The New Year, New Financial You!

We walk through the new tax year changes that hit dentists and dental practice owners first, from frozen thresholds and fiscal drag to payroll cost rises and dividend tax. We then zoom out to the systems and decisions that protect profit: MTD readiness, cloud accounting, automation, smarter borrowing, and building a practice that can grow without breaking you.

• personal allowance and income tax bands staying frozen and why fiscal drag feels like a hidden tax 
• self employed national insurance changes including Class 2 being abolished with voluntary contributions for State Pension credits 
• employer NI increase and secondary threshold change plus what it means for staffing costs 
• national living wage rises and how cost pressure shows up in practice margins 
• dividend allowance staying low and dividend tax rate increases plus dividend planning across 2025 to 26 
• pension annual allowance and using company cash efficiently 
• capital gains tax rates and business asset disposal relief moving to 18% 
• capital allowances changes including first year allowance reduction and why car emissions rules matter 
• IR35 risk for associates and why contracts must reflect genuine self employment 
• key self assessment and reporting deadlines plus why you should keep them on a calendar 
• Making Tax Digital for Income Tax from April 2026 and the quarterly update model 
• why Xero and cloud bookkeeping improve tax planning management accounts and decision making 
• PMS integration and the KPIs to monitor such as revenue per chair staff costs and cash runway 
• common accounting pitfalls including personal spend inconsistent bookkeeping and no monthly close 
• Samera AI approach to bringing practice data into one place and automating associate pay 
• dental practice finance basics including LTVs interest ranges and the startup versus goodwill picture 
• what lenders want plus deal red flags and why independent buyers’ advice matters 
• offshoring bookkeeping and finance work safely with training process and GDPR controls 
• growth stages from founder led to multi site plus group structure and becoming sale ready

Just reach out to myself, reach out to Euros, reach out to Natasha, go to our website

If you require any help, don't hesitate to reach out to the Samera team at www.samera.co.uk. We are all here to help you!

Thank you,

The Samera Team

Transcript

Welcome And What We Cover

Arun 0:17

Right, good evening everybody, and welcome to a new tax year. How exciting that is, or not. But I had tonight, I have Natasha and I have Uros joining me, and uh we're gonna talk to you all about things around finance, tax, and everything you need to know in this financial year if you're running a practice or maybe if you're maybe an associate. Um, we've got um quite a lot to get through. Um, it was gonna be a two-hour kind of session, but we're gonna try and keep it shorter than that just to make sure that no one goes to sleep with our dulcid tones, talking about tax and accounting, which I know can be dry. Um, I am home alone and I have a dog that might bark. So if the dog barks, I'm really sorry, and I might have to run off and sort the dog out. But uh you've got the lucky, luckily you're in the hands of Uros and Natasha here. So now my name's Aaron, and and actually, my and my dog's name's Teddy, by the way, as well. She might turn up and she is very cute, but uh um she will um kind of dictate everything that goes on here. Now, my name's Aaron, I'm I'm the CEO of Samera, and I've been dealing with dentists for 24, 25 years. I got into it because I married a dentist. I have you Natasha in the team here, she's uh our senior uh manager in the accountancy team, and she's all things accounting tax and everything else. And then I have good old Uros, and Uros is our funding man. Um, so if you need money to borrow money, to raise money, to buy a practice, to do a startup, he's your man for that. So, first session, and we're gonna be short, short and sharp, and these are kind of eight to ten slides each session. Um is thresholds, allowances, dividends, basically all the tax changes that happened from the from the 6th of April. Now, can you hear the dog? Yes, I knew it. I don't know why the dog's going mutts. So I'm gonna leave this with you, Natasha, whilst I sort the dog out. So I'll sort the dog out. You take this over. I'll be back in a second.

Natasha 2:18

Good evening, everyone.

Uros 2:22

I think he was supposed to put the presentation on as well, but the dog distracted him.

Arun 2:28

The presentation is on, isn't it? Okay, don't worry, I'm back. The dog's all quiet, so this is gonna be uh an interesting webinar, guys.

Uros 2:37

So I got two dogs in the background as well, which aren't mine at the moment, so bear with me as well. They're not yours, have you stolen them or something? Babysitting, please.

Arun 2:47

Okay, go on, go for it.

Income Tax Bands And NI

Natasha 2:49

Yes, thank you, Aaron. So the few things. So obviously, new tax here, as Aaron said, there are quite a few changes happening on the tax world, okay. Uh, which includes the rates and thresholds, dividends, CGT, and capital allowances, pensions, planning, and also we also cover a bit of IR 35. And uh with regards to the rates and thresholds, the thing is uh that's nothing changed, okay. Uh the personal allowance will be frozen up under 2030-31, that's going to be 12,570. So for whom who doesn't know what's 12,570, it is a personal allowance on which you would not pay any tax on it. Okay, so that's been frozen up 13031. It's going to be static. And the basic rate would be 12,571 to 50,270, which is uh be at a rate of 20%, and comes the high rate, which is from 50,270 up 125k, on which you'll be paying 40% tax, and you have additional rate, which is 125k, you're going to pay 45% tax. And uh, as I said, that's no changes to this, it remains the same. Uh, but uh there was a change in the um natural insurance for self-employers. So, as you may know, like we have two types of natural insurance for self-employers, employees. One is uh the class four and class two. Uh for class four, which is on six percent on profit between twelve thousand five seven to fifty thousand two seventy, and that'll be two percent above fifty thousand two seventy. So that's for class four, and class two is been abolished, so no longer you don't have to contribute towards a class four, but you still have an option to voluntarily contribute for class two, which is around 300 something per year per week, which is okay. And uh yeah, that's on the class four and class two. Obviously, the benefit of contributing towards the class two for the voluntary would be towards your stake pension. So if you want to, if you have a gap, if you feel like you need more credits towards your stake pension, it should be recommended to uh do voluntary contribution towards your class two.

Arun 5:00

So, okay, thanks, Natasha. So the the as it says here, there's a hidden tax here, though. You might think, well, nothing's changing, but the issue is it's called fiscal drag. So as your as you earn more, as your salaries or earnings go up, okay, a larger proportion will be impacted by the tax. Okay, so um they haven't raised the bands ultimately. Okay, the bands have just stayed where they are. So um, yeah, it's just as it says, it's a hidden tax, unfortunately, which uh which is never a a great thing. Um, but it seems to be uh uh the thing of the previous government as well as this current government as well. So on NI and national living wage, yeah.

Natasha 5:38

So the employee in NYC. So anyone who has a POI scheme, you need to buy the employer in IC, right? And the national minimum wage changes with regards to the employee in Nice on which your employer will be paying for national insurance contributions towards their earnings, so that has been increased from 13.8% to 15%, and your secondary threshold which reduced from 9,100 to 5,000, and the employment allowance on which there won't be any taxes at all, that's been increased from 5,000 to 10,500. So the weightwork is like up under 10,500, there won't be any thresholds for the employer in IC, and that's an allowance that you would get.

Arun 6:20

But as you said, the uh typical practice with four staff at 25k each, it's about another two to two and a half K payable, correct?

Natasha 6:28

Yeah, additional tax because of the increase of employer in Nairobi.

Arun 6:32

Yeah, which is a real um this this was this was quite quite key last year. I think it was all quite relevant last year. It's kind of now fully bedded in. Um, I guess that's the reality. And then the national living wage, Natasha.

Natasha 6:45

Yeah, so that's something we have seen is increasing to a certain extent every year. So for this year, it's been increased. So anyone above 21 and over, it's been increased to 12.71 from 12.21, and 18 to 20 from 10 to 10.85, and anyone under 18 and apprentice, uh, that'll be increased from 7.55 to 8 points per hour.

Dividend Tax Changes And Planning

Arun 7:08

So okay, so again, costs are rising. So the living wage is risen, the employer NI has risen, the the um tax threshold has remained the same, but we've got fiscal drag. Um, not a pretty picture, is it really? Uh then dividend tax. Bad news on this one.

Natasha 7:29

That we also have dividend tax has been increasing. So I see me know, like we have quite a few clients, quite lots of them actually, thinking of incorporating. Now it's a benefit of doubt whether you should do it or not, because I don't the dividend taxes are increasing. Okay, again, that should be an opportunity to save some tax, which is still better compared to you paying an in 2020, 20%, 40%, 45% on self-employment. So the way it works, so dividend allowance is 500K, which has been last year. Sorry, my bad, 500 pounds, which is for 25, 26, and for 26, 27. That's no change. Yeah, um, it has been reduced further. So at a point we had 3000, 6000, 5000, it's been reduced to the maximum. So it's 500, that's the allowance on which you would not pay any tax, which is 500 tax-free. Uh, basic rate has been increased from 8.75 to 10.75, which is a 2% increase, and higher rate from 33.75 to 35.75, again, another two percent increase, and additional rate from 39.35 to 39.5, that's not changing there.

Arun 8:38

So, on the planning side of things, what what are we suggesting here, Natasha?

Natasha 8:42

So, uh obviously it is really important that uh now that you're reaching the tax year, which is for 31st of March 2026, to do a proper dividend planning, right? Obviously, you don't want to fall into um paying more taxes on the dividend side of it. So, therefore, like it is really recommended you plan ahead for 25-26 tax year, which is compared to 26-27, is much lower in the tax side of it.

Arun 9:05

Yeah. So increase your dividends effectively in 25-26 as opposed to 26-27, correct? Yeah, yeah, yeah. And then on the pension side of things, there's no changes there, are there?

Natasha 9:16

And that's no pay, there's no change. Obviously, uh many of you might know like you have a 60k allowance per year on which to us you can contribute to S your pension, and that will qualify for tax relief. So that's not much change, the allowance change.

Arun 9:30

That's that's quite an attractive thing.

Natasha 9:32

If you've got the cash in your company account, um you can use that to pay into your towards your pension rather than paying tax on it, yeah.

Arun 9:40

Correct, correct, correct. Okay, all right, let's move on to slide six.

CGT And Capital Allowance Cuts

Natasha 9:44

Yeah, the capital gain tax for the bank rates, yeah. Yes, obviously. So capital gain tax, so this is on tax tax, that's you're gonna pay on disposal of assets. Okay, so uh it's for the basic rate it would be 18%, high rate 24%, and for residential property it's going to be on 18% and higher rate on 24%. So anyone who has an asset provided that subject to, if you disqualify for business asset disposal relief, you will get a lower rate. But uh in the previous it was 14%, now it's been increased by 4%, which is 18% from 26-27. So when you qualify for BADR, which is the business asset disposal relief, you still have to pay 18% tax on your disposal asset.

Arun 10:30

That's why so many people were trying to get their deals done prior to the year.

Natasha 10:33

Prior to the new year, exactly. Yeah.

Arun 10:36

That's all kind of history now. So we are in the 18% regime now. Okay. Uh, capital allowances, some changes there as well.

Natasha 10:43

There are a few changes. Again, the the first year allowance has been cut down to 40% from 100%, okay, which is not a good news at all. Uh, obviously, the capital allowances come into place when you purchase an asset. It can be your car, it can be plant and machinery, it can be an equipment, so that will qualify for capital allowances. So, as you know, like you have the annual investment allowance of one minute, sorry, one million per limit, right? And the the return down allowance will be cut down from 18 to 14 percent. Okay, and the new first year allowance will be 40 percent, it was 100% before, and costs no change for any cost that has a zero emission, like electric car, you would get 100% first year allowance. So let's say you bought the car 50k, you can write write off enter 50k towards your tax bug for the first year.

Arun 11:35

Yeah, so but the big one is number three, isn't it? The drop.

Natasha 11:39

Yeah, that that's because I don't know as as far as I see, like most of the plant and machinery would qualify for it, and uh most most of the asset will qualify for it. So now you just you're gonna just want to get like 40% for the first year allowance.

IR35 Contract Risk For Associates

Arun 11:52

Okay, okay, all right, right, fun and games, and then quickly, very briefly, I'll quickly touch on IR35. It's what I can actually going back to this CGT side of things just quickly, or capital get allowance kind of things. Um the key here is to time your purchases carefully. Um, and because again, changes might happen in the following tax year, so you have to think when you're gonna buy these items. Okay, so just plan your purchases.

Natasha 12:19

Just one thing I just want to add here about these cars, which is being commonly asked by most of our clients. It is really important that you kind of seek advice before you do the purchase, just to understand, like, because not every car will qualify for 100% relief. So, depending on the CO2 emissions, uh, the capital allowance will differ. So, it is really important that you understand which bracket that falls into.

Arun 12:40

Correct, it's actually quite a complex area.

Natasha 12:42

Car it is, yeah, it is a complex area.

Key Deadlines And Incorporation Checks

Arun 12:44

People leave it at the last minute. So, if you need help, get in touch on that side of things. Okay, all right, and then IL 35. Um, this is something that people have been talking about for a few years now. Um, it's basically the contracts that you have with your principals or practice owners if you're an associate should reflect self-employment. Um, the risk is that um at some point the practice owner could become liable for NI and PAY backdated um if the contracts aren't right, and if it's proved to be that the associate wasn't deemed to be self-employed. Um I won't go into any further detail. This is really done on a case-by-case basis. So if you need any help, we work with a solicitor and we work with um uh with some tax experts in this area, but just to flag it, if there's also any concerns that do arise, because I think this could be something that HMRC want to drag up again. Um, key dates. Um we've got well, 6th of April's gone. 5th of April's gone, but these are some of the key dates you can see. They're pretty self-explanatory. 31st of July, second payment on account. If you're doing paper returns, which hopefully you're not, okay, it's 31st of October. Self-assessment um by 31st of Jan. Um, and then 5th of April, you need to check your making tax digital scope. And you might be wondering, what on earth is making tax digital? And if you've had your head in the sand over the last few months, uh and you've obviously missed one of our wonderful webinars that myself and Natasha has done, um, you need to make sure you're fully aware of what is making tax digital and it affects you, and we'll be talking about that in a moment in the on the next slide pack here. But in this is just a real summary um of things. But Natasha, anything you want to just highlight here?

Natasha 14:37

Uh not really. So obviously, with regards to MTD, there are a couple of dates everybody should be aware of, which I would cover as part of the MTD. It's really important for you to understand when to do the filing and when to do the final decoration. So there's some dates that you need to keep on track of it, right? And obviously, as I said, like it is really important to understand one of the major questions, most commonly asked questions is whether I can incorporate. So, as I said, like uh the taxes are changed, and it is really important that you assess your situation. And uh, what you used to do when a client asks us whether I can incorporate, we we do not say the answer yes or no. We go through a detailed assessment, an incorporation assessment. It is really important that you do that and understand the tax benefits and then do the incorporation.

unknown 15:21

Right.

Natasha 15:22

And other taxes are changing. Um, and if you need any help on the practice sale planning, uh business asset disposal relief, we can kind of uh advise you on that front.

Arun 15:31

Uh yeah, that's it, uh let's move on to thank you, Natasha. Let's move on to the next set of slides.

Speaker 15:41

Okay.

Uros 15:51

We just had a quick question from Danish asking, is this for sole traders or or limited companies?

Arun 15:57

Well, it's a mix it's a mix of things here. So what we've gone through where we talked about dividend tax and that type of thing, that'll be relating to companies, okay. On the business asset disposal relief, Natasha, do you want to explain that? Oh, I think she's frozen.

Speaker 16:13

Have you frozen, Uros? You're still there?

Arun 16:16

I'm still here. You're still there. Okay, so business asset disposal relief, it'll vary. Um it's a it's a mix of things. I think that it I I it's not gonna we're not gonna go into the detail here, but it is relevant for companies and some of it is relevant for individuals as well. I think that's the kind of key message here.

Speaker 16:35

Let me get some slides.

Arun 17:49

Right, okay. Right, MTD cloud accounting, right? Let's go through this together, yeah.

Natasha 17:56

So sure.

Arun 17:58

Just start you start with MTD Natasha, you talk about that.

Natasha 18:01

Sure, sure. So MTD, which is uh making tax digital. So as I don't say, like it's not on the horizon, it's already in place, it's just started. So um, as many of you might know, like starting from April 2026, then MTD becomes effective. So anyone who has an income above 50k um from the sole trader has to report 3MTD, right? Which means uh the quality income from 24-25 tax year has to report 3MTD. Okay, and um the way it works, you know you need to report your income and expenses every quarter to HMRC, right? In order to you're gonna have four quarters of returns, file declarations on top of your proper personal tax returns. So that's how MTD works in a nutshell. And uh so as I said, the qualifying period for April 2026 tax year would be income 50k and above in 24-25, further been reduced for 30k in April 2027. So anyone who has 30k and above in 2526 has to report through MTD starting from April 2027, and from April 2028, it's been further reduced to 20k. So if you have an income above 20k towards your qualifying income will be qualified will be meet through this MTD. So that is MTD in a nutshell.

Arun 19:19

Okay, all right. So what does it actually require, Natasha?

Natasha 19:24

Yes, so uh just take a bit of an like history, how this works at the moment, it's like up on the 25-26, you may not you just need to file one return to Marcy towards the end of your tax return period, so that is on the 31st of January. And that is so mandatory for you to have everything on digital format. You can do on a paper format, but as per the MTG, it is really important that you have a MTD compatible software, something like a zero, free agent, QuickBooks. There's a quite lot of software exit in the market anyway. So, what you have to do is like you to keep your records in a digital format and into uh uh record all your income and expenses in the software, and then number two would be as I said, like you need to submit quotate updates to HMRC, so that is four quarters in a year. So the way it works is like for the first quarter, for example, April, May, June, the submission will be due by one month and seven days, so that'd be by 7th of August, and that's for the every quarter submissions due, and finally, you also need to do a final decoration, which is by 31st of each year, so that will be a combination of all the quarters together that has to be submitted to HMRC. And uh this is ultimately sorry, Karen. Yeah, so at the moment, um obviously at the moment we just have to do the reporting, you don't have to do any payment to HMRC, just only for the reporting purpose.

Xero Cloud Bookkeeping For Dentists

Arun 20:42

Yeah, so again, this is just more admin that anyone who's earning over 50k at the moment as a sole trader or self-employed has to pretty much do this. Um, so increasingly we've had a lot of dentists approach us and get this done. Let's move on to something a bit more more about cloud accounting. Would you want to talk about this, Natasha?

Natasha 21:03

Yeah, of course, Aaron. So, uh, as I said, like the key to a proper tax planning is all about your data, right? About your financial records. So, in order for us to do a proper tax planning or do an estimation, it is really important that we have the records in a digital format, right? Something like a zero software, which is the one of the leading software and the bookkeeping software being used across the board, can be advantageous because it has so much features. Number one would be that it will connect with the bank, so you don't have to do anything manual here. Your business bank account will be connected with the zero, and the feeds will be available on a 24-7 basis. And the bank feeds connected from day one, as I said, um, or you don't have import through CSV because it's been connected automatically. Okay, and uh the dental chart of accounts, so everything that's for example, if you have a cost, it can be the dental materials, your labs, everything will be converted to a code, which is called a chart of accounts in a system. And um, and also it is really important that if you have a digital system for us to capture your invoices and expenses in a digital format, which is a Hub talk that is being In built with the zero that has the facility to read the documents and upload that to the uh zero and convert that to a particular transaction. So that is Hub Doc and tracking categories. So that is this is mostly applicable for someone who has multiple sites that can be enable us to understand how your practice is performing on a location basis or cost center basis. So this is also one of the features that is in zero. So this is very few, but there's many in zero, right? The key is to set up the zero properly to understand how it's been set it up. It is fundamental for us to have a proper financial system in place in order for us to produce accurate and quality reports.

Arun 22:55

Correct. And I think the bottom line is if you've got that set up correctly, then that information is firstly more organized. It'll make save you time at the end of the year to get your quarterly or returns or annual returns or annual accounts done, but also it gives you feedback. You can look at it week by week, month by month, seeing how I'm doing and make better decisions. And I think that's the key message here. You can prepare management reports, management accounts to see am I making money, am I losing money, where am I losing money? I think this is something that historically, and I've been in this game 20 odd years with dentists, dentists didn't really need to worry about it that much. Things were easy. But as we showed in the previous little presentation earlier, costs are rising, um, there are more taxes, there's more competition. Um, you need to know your numbers. If you don't know your numbers, you're gonna struggle. Okay. Um, and the first thing you need to do is put a financial system in like zero, okay, and get someone to set it up correctly and run it for you, like ourselves. Um, we can definitely help there. So that's kind of we'll move on to the next slide, Natasha. Yeah. So do you want to add something there? Did you want to?

Natasha 24:02

Yeah, I just want to add, just to add on top of what you was just saying. So for all of the clients, I will literally for all of the clients, we're trying to do everything on a monthly basis, right? We do the booking on a monthly basis. I have seen the result, like it's quite evident. We have seen the results because what we do is like we if we have things done on monthly, it's just really we can produce the key KPIs, like how the cooperation tax looks like, how's the director's loan account looks like, the primary KPIs. It helps them with the cash flow, with the tax planning. So I just want to really reiterate the point like proper system in place and consistency, getting things done on a monthly is key.

Dashboards KPIs And Monthly Close

Arun 24:38

Absolutely, absolutely. So let's move on to uh PMS zero integration. I'll quickly just talk through this here. With things like Dentally, you can actually integrate zero into it. So your treatment revenue generated in Dentally is posted to zero each night. Um in addition, and I will be showing you something later under our Samera AI tool, where you can actually get the information from the PMS in, you can get the information from Xero in, and that then can help us then work out the associate pay, and then you can also see real-time dashboards of performance. This is where we're going, and this is where we're introducing with certain clients, where you can actually get all the data into one pot and then analyze the business and analyze the performance and then make better decisions. And I'll talk about that in a short while. Anything you want to add here, Natasha, on this side of things?

Natasha 25:34

Um, no, no, I I think we we can cover as part of these AI features using yourself, but that'd be fine.

Arun 25:41

And and then these are some of the metrics you should be monitoring, okay? Um, if you haven't got everything set up, but you want to, these are the things you should be looking at. Um, revenue per chair per day. So, what are you generating per day? Ultimately, you can then work out what your break-even will be. Um, your gross margin, what are you making after the main costs of associates and labs and materials? Um, staff costs, associate payers, all eBit DAR margin, debtor days, cash runners. So these are just kind of some of the key metrics you want to monitor. Um, and again, we help people set these up. Um with our Sumera.ai tool, we'll be showing these, sharing these, and it'll be all automated for you once you if you've got all the systems set up correctly, um, and that will save you a lot of time and ultimately give you better insight. Um, some common pitfalls we see when people do their accounting, um lots of personal stuff going through with a business credit card, inconsistent bookkeeping, um, associates paid inconsistently wrong, um, no monthly close, and that's a really important thing. The accounts aren't closed each month, and therefore things get posted back to a prior period, uh that which will then impact the management reports. Um, it's just poor management, okay. And really, what they can a good a good accounting firm should be helping you get organized first, and then from that, they can then help you present and present the information in a in a detailed and organized manner for you to make better decisions. So, what does good look like? Um the way in my mind it looks like every receipt or every invoice is scanned using Hubdoc or Dext. Um, that comes into our system. Our team of bookkeepers will then post that into Xero into the right chart of into the right field in the chart of accounts in zero. Um, and therefore we're getting a clear picture of the performance each month. Um, associate pay is worked out swiftly using something like Samera.ai, where it rather than taking hours, it can be done instantly because you're getting the information from the right places. Um, you lock down the PL at the end of the month, so nothing else can be posted after a certain date, and that falls into the next time the next period. Um, and really you should be knowing what your tax liability is going to be by by kind of by the time January's coming quite early on in the year because you've got your accounts done, you had your tax returns done early. That's the key. Okay. Now, I'd still say we've got a long way to go working with dentists. Dentists, I know, are very busy people, but the ones who get it right are the ones who are growing, they got their accounting affairs in order, they know their tax liabilities, and they have a good setup. Okay, so really important to get these types of things um set up correctly. Um just as uh some numbers, we are zero partners, we are specialists and dentists, we can help with MTD, we can do the bookkeeping, we can do PMS to zero integration. You know what? We can do pretty much all of it. We can do payroll, we can do associate pay, we can do all. Anything else to add, Natasha, from your side?

Natasha 28:52

No, really, that's it from my side too. Thank you.

Arun 28:54

Okay, all right. So I know we're going through these points very swiftly. Um right, there's a question here, Clyde Den. So four quarterly submissions, one annual declaration, and one SA 100. Right, Natasha, is that correct?

Natasha 29:09

Yeah, so that would be like four or five and five. Yeah, that's right.

Samera AI Automating Associate Pay

Arun 29:14

Correct. That's basically in a nutshell, correct. Yeah. Right, let's move on to the next set of slides. Let me close this one down. Okay, so let me kind of talk about Samera AI. On these sides here is all talking about um how we also automate associate pay. But for for any practice owners who are out there today, we've been working with practices. We own dental practices ourselves through my wife who owns clinics, private clinics, and we've seen that data in dental practices sits in so many different places. You have data sitting in something like dentally, you have data sitting in zero, you have data sitting maybe in some payroll systems, you have data sitting in um Google Analytics, you have data sitting in Google Ads, you have data sitting in HMRC's tax portal. Honestly, there's data all over the place. However, none of that is sitting together, it's just sitting in different pots all over the place. So, what we're trying to do with Sumera AI is bring everything into one platform. And the way we'd call this is something like a data lake. It's coming into a lake, one lake of data. And then what we're trying to do is help practices understand that data to ultimately make better decisions and ultimately take actions to ultimately grow the profit, grow the business, and develop the business, and make ultimately make better decisions. Now we're at the point where we're still developing it, it's kind of moving at some pace, but we've always thought that the first thing we wanted to solve was the associate pay problem, particularly in larger groups, okay, that they've got multiple sites, multiple clinics, um, multiple um systems, and trying to get all that information in lab bills and everything else into one place is just it's it's a headache. So the key here is to get everything integrated into one flow. So literally at the end of the month, the report payment allocation data goes into Samera AI, and at the same time, the information of the lab bills goes into Samera AI, and effectively it works out the associate pay for that person straight away. So let me kind of just quickly walk you through this. Um, it can ultimately it will save time, and I think that's the whole point because in your that we were highlighting earlier, costs are rising in practice, they're automate as much as possible. That means you freeze up manpower to focus on growing the business. So your practice manager should be really then focusing on, okay, how can I get more patients? One of the big issues we're seeing in clinics at the moment is that there are it's it's challenging out there. There are lots of is there is empty white space in in diaries, in appointment books. So, how do we overcome that? We have to ultimately um kind of drive the business. But if your team are so busy just dealing with the admin, and there is so much admin in the dental practice, whether it's CQC, accounting, finance, that type of thing, you're never going to be able to drive it unless you hired another person, which is another overhead, which is another cost, which you'd have to pay more NI on, more taxes on, more P AYE, all that type of stuff. So you really want to make sure you're re-engineering your business. And to want to, in order to re-engineer it, you have to start thinking, how can I use technology to do that? So Sumeri AI is a starting point. So, as an example, um, a practice manager wastes hours on that every every month trying to get the information into a spreadsheet, then getting the lab deductions wrong. It's just messy. So, what we're doing is automating it, we're getting the lab invoices in, zero reconciliation, you'll have a payable pension preparation, patient deposit handy, all this type of stuff, okay? And in a group of about three sites, 12 associates, it'll probably save about a number of hours, okay? A lot of money, a lot of time, okay. That's kind of what we're trying to get to. We want to try and automate as much as possible in your dental practice. And we're starting with associate pay, but we're moving into a whole range of other things. So I'm so what I'm gonna do is I'm gonna literally show you a quick demo of it, and I'll show you some other stuff we're developing with it as well. So let me try and get this working.

Speaker 34:33

You can see it, yeah. Cool. So I'm just gonna move this down here.

Arun 34:43

So this this is a demo account, um, and it's got a whole bunch of um different practices in here. And I'll just click on one of these as an example. I'll go to this one here, and I'll go to payouts here. So this is taking all the data from zero and all the data from dentally. So, as you can see here, we've got integrations with zero, as you can see here, it's connected up. It will do QuickBooks soon. Okay, we go back to here, and it syncs with dentally on a routine basis. And you can see that in this example, James Carter generated £5,330.59 pence, and based on his associate agreement, he's gonna get paid out 1951 after certain charges, card charges, lab fees, any materials that he pay we've paid on his behalf, whatever it might be, whatever the agreement is. Now, the payrolls are all defined here, and as you can see, they've all got different terms. This is just this is a um a demo, but I'm just trying to highlight how it works, and what we're trying to do is make it very um simple for a user. So a practice manager doesn't really have to do much. The information from Dently comes in, the information from uh zero comes in, and it just works. The numbers are there now. If I go back to here, if I click on um, for instance, James Carter, we can see all his transactions of the money that's been allocated. This is all coming from Dently, and we can track this all back to Dentally that he generated 5330. Okay. And he's minimize that. I can go back. Where did it go? If I go back to here, um, if I'm happy with it, ultimately we then send him a pay statement with all the deductions and everything on it, and put his email address in there and off it goes to him. Okay, so that's one part of Samaria, but I'd honestly that's just like literally less than five percent of what we're trying to get to. We're really going into something much more bigger and better and kind of exciting. So let me just highlight here for anyone who's a practice owner, again, we're getting data from um at the moment. This this data is coming from uh zero. So zero the feed is feeding information of the profit and loss for this practice, for example. That's the monthly view, that's an annual view. You're seeing each month, the profits all coming from the chart of accounts from zero that's coming through. I go back to monthly view here. We also have something here that says CFO recommendations. So, what this is telling us, we're using AI here to give us ideas. So, why has it gone down? What do we need to do? What do what do we recommend the client to do? In this instance, um, review the current financial position, take action to optimized cash flow case. That's a bit of a generic one, but it's giving you some advice. And as we do this, and as we develop it better, it will get better and better. But you can see this is kind of where we're trying to go to is that we get all and now imagine imagine now we have dentally data in there in terms of we're going to be analyzing performance, and we can see it, for instance, hourly rates of dentists, okay, who's performing well within the practice. If we have Google data in there, we can say, okay, which which Google keyword is helping us to generate the customers coming through the door. So it's actually quite an exciting time, and we're developing this in-house. Um, we have a team of AI developers and we're testing it on our own clinics. Um, but the one thing that is working fully and fully ready to go is the associate pay side of things. So if you are an associate and you think your practice owner needs to be doing things better, um, reach out. Or if you are a practice owner and you think you want to um automate your associate pay, reach out to us. We'll be happy to show you a proper demo and see how it can work for you. One of the things we want to do before we always do that, though, is do a data um analysis or data audit of the data that clients have. Um, because what we've seen is people use zero differently, people use dentally differently. We need to make sure that it's standardized. So there'll be an audit that's done beforehand, then we can then connect you up accordingly. So I don't want to dwell on that too much. Um, what question here is when is it we'll be integrated with okay with SO good question? SOE dentegration. We have actually now and remember, SOE is not a cloud-based system, so it doesn't have an open API. However, um my development team have built an SOE connector. So what that means is that we'd get it at the end of each month, we'd download a CSV file from you guys, and that CSV file would be uploaded into our system and matched with the right fields. So that is working. I've tested that and um it's working really well. So that's something to consider because ultimately SOE, if you if you aren't aware of it, it's a piece of software that was developed 36 years ago. Okay, think about it. 36 years ago is a long time in the software world and it isn't on the cloud yet. I don't know if they're going to move it onto the cloud. I think everyone they're trying to move people from SOE to Dently because they're kind of owned by all the same people anyway. Um, but um we do have that connector um for those types of clients because in my own clinics, we have one clinic that's on dently and one clinic which is on software of excellence. We were on software of excellence historically, but we moved one to dently so we could build these products because we see this is what's needed, and then in terms of the um the uh software of excellence, we also know most clinics in the UK are still on software of excellence, so we needed to build that connector for this. So, yeah, all moving in the right direction. Um, yeah, that's that's the kind of theme of on this one. Any other questions? No, I don't think so. Okay. Please feel free to ask questions as you go along anyway. Right, let me remove that one.

Speaker 40:44

Now we're gonna move to next one is finance and euro.

Arun 41:02

Berlin, they're not in the background anymore. I can't see. Give me one second.

Buying A Practice And Funding Options

Uros 41:17

Can you see the slides? Just the first page though, yeah. Yeah, yeah. Okay, go. Thank you. So, with all the mostly positive news from taxes and things like that, now I'm here to tell you that it's the right time to buy your dental practice or do a startup. Um, I'm not aware aware with this stream yard. Do I click for the next or is it?

Arun 41:50

No, no, I'll I I'll click it as I get along today.

Uros 41:52

So we can go to the next slide. So we're just gonna go through a couple of things, essentially LTVs, appetites, and a little bit about everything. But the most important thing is we won't discuss everything, it can become quite complicated. Sometimes, no, the best thing is always to reach out. Conversations are free, and it's always best just to have that conversation so I can have real data in front of me and we can go through it one by one. But first of all, so we have to uh 2026 market in one slide. So Bank of England base rate is still 3.75. Thank God it stayed the same way. Speculations if it's gonna go up and down is always it's always discussed, but only time will tell. The usual associate-led practice EBITA multiple is still around 10x. It can go a little bit lower, a little bit higher, depending on location and a couple of other factors. For owner-led uh practice EBITA uh multiple is 3.5 to 6 times. Again, private NHS, that all puts a factor into it. Um, and as well for people who don't know what associate-led and owner-led is, associate-led means you don't have to be there. Associates are doing all the work, owner-led means you're the dentist, you're in charge, you're there working pretty much all of the time. Um, the typical LTVs on your first purchase. Um, so we have goodwill and freehold. Here we're gonna be talking about goodwill, which means the actual business aspect, the chairs, the clients, everything that goes into it, is between 90 and 100% LTV. So it means that you only need 10% deposit, or in some cases, 0%. We see more banks going up to 100%. They're trying to be competitive between each other, so there's more players in the field. But I would still generally say say 90%. If you get 100% if you want it, great. But always think about 10%, not 10% deposit. Um, and what changed in the last 12 months is it's busy. It's always busy. Appetite is growing as always. Um, mixed NHS practices are still valued on the same the same way, essentially. There's a nice little um uh phrase called B A D R, which I actually had to Google because I'm not an account. It myself, so it is tightening. Natasha touched on that a little bit earlier. So 18. So more people are keen on selling, and that's essentially it. We can go to the next slide.

Speaker 44:26

Sure.

Uros 44:29

Pathways. So it what kind of finance are you getting? So we have five normal ones that we usually deal with day to day. Your startup practices, which means you're starting from scratch, you're finding a building that you either buy or you lease, and you get builders in there, you convert it into a dental practice, you get one or two chairs, preferably one. Always start minimal and then grow as time goes. The banks will love you way more for that as well. So will your wallet. But you start slow and then as time grows, you grow. But that's how startups are 70% LTV, not LTV, apologize, LTC, so loan to cost, which means that building, let's say it gets very complicated with startups. It's 70% overall, but then if it's free hold, 70% of that overall amount, 75% goes to the free hold, the outstanding remainder or 70% goes to the actual build-out, fit out costs. It's complicated. So it's best just to have that conversation so we can go through the numbers a little bit more into details. But overall, 70% LTC. So if you're buying something for a million, they'll lend a maximum of half a million because that's the maximum that uh that they will lend. Um, interest rates.

Arun 45:53

Just a startup, though, yeah?

Uros 45:54

Just make that just a startup, absolutely, yeah. And it's very limited the appetite for startups. There's always there, but only a couple of banks that actually do them. The rest don't really deal with startups. Uh, so it's a lot more work from your side, my side, and in general, a lot more time spent doing this as well. Sometimes it takes over two years as well to actually get everything from the ground, and that's where Good Tim is quite necessary. But regarding the interest rates, uh, we're talking base rate plus four to five percent. It's higher, definitely higher than the average if you're buying Goodwill or Freehold. Why? Because it's an unproven business, so it means they're giving you money for basically nothing. I do not know any other industry that actually has that kind of fate except in dentistry, which is a great thing for anybody who wants to start from scratch. Um, with startups, you need to have a business plan and you need to have financial projections. Those are vital. The bank will not even consider without the financial projections. And Samira, we're here to help you with that as well. Um, that's pretty much it, just touching on, oh yeah, regarding the startups as well. So it starts with a higher rate, four to five percent over base. After a couple of years, once you prove your Ebitha and you actually start becoming a business, so you have goodwill, we can always go back to the banks and renegotiate for a better rate. You know, that's usually how it goes. If you're not lucky with the original bank that gave you uh your loan, we can go and negotiate with others. So we see who wants to be the most competitive again. Next, we go over to Goodwill, which is just buying the actual business, as I said before, and you're renting out the freehold. Uh banks will do 90 to 100 percent, 80 to 100% on the second one, depends on pretty much your background, securities, and things like that. Um, business no interest rates, they went a little bit lower, so it can go 1.9 to 2.75, something like that. Always count between 6.2 to 6.5 just to be safe. If it goes any lower, you're lucky. Um, your term is 15 years and the lease has to match it. So when you're looking at practices to buy, one of the first questions is for the seller is how long is the lease? If it's 15 years, brilliant. In that case, the banks will be happy, otherwise, just check with them, and usually the sellers know they will have to extend it anyway, so it's all covered. Um, then we go to freehold and goodwill. Freehold means that you're buying the property itself as well. The old-fashioned uh brokers will say brick and mortar, the new generation will just say freehold. Uh, that means that you own the property, adds additional security into the mix. The banks like it a lot. Uh, they will offer you 100% LTV, so it means no deposit needed from your side. Um, it also makes the term longer, 20-25 years. Sometimes it will also pull the goodwill uh longer as well. You can do it over 20 years, and it's just very good overall. You own the building after, you know, there's only pluses. And after you want to retire, you can rent it out. You know, there's you got a million options. Uh, refinance, that pretty much means that either the economy changed, something changed in general, and you want to revisit your existing loan just to see if you can do anything better. Asset finance, um, it's a mix. You know, you have an existing practice and you just want to buy a couple of extra chairs, or you want to do a startup practice and do something that will give you 100% of uh the pretty much the value, so you don't have to put any deposit in. It's a shorter term. The interest rates are usually like it varies. I won't give you an exact number, but it's not that bad. Uh, it really varies between equipment and things like that. But um usually people choose it when they don't have enough cash flow on the side to spend 25,000, 45,000 pounds for CBT, CBCT machine and things like that. So asset finance is a good solution to that. And we can go to the next slide. This is just an example of a 1 million uh pound goodwill practice. Give me just a second to go through it quickly, but while I'll have a glass of water. So LTV. We'll take an example of 90% here. We could do 100, but we'll keep it at 90. Um, they will lend you 900,000. Your deposit has to be 100,000, but there's always fees. That's the beauty of uh finance. There's always fees. Um, there's a bank arrangement fee going from 1% to 1.75%. They can usually put it on top of the loan itself, so you don't have to pay that at completion. Uh that's always an option. Um, the broker fee for buying existing uh practices, existing goodwill or freehold is 0%. When we're talking about startups, it's 2%. As I mentioned, it's a lot more work from for both sides. Um, valuation is imposed by the bank, so they will send out a valuator to pretty much check that the freehold is valued, what is valued, and so is the goodwill. Um, they will give you a panel between three or four people to choose from. So you make the decision. The prices range from two and a half thousand to seven thousand. It's a varied number. So people just usually choose whatever they're more comfortable with, and that's it. Solicitors, if three to seven thousand, sometimes even fifteen thousand pounds, depends on the complexity, depends on a lot of things. Usually, if it's NHS, it's gonna cost you more. If it's freehold involved, it will cost you more as well, of course, because there's more work to be done. But on average, for a standard practice, um 3,000 pounds if we're just talking in private, buying goodwill only, and everything goes smooth. Uh, did I miss out on anything here?

Speaker 52:02

No, those are the main things.

Arun 52:04

There will be other fees when you're purchasing, like um, there'll be certain accountancy fees and due diligence fees, that's what that's separate.

Uros 52:12

Oh, yes, and there's security as well. I forgot to mention they will do several securities uh for the transaction, usually comes to no from 250 to no 250 pounds to 300 pounds per security, they will pose about three to five, depends on the deal as well.

Arun 52:31

So, what do lenders want now these days, Uros? They're not picky.

Uros 52:35

I always say that.

Arun 52:37

As long as the number makes sense, the appetite is really, really strong, you know, compared to the it's very strong in dentistry, if I could kind of echo what you're saying, because uh I've worked with many industries over the years, and dentistry the the thing about what back why banks like about dentistry, firstly, they're professionals and so they're regulated industry, so that you it's unlikely you're gonna run off with the money to Brazil or something. Um, secondly, I think um dentistry generally is a need-based service, so people always will need dentists and and and healthcare, so that gives them confidence. And thirdly, I think the number of failures of dental practices is pretty pretty low, to be honest, you compared to many other industries. So um it's not the fastest growing industry, but it's something that's stable, consistent, and that's what banks like, they love that. Sorry, my introduction.

Uros 53:28

No, no, absolutely you're absolutely right here. So, usually just for a strong application, three years plus, if we're talking anything below, it makes a little bit more complications in the actual application. Um, healthy personal financial profile. What that means is please no gambling, no holidays to Maldives every three weeks, and uh just be sensible, you know. Uh evidence of management capabilities. So it's pretty much making sure that you can do the rota, you've been in a managerial position before, or you're just involved in the day-to-day and a dental practice. That's usually more than enough. Uh, realistic financial projections. Here I have to stress this is for startups, and the same for the business plan. The business plan does not have to be that uh strong essentially for buying existing goodwill and freehold. Uh, they just want to see your pretty much your background, what you've done so far, and your experience. But for a startup, again, financial projections are very vital. They have to be stress test and they have to be very conservative because as soon as something doesn't make sense, they will start questioning it. And once the bank starts questioning things to a certain degree, it's never good for yourself, you know. Um, and regarding the red flags, owner-led private practices with no associate continuity plan, that's always a big one. UDA heavy NHS contract without a clear handover. That's very important when you're buying something because for the clients as well, they like uh, how can I say a certain security and they like the certain ease. Uh, Aaron will probably be able to say more on that as well. Uh, but sales brochure, Zibita, they don't tie to the accounts. Sales brochures always inflated, you know. In from a seller's perspective, the more they can get from the practice, the better it is from them. They make a commission. And at the same time, most of these people, I won't name any names, they also do the finance. What that means is they get a good commission when they're selling for a high price, and they also get good commission when they're financing for a high price. So that's where people like us at Samera always good because we don't have that conflict of interest. We're completely on your side as buyers' advisors, essentially. Then we also have seller refusing to share full management packs during due diligence. That sometimes does come up, you know. And I always say when you are buying, you need to go there, you need to go in person, you need to ask as many questions as possible, because a good seller will tell you everything with no hesitation, you know, because they have nothing to hide, they're usually just retiring, and that's it. So they just want their practice to go to good hands. When you're seeing sellers that are trying to hide things, they're trying to hide for a good reason. Either the practice is losing money, they're not doing well in some kind of for some reason, and they're just trying to hide. And the best one is when they're sending, no, they're sending you account statements from the year 2021-2022, and it's like that's uh you can't work on that. You need recent data. And one thing as well, which uh it's not really a red flag, but it's something that you need to make sure that you know is how you're purchasing. Is it an asset purchase? Is it a share purchase? Is it a partnership? You need to have that clear straight away because the banks will uh do the structure, no, they'll do the credit based on the structure itself. And also that makes it kind of clear for solicitors, accountants, because share purchase means more responsibilities that you're taking on to. While an asset, you pick and choose what you actually want. Anything uh you would like to add or anything?

Arun 57:20

Yeah, I'll just say I think going back to the accounts thing or accounts which are old. I think if someone hasn't got up-to-date accounts and they're valuing the business on a two-year set of accounts of two years ago, a lot of things could have changed. And it's just it just shows they're not prepared to sell or that they haven't prepared it well for sale. And it's just going to be a mindfill when it comes to doing the due diligence, which will just cost you more time and money. I would try and get as much information up front as possible for you then to make a bright decision to buy it. Never be forced by a seller or a seller's agent to force them. If they're saying also we've got other interests, let them have other interest if it's looking questionable. But get, as Euro said, get a third party like ourselves in. If you're if you're not sure, we we act as buyers advisors, that's all we do, okay, on this side of things. We help people with the finance, we help people with the valuation, we help people with the due diligence, and we and we tell people whether people should buy it or not. Does it look like a good deal? So I think really important to know this, especially in this climate now where um I think we're gonna see a quite a large flurry of people trying to retire over the next few years, and it's younger guys out there. Yes, the banks will lend you the money, but that that doesn't mean you should take the money just because it's a practice for sale. You need to buy, get the right money for the right practice on the right terms. That's that's the key. Okay, how long does it take, Uros?

Uros 58:42

Uh indicative terms, a couple of days, sometimes within the same day, banks are eager. I said that.

Arun 58:50

But everything else takes forever.

Uros 58:52

That's usually when you have to start pushing, especially solicitors. I didn't say that. Well, we got uh credit back and offer, which you which means that the bank has agreed for the amount and everything is starting to go. That's usually within 10 to 14 days uh after everything has been received, everything has been clarified. Private practice completion, six to nine months. NHS makes everything more complicated, nine to twelve months. You know, these are averages. Sometimes it can be quicker if everything aligns in your way, the stars align, or sometimes it can be way longer, you know, depends on a lot of factors. As long as you have a good team team pushing everything through, it makes it much smoother.

Arun 59:36

Cool. And then lastly, I've kind of we've mentioned this, but just well, quick I can quickly go through this though. Um, as a buyer's advisor, and I think as as I said earlier, we've been working in this sector for 20 odd years, and one of the sad things that I've seen is that young dentists have been taken advantage of quite often by by by an agent, a sales agent, where they're sales agents working on behalf of the vendor, and then at the same time they're trying to encourage a young guy to buy this practice, knowing full well that the they can get the finance and put the two together and get the cash in on the buying and get the cash in cash in on the buyers in terms of the finance charges, cash in on the vendors, in terms of the percentage they get on the sellers. Now, to me, that's a massive conflict of interest, and I've sadly seen many people had their fingers burnt, paying over over the odds for a practice which really didn't qualify for those prices. So I'd always stress to get a separate independent buyers' advisors. Of course, we are that, okay, that's how this is our pitch. Um, we're not a sales agent, and we'll do everything on your behalf to to advise you what to do in buying it, whether it's the right price, whether it's the right financial terms, whether that to structure the deal. And one of the key things that point four here is or point two, firstly, is that we do know the lenders, we know them all, and we know which lender is right for which which type of deal. Um, and then really point four is the one I really want to stress here is that get us in early. We could if someone says the practice is worth a million quid, it may well be worth a million quid, but it may not be. And our job is to analyze the numbers, break the numbers down to say, actually, you know what, it's not worth a million quid, it's worth I don't know, 800,000 pounds um because of XYZ. And you don't want to go down all the way down the line and realize that you spent time and money on a project which ultimately isn't worth it. So, really get yourself an independent buyer's advisor. That's what my kind of tuppence with. Anything further to add, Yoros?

Uros 1:01:33

No, I think that's pretty much it. Regarding the challenge devaluation, um, Erin, you can pretty much touch up on what you do in this case. So we act uh kind of on your behalf, uh, helping you reduce the price. And why this is a good thing is let's say you're an associate and wants to buy a practice that you're working in at the moment, you kind of want a third person to come in and say, No, your practice is not worth that much, it's worth less because we're gonna be the bad cops. You don't want to be the person coming in and saying it's worth less. It's always good to have a good relationship with the current owner and have us do the bad stuff.

Offshoring Finance Teams Done Safely

Arun 1:02:14

You can always say my advisors are so my advisor Samera is saying that it's not worth this because of XYZ reasons. Blame it on us. That's what we're just saying. Okay, so I've still got my dog. I don't want my dog's barking at name, so she's very excited. Um, she wants my attention. So we'll coming on to the last thing. So, any help you need on finance, Uros is your man. Uh, absolutely, all of those things, right? Last slide pack. Um, there's one question that I haven't answered though. Um, is your associate pay tool able to handle the deductions and respective cross charges? Yes, in a nutshell, yes. Um, we are tweaking it so we can do all the cross charges, it can do all the deductions. Um, because as you're all right, that is critical. So correct, we can. And if there are things that always need to be an ad hoc charge in the month, that can always be added to the associate pay as well. So we are have got that in place because we've built it around our own practices. So bear with me a second. Let's try and get to the last time. I'm so sorry, everybody. She's a cute little dog, but she loves to bark when she's not meant to bark.

Speaker 1:03:51

Right.

Arun 1:03:57

I will just go through this very quickly now. For some of you, you might be aware that um over the years we we've been building a team overseas in India, um, and uh that enables us to deliver accounts, management accounts, bookkeeping, payroll, all of these things super sufficiently super fast, um, because we've got quite a large team there now to support us. Prior to that, we would struggle um here in the UK finding the manpower, but now with all the technology that's available and the quality of the capable talent that we've got in India, managed by myself and Natasha and other team members here in the UK, we have a great team. Um so what I'm trying to highlight here is that there is an opportunity with all these costs rising, okay. Um you want to make think, well, think, okay, how can I, if you're a practice owner, how can I keep my costs reasonable? Okay. Um that's not easy, but if you have an offshore team or team using or an accountant using an offshore team, we can be a lot more um kind of efficient and kind of and and using technology at the same time, we can be more efficient and cost effective. Um so one of the things in the accounting space is that um if you wanted to, for instance, set up your own team. Let's say you had a group of five practices, you might want your own team over there. We can certainly help up set up your own company in India, set up the team, hire the team, set the office up. We can do all of that type of stuff. Alternatively, you might say, you know what, that's too overkill for me. I just want one or two people, like a bookkeeper, to help me. Um now, what we've realized over the years is dog's not gonna stop talking, barking, is it? So um, what we've realized over the years in dealing with offshoring, um and I know people do use freelancers overseas, think people on task rabbit or an upwork or that type of thing. Major risks, major GDPR risks, major, major issues that can come out of that. Okay. Um what we've realized is that you need to have a dedicated team, um, people trained on your processes and systems, um, training on the exact processes and technology, um, make sure that they're trained, um, and also always have direct communication. With with the end client with yourselves, and therefore they can handle volume. What doesn't work is just chucking it over to someone overseas and hoping they can do it. Um, no doubt things can be cheaper overseas, but as they say, if you pay peanuts, you get monkeys. That's a phrase I've always used over the years. So it's really important to use a provider that um understands your business, understands the industry, and that can ultimately help you um keep your margins tight, but at the same time deliver what you need. Um, what's good for offshoring? Um, bookkeeping, lab invoice matching, management accounts, MTD quarterly, that well, that returns is not relevant for dentists, year-end accounts, all that type of stuff. Okay. Um, what we do here in the UK, people like myself, Natasha, Charles, Kara, and others are here dealing in liaison with clients on any more kind of nuanced or advisory elements, we can all help there. But again, you will have a dedicated accountant sitting in India working for you who you can talk to uh face to face on Teams, um, even they even come over to the UK on occasion as well. So just wanted to really um kind of highlight this to you. These are some of the things that we do. Um, we have a standardized process, we have reviewing processes, we use the latest tech. We're always training, constant training. Um, lots of communication over Teams, we have dashboards and turnaround times, we have an SLA that we all stick to. But the the key thing is that people always want to know is okay, how much can I save? And I suppose this is if you're running a practice and you've got a bookkeeper and you've got a payroll person dealing with these types of things, you can see the numbers speak themselves. It can be a huge saving, okay, an absolutely huge saving. So it's worthwhile investigating that if this is something, if your business warrants that side of things. We can work in two ways: uh, a managed service, where effectively you kind of we we give you manpower and you pay us a fee for that manpower month by month, okay, on a full-time equivalent price, and that can be launched literally within days. Um, alternatively, which is longer, which honestly maybe the best thing in the long term is we help you set up your own company. You then ultimately hire the staff, and your costs will be low on a per person basis, but you still have to manage manage all the manpower and manage all the management issues and kind of compliance issues overseas as well. So, different ways to work with us. If you need any help, interested in this, um manage service starts from £1,500 a month. Um, reach out to me. All of it's on the SumeraGlobal.com website, all of this information. Um, and we're doing this increasingly more and more for people as costs are rising, as we saw earlier. And the first pack of slides that Natasha showed, the taxes are rising, all the costs are rising. So we have to think differently, and that's why we have to re-engineer our business accordingly. So that was a quick five-minute run through on that subject, and I'm conscious it's ten past eight and my dog is still barking, so I will get to the last session now.

Speaker 1:09:31

I think closes.

Growth Strategy And Sale Readiness

Final Takeaways And How To Reach Us

Arun 1:09:44

So let's just go with the last session. I'm just gonna talk briefly on growth. So this is for those practice owners who might have one practice or might have more than one, but are thinking of growing, they want to grow further. What do we need to consider? So three stages I've kind of botted it down to or kind of windled it down to. You've got single site, founder led, you're the main clinician and the owner. Revenue might be about 500k to one and a half, but the bottleneck is you, okay, and your time. Um, the job is to really replace yourself, and that's the key thing is I see lots of people earn do very good money, but if for instance they drop kind of got very sick or when on holiday, the cash flow goes into disaster, and um it's not ultimately a business, you're you're doing a job, okay. A business is when you ultimately are an entrepreneur and you've hired other people to do that work, okay. So in this instance, that would be point two, where you've hired delegated in the diary runs without you there daily. Associates are doing work, specialists are doing work, hygienists are doing work. Um, and the ultimate bottleneck there is your ability to scale systems. Now, this is increasingly difficult to do that, especially with manpower issues we see in dentistry. Um, not an easy thing here in the UK market. I suppose the last and the last stage is then you might go from one or two sites to multi-sites, two to five to ten to hundreds, whatever it might be. And that's when you really need group structure, centralized functions of finance, accounting, HR, marketing, um, and really have a strong infrastructure in place and ultimately a debt strategy in place. It's not just having zero and trying to do the books, okay? It's about having a proper organized manner that you can ultimately see the accounting first um counts for one practice and you have it for multiple practices, and it's all standardized, and then you can consolidate it all together. Now, remember when Natasha said earlier chart of accounts? Well, that's what you really want to have, for instance, is standardized chart of accounts across all your business so you can consolidate all the information together and see in a click of a few buttons how you're performing. So, where does actual growth actually come from? Well, key points here, there's key key ideas here. I know there's some are low, some are medium capital need, and some are high. The key, the key thing that so many practices, and this is this is I think where many people go wrong, is they might have a practice and it's doing all right, and they might be at 50, 60 percent kind of occupancy. Just because a bank can lend you more money doesn't mean you should go and get another practice. And there's this big ego thing in dentistry that I've realized over the years is that oh, I've got 10 practices, I've got 15 practices. Honestly, you've got 10 practices that aren't doing particularly well. Why not just have one or two practices that are actually doing really, really well? Okay. Um, it means less headache, less stress, and um and a better quality of life. So the first thing you really want to do, and this doesn't need a huge amount of capital, is fill the existing diary, okay? And that means getting your marketing right. Now, getting your marketing right, what are you doing? There's so many things to consider here: the SEO, your ad word ads, meta ads, Google ads, um, other kind of offline marketing techniques, and that's for another day I can talk about it. Um, another way to do that is to raise your fees. So many people are so hesitant in raising their fees, yet operating costs over the last few years has risen for many, many clinics. Well, if your costs are risen, you're gonna have to raise your fees, otherwise, your margin's gonna squeeze, or you're just gonna be out of business. Again, number amount of capital needed is relatively low. Other things that you could do are add specialisms such as implants, ortho, um, and the capital needed may not be too much. You might need to borrow some money from Uros for asset financing for an implant system kit or CBCT or something like that. Um, next stage is then add further chairs if you've got scope to fit more chairs, and then the big kind of capital needs are when you're gonna buy that next practice, okay? Um, that'd be a step change, and then ultimately more debt, more capital is needed when you're gonna build that growth, bigger structure, bigger group, headquarters, all these types of things you're gonna have to consider. So there's low capital, medium capital, and then there's high capital. And quite often or not, many people just jump to try and do high capital when they haven't even really fulfilled the lower and medium levels of capital needed. So, really important to get that right before you move on to borrowing more. Because I said earlier, dentists they banks love dentists, it's easy for them to give money to them. That doesn't mean you should take the money, just think logically what am I milking my assets that I've got sufficiently before I take on more debt? So, how about structuring? Um, very kind of quick overview here. But in my mind, over the time, and this is how I've done it for my wife's clinics, you have a hold co and you have it individual practices sitting under that hold co in separate companies. Why? Because you might want to sell one of those practices in the future. Um, and that kind of helps, okay? It's just clean. So again, separate accounts, separate reporting for each entity, which then feeds up into the hold co. Um, and then hold co is ultimately owned by you, who may well be the benefit, ultimate beneficial or holder. Properties would sit in a separate property company, um, which um can then charge a rent at market rates to these operating companies, and then ultimately you might have a service company that charges a fee to these operating companies as well, things like finance, HR, all that type of stuff as well. So, just a very quick, quick overview. Um things that you want to see if you're running a grow growing group, growing a group. As I said earlier, you want to have one chart of accounts, which is standardized across your group. You want a monthly board pack so every month you see how you're doing, um, in terms of PL, site-by-site dashboard, cash flow KPIs, um, say by the 10th of each month, so you can make decisions. We're building all of that into our Sumera AI, by the way. Um, treasury and debt, you want to be able to see your cash kind of position at the moment and what your next what your what your cash you're gonna need coming up, um, if there's kind of holidays or vacations or kind of people being away, whatever it might be. Okay. And then really the fourth thing you want to see is who is making your money in your practice. And again, that'll be in the Summer AI thing, which is which clinician is eBay DAR positive, which one isn't? Well, who's making the money in the practice? And that then can help you drive conversations to ultimately build a better business. Really important to have these basic building blocks in your practice. But the reality is quite different, sadly, that I've seen over time. Um, common failure areas, owners always still signing the invoices, um, bookkeeping is inconsistent with multiple sites, associate pay is calculated differently per site, um, debt taken without any covenant modeling, and ultimately just taking short-term debt, which then turns out to be very expensive. Um, so many weak weaknesses. But what a good principal will do um get a finance lead, might have a um a finance manager like in part part of taking someone in our team on, standard I zero and practice management setup, uh, one framework for all associates, payments, a good debt policy in place, a group structure. Um, you might, as I said earlier, you might take a fractional CFO or finance director on, which we do offer our services. I do actually provide CFO services to groups. So those are things that you might want to consider as well. Um, and I think this is the real key point is that I think there's a term called a sale ready versus sellable. And the sale-ready ones are the practices or the groups that are always going to be charged, getting a multiple that higher multiple. Um, so if you look at these from each point, this will this will give you a good point to understand. So if if the clinic from the clinical side, if the founder is still doing most of the implants, doing most of the dentistry, um, the value will drop. There's too much risk associated with anyone wanting to buy that group, okay, or by that practice. Too much risk on one person is a key man risk ultimately. You want to spread that risk across the business with multiple associates so the succession is clear. From a financial point of view, um, to be sale ready, you want to have clean, audited, management accounts. So I know from last month how my practice did, what the money's making, who's making me money, on that information. That's when you're going to be easy to sell. From a compliance point of view, all documented SOPs, HR files, um, the IP is all registered. Um, structure, as we said, I just showed you the hold code, op codes, prop code, service codes, all that type of structure. People, you don't want to have one person making all the decisions. You want to have a clinical director, certain managers in place to make decisions. Really important to have that in place. And then, as I said earlier, the systems you have, you can't just have zero, okay? You need to have integration with practice management systems, dashboards, making tax digital ready, Samera AI with us, which we're launching soon. So there's so much to cover here. We've kind of talked for like an hour and 20 minutes. I'm surprised that no one's fallen asleep yet. But in a nutshell, um you want to get your structuring right, um, get the hold co right, prop com. And one of the tips, just one of the things that people don't even know, most people don't know. If you have a hold co and you have a your dental practice in another company down here, and let's say you sold this dental practice, the proceeds will go into that hold co. You won't actually pay any capital gains tax when you sell that, okay, because it's in a hold co structure. Okay, okay, you've got an issue of taking money out of the hold co, there'll be a dividends issue, but that is a way of doing it, legitimately doing it. So these things need to be planned and organized. And that has to be done, it can't just be done just before I sell, it has to be done at least more than 12 months before I sell. So having a conversation with the right people at the right time is absolutely paramount. If you need an FD, as I said, uh we provide those, so I provide those services depending on the size of your kind of practice and group. Um, acquisition support, as I said, Uros mentioned earlier, DD, evaluation, finance. So we're all here to help. Um, I know we've bleated on for an hour and 20 minutes or so. If anyone needs any help, I won't go on any further now. Just reach out to myself, reach out to Uros, reach out to Natasha, go to our website. Our website has a ton of information on there, um, on articles, reports, guides. Um, we have our YouTube channel, plenty of videos to watch there. You can get some information from. But bottom line, don't sit and mull over it and kind of stew on it. Get some help. Dentistry is a great career, it's a great business, but it's an increasingly tough career, and it's an increasingly tough business to run. And getting the finances right and getting the money right and getting your accounts and taxes right is absolutely fundamental to this if you're actually going to create great value. I hope you found this useful today. Um, we will be having a recording of this, and um, we will be sharing this in due course, but um, feel free to reach out. Any final comments from you, Natasha or Uros?

Natasha 1:21:18

No, not really, thank you.

Uros 1:21:20

None for me as well. Thank you, everybody, for your time. Cap some dinner if you haven't yet, and we'll talk soon.

Arun 1:21:27

Absolutely. I'll get my dog. Sorry about the problem again. So um next time I'll make sure that she's kind of muzzled things. Okay, thank you.

Speaker 2 1:21:37

Thank you, good thing.