Blog   Tagged ‘banking partner’

How to finance your dental practice: the most important questions to ask

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As a dental professional, you’ve probably spent at least eight years in school preparing for your career (12 to 14 if you are a dental surgeon). After that, your focus will be on growing your new practice by building your patient panels and providing quality dental care to the community you serve.

dental practice financing

But what’s next? There are questions you need to ask yourself as soon as you open a practice:

  • Does your practice need remodeling or construction?
  • Do you see yourself bringing on a new partner at some point?
  • And most importantly, are you adequately planning for your retirement?
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As we work with dental practitioners, we’ve noticed a trend within this profession. A lack of strategic borrowing to pay for their practice’s expenses is a leading cause that prevents dental practitioners from retiring when and how they want. Only around 8 percent of dentists are able to retire and maintain the lifestyle they had during their working days.

Dental practitioners face many challenges in today’s market. Those challenges are further motivation to properly manage your funds. An important aspect of your finances is considering the best borrowing practices for your office. Some questions to consider when thinking about a loan for your dental practice:

What are your goals for your practice?
Determine where you see your practice over time. Figure out how quickly you want to grow your practice or if you have aspirations to open multiple locations. Identify a plan and partner with industry professionals who will help you achieve your ultimate objectives. Then discuss with your banking partner what financing structure will help – not hinder – this plan.

Are you borrowing with the best interest of your practice in mind?
Ask your banking partner to explain all loan options so you can align the loan structure to the best interest of the practice.  For example, some loans have a balloon payment at the end, which could require you to pay additional interest. The money you might have to pay in additional interest could be used instead to help expand the practice or could be committed to your retirement.

What are your ramp-up and wind-down strategies?
In addition to determining the long-term growth of your practice (ramp-up), you will also need to eventually consider succession and retirement strategies (wind-down). Have you considered hiring an associate to purchase your practice as a component of your exit strategy? Have you engaged a CPA firm to complete an evaluation of your practice? These are potential issues to consider as part of a succession plan.

Every practice is unique and you might even find that long-term goals change over time. Start planning early and understand what financing options are paramount for your practice. Find a banking partner who will help you determine the best loan options for your practice and your eventual retirement and succession plans.

For more financial advice, take a look at my video on Business Banking for Dentists.

 

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Dave Bauer is a Vice President / Region Manager for UMB Business Banking. He is responsible for leading the Business Banking teams in the St. Louis and Oklahoma City regions. He joined UMB in 2011 and has eight years of experience in the financial services industry.



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How to take advantage of your banking partner

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Is your bank helping you make money?

Optimism is on the rise among business owners. This is the first year coming out of a down cycle in the economy and businesses are ready to grow. They are looking to expand operations, hire new talent and purchase new equipment. But they are also searching for new strategies, financing options and ideas for better market penetration. In today’s economy, one of the best partners a business can have is their banker. Ask yourself if your banker is:

  • bringing more to the table than monthly reports or the weekly “how’s it going” call
  • strategizing with business owners on how to expand operations, create more efficiencies and generate more revenue
  • understanding every aspect of a business, from cash flow to risk management and payroll to IT services.

Continue reading below to find out more on this topic.

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Here are a few areas bankers can help businesses strategically grow and profit in today’s economy.

How Does Your Cash Flow?

Most business owners talk about the importance of cash flow, but not many go deep into the process and determine how to make it better. Businesses need to ask questions such as: How many days does it take to collect on receivables? How long are you paying on collectables? Are you getting discounts for paying early?

A lot of companies are operating inefficiently.  They are duplicating internal steps or making extra steps to receive money. It costs $2 to $5 to mail a check, whereas sending an Automated Clearing House (ACH) payment costs less than $1. Businesses need to review how much time it takes to print, stuff and mail a check versus using a card or ACH payment.

By working closely with a banker, businesses can gain cash flow relief and create better efficiencies in their operations. Bankers also can help business owners create a profitable and logical cash flow system.

Risk Management and Efficiency

Risk management is exactly what it sounds like. Anything businesses can do to manage risk will ultimately benefit their bottom line. This includes having dual controls with employees, doing regular inventory checks, having different people sign off on checks and having a process to detect and deter internal and external fraud. So much risk can be diverted simply by paying attention to the small, everyday details.

Risk efficiency is something bankers also should discuss with businesses as it relates to items such as outsourcing payroll or return collections. Often times there are functions that businesses can outsource to save time and money. One of the main things to be outsourced is payroll. A payroll provider can help save a company time and money. They may also accept tax liability so the employer isn’t responsible for tax penalties.

For companies with large receivables, it may be more efficient to have a lockbox or outsourced collection system. Bankers can greatly reduce time and efforts for clients that have high receivables. Another area to outsource is IT. Businesses can outsource their IT needs to a third-party group in order to save time, headaches and money.

Creating Operational Efficiencies

Bankers understand cash and business cycles. They can help a business create operational efficiencies in several areas, including payments, cash flow cycles, commercial cards, reconciliation and so on.

One example is the process of purchasing equipment. As businesses expand their work, make repairs or replace units, they may find themselves making multiple purchases throughout the year. Rather than go through the process of taking out a separate loan for each investment, companies should map out their anticipated needs for the year and take out a line that will cover all potential investments. Not only will this save time, but it also provides flexibility to buy new or used equipment and to proactively plan for capital expenditures they may want to make during the year.

Purchasing cards are another item to consider from a processing standpoint. Not only does the right program provide valuable rewards, but it also cuts down on check writing and provides increased flexibility in cash flow. Additionally, it creates a more streamlined tracking system for accounting departments. By allowing job numbers to be attached to specific expenses, companies can easily allocate costs to the appropriate projects, which results in more effective planning and budgeting.

By working closely with a banker, businesses truly have the opportunity to expand and grow through creating efficiencies in areas they never knew could be improved. Any operational, cash or risk management improvement will ultimately improve a company’s bottom line and their outlook for future growth opportunities.


Mr. Bibens is a treasury management officer for UMB’s Commercial Deposits department. He is responsible for providing consultative technology and cash flow management solutions to companies and public entities throughout the Greater Missouri area. He joined UMB in 2010 and has 10 years of experience in the financial services industry.



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Your Bank: It’s more than a place to get free candy and custom checks

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Banks and technology have evolved in the past 20 years and this has changed the way you interact with your bank. Even though the buildings, technology and even the industry have changed, your relationship with your bank is still the same.

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You should still expect a partner in your bank. The professionals at your bank should walk you through financial situations so you can plan beyond simply paying your monthly bills.

Your bank should:

  • Help you create a financial plan that is a series of relatively simple steps that fit into your life in a practical way,
  • Advise on relevant, current topics, and
  • Connect the dots between global economic issues that could impact your goals

Banks have a responsibility to be transparent and to provide you the tools to achieve your financial dreams! Check out this video about what an advisor at your bank can do to help you do just that.

Bank deposit products provided by UMB Bank n.a., Member FDIC. Equal Housing Lender


Ms. Pierson serves as executive vice president of Consumer Banking. She joined UMB in 2011. She received a Master of Business Administration from Rockhurst University and a Bachelor of Science in Industrial Engineering from the University of Missouri. Ms. Pierson is actively involved in the community, having served on a number of boards including the Kansas City Area Development Council, LISC of Greater Kansas City, the University of Missouri Industrial Manufacturing Systems Engineering Board and the Lee's Summit Education Foundation Advisory Board.



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