By Simon Vincent, Senior Tax Accountant at Hive Business.

I often speak to dentists looking to buy another practice when the one they’ve got is failing. It seems strange to me that people would pay for a new toy yet won’t invest a fraction of that to make their old one work properly.

What could explain this? As Hayley wrote here, one of the forces at play seems to be social conformity, or keeping up with peers. It’s just “what you do”; you train, become an associate, your mate buys a practice, you buy a practice, your mate buys a second practice…

It’s good to stop and think before you go too far down this route. We know that goodwill prices are high at the moment, and so before you take on another backbreaking load of debt, I’d try to find better ways of spending your time and money. You can make as much money with one practice as with two, and it’s much simpler.

If we see that someone appears to have problems with the business side of their practice, our priority would be to go in, diagnose the issues and make a recommendation. If that recommendation happens to be that they spend £20k on marketing, you can usually hear a sharp intake of breath.

They don’t want to hear this stuff, and maybe part of the reason is that marketing seems like something unskilled that anybody can do, a bit like admin or cleaning. Even if that were true, cleaning the bogs takes time, and a highly trained clinician’s time is expensive.

Maybe there are other forces at work. Dentists like investing in training, equipment and practices because there’s no choice: if you want to be recognised as an implantologist you can’t teach yourself, and you have to buy the kit in order to do the work. If you want to acquire a practice with a patient list, you have to pay for it.

On the other hand, if you need a new website there are plenty of people out there who will promise to do it for wildly different rates. It’s confusing and irritating; how do you know what you really need to pay for when just anyone can do social media, and almost anyone can build a website. It’s all a bit grubbier than the sanctity of being a clinician.

In successful dental practices, every member of the team, clinical and non-clinical, are just as important. The shared goal is to deliver a great product. New patients won’t get to find out how talented the clinical team is if the receptionist isn’t very good.

I wonder if the drive to acquire a second practice isn’t a convenient distraction technique from this reality, sticking to the comfortable old narrative that says: “I am a competent/excellent/gifted clinical dentist and so any practice I open has to be a success, sooner or later.”

Unfortunately that hasn’t been the case for some time, and often successful practice owners — like Mike Hesketh — aren’t involved in clinical delivery at all.

And yet there’s something about having a new toy. It’s human to get bored and want something new. That’s why when someone says to you, “Your old toy isn’t working properly, you need to spend £20k to fix it,” you might reply, “That’s a lot of money, I don’t want to spend that.” Fair enough. But before you find yourself calling back a month later to say, “I’ve seen a new toy and I fancy buying it for £1m,” ask yourself four questions:

• What are my personal goals?
• Will the burden of another business bring me closer to them?
• What are my financial goals?
• Could these be met with modest investment in my current practice?

There’s nothing wrong with having multiple practices, just get your first one right before you move on. If you want financial returns, you don’t need to spend a million quid, you can see substantial returns for five per cent of that — spent on what you’ve got. As Dan wrote here, it pays to use your head, not your heart. Call 01872 300232 or email hello@hivebusiness.co.uk to