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Starting a new dental practice is the most exiting part of graduating from your dentist school. One of the most important parts of starting any business is having a financial plan. Check out five common financial planning mistakes dentists make so that you can avoid them. Keep reading to find out how to make smart decisions for your business.
Mistake #1: Insufficiently Insuring Your Income
While no one wants to think about becoming injured, everyone is at risk of some sort of workplace injury, even dentists. From sharps to radiation exposure, hazards lurk all around a dental office. If you become disabled and can no longer perform the duties of your job, you will need to file a disability claim with your insurance. Many dentists forgo adding disability insurance riders that account for inflation or dentist disability insurance all together because they don’t believe they will need it. It is a huge mistake not to protect your income.
Mistake #2: Not Saving for Retirement
Dentistry is not the only profession in which people commonly don’t save or don’t save enough for retirement. As a dentist, you may think that government aid and your current savings will be enough to last you through retirement. However, rising life expectancy and inflation makes it more challenging to live on less. Today, experts say you should save about $1 million for retirement. That amount alone would last you 20 years if you spent $50,000 a year.
Mistake #3: Managing the Business Alone
A dental practice is a business like any other, and it comes with financial planning, assets, staff to manage, and a slew of other intricacies you may or may not have thought about when you decided to pursue dentistry. You don’t have to manage your business alone. Partnering with another dentist can alleviate some of the burden of managing the business. You might be better at customer relations while your partner takes care of the financial operations.
Mistake #4: Opening in a Bad Location
If you want to make money as a dentist in private practice, you must open your dental office in an accessible location. Further, you should market your services to the clientele that are most likely to stop into your business. Choose office space that you can afford and that your clients can easily locate in a neighborhood they’re familiar with and comfortable in.
Mistake #5: Depleting Your Budget
Your confidence in your future income may motivate you to burn right through your budget, but beware of potential future costs that could put you in the hole. While you may attract some clientele with the latest equipment, consider which machines are necessary to improve the health of your patients. You can make your lobby and operating rooms look upscale on a budget and impress your clients with your stelar customer service and quality treatment.
You can avoid the five common financial planning mistakes dentists make. Remember to protect your income, save for retirement, and stick to your budget. Further, you should choose a good location for your practice to entice patients, and never be afraid to ask for help. The key to success is learning from the mistakes of others.