The UK’s Dental sector – Braemar Finance conducts a detailed research across a range of key subjects, from access to finance to their diverse business priorities.

Access to funding and appetite for investment

Exactly half of Dentists we polled find it a challenge to access the funding they need to invest in their businesses. Only 17% think it’s becoming easier, which challenges the commonly held view that there is a strong appetite to lend from all major funders and that there is a lot of ‘easy money’ in circulation.

Despite the funding challenges being faced, there is the appetite to invest, with 60% of those polled planning to actively seek finance for business investment in the next 12 months; a further 25% won’t be investing while the remaining 15% are still undecided.

With so many Dentists feeling the challenge of accessing funding, it’s clear that it’s a mixed picture out there. 

Q: Thinking about access to funding, is it….
A major challenge 21%
A minor challenge 29%
Becoming easier 17%
Never had a problem 25%
Don’t know 8%

Economic outlook

Dentists in the UK are best described as ‘cautiously optimistic’ about their prospects for the coming 12 months, with 38% ‘confident about the steady recovery of the economy’ and a further 26% feeling that while the worst is behind us, albeit with a slow path to recovery ahead. Nearly one in five (19%) feel that the economy could yet decline and 13% are yet to see a true recovery.  Four percent feel the economy is worsening.

Looking at forecasts for anticipated business performance, close to half (47%) are hoping to expand, which sends a strong message about practice owners’ ambitions. Half again; however, (48%) are expecting to tread water, which for many is success in its own right, while only 3% predict a scaling down of their operations and 2% thinking of closing down entirely. 

Q: How do you expect your business to perform over the next 12 months?
Expand 47%
Stay the same 48%
Contract 3%
Close down 2%

Barriers to growth

Finance – both obtaining it (16%) and the high cost of it (18%) – is the main barrier to growth, along with ‘general economic conditions’, also 18%. This should not come as a surprise because of the number of practices that find accessing finance a challenge. In common with many industries, the health of the dental sector is closely tied to that of the general economy.

Interestingly, ‘skills shortage’ at only 9% is not high on the list despite the UK, unlike most other EU member states, being a net importer of dentists. Currently, around 16% of the dentists registered with the General Dental Council not obtaining their qualifications in the EU. With Brexit on the horizon, it could be expected that a potential skills shortages will have a higher significance within the dentistry market in the UK.

Q: What is your main barrier to business growth?
High cost of finance 18%
General economic conditions 18%
Obtaining finance 16%
Regulation 12%
Restricted cash flow 10%
Skills shortage 9%
Keeping pace with technology 7%
Competition 6%
Lack of marketing budget 3%
Utility bills 1%

Business priorities 

Achieving growth is by far and away UK dentists’ highest priority with 38% selecting this option; ‘paying down debts’ comes in second followed by ‘developing products and services’.

The results should be seen as a positive indicator of the appetite for sustainable growth and the overall financial health of dental businesses in the sector. Combined, a quarter of dental practices see developing staff, products / services and equipment as their main priority, demonstrating that they are looking to the future with optimism and have plans in place to achieve their objectives.

Q: What is your main business priority at the moment?
Achieving growth 38%
Paying down debts 23%
Developing products/services 13%
Investing in equipment / assets 12%
Standing still 10%
Investing in staff 3%

Sources of financial advice and support…

In common with many of the other Professions polled, Dentists’ first port of call for financial support and advice is their accountant.

Accountants have a big role to play in advising and helping Dentists unlock the doors to finance and investment, ensuring funds are sourced and directed correctly and effectively.

Where do you (as a business) mainly go for financial support and advice?
Accountant 41%
Bank Manager 19%
Finance Advisor 19%
Other 9%
Friend/family 7%
Online 5%
Peers 0%
Solicitor/lawyer 0%

Brexit

Much has been said and written about Brexit and the UK’s decision to exit the European Union. With so much uncertainty about what that means for businesses, half of Dentists don’t see the UK’s impending exit from the EU as either an opportunity or damaging to their future. The rest are quite polarised, with 27% feeling ‘less confident and 21% ‘more confident’ about the prospect of the UK’s departure from the EU.

Q: Does Brexit make you more or less confident about your business prospects?
More confident 21%
The same 52%
Less confident 27%

Late payments

Late payments are an underreported issue that affects businesses across all professions and sectors in the UK, and it’s no different for Dentists. Three out of every 10 firms admit to having problems with late payments and with cash flow funding already being demonstrated earlier as being an issue for some professions to obtain, it’s critical that Dentists find a way to reduce late payments for continued survival.

Q:Are late payments a problem for your business?
Yes 28%
No 72%

 

By Aileen Boyle, Managing Director, Braemar Finance

If you would like to discuss your finance options contact a member of the team who will be happy to help on 01563 852100

www.braemarfinance.co.uk/dentist

2018-11-09T13:17:45+00:00 |Uncategorized|