How To Run a Profitable Dental Practice in a Deprived Area

Can a dental practice thrive in an area of high socioeconomic deprivation?

In the premiere episode of Just4Dentists, Dr Ruth Baidoo speaks with Dr Khalid Master, co-owner of Bank View Smile Studios in Blackburn, about running a sustainable dental practice in an area of high socioeconomic deprivation.

In this episode, they explore:

• The Four-Quarter Model: How Dr Khalid Master uses a four-quarter business model to balance NHS contracts, private fee-per-item dentistry and maintenance plans to build financial resilience.
• The Clinician’s Trap: Why being an excellent dentist doesn't automatically make you a great business owner—and how to separate the two.
• Accessibility vs. Dental Practice Profitability: How affordable maintenance plans (starting at £10–£15 per month) are used to cover 100% of fixed business expenses while keeping care accessible.
• Dental Practice Ownership: The financial reality of buying a freehold versus just the business and goodwill and how each choice impacts long-term wealth.

Following the interview, Ruth is joined by financial specialists Andrew Brown (Director and Mortgage Broker at Mortgages4Dentists) and Martin Febery (Principal Adviser at Money4Dentists) who conduct a practical financial audit of Khalid’s story, covering:

• Risk Management for dental professionals
• Essential protections including Key Person Cover and income protection
• Dental financial planning fundamentals: How to calculate your monthly break-even point and stay ahead of tax liabilities
• Investment Strategy: The pros and cons of using a pension to purchase dental practice property.

This episode is for:

Dentists, practice owners and associates who want to understand how to build a financially sustainable dental practice — even in challenging economic environments.

Music Credits:

InPlusMusic: ‘Funk Funky Beat Music’

Raspberry Music: ‘Feel Good’

Cold_Fire: ‘Base and Claps’

Have a question, or want expert insight?
 📩 Email info@j4d.co.uk

💬 Join the Just4Dentists Facebook community to keep the conversation going.

Presented by Dr Ruth Baidoo 

Brought to you by the Just4Dentists team

This is a Your Podcast Producer Ltd production

Disclaimer: The information provided in this podcast is for educational and informational purposes only and does not constitute formal financial or legal advice. Every dentist’s career pathway and financial situation is unique; therefore, you should not rely on this content as a substitute for professional advice tailored to your specific circumstances. The value of investments can go down as well as up, and past performance is not a reliable indicator of future results.

Transcript

How To Run a Profitable Dental Practice in a Deprived Area

[OPENING CREDITS]

00:00:00 DR RUTH BAIDOO

Hi, I'm Dr Ruth Baidoo, a dentist who spent years figuring out not just how dentistry works, but how life as a dentist works. This series is all about the human stories behind the profession, the financial decisions, the identity shifts, the pressures, and the moments that define your career. We're going to dive into money, mindset, career growth, and the practical realities of building a life in dentistry. And with the help of industry experts, we'll be breaking down what all of this means for your financial future. So whether you're just starting out, you're deep into your career, or simply trying to make smarter decisions for your future, this podcast is for you.

Welcome to Just for Dentists.

[INTRODUCTION]

00:00:41 DR RUTH BAIDOO
Hi everyone, I'm Dr. Ruth Baidoo. This is Just for Dentists.
This is so exciting. First podcast, first episode. Really, really excited to get to know you along this journey and for you to learn something new as well as me learning something new as well. I hope that you're all doing great today as well.
So you might be thinking, why does Just for Dentists exist?

So it aims to help break down kind of the financials behind what it's like to be a dentist - so whether you're an associate or a practice owner. My name is Ruth Baidoo. I'm a dentist who's been qualified for 10 years now.

I've worked in a range of different practices down south, up north, actually graduated in Scotland. Dentistry wasn't even my first degree. I actually did a degree beforehand. So I've had a lot of experience in getting into dental school, making my way through that and then navigating what life as a dentist is actually like.

So there's lots of things that I've got to contribute and lots of things I've actually got to learn as well. So we're both in to learn something new today.

All right, so today's guest is someone I've been really looking forward to speaking to, Dr Khaled Master. Khaled is a co-owner of his practice, Bank View Smile Studios in Blackburn, and the patients that he sees often go back to three and sometimes even four generations.

Khaled qualified from Liverpool back in 2000 and has spent his entire career in general practice, whilst also building up a huge range of specialist interests, from implants to orthodontics to perio, cosmetic work and full mouth rehab cases too.

Under his leadership, the practice has won more than 30 awards.

He's mentored hundreds of students, opened his doors to young people considering dentistry and has a real impact on the next generation.

I'm really excited for you to hear this conversation because whether you're an associate or a practice owner, I think your eyes will really be opened.

Later on in the episode, I'll be joined with financial experts to break down some of the topics phrased in today's conversation and how you might want to apply the lessons to your own pathway.

So stay with me.

[FINANCIAL DISCLAIMER]

This podcast is for informational and educational purposes only.

The views expressed by myself and my guests are our own and are provided as general expert guidance and industry insight.

Because every dentist's circumstances are unique, you should always seek independent advice tailored to your specific situation before making any major financial decisions.

[DR KHALID MASTER INTERVIEW]

00:02:51 DR RUTH BAIDOO
So Khaled, welcome to the Just4Dentists podcast.
Really lovely to connect with you.
So how are you doing today?

00:02:57 DR KHALID MASTER
I'm very well, very well.
Thank you for the invite.

00:03:00 DR RUTH BAIDOO
You're very, very welcome.
So let's get straight into things.

Let's talk about owning the practice and what the jump was like for you. Was there a moment where you hit any sort of like real financial pressures when it came to owning the practice?

You can be as open and as transparent as you want to be.

00:03:14 DR KHALID MASTER
Yeah, I mean, look, life as an associate, again, with the benefit of hindsight, is very easy. Trust me, running a practice is a very, very expensive business.

You know, as an associate, you can just come into work, do your 9 to 5, pick up your stuff. Patients just appear by magic. Your equipment works. Nothing happens by magic.

All of this costs money. All of this takes planning. So when you become a principal, the financial pressures and the stress and the time is immense.
So it's not for everybody -  being a principal. But for most people who feel that they've plateaued as an associate, definitely being a principal is the best thing that could happen.

You're in charge of your own destiny. You're in charge of the way in which you feel care should be delivered. And the only way you're going to do that is if you're the boss. You get that right. You can take all the credit, pat yourself on the back, happy days.

But if you get it wrong, then you should be the first to eat humble pie and say, maybe I didn't quite get it right. Maybe my boss was right in the way they did things.

In terms of financial, it was doubly difficult for me because I'm based in Blackburn in the Northwest. This is an area that's socioeconomically deprived. We're usually in the bottom ten - there's some wards within Blackburn that are the worst in the whole country from a socio-economic point of view.

And what I would say is that when I took over this practice, my predecessor, Timothy, he'd been very wise. He was the LDC chairman. He'd grown up in this area. His father was from this area.
He was a local chemist. So what he'd done, he'd laid the foundation really well.

So when I bought the practice, and this is one of the reasons why I bought this one compared to any of the others,

is that almost one quarter each, there was four different systems that were operating within the practice. So one quarter was NHS. So there was a NHS commitment still, a substantial one. Then one quarter was private fee per item.

So people who weren't linked to the practice, but would just come and have odd procedures done when they felt like it.

Then one quarter was, at the time, DenPlan Essentials.
So that will take care of the long-term care and maintenance. And then there was one quarter on comprehensive care, almost.

I mean, it was almost perfectly 25%, 25%, 25%, 25%. Now, my accountant was unbelievably happy at that, because ultimately, we've not put all our eggs in one basket. And of course, the NHS contract had changed four years before that, 2006.

I bought the practice in 2010. So this allowed me to then diversify according to where I felt the growth area was. And the growth area for me, out of those four systems that worked well for the patient and worked well for me was the essentials package.

And we now have a setup where more than 50% of our patients are on an essentials package and then the other 50% is broken up.

Our NHS commitment is the same as it was before, but it's now less than 10% because of the growth of the other areas in the business. So what I would say to any associate looking into going into becoming a principal, do think more than just the numbers.

Look at how the practice is set up, look at what systems they have in place, and then ultimately for you to make it a success, you have to have a plan to take it to the next level.

And so don't just look at the affordability element and the profitability with regards to borrowing versus how you're going to pay that borrowing back unless you're in a for two years a situation where you have those funds available.

You're going to have to pay a business loan.

You're maybe going to have to pay a mortgage if you're buying a freehold.
Because that's another thing about this particular place that I wanted to try and keep the costs low. So I just wanted to buy the business. And I was trying to encourage Tim to keep the building, but circumstances were that he was going to move abroad.
And he said, look, I don't want to be an overseas landlord. And you're like a son to me. So at the end of the day, I would say that the amount of money you're going to pay me back in rent will probably be the equivalent of paying a mortgage.
And at the end of 10 years or whatever, at least you own part of your capital.
as opposed to you having just paid me rent and you don't own anything other than the business and the goodwill.

So I ended up taking a much bigger borrowing, which has taken longer to repay, but thankfully I can say I'm at the other end of that.
But do think about how your income is going to be generated and how much control you have over that. would be the biggest bit of advice I can give to would-be principals.

00:08:01 DR RUTH BAIDOO
That's really sound advice, so really sound advice. So you're not going into this blindly. So although it wasn't necessarily a pathway of how you wanted to approach things, it actually paid off in the long run.

So I'm really intrigued about the sort of system and the model that was already in place in the practice before you took over. And now as time has gone on and the economy has changed and things of that nature, so has dentistry as a business.
So you have a business to run, but how has this approach worked, even with the demographic of the area changing and the practice and also the people around you as well?

00:08:31 DR KHALID MASTER
Yeah, really good question. And so if we just unpack the plan issue.
So we still offer comprehensive care just to a smaller number of people. We also offer more than one maintenance plan. And I think this is the key. So we have three essentials plans. So one will be an annual checkup and hygiene. And the most popular one is the two checkups, two hygienes. And then those that are periodontally susceptible, they get the third package, which is two checkups and four hygienes.

Now, all of them come with price points. So that's the reason why we always were very careful that we would start our essentials, which is our cheapest package, and essentials one being the entry level to be at an affordable limit for our area.

So when we took over, that was less than 10 pounds for one month.
That's not a big outlay. Even if times are tight and finances are tight, I think that £2.50 a week, or 50 pence a day, less than that is certainly affordable.
As time's gone on, of course, with inflation, that's risen slightly, but even now it's still around £15. So this is not a very expensive outlay.

And this has been, and the most expensive, of course, is comprehensive care E, which can be knocking on the door of £40 pounds at the moment. But then these people have a lot of dentistry in their mouth. We're ensuring that dentistry and they're not paying for their time when they come and see you. So having a range of packages helps.

To go back to your question about how things have changed. Absolutely, there's been a cost of living crisis. Absolutely, there's been redundancies.
And in areas like mine, you feel that more acutely.
And the peaks and troughs are way more than it will be in a city or in other more affluent areas. So you have to be reactive. And what's been the beauty of that is, for instance, someone on Essentials 2, which is the standard package, starts to hit some kind of financial constraint. They very rarely want to leave the practice.
So what we will often say is, look, you can do one of two things.

You can downgrade to essentials one. It's not clinically as good, but you know what?
You still got contact with us. We still have an opportunity to see and check you once a year. And it's better than not going out into the dental wilderness because you can take a payment holiday and we've got plan providers and COVID allowed us to do that. Our plan provider is very good. And they'll say, look, we can provide you a payment holiday for six months if you've been made redundant so that it gives you an opportunity for you to then seek new employment and then resume when you feel like it, liaise with the practice and will work together as a team, the plan provider, the practice of the patient.

And if there's a circumstance where potentially you're able to upgrade and you're clinically necessary for you to do that and the affordability is there, your plan providers and your plans in place need to allow you to do that, which increases revenue, of course, and it keeps things in-house.

00:11:35 DR RUTH BAIDOO
Amazing. So I mean, you've been practicing for quite a while now.
In your opinion, this sort of model that you have, it seems to be working quite well for you and for your business. Is this something that you think more principals should consider doing from a financial perspective or not?

00:11:48 DR KHALID MASTER
100%. What you can do is look at the model that we have here at Bank View, and you can roll that out locally. All you might have to do is just tweak the numbers slightly. But I was very fortunate. I worked with a management accountant within a year of owning this practice. And I soon realized, having been an associate for so long, that being a principal is not necessarily, as I said earlier, for everyone.
Now, my forte is clinical dentistry. That's what I'm trained to do. That's what I'm hardwired. Running a small business is a completely different discipline.
And for heaven's sake, please don't think because you're a good dentist, you'll be a good businessman. In fact, I would say that I would say it's the total opposite.
The better you are as a clinician, the worse you will be as a businessman.
And I know some of the so-called best dentists in the area before I came into the area had the biggest debt list in the whole area.
Don't make that mistake, man. Now, one of the things that I learned was learn to run your business from some of the people who are experts at that.
So the management accountant that I worked with, he taught me some of the basic principles.
And one of the things that he said is the, was something for me to aim for in business is to get my plan provision to a certain level per month that would cover 100% of my expenses on average. So when you take your fixed expenditure and your variable expenditure, work it out.

So this is where the management accountant comes in and you've got to drill down the numbers and you've got to look at those. And so if, for instance, there is a scenario where you know that it costs you £30,000, for you to run your business, whether you're in it or whether you're not, for that surgery to run and so on, then your ideal outcome is your plan provision needs to be equivalent of that.

Which means that if I take a whole month off and I don't physically come in, I know that I don't need to worry because all my expenditure as a partner is going to be covered by my capitation. And you're seeing these people once every six months, once every year, but they're paying you every single month. So therein lies the difference. The difference for me is that every single day that I come in and every time I do item of service treatment where someone pays me over the counter, that's my actual wage. And that's the thing that, and if I have a good month, obviously, you know, I earn a lot. And if I have a bad month, at least I know my expenditures come in.

00:14:21 DR RUTH BAIDOO
Yeah, I get that.

00:14:21 DR KHALID MASTER
So yeah, that's the, I mean, you've got to, it's more than just the headlines.
You've got to drill down into it. But ultimately, that in a summary, helicopter view
is how our business is run. And it's proved to be very successful.
And it is independent of the area that you live in. If I can make it work in my situation, anyone can in this country.

00:14:42 DR RUTH BAIDOO
Last question. You mentioned accountants.
So I can tell that you're very much involved in the team and that you have a lot of insight with that as well. So what kind of advice would you give to anybody who's listening to this in regards to teamwork or just any final words that you want to say?

00:14:56 DR KHALID MASTER
Yeah, so as I've said earlier, pick experts. So there's lots of accountants.
I mean, on my road, we have 5 dentists and we have 6 accountants.
So it's the main road in Blackburn where a lot of the professional services are.
So on the one hand, there's lots of competition, but then on the other hand, it's all accessible, but very few of them are dental specialists.
So try and find people who are specialists in your area, even though they're specialists in theirs. they need to be specialist in yours. So find specialist accountant and then the management accountant I work with exclusively works with dentists.
So again, principles are principles and they are across all sectors.
But when they have an idea of what your life is like day-to-day and the challenges you face, the advice they can give you is way better than someone giving you general advice.

00:15:46 DR RUTH BAIDOO
Amazing, Khaled. Thank you so much. We could have talked all day.

00:15:49 DR KHALID MASTER
Yeah, maybe a part two, who knows?!


[RUTH REFLECTIONS]

00:15:53 DR RUTH BAIDOO
So today it was really great talking to Khaled. It was like talking with a friend.
Very, very easy conversation, lovely guy. And he touched upon a lot of things that I think are very, very insightful, whether you're a practice owner or an associate as well. It doesn't matter about your background.

It doesn't matter about how much disposable income you have. He's really trying to make dental care accessible to all. And I think that's really, really smart. And not only that, it's very fair as well. You know what the state of our economy is like and things of that nature, but knowing that there's a level playing field that doesn't matter what your background is, can really have a massive impact on the community that we provide service to.

[ASK THE EXPERTS]

00:16:33 DR RUTH BAIDOO
All right, so one of the things I love about this podcast is that we don't just share stories, we also unpack what they really mean financially.

So in each episode, I'm joined by a panel of trusted experts who help translate lived experience into practical guidance. The numbers, the planning, the decisions behind all the scenes. So if you've ever listened to something and thought, that sounds really interesting, I want to know more about that, you're in the right place.

Today on the panel, I'm joined by Andrew Brown, who's the director and mortgage broker at Mortgages for Dentists, and Martin Febery, who's a principal advisor at Money for Dentists. So how are you both?
00:17:05 MARTIN FEBERY
Really good, thank you.

00:17:06 ANDREW BROWN
Very well, Ruth, and it's lovely to meet you as well on this first episode.

00:17:10 DR RUTH BAIDOO
Definitely. Looking forward to us kind of discuss things a little bit further.
So let's just get straight into it. So we've just heard Khaled's episode about him running a practice in a challenging economic environment and the pressures of that, the unpredictability, the realities of leadership and things of that nature. So let's just break down what this means financially for practice owners.

So the first question I want to start with, Andy, is that given the unpredictable nature of practice ownership, so whether it be illness, economic downturn, staffing challenges, what protection should principles have in place to protect both themselves and their business?

00:17:44 ANDREW BROWN
Yeah, I mean, that's a great question to start off with. And I think we all saw the passion that Kali talked about is business. So protecting that business is absolutely critical to think about. And really, there's probably two things that we should talk about at high level. There's protecting the business, and then there's protecting the personnel that work in the business.

In this case, it could be an associate or a dentist, it could be a dental nurse.
And so if we start from a business perspective, if something happens to the principal, that's going to be usually a major problem for a practice because they've got their fingers in everything.

And if they're suddenly not there, then the practice could really, really struggle.
So we have to think about protection in two ways, protecting the business itself
and then also the individuals. And so if we start with the business itself, there are lots of different types of insurances that you could consider getting.
You can have cover like key man cover or key person cover, we should say.
And so in the event of a key person a business, getting an illness, it could then pay a monthly amount that would be payable to the business.

So that, for instance, they could get a locum or they could invest in something else they need to keep the business running. And that example was with someone being ill unexpectedly. There's also worse that can happen, such as death, or it could be critically ill as well, where they're going to be out of the business for potentially many years and may not return.

So it's really important to think about what would happen in that scenario to my business. If something happened to me or one of my key persons, what would we do? And I'd highly recommend that you think through that scenario and speak to an expert that can maybe educate you on the different ways you can insure against those risks. And the great thing is, the business can pay for that cover.
It's all effectively A taxable expense on the business, which really, by the time you strip money out of the business, you sometimes could be saving up to 50% potentially.

But you've also then got to put a different hat on and think about yourself and potentially your family. And everybody's got different circumstances.
Some people might have kids, some people might have a young family, might have a dependent relative, such as the wife, or it could be even parents.

And you have to think about, if I'm not earning money, What's going to happen to those people that I'm supporting? And again, you've got to go through those different scenarios. The worst case scenario, what if I was to pass away, what would happen? And so there's, again, different insurance policies that you consider putting in place to protect yourselves from those eventualities.

00:20:23 DR RUTH BAIDOO
Really, really interesting. I know it's a little bit morbid in talking about things like this, but it's better to be prepared than to be, get caught off guard unexpected. So, Martin, a question directing to you. Oh, were you going to say something?

00:20:36 ANDREW BROWN
Well, I was going to add one thing, Ruth, that it's really sad at the minute that only about 30% our families are protected at the moment in the UK. And I don't know why, whether it's sort of cultural that because we don't have to have it, we choose not to. Whereas the car insurance or building insurance, we have to have those products in order to get a mortgage or to drive a car.

But these types of insurances are optional or they're considered optional. Some might argue they're mandatory for some families. And so there's a big gap. Is it what I call an insurance gap, massive gap, where if something happens, it can destroy families and lives and they're not going to be able to live. And so it's something that us as advisors are trying to plug that gap and promote the positives about the products and maybe shake off as well some old-fashioned thoughts around
what insurers are trying to do with these products, i.e. they're not going to pay out, when actually it couldn't be, it's the opposite. There's a big gap and it's something as a business owner I feel passionate about and we have over 20 staff working for us and I'd hate that a customer to come to speak to one of our advisors and we don't have these discussions with them so that people can really think about
what might happen if something bad does occur in their life.

00:21:52 DR RUTH BAIDOO
Yeah, very, very necessary conversation to have.

00:21:54 MARTIN FEBERY
It's actually really interesting. You never speak to someone who's made a claim that says that insurance isn't worth it.

00:21:59 DR RUTH BAIDOO
Exactly.

00:22:00 MARTIN FEBERY
There's a lot of people that say, oh, it's not worth it because it's not going to go wrong, or they have a bit of faith, or it'll be fine. But actually, insurance is never worth it unless something goes wrong.

00:22:10 DR RUTH BAIDOO
All right, so one of the questions that I want to ask, how should dentists calculate their monthly break-even point? How often should they be reviewing it?

00:22:17 MARTIN FEBERY
There'll be a lot of dentists that calculate it when they take on a business, but they never think about it again, even though costs and staff and interest rates and income, but all those things change constantly. So this isn't necessarily about the method, because we're not going to, I'm not going to start talking about marginal costing and absorption costing and anything like that. But it is more about actually doing the calculation.

So it's not the calculation itself as much as it is actually getting on and doing it and keeping it updated. So when you know your break even, you know what costs you need to keep the practice running each month, everything becomes kind of a lot calmer. You know the impact of losing an associate or taking on someone new or investing in a piece of equipment because you understand your business properly.

So without having that, it becomes a bit of an adrenaline sport, stress is created when you don't know whether your decision is risky or not. So it's Khalid's own experience shows that reviewing it regularly, certainly in times of economic uncertainty, and you know, considering the area he's in, it gives him the ability to lead proactively and not be reactive to anything. It's literally one of the simplest, most powerful disciplines that a principal can use.

00:23:42 DR RUTH BAIDOO
And Andy, anything to add to that?

00:23:43 ANDREW BROWN
Yeah, I guess I can share a lot of my own experience because I've run my own businesses for a number of years now and the mortgage brokerage that I own has been running for over 10 years. And now this is why I have to confess that I'm a mathematician who likes spreadsheets. So I'm not a dentist who likes playing with teeth. I've kind of got the other side of the thing, of the coin, if you like, naturally. And so I'm naturally good at doing the things that you need to stay on top of costs. And if I just sort of dig into that a little bit, what does that mean? Well, I think first of all, it involves setting an annual budget. And the great thing is most dentists are going to have established businesses. You're going to know exactly what you did the year before, and things probably won't vary that much in the next year.

So it's a great starting point for get your profit and loss by month from your accounting software and have that in Excel. And you should be modelling out month by month for the next 12 months. What do I forecast or budget my costs to be? What do I think the revenue is going to be? Therefore, what do I think my month by month profitability is? And it may be to do with some contracts that you might not every month plan to make money. But if you know were going to lose money in one month, but don't, it's going to come back in the next because there's some large payments in, that's okay. And you can keep on track of that. And I would say good practice is to probably do a re-forecast at least once a year. I do mine twice a year. So we do what we call a forecast one after four months. And then after eight months, we do a forecast two. And that's essentially we take the first four months of the year actuals and then plan out the next day. And then after eight months, we look at the eight months actual plan out the next four. So you're continually looking at your numbers and where you are. And therefore, when you get to the end of the year, you're not thinking, when someone asks you the question, well, how much money did your business make? A lot of dentists might say, do you know what? I have no idea. I just don't know. Whereas actually someone who's on top of their business and in the numbers will know exactly where they're heading and there won't be a surprise. And the big one that Martin will talk to, he's a qualified accountant as well as a financial planner, is tax.

We've got a great responsibility of self-employed people to save tax. And if you own a limited company, which many dentists do, you've got corporation tax to think about. You may have staff, so therefore you've got the employer's NI, the employee's NI, possibly pension payments to make each month and pay as you earn tax. And then on top of that, if you've taken dividends, you've got a personal tax bill that's due usually every January and every July. So if you're not on top of your numbers, you can be, considerably out potentially when HMRC is writing a letter to say, this amount's due on the 31st of July and you're thinking, oh my gosh, maybe I shouldn't have booked that holiday to Mexico and got the new car two months ago. So I think being on top of the numbers is absolutely critical.
And the reason we mention that is if you're thinking about owning your own practice, it's really important that I'm not necessarily, I shouldn't be scaring you. I should be hopefully making you think, well, that's something I need to do to be successful. And if you're not prepared to do that, you do have to ask yourself a question, am I the right person to be running a business? Or if I'm not, who's going to do that? Who do I trust that can help me do that to stay on top of the financial side of the business?

00:27:00 DR RUTH BAIDOO
As dentists, we're taught the dentistry. Nobody teaches us the business. So I think there is this humble balance of trying to work out where are my strengths? For you guys, it's probably in the numbers because that's your background. But maybe for a dentist like myself who's good at doing the clinical side, it's accepting, okay, I hold my hands up. I need some help. I need to get the right team around me. I need a good accountant, broker, et cetera, to kind of help me do all these things.

00:27:23 MARTIN FEBERY
So this, again, it's the thing we've talked about is it comes to clinical excellence versus business leadership. There's some really, really great dentists and, you know, dentistry trains you to focus on precision and outcomes and patient care, not necessarily, as you said, cash flow and staffing structures and performance metrics and how to look after a building. So there's two parts to it. You have to be a kind of that kind of person that's either going to get into it, understand it, or the advice and the people helping you do it have to be given the responsibility to it because cash flow and overheads and planning income and debt commitments, they aren't complicated, but they need to be watched.

00:28:08 ANDREW BROWN
Yeah. And it's maybe to just to add to what Martin said that you don't have to help have help forever. But in the early years, it makes a lot of sense. And I remember when I first run my first business and this was to do with buying and selling a property about 15 years ago. I didn't know what a bookkeeping system was. I didn't know what, at that time, Sage was all the rage. Everyone had Sage. And I actually paid a consultant to come and help me set up Sage with all the right nominal codes so I could track the incumbent expenditure. And I remember in the meeting, I was with them for two or three hours and I thought, this is so alien. And I'm a mathematician and it still seemed like really difficult. But actually you learn. And now over 15 years experience, 20 years maybe of running businesses, you can take on more yourself. So I think don't be afraid to get help in the early years.
There is, whether it's your accountant, possibly even a consultant that can come in and kind of show you the ropes and try and make improvements, make you more efficient, hopefully and ultimately make more money, have more revenue, deliver better services to your clients. That's a really smart thing to do. And then you don't have to do that year in and year out. Gradually over time, you'll start to get more and more confident at doing it yourself and realise actually it's not that difficult.
I just needed to go through the learning phase to know what does make a good business owner and managing the finances on a regular basis.

00:29:33 DR RUTH BAIDOO
Yeah, I think it's really reassuring because I think sometimes there might be this initial sense of like failure if you feel like you're asking for help or just could even be pride. Let's call it what it is. You know, I've got this practice now. I've got the keys in my hands. It's my name on the deed and everything else. But actually asking for help is a very humble thing that needs to be done, but there's a lot that can come from it as a result as well.

00:29:56 MARTIN FEBERY
That is actually exactly the point. Managing and leading a company is a skill. It's a learnable skill, but it's an actual skill. You need to learn it. Whether you do that yourself or you get help doing it, it doesn't just happen. So being a great dentist, and it happens with a lot of professionals, actually, we see it an awful lot. Being great at your job doesn't necessarily mean you can run a business. You need to learn that part. And it's, yeah, unfortunately, I'm sure in many cases it's about pride, but you've got to accept it's just learning another skill.

00:30:28 ANDREW BROWN
And learning from mistakes as well. It's okay to make mistakes. I always think fail quickly, if you're going to fail and then dust yourself off, move on. Don't be afraid to try things. But what you do want to protect yourself from is a major mistake where, and that's where, if there's things you really don't understand, then it potentially could be quite critical, it could have severe consequences if you get it wrong, that's maybe the time to, right, who do I pick up the phone to, get some advice to make sure I get myself on track.

00:30:58 DR RUTH BAIDOO
So, a question I want to open up to both of you is that Khalid took on a larger loan to buy both the practice and the freehold. What should dentists weigh in when deciding whether to buy just the business itself or the property as well?

00:31:10 ANDREW BROWN
Yeah, I mean, that's an interesting point. And are you happy if I go first, Martin?

00:31:17 MARTIN FEBERY
Please do.

00:31:18 ANDREW BROWN
So it's interesting. Dentists have got quite a strange profession in that you have to make some really tough decisions in your life of what you're going to buy first. And I always laugh because there's some big things in life. There's getting your first house.
There's getting married, we all know that, anyone who's done that, it's very expensive if you do the full trimmings. And then there's also then for a dentist, they've got this kind of third dimension about buying potentially their own practice, and that could have, you know, a fourth dimension, a building. And people prioritiSe those in different orders. And it's funny how the wedding seems to slip down the list nowadays. And actually, the most important thing for a lot of dentists is they either want to own their own business or they want to own their own house.
And they can compete against each other. And so I would advise people to think about what is the top priority in their life. Because getting a house, if you're potentially an associate, you've got a couple of years of stable income, that's a great time to get a mortgage based on those accounts. Once you go into sort of business ownership, you're then going to be assessed differently. You're no longer an associate. You've now got probably a limited company, not always to manage the company's accounts and finances and your earnings is based on how well a practice performs.

So first of all, you've got to think about your order. And then in terms of buying a practice, I suppose ultimately it's mathematics and it's risk. It's, have you got the value in terms of the goodwill of the business, the building, to have the type of deposit that a bank would want to allow you to do the purchase? And assuming that you have, then do you want to take on that sort of debt? You may prefer to buy a practice, i.e. the goodwill, the clients, and rent the building from either the former owner, or it could be someone else who owns it. So ultimately, I think if you do the whole, the full Monty, if you like, your own house, the dentist practice, and the building, is probably going to give you the best rewards in the long term, probably, but you're also taking on a lot of extra stress and risk.

Because as Khaled mentioned, I really liked his story about the previous owner who said, well, why pay me rent when you can own the building and pay the same amount on the mortgage? And it does make a lot of sense, but you're then responsible for that mortgage. If anything goes wrong, you're committed to making those payments. So it's looking at your overall risk appetite in terms of what you've got going on in your life, maybe what the costs are going to be in terms of repayments.

And a company that specialises in commercial finance, such as Lilyhead, who we work with very, very closely, they're able to provide the quotes and information about what the different scenarios would cost. And I think it's ultimately about working with a professional, working closely with your accountant and coming up with a solution that you think you can afford, that you think the business can support. The sustainability point is key as well.

00:34:21 MARTIN FEBERY
I think there's something else to it as well. So property decisions only make sense if they fit the bigger picture. That's the way to look around it. It's actually, it's two investment decisions. Owning a property is not the same as running a business. There can be a lot of advantages owning the property, but there are also risks, but they need to be looked at with their own merits. They're not the same thing. So yeah, as Andy said, down to risk and the way you feel about these things. A property isn't something necessarily to consider in terms of the profit you make from it in the same kind of sphere as earning profit from a company. Two completely different things. And it is good to take advice and kind of split those out completely and just consider each. You can also think about good advice will tell you how to use your pension, for example, to buy the property and how best to structure it and repayments and reducing your risk. So it's a really big decision, but the property part of it has to fit your overall picture.

00:35:26 DR RUTH BAIDOO
I can really understand that I'm saying this as an associate, not as a practice owner at this present moment in time, just really understanding how important it is to get the right people around you, get the right team around you, whether that be accountants, somebody could really break things down for you to make a lot of sense of it. So thank you so much, guys, for your input. It's been really, really interesting.

00:35:44 ANDREW BROWN
Great. See you soon.

00:35:45 MARTIN FEBERY
See you soon.

[EPISODE RECAP]

00:35:47 DR RUTH BAIDOO
Right, before we wrap up, let's do a recap of everything we covered in today's episode. Takeaway one, great dentistry doesn't guarantee a strong business. You need to track your numbers, especially monthly break evens and overheads. Two, protect your income as much as you grow it. Insurance and contingency planning protect both you and your practice. Three, profit should fund your future, not just today's costs. Think pensions, investments and exit plans, not just next month's bills.


00:36:16 DR RUTH BAIDOO
Thanks for spending time with me today. Huge thanks to my guest, Dr. Khaled Master, and to my expert guests, Andrew Brown and Martin Fabery, for running the numbers. If Khaled's story has got you thinking about profitability, community dentistry, or the realities of running the practice right now, come and join the Just4Dentists Facebook community group and keep the conversation going. You can also email me directly with your questions or ideas for future episodes at ruth@j4d.co.uk.

Make sure you're following or subscribe to Just4Dentists on Apple, Spotify, or wherever you listen to your podcast. And if you've enjoyed the show, this is our first one. A quick rating or review will really help other dentists find it too. Thanks so much for listening and we'll see you in the next episode. Bye.

[OUTRO CREDITS]

00:37:01 DR RUTH BAIDOO
You've been listening to Just4Dentists presented by me, Dr. Ruth Baidoo.
Just for Dentists is brought to you by the Just4Dentists team, experts who are proud to provide dental professionals with the right insights to navigate the financial and business decisions dental school didn't teach us. For more resources, insights, and tools to help you get the most out of your career, head over to www.j4d.co.uk.