Small Business Money Tips – Entrepreneur Doctors: Dentist, Optometrist, Chiropractors, Veterinarian

Small Business Money Tips – Entrepreneur Doctors: Dentist, Optometrist, Chiropractors, Veterinarian


Hey guys! This is Justin Goodbread with Financially
Simple. So I’m talking specifically to the dentists,
the chiropractors, the veterinarians, the optometrists, all you doctors who own your
own business. I’m gonna call you entrepreneurial doctors. Sound good? You’re smart. You have visions and aspirations to grow this
grandiose business, and you’re not very good at business for the most part. Sorry, just a fact. I wanna give you 4 points which you can look
at that I see on a regular basis, areas within your business which can cost you a lot of
money. Number one, don’t forget there is a liability
side to your balance sheet. Most of us want to focus on the assets. We wanna look at how much cash we have in
the bank. We wanna see how much equity we have in our
practices. I understand that. I’m with you. Remember, I’m a business owner myself. I deal with my personal balance sheet. But, don’t forget those liabilities. It’s not uncommon whenever I bring on a new
client who’s an entrepreneurial doctor that inevitably we have to deal with refinancing
their practice notes, their equipment loans, their building loans, etc. Why is this? Whenever you go and apply for that loan, whether
it be for a building, for equipment, for your practice, etc., the bank is not incentivized
to help reduce your interest rate once you sign that note. So, it’s not uncommon whenever a client may
have, let’s say, a 4% interest rate on a practice note, but yet the free market is yielding
3%. 1 % difference on 5, 6, 7, $800,000 is a lot
of money in interest. I’ve often seen where I can refinance a note
even with the interest rates close to the same, and knock 2 or 3 years off the amount
of payments. So don’t forget the liability side of your
business. It’s a pretty common mistake we all make. Number two, insurance. Yeah, I’m with you. We’re all insurance poor. Huh. Life insurance, disability insurance, home
and auto, umbrella policies, business overhead, the list goes on and on. Every year, you should take a hard look at
your insurances. “Justin, that’s gonna take a lot of time and
energy.” You’re right. It is. That’s why you hire a CFP, a wealth manager
who’s a business owner, who understands all these little nuances like I’m talking to you
about. Someone like me, I have multiple insurance
agents and outlets I can shop for prospective professionals and look on a year by year basis
if any other company has brought new products to the marketplace and gone through the state
insurance commissioner, which can reduce your premium payments. I’m working with a client right now that I
think we’re gonna knock $4,000 a year off insurance payments. That almost covers my fee! So work with a good wealth manager to take
a look at those insurance products. All right, number three. I’m not throwing rocks through a glass house. Don’t buy all the toys. You really don’t need them. Look, obviously we’re talking about boats
and cars and airplanes, and all the other things that I’ve seen many doctors like to
buy. More importantly, whenever that sales guy
comes around and mentions the latest, newest technology or that product, and it’s usually
about November, December they come around, and they say, “Hey, look. I have this new widget, or I have this new
product, and if you buy this, you’re gonna generate a tax deduction for yourself, and
it’s gonna increase efficiency in your office, and it’s gonna cause you to be able to bill
out more. We’ve heard the speals. Many times, those sales folk are having to
meet their own quota, so just because it’s there doesn’t mean you need it. Run some data on the numbers. Get with your wealth manager and see if that
particular piece of equipment will, in fact, help you over the next 15 years or 20 years,
not in the next week. Hey look, number four. Probably one of the biggest ones that I see,
and that is, don’t forget to pay yourself first. What do I mean? Okay, so you’ve bought your practice. More than likely, you have a fair amount of
amortization and a fair amount of depreciation that’s gonna occur in the first year to 3,
maybe 4 years. In those years when you have that depreciation,
make sure that you’re putting money back into your own retirement accounts. Too many times, young doctors get in when
they’re not working with an advisor, and they get into their practice in the first year
or so, and they realize that they’re not paying a lot of money in taxes, and they increase
their lifestyle. It sure is helpful if you’ll go ahead and
set good habits to pay yourself first. Max out your retirement accounts. That’s a good help for you. So those are four areas that entrepreneurial
doctors often miss. Check those, and make sure you’re not losing
any money. So guys, this is Justin Goodbread with Financially
Simple. Hey look, let’s at least make our life financially
simple.

Author: Kevin Mason

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