Dr James, 0s:

What's up everybody? Welcome to this live um in the flask. I almost said in the flash, but I guess we're here digitally, but it's still comments, right? It's live, you know, for what it's worth, which makes it really fun and makes it really interesting because as they all say, well, you know, as as as any sort of live content goes, uh anything can happen. We're here to have fun, we're here to have a laugh, and also what that means is people can ask questions directly to the hosts of the webinar, which is amazing. As ever, you can claim your CPD for this episode within the official Dentists Who Invest Smart Money Members Club. Smart Money Members Club also includes multiple mini courses and webinar series on finance for dentists, including how to become as tax efficient as possible, as well as understanding investing. All of this content comments as verifiable CPD, and you can download your certificates there and then on Putin BGSE. In addition to this, we also include a whopping 10% discount on your dental indemnity and 5% discount on lab bills for dental principals, amongst other perks and discounts for members. Please use the link in the description to claim your verifiable CPD for this episode. And I'm joined today by Dr. Barry Oulton and Mr. Shishir Khadka, and we're here to talk about anything and everything tax strategies specifically for principals. Because as we all know, principals run their businesses, tax is no fun in the UK, and tax can be the difference between us being in profit and not being in profit, but no one actually tells us stuff, tells us this stuff, especially in dental school and not even our own accountants. What do you think about that, Barry? Does that sound about right? Barry insisting.

Dr Barry, 1m 35s:

I tell you what, um, I've been in dentistry now for 30 years, and I owned my practice for over 20. Uh, and I've been nurturing and coaching dentists and dental practice owners now for the last few years. And it's only in the last 12 months of having met Shishir that um we truly have begun to massively understand our numbers and what can affect our profit. It was Shishir that taught me that practice owners don't have a profit problem, they have a cash flow problem. And that is they're making profit, but they could be doing a hell of a lot better. And that's the aim of tonight is to share some key strategies that he's been sharing with my clients that's making a massive difference to people. So yeah.

Dr James, 2m 28s:

Hell yeah, that's the aim of the game. Tashir, how are you this evening?

Shishir, 2m 33s:

Yeah, I'm good. Thanks, James, and and glad to be here today. Yeah.

Dr James, 2m 36s:

Good to see you, mate. I can't wait to see how you two are going to bounce off each other tonight because obviously Tashir's uh expertise lies in the tax side of things, being an accountant and a content that specializes in dentists, but not just dentists, specifically principals and also cash flow as well. And Barry's expertise. Well, Barry was a dentist, uh, is a dentist, of course. Is a dentist, is a dentist. Let me allow me to correct myself for Barry's uh apologies. He still identifies as a dentist, I guess you could say. Uh, but have you worked when was the last time you worked clinically? Or are you clinical now, Barry?

Dr Barry, 3m 7s:

Yeah, yeah, yeah. I'm working on Saturday.

Dr James, 3m 8s:

Oh, beg your pardon. Beg your pardon. There we go. Uh yeah, excuse me then. But yes, Barry is obviously uh formerly a principal as well and knows everything there is to know about making a practice profitable. So how about that? How about we do that, guys? How about we jump straight in?

Dr Barry, 3m 21s:

Let's do that. I'll if you don't mind, I'll share screen, I'll get into the uh into the and then I can do the intro. Can you see my screen there, mate?

Dr James, 3m 29s:

Yeah, we got you.

Dr Barry, 3m 31s:

Uh amazing. Okay. Um so thank you, those of you that have joined us. I I just want to make a simple promise, really, over the next 45 minutes, that Shishir and I will make sure that you leave with seven concrete strategies for keeping more of what your practice already earns. Um, and it's not by working more chair side hours, it's not by ramping up, you know, the new patient numbers or making uh, you know, increasing fees necessarily, it's by making smarter decisions with the money that you're already generating and identifying the areas that Shishir has helped my existing clients um that are now working with us jointly um to understand. And we've he's seen this across hundreds of practices. Um, and most most practitioners don't have that profit problem. It is cash flow and they have a structure problem. It's organizing the things that they're doing. That they're making the money, um, but the difference between two practices that are making the same revenue can be six figures a year of personal income, purely down to how that money is structured. And that's really what we're going to walk you through. Um, so uh Shishir and I are gonna be bouncing off each other, and um, we're very, very happy to take questions. It may well be that uh if James, I can't see the questions because I've I'm operating the slides. So if somebody else can jump in and it's appropriate to answer, otherwise, we promise we'll answer it at the end. Um, and we will also make sure that you can have these slides and have access to them. Um, and then one thing again before we start, what what we're about to share isn't theory. Each of these seven strategies is being used by real principles in dental practices to keep more of what they earn. And at the end of the day, that's what we all want, right? Some of them are people that you may even know. None of them did anything fancy or exotic. Um, none of them made aggressive structures. They simply made decisions about how their money was being handled. And instead of letting the structure run on autopilot, by the end of tonight, we're gonna know exactly what those decisions are. Um, so let me just kind of introduce really the two of us. My name is Barry Alton. I am a dentist. I owned my uh practices for 20 years. I'm now a full-time business coach, although I do work the odd Saturday in clinic. Uh, and my business partner is uh Shishir Kadka. He is a chartered certified accountant. He specializes uh in UK dental principles, uh, and he also is a CFO for a number of companies. One, he took from five to fifty foon, uh, and he's a CFO for two microcorporates. He's worked with associate-led practices, NHS Mixed, fully private, and he also has obviously microcorporates corporates, and he's acting and advising some DSOs. Um, I've worked with a lot of accountants over the years, and Shear is so sheer is the one that I've found who can actually explain this stuff in plain English and tell you what to do with it. I have found over the years that I have had no advice, poor advice, and diabolical advice. Rarely have I had great advice, and I've never had advice that was ahead of the curve. I've always effectively driven my business through the rearview mirror financially. I waited for the accounts, I didn't have accurate information, I didn't have accurate data, but I still didn't fuck it up. I still made enough money to operate and live as a family. But what I now know is for probably 16 years, I was living, I was leaving probably six figures on the table because I didn't understand the figures. And that's what Shishir is now doing with my clients. What we're going to cover tonight is seven strategies, concrete moves that will keep more of what you're already earning. It'll be in plain English, no jargon, no theory. If there is, we will back that up with making it simple and understandable so you can take it away with you. There'll be both of us here. Shishir really is the financial mechanic. And mine is about ownership and decisions and strategy. It'll be about 45 minutes and you can drop questions into the chat. Uh, we'll give you a replay of this and you can have the slides. We want to spread this information as much as we possibly can uh because we know that this will make a difference. Uh, whether you choose to engage with us or work with us or you know, chat to us or not, uh what we'll share will make a difference. Um, and uh strategy number one uh is where I will hand over to Shishir because he is going to run you through that profit isn't what you think it is. Shishir, you're there, mate.

Shishir, 8m 45s:

I'm dental accountant and CFO, and um so it's good to be here. And uh yes, so profit is uh you know, it's uh it's not quite sure of a word because when you talk about profit, like you know, are we talking about gross level profit? Are we talking about net profit? Are we talking about profit after allowing for taxes? Are we talking about money in the bank? And uh so by having conversations with different people, Barry, what I come across is they mean different things. So I have to seriously ask them, like, what you mean, profit? You know, so so yeah, the the first thing that I want to be clear is the four numbers here, but you just uh put the four numbers there to be uh uh just to be just to be sure. Like so we have the revenue, we have the profit, we have the cash, and we have to take home. These are the key four figures that you want to be aware of. And here's the here's the biggest things problem that I see with most redental practices that when they when they record the money that received from patient into zero or quibbix accounting software, they are recording based on election, not on production. The issue with that one is when you're not deferring the revenue, you are showing your income or revenue sooner than actually it happened. As a result of that, your profit is overstated. As a result of that, your tax is overstated. So, first of all, you need to be aware of the difference between production and collection. The revenue is what you earn, and you might have done in design case that straddles for three months, but you won't be recognizing the revenue based on near to the completion. That is the safest way to do it, and and also it will save you taxes because you're doing it at the time when the work has been completed. And the profit is what's left after cost and expenses. So, this is the cost are the materials, that associate fees, and and the uh and the wasties, uh you know, the clinical waste um that happens to the business, that cost, and anything that does not fall into that one by default is expenses. So, I'm not going to more detail about what is capital, what is uh expense item here because that becomes too technical for you. But if you if you take that materials, lab, associate fees, and wasties, uh anything out of that that is part of the overhead expenses. So profit is simply your revenue minus minus cost minus expenses. So, but the cash in the business is different anymore because it has to take care of like all the loan repayments, all the practice uh equipment payments, all the things EMIs, all the loan um taxes need to be paid. So, this is where the timing uh aspect comes into play. This is why the profit and and cash does not does not equal at the same time when you're looking at the same period. And and you're wondering like how much should I take home? And uh based on that, how much tax I'm paying. So you take home pay, it becomes a crucial figure. But here's what we do with our clients. First, we don't start with the revenue in the first place, and we call it the dream profit goal. And in our and in our software, what we build is called the profit calculator and uh the profit-to-pocket model. So we start with the what your revenue, what your take-home pay goal is, and based on that, what the revenue should be so that you can have your take-home pay. This way, you are reverse engineering the process. So, so these are the four figures that you absolutely be need to be aware of on a monthly basis. Your cash position, your profit position, your take-home pay, and how far are you off in terms of uh how much you're withdrawing from the business, and what is the top line revenue that is supporting uh to it to that figures. Barry? Yeah, sorry, mate. Yeah, so so which leads to like uh I've seen this often that you know uh a practice can have like a a 1.2, like both practices are doing like 1.2 million, but they are operating at different profit margin. Literally different profit margin. Well I've seen also someone doing a 1.2 million versus someone doing one eight hundred thousand, and eight hundred thousand pounds uh is doing percentage while the net profit is more. And so so we have to understand the margins in the business, and and especially when we look at from the peer types, the NHS type, uh the private type, um you know, a business think about this a business from NHS uh you know categorically NHS type business, say 75% NHS, 25% private versus of 70% private and 20% NHS, most does a million pounds of production, who is going to make more profit? You know, like so so the the peer type is also gonna be a crucial part of this process. And and uh so when we look at this one, uh if a business doing a 1.2 million, practice A doing uh is a principal paid, and practice B is more like uh you know structurally like salary dividends, etc. So if you're if you're optimizing this front, so your take-home pay is going to be much higher than when you do practice B. So you've got to plan for these things. And how it's structured, right? Oh yeah, absolutely. You start with the structure. It's like the way I say, Barry, it's like uh if you're going on a motorway, you know, and the first thing you want to be sure of is like which car you're driving or which vehicle you're driving on. It's crucial because if you are driving a bus, and and trust me, that you you're not gonna go far much faster as opposed to you're driving a faster car, you know, like it has to be it takes more weight, you know. It has to carry a lot a lot of crap with it. So so the structure has to be right in the first place. You start with the structure.

Dr Barry, 15m 4s:

Uh strategy too is actually me because it's non-financial. Um this is separating yourself from the business, and this is where I categorically got it wrong. Um, because behavior shows up in the numbers without a shadow of a doubt. Um, so Sher and I both end up at the same conclusion just from different angles. When most of us start out as principals, the practice and the personal become very blurred. Um, the practice card pays for the petrol, the personal account covers a supplier when cash is really tight at the practice. Drawings go up when there is a holiday coming and it can go down. And, you know, be honest with yourselves. It's just we in the early days certainly we treat the practice almost like a personal bank account. And I did this for years. I used to get shouted at for using the Amex. I because I had an Amex and I paid for everything on the Amex because I was getting air miles. And so I kind of ended up blending the personal with the business, didn't think there was a major issue with it. Um, and that works in year one, uh, but it doesn't work at scale. And it definitely doesn't work when you want to extract serious money or eventually sell, because they then have to start extracting what the personal is and what the professional is. The shift we recommend that you need to make is at an identity level. Effectively, you're two entities, right? You are the owner, and the owner gets paid in defined, structured ways, as per a couple of slides ago. The practice is a separate business with its own cash flow. It's got its own reserves, its own decisions to make. The two are connected, but they're not the same thing. And the the question is, well, why does that matter? And realistically, there were three reasons why it matters. First is control. When you separate the two, you stop reacting. Drawings are no longer a function of how much was in the bank. Uh, you set a salary and you set a dividend rhythm, you set a pension contribution, and the practice runs on a budget. And that's what I never did. Uh, you stop really being whipsawed by a slow NHS schedule or a quiet week in the diary, or you panic about white space because actually everything is planned for. Second is tax, the dreaded tax. The HMRC treats salary dividends and pension contributions very differently. Shishir will take you through that detail in the next strategy. But the point I want you to hear right now is that you cannot use any of that structure if you've blurred the lines. And you'll just dip into the account when you need money. And again, full hands up, this was me, totally guilty. Separation is actually a precondition for everything else we're going to talk about tonight. Third is exit value. Now, ultimately, um, so she and I are talking to uh a number of uh practice brokerage, because in an ideal world, we would love to get hold of practices three years before the day that they've decided that they'd like to sell. How do we do that? I don't know yet. But if there's ever an inkling that you you are thinking of selling, we would love to have a five-year exit strategy because with that, we can start to make a difference. So whether it's three years from now or 15, a buyer ultimately is looking for a clearly run practice with separated finances, a practice where the principal's lifestyle isn't buried in the PL, which obviously in the early years is an advantage, right? But it's hard to value, it's harder to sell, or ultimately it sells for less. Uh, and every month you're blurring those lines, if you are, is a month that you are effectively chipping away your eventual exit number. So if there is some potential exit in the future, our advice is to separate you and the business. So practically, what does separation really look like? It's a defined monthly salary going from the practice to you. It's dividends paid on a schedule, not on an impulse, a separate personal bank account the practice never touches, the practice holding its own reserves, a buffer, ideally three months, two to three months, but ideally I want my clients to have three months of operating costs, sitting in the business, not being swept out at a moment it appears, and every personal expense staying personal, unless there is a legitimate documented reason for it being in the practice.

Dr James, 19m 50s:

And and can I just highlight something really quickly? There's also the oper the opposite problem where you have huge cash reserves in the business, like way over and above uh your operating costs. And I think we cling on to cash from a point of view of safety, like we feel safe the higher the number is. But actually, that's wasted opportunities as well, because that could be reinvested in the practice or in some sort of other investment effectively. Uh, again, that's where your knowledge on how to upgrade your practice comes in, or your knowledge on investments and everything along those lines. But that's actually just as big a problem. And I've I've seen that all the time. I see, I know this is obviously for principals. I see associates with 200k in a limited company just sat there and no plan, basically. And uh the reality is you're losing that wealth, you're literally donating your the hours that you put in to generate that wealth back to the government because obviously inflation is eating away at it. So I just wanted to point that out and not uh sidetrack things too much.

Dr Barry, 20m 46s:

Yeah, I think that's a really good point, mate. And what we do with with our clients really is that for us, once you've got two to three months of operating capital sat in the bank, then it's about looking at as money builds up, what are we gonna do with that? You know, for me, there's a difference between growth and scaling, right? Growth, we talk about growth really being about um historic. Where am I? Where have I been? And they kind of think about increasing that by 20%. Scaling is what people are doing when they're buying multiple practices. It's not a case of, oh, we want to do 20% better. It's a case of right, if I could write this and I wanted to, you know, really go for it, no holds barred, what would I do? I'd have six practices. Then you can start to reverse engineer that and see what you're gonna do. In terms of individual practice owners, um, we've worked with people who are, you know, in similar situations, similar size practices. One of them draws what she needs when she needs it, you know, eight a month, 15 the next, 30 when there is a holiday. And then the second one takes a fixed monthly salary, fixed quarterly dividends, annual top up. And there's a profit headroom at the year end. Now, same total income across the year, but completely different relationship with their money. Patient A, patient A, Principal A tells me that they're anxious, they're worried about money even in the good months because they can never predict really what's coming next. They end up having high profit, but no money to pay the tax. They don't have a profit problem, they have a cash flow problem. Principal B told me she stopped thinking about the practice cash completely because she knew exactly where she was and exactly what she was doing. Same income, different structure, different life, different stress levels. And I would hasten to ask I bet, I bet my last 10 quid that there is virtually nobody on this call that doesn't have some element of financial stress. And that could include the people that you've just highlighted, mate, which is they've got tons of cash, but they don't know what to do with it. So this is what is really on offer, right? Is not less freedom, but more clarity. And principles are run themselves, and the practice as separate entities are the ones that don't dread the post. They don't dread the brown envelope, they don't lose sleep over a tax bill. So if you're if you're running it as your own personal kind of bank account, our advice is stop that ASAP and begin to separate it out. All right, tax efficiency ladder. This is just Jia coming in, right? This is that's just his name.

Shishir, 23m 28s:

Okay, so just to uh touch on this bit, I think the salary, dividends, pensions, and further, so these are like uh standard things that uh you know uh that you may be aware of. And you know, obviously you want to be an optimum salary, uh, and uh obviously the NI threshold has gone up and uh the employment allowance has gone up. Um so what we have found when we've done the exercise is if you have more than seven staff members, on average, I'm talking about on just on average, um and dental practice have worked with me in um over the years that if you have more than seven staff, which means that you are you're going to start paying extra inputs and I contributions. Um this is um this is on top of the you know the minimum wage increase as well as the uh as well as the employment allowance has gone up to uh to 10,500. But what we've seen is if you have more than uh seven staff, you start to pay more improvements and I. So dividend obviously the spinning change um the and uh and it's still salary plus dividend is um uh is it is still uh you know viable rule for most of them and pensions, um, you know, 60,000 years, you can go back to to last three years, 180,000 if you've got to invest it, and this um this ICS, ES, ES, and NS, and this lot of things that uh that will need uh just a webinar on its own. If you have to go deep on one of the things, what I would touch on is just to link to the the previous uh thing that Barry was talking about, you know, separating the personal versus um the um the company, what I added more is that what what I see is that the most dental practice they have this structure. They have a uh uh they have a sole trader for NHS contract, and they have a limited company for the private treatment, and they have wanted to buy toilets, and and they might have an education arm as well. So you so here's the strategy for you, and I don't I'm not seeing that many um dental practices do that. So uh do that, which is you would want to be setting up your property code, your limited uh company for property, you'd want to be uh creating a limited company for your trading your your private treatment, and you also want to be set separating or creating a separate entity for your if you are doing some education work and your IP is that. So, in this way, if you sell your dental practice, you're selling dental practice on its own and your IP is protected, and you still have your freehold and properties intact. And uh mostly that I see is they just set up a holding company and they have the few few companies on underneath that bond, and without that taking this into account, and uh uh you're not going through the optimized route. So, so his example of the work example, personal income here, and like uh yeah, 60,000. The I the idea of of this in the Barry is that uh it depends on the the income bracket you're in, and also people think like, well, a taxation is just from 6th of April to the following 5th of April. No, it's not. It relates back to the previous year and it also relates back to the the coming year next year as well. For me, it's already a three-year cycle. Is it is not from 6th of April to the following 5th of April, it is not so so you you gotta look at from the three-year cycle point of view, and and uh and what personal income do you need to survive, and uh and also for holidays and things like that, and also what money you need to extract from the business to invest in certain areas. So after doing that only, and you can be sensible enough, and if your profitab of the business, if your net assets shareholder funds allow you to do that, and if you cash in the business, allow supports for your working capital, then you uh I suggest you to go ahead down that route. Um obviously when you're investing in different areas, um different areas, the the compound effect is um is uh is more so so you so um so here the idea is that uh you'd want to be taking into account the route of salary plus dividends plus um kind of family um you know contribution to working in the in the dental practice. Obviously, they are doing genuine work, you know, genuine work, you know, maybe that's marketing, maybe that's admin work, maybe that's bookkeeping work, but they got to be genuine and and uh you can utilize that and and you know, up to £50,000 you think back, you're paying taxes at 20%. So you want to do those kind of things.

Dr James, 28m 26s:

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Shishir, 30m 16s:

Yeah, so this one is an interesting one, uh Barry. You know, like uh so I would say like your practice is like a business, is like a vehicle that supports you that how you're building the wealth. And the way you can build wealth is actually by building assets. And what are the assets in dental practice? It's the activation that you have in the business. Number two, it you have the substitute for yourself. That if you if you are doing most of the clinical work, then uh then uh when you do sell the business, then the valuation will be at least uh two times less. And that's how crucial it is. And uh staff and um and and uh and and the and and all the statement uh sorry, the structure, the the systems and processes in the business are crucial part of the asset of the business. So at the end of the day, that's with what you're studying. So you want to be building the asset in the business rather than just an income. I'll give an example, Barry. That one of our clients uh uh he he cancelled a monthly call. He says, I just got an opportunity to uh to do uh implant for for uh for a patient, it's like 4,000 pounds income. And in like but I asked him, like, uh how old are you? And so like I'm 52. How long do you think you can do this? You know, and going on for and said, I only have arthritis problem, and I do that. And and and the thing is, I said, like, but you have been chained to the dental sheds. In general, in top line only, if that is not healthy for you and for your for your health and for anybody, you know. Because you're not keeping the profit margin. And I'm gonna show the maths in terms of well, if you do the work, then this is the the profit that you make from the business, but we let your associate do the work, so else so he's gonna make 1304 pounds. But if you make the if you do the treatment, you make 2200 profit, and probably here's the difference 800 pounds. But imagine that you could get three more patients of this one, that covers that, isn't it? Now you're no longer doing the work, someone is doing the work for you, you still have some level of profit, but you got the time back. Yeah, and then that's that's crucial.

Dr Barry, 32m 44s:

Yeah, the one thing you can't get more of time. You can always make more money, but you can't make more time. Yes.

Shishir, 32m 53s:

Yeah, so um so so so I think the wealth is uh is a big concept and uh big concept. And uh so when we're talking about wealth, and what what we uh what we cover is like uh the cash flow in the business, so that the the business is supported uh you know for the working capital, and and what's the e-bit and the profitability of the business, and uh what are the things that you own that last set to you, and uh and how you're financing the business, and how you uh look after the tax situation in all aspects, and then what is the exit plan? And these are the six areas that we cover in terms of how you build wealth from by using business as a vehicle.

Dr Barry, 33m 42s:

Yeah, nice one, mate. Um point number five out of seven. Uh again, this is me, right? Because this is uh exactly what I was like the hidden cost of actually doing nothing. Um, and what I mean, what I mean by that is that by not taking any decisions, you don't see anything. So you don't see anything in action, absolutely, right? It's because um it's one of the things that's costing most of us right now, but you can't see it. Um when you make a bad financial decision, you find out about it, right? It shows up. You either have somebody knocking, phoning you going, what the hell are you doing, or something else goes wrong and you feel it. But then at least you can correct it, at least you can get the data, find out, and do something about it. But when you make no decision at all, when you leave the structure as it was when you bought the practice, or you when the early days that you put it together and you don't review your salary situation or your dividend split, when you never set up pension contributions, nothing visibly bad ever happens. So you kind of just get on with it. And like I said, it's really hard to get it wrong in dentistry. But the problem is the practice keeps running, the money keeps coming in, and then you don't get a letter from the HMRC to say, oh, by the way, you could have saved 25,000 quid, but the cost is there and it's hidden. And the gap between what you took home and what you could have taken home year after year really does compound and build up. And I've seen that in my own career. I mentioned it earlier on. Six figures probably that I probably left on an annual basis. And I've seen it in dozens of practices that I've coached. The principals who suffer the most financially are not the ones making bad calls, they're the ones not making any calls at all, not making any decisions. And they're basically running their finances on autopilot, or they did what I did, which was to abdicate control to uh an antiquated system run by lovely accountants, but run in, you know, almost in reverse, certainly a year behind. Um, so you know what what I'd love to do, Shishir, is to hand this bit over to you so that you can kind of run through these figures, right? Which is the areas where this shows up the most and the things that ultimately when when we're using the software, it really does bring these to the forefront so that they're not hidden from the clients, right?

Shishir, 36m 12s:

Yeah, and and uh one thing that we do uh run through the clients, Barry, is we run through like tax A to G checklists, you know, like based on their circumstances, that you know, so that nothing is left behind, you know, like uh you're doing things uh in the in a illicit way and and uh we entirely do that. Um but it's all start with planning, you know, like it's all start with planning, just like treatment planning, there's a property planning and there's a tax planning.

Dr Barry, 36m 40s:

Treatment planning, but we don't treatment plan our money, do we?

Shishir, 36m 44s:

Yeah, treatment planning your money, yeah. That that's what's um you know that could be the difference between having an additional £50,000 in the bank account in a personal bank account after paying taxes, you know, like you know, after a line for tax, personal taxes or not, you know, that could be the difference. Um uh two weeks ago I was at an event and um I was at uh uh Dr. Marie Shitney's trusted treatment event in Winway's, and and uh the guy came to me and uh he's a very successful guy, he's very very good clinical guy, and he showed me he told me that he sold his practice to um big DSOs and they paid him 75% of the equity on what they agreed on, and and for the few years it was based on some contingent of being 5% of SLABCDE. That didn't happen, he lost that. And in hindsight, he tells me that um you know if I had uh you know known some of this information, not from you, C if I had just have this information from somewhere just like you, and things could have been different, you know. Things could have been different. It's just about being knowledgeable in this area, not to be just being in confined in a clinical room, you know.

Dr Barry, 37m 51s:

And in the mate, that's but but to be fair, and I don't know how many people know my history, but that's exactly what happened to me. Is that sold into sold into a DSO.

Shishir, 38m 1s:

I didn't know that. I I didn't I didn't know that, I didn't.

Dr Barry, 38m 3s:

Sold into a DSO and the earnout, um, you know, we've got a percentage up front, but the earnout, 432,000, we didn't get. Uh, and we didn't get that because I was wet behind the ears, I didn't get the right advice, and I didn't really know what to do. And so when I say in this strategy that the cost is hidden, that's exactly what I mean. 200,000 to 300,000 pounds conservatively over 10 years, simply because nothing was decided. And here's the bit actually that makes this strategy really different from the others, because there is no skill involved with this, right? For me, there was no skill involved. You don't have to learn anything, you don't have to take a course, you just have to make a decision. You make a decision, you pick a date, and you get some advice. You get somebody qualified, which is not me, obviously, to review your structure, give your advice, and you do something about it, whatever they find, so that you can actually be proactive, not reactive. And I think as a principal, I was reactive to my finances, not proactive. And if you are watching this and you think that's probably me, make a decision and do something about it. Because it doesn't have to be you that pulls the data, the software that does it, there's people that can do it, but don't just rely on your accountants giving you information that is six to 12 months, if not longer, behind. Because if you do something now, it will have a massive effect moving forward year on year on year. Um yeah.

Shishir, 39m 31s:

Yeah, but uh we talked upon this uh this idea of you know restorative dentistry versus you know like you know, like preventive dentistry is the same thing, you know. Um so yeah, we we want to be proactive in into um planning the the treatments uh for our patients, and and same thing that we want to do with with the with how you uh do proactively plan your business, profitability business, so that the the taxes and and the cash situation is based on that figure.

Dr Barry, 40m 4s:

You know, well you just said profit and cash. Jump onto that one briefly, mate, because we've got two more points to go. Um explain cash flow versus profit.

Shishir, 40m 15s:

Okay, here's the uh simple way of explaining profit versus cash flow. Um, well, cash flow is is collection, so this is what you keep in the till, like money gets collected, and profit is what you do the treatment on. But isn't that the same thing? You know, it is not uh because uh what profit is based on revenue and revenue is earned, not received. So it's based on what you do the treatment on. It's a bit like um teeth versus gums, Barry, you know. So yeah, they're just part of the oral health, you know, like uh teeth is like uh you know, you never held the teeth. I mean that's your profit because that is like that's the teeth of the business, right? That's the teeth of the uh of the mouth. But the gums is the one actually holding the teeth. Without gums, it does not hold the it doesn't hold the teeth. And how do I know? Because I lost all my teeth in 2019 uh due to severe periodental disease. That that's how I knew. You know, I I first experienced that in the same way that's in the business, it will not hold the business.

Dr Barry, 41m 27s:

So, mate, ex explain the three that you explained to me the three things that everybody needs to know so that they can take that away with them tonight.

Shishir, 41m 36s:

Yes, so uh when it comes to uh property cash flow, what you want to be tracking on is you want to be tracking on the net profit versus net cash flow month by month. And you want to be reviewing every quarter, and you want to be seeing like a line graph that tells you here's the net profit line, and here's your net cash flow line, which one is higher, which one is going in what direction? That tells you where the problem is happening. So uh this way of like uh you can just build a simple spreadsheet just to track your uh cash flow from operation point of view, how you run the business, from an investment point of view, what bit uh money is invested in the business from an investor point of view, and from a financing point of view, how the business is finance, and you'll find out what is your net cash flow. Net cash simply just means how much money you kept in the in the business in that say in that month. Whereas how much profit you made, which is you can't actually see it because you can't spend profit very, you know. So you need cash in the business. So both are important, and both are important, but you won't be seeing which one is uh going higher and which one is heading in which direction. I think that would be the um the single biggest thing that the business owner should be looking at on a regular basis. And if I have to pick one number from of all the numbers of all the numbers, I would just pick one number, which is net cash flow every month. How much cash you are keeping in the business, not from a bank balance brought forward, just from how much you received, how much you paid, how much you kept. If that's growing, and it's a good sign that you know, unless you you unless the money has been plot from investor point of view, that's that's a separate issue. I'm just talking about categorically from uh from an operation point of view. Yeah.

Dr Barry, 43m 34s:

Nice, nice. Final point. Uh the final strategy is have a plan, guys. Um have a 12 month game plan. Uh don't be looking back, don't be steering your ship with a your financial ship with a rear view mirror. Um and plan ahead. Take this, we'll give you these slides. A 12 month game plan really replaces, you know, you're gonna Have a rhythm to it. It's not complicated, just has to be there, has to exist. And this is what we recommend: this kind of monthly review, quarterly review, and then annually. We're looking for three months out. Why three months out? Because you want to be looking at pension contributions, equipment timing, associate restructuring. With our software, Dem Pulse, every single one of my clients has been in a situation to renegotiate their associate contracts because data doesn't lie. It's not a 47.5% finger in the air. It's actually we know that in order for us to make a profit, you need to gross £1,827 a day. And if you can do that, you can have 45%. You also then want to be looking at dividend timing. And then we would be doing two annual sessions and done well, they are worth tens of thousands of pounds. So, in brief, all seven things, right? Profit isn't what you think, right? Four numbers, not one. Separate yourself from the business. Do that now. Think about owner versus operator. I have a training program called owner versus operator, and it's an identity shift and it's one that you can do quite quickly. Use tax efficiency ladder for salary, dividends, pension, and wrapping up. Treat the practice as a wealth engine, not just an income. Recognize the hidden cost of doing nothing. Make a decision, get on with it, because you can always course correct. If you're not doing something, then you're just kind of drifting. Manage your cash flow, not just your profit. Three numbers that you always need to know and run a financial game plan. Now, knowing isn't doing. What's needed is structure. Let me just briefly introduce you to what uh Shishir and I have now got and we offer, and it's Dent Pulse. We are actually launching this uh at the Business of Dentistry with uh Sir James of Martin. Uh and Dent Pulse is a genius piece of software that Shishir has worked on for over four years as a CFO and a certified chartered accountant, and it's a financial operating system for practices and for groups. It is 100% data-driven. It combines your PMS with your financial software, whether you are software of excellence, dentally, systems for dentists, whether you use iPlicit, QuickBooks, or Xero, it connects those things together. And the idea is it gives you instant clarity, control, and confidence. And our aim is to support you guys with it to maximize your profit, minimize your tax, mobilize cash flow to accelerate wealth effortlessly. We have a cash flow module, we have a tax module, we have an associate ranking system, it does it all for you. And we just wanted to make you one offer up until the business of dentistry. There is a, if you're interested in this, we're gonna um get you to book a demo, right? And have a conversation with us and we'll talk you through it. But we have two offers for anybody signing up up until midnight of the business of dentistry. And that is a no-contract-based where you have a setup fee. Uh, it's discounted for 1500 quid, and currently there's no VAT because we're not vattable, then it's 197 a month. Or if you don't want to pay the setup fee, that's absolutely fine. You sign with us just for 12 months, then it's a rolling one month at 249. If you are interested, then we have that early bird kind of early entry level because, like I said, we're launching on the 9th, and we'd like to give you that opportunity. That QR code will enable you to book a demonstration of the software. You can also uh we'll have testimonials from our existing clients who are working with it, operating with it, and already finding the incredible benefit of having up to the day. It it literally updates every minute because everything is connected through APIs. And so our recommendation is you've already got something valuable. Make sure that the value flows back to you. Uh, James, thank you, mate. Uh, are there any questions? We'd be happy to take them.

Dr James, 48m 19s:

Hey, listen, uh, thank you guys. I think the thanks go the other way. And you know what we can do at the very least, guys. I'm gonna try to balance a laptop here and do a little clap uh for Barry and Sick here uh for sharing everything that they shared this evening. And you know what? It's when you run a business, right? Like there's no exaggeration to say uh that if you get on top of this stuff, there's five, six figures in the business. You already see what goes through the bank account. So it's just it's optimizing that, and that's what's the value lies. And you know what? If it doesn't, don't do it. But but uh the point is that we wouldn't be talking about this stuff, is even if we didn't think it was that powerful. It's all about the individual, just weigh it up. And the key thing I'd like to emphasize, which is actually one of the reasons I started Dennis Who Invest, is the point of doing this, is you don't have to work any harder for it. I think people equate more money with working harder in their heads. What we're really talking about is optimizing things. But yes, anyway, Sishier Barry, thank you so much for that.