of investments at Campbell Dallas Financial Services. Call 0141 942 6060 or email anne.alexander@campbelldallas.comfor further information.

First impressions count

Richard White explains how putting a lot more effort into marketing your practice can positively influence what your patients think of you.

Ask most dentists how much they spend on marketing each year and the response is likely to be a few hundred pounds on Yellow Pages advertising, and maybe a bit extra to keep the website going. But in reality, an average practice expenditure is around £30,000.

So why the big discrepancy? It’s all about how we see marketing. To most dentists, marketing is synonymous with advertising. But marketing is the means of establishing you’re practice’s image in the minds of your existing and future customers.

Refurbishing the practice, for example, isn’t just for the benefit of the staff – it’s to improve the patient’s image of your practice. Investing in new technology isn’t just about buying the latest dental gadgets – it enhances the services you offer, and helps your patients to perceive you as being a modern practice.

Let’s take a look at all the aspects of your practice through your patients’ eyes, and how the application of a little marketing will affect the way that they think of you.

Successful, modern practices know they need to create an excellent first impression. The first thing their patients see is the outside of their practice, so they make sure it always looks clean, smart and attractive. They realised long ago that an exterior with peeling paint, rubbish in the front garden and an old-fashioned, unpolished brass plate by the front door, gives the impression of a dental practice, which has a similar old-fashioned approach and little pride in its work.

The same theory should be applied for the inside of the practice. Stained carpets and old-fashioned décor gives a bad impression, so make sure that the reception area is light and airy with comfy, modern seating.

Your reception area offers you a great opportunity to create some ‘wow’ factor for your practice. More and more of our clients are putting a huge amount of effort into making their reception area really special, by anticipating the needs and desires of their particular type of client. For example, some family oriented practices with lots of young patients have invested in Playstations and buy in the latest games. As long as headphones are also supplied, this keeps both the children and their parents happy! Similarly, practices with a holistic view of dentistry have made their reception area calm and relaxing areas to be, by installing low lighting, comfortable chairs and a soothing water feature.

When it comes to the treatment room, your patients are unlikely to know enough to judge whether the equipment is modern or not. But they will be able to tell if it is clean and well-looked after. They will also form opinions based on your manner towards them, how gentle you are while treating them, and even how you and your dental nurse interact together.

Your patients are unlikely to know much about dental equipment, but they will notice if you get in a piece of equipment that makes a real difference to their treatment. They’ll appreciate the fact that you have invested in something which helps to make their dental treatment less painful or more convenient, and are quite likely to tell their friends and family about it, therefore marketing it for you.

The way you and your staff interact with your clients strongly influences their image of your practice and can make or break the business. Successful practices are those which realise that their receptionists are their public face, and so ensure that they are knowledgeable and informative, polite and friendly, as well as looking smart and presentable. Your staff need to know that having a bad day is no excuse for being rude or impatient – even if it is a one-off the client won’t know that, and will not appreciate being treated badly.

All the points mentioned will help to form an overall impression of your practice, one that will stay with the patient until you do something pretty radical to change it, and one that they will also pass onto their friends and family. So, given the original aim of marketing – which is to build a reputation and image that appeals to your target clients – it seems clear that marketing is at the core of your business, reflected in everything that you and your staff do each day, and without it you wouldn’t have a business.

To gain the most benefit from the £30,000 that you already spend on marketing, you need to let people know about it. You need to make sure that your patients know that you have invested in new equipment and explain to them how it will improve the standard of dental care they receive. You need to let them know about training courses you and your staff have attended, and what difference it will make to the services you offer.

And you should let them know when you refurbish the practice – don’t just assume they will notice, tell them you have done it and let them know what the benefits will be. If you want to attract new patients, you also need to let them know about your practice – what services you offer, what your ethos is, and why they should choose you above any other dentist in the area. The way you communicate will play a key role in your success, and further influence the perception that customers have of you.

This is why the most successful practices set aside some extra marketing budget – to pay for your methods of communication. We’re not talking about the difference between spending £500 and £5,000 on marketing. We’re talking about the difference between the £30,000 you currently spend and £35,000. And that £5,000 – just 15% extra – can make or break your practice.

Patient newsletters can be a successful marketing tool. They provide a perfect vehicle for keeping your patients informed about what is happening in the practice. Patients will feel valued because you have taken the time and trouble to communicate with them. They are more likely to ask about new services and procedures that you have featured in the newsletter. And your practice will rise in their estimation, which will often prompt referrals to friends and family.

In fact, for practices which are happy with the size of their patient lists, but that want to encourage uptake of higher-income treatments, a patient newsletter is the ideal way of achieving their goals. Practice leaflets, websites and patient welcome packs have a similar effect.

Professionally produced, comprehensive patient welcome packs that include a patient information/treatment leaflet, fee guide, payment plan description, medical history form and smile analysis, all housed in a high quality folder, are likely to cost around £5,000 for 2,000 copies (£2 to £3 each).

They are usually sent to anyone who calls to enquire about joining your practice, and can encourage the ‘wow’ factor, which strongly influences the recipient, prompting them to choose your practice above others they have contacted.

Many dentists regularly complete detailed clinical audits, but the most successful also regularly carry out marketing audits. They make sure they ask new and existing patients how they heard of the practice or treatment, and log the answers. They regularly look at the results of their marketing activity, and adjust it if necessary to reap the maximum rewards. And they regularly give their marketing communications a fresh look, making sure their brand image is kept up to date and on message.

Many dentists still find it hard to justify spending so much on a pack, and yet a look at the figures below makes it clear that welcome packs can still more than pay for themselves. These figures assume that the proportion of new enquirers who become loyal new patients is currently 40%, rising to 70% after introduction of the new patient pack.

There are also lots of hidden benefits in attracting new business through marketing. Your investments in equipment and training, for example, are put to better use and therefore cost less per patient. Staff morale is likely to rise as the business becomes more successful, and you ensure a brighter future for your practice. So, the next time you start thinking about marketing in terms of cost or income generator, remember – you are already investing thousands of pounds in marketing.To make sure that expenditure reaps the maximum benefit for the practice, you just need to spend a little extra on communication – the results will speak for themselves.