Q&A on dentists, finances, and mistakes to avoid

By Kevin Henry, DrBicuspid.com editor in chief

June 3, 2020 -- I recently had the opportunity to talk money matters with Chris Panebianco, who is the chief marketing officer for Bankers Healthcare Group (BHG). He has more than 11 years of experience in financing for dentists, and I thought it would be good to get his thoughts because he has worked with the market before and during the current COVID-19 pandemic.

In our Q&A, I asked him about mistakes he has seen when it comes to finances, as well as the best piece of advice he could offer right now to dentists and team members.

Q: What are some of the biggest mistakes you've seen dentists making financially in recent weeks?

A: That's a great question. Before March 15, I probably would have answered that differently than I will today. I think the biggest mistake I am seeing now centers on cash flow, including cash flow expansion for equipment and planning for the necessary upgrades as new procedures come out and safety measures must be taken.

Chris Panebianco
Chris Panebianco.

Dentists will often have to purchase a large amount of equipment to stay on top of cutting-edge dentistry, and knowing how to quickly see a return on their investment is extremely important. If dentists finance through the equipment manufacturer, they're potentially waiting up to 30 days to get their funding. However, if they work with a lender like BHG, they can have it in as few as three days. When new equipment is going to improve the revenue and overall net worth of a practice, dentists shouldn't have to wait a month to get it implemented. Instead, they can use that time to get it installed, train staff, and market it. Now you're seeing the return on your investment rather than waiting on your financing to come through.

The other big mistake I've seen, and it's especially relevant now, is building cash flow. Before COVID-19 hit and so many practices were shut down, dentists may not have been focused on building their cash flow. Now that practices are opening up and they're preparing to resume business or have already, they still don't have the revenue they may need because the reserves aren't there and they're working hard to catch up.

Q: What advice are you giving about preparing for the near-term future, whether that includes things continuing to trend upward in the dental industry or another potential problem because of a possible return of COVID-19 in the fall?

A: I think, right now, the big thing is to prioritize your expenses.

I think a lot of us were caught off-guard in every industry for what was to come. No one had any idea that we were going to be shut down for two to three months. But, if that second wave comes, I would say it's all about adapting now to prepare for that possibility.

I would consolidate my debt. Take your multiple payments and high-interest debt and consolidate them into one affordable payment. I would also consider taking a little extra in that loan to have on hand for unexpected expenses. By doing this, you can start to build your cash reserve.

Just really be prepared as best as you can and remember that cash is king right now.

Q: I know we're talking about business finances, but then there's the personal finance side of things as well. Is the advice you would give there different?

A: I think you have to look at your personal side the same way you're looking at your business. After all, you are your own business, and consolidating your debt and adding your own personal cash flow is important.

My advice is to have the cash flow, understand where your money is going, and be prepared for the unexpected. Personally, I want to make sure that I have six months to a year of solid income sitting in my account so that I can cover my mortgage and other vital expenses. My goal would be to wipe out as much as I can coming out of my account and have just one monthly payment that I can stretch out over a long period of time.

Make sure any debt you have is an affordable monthly payment. You have your cash on hand, but you want to know that you can beat that debt obligation.

Q: If there was one piece of advice you could give that somebody could really tackle today, what would that be?

A: I would say that you need to get your cash reserve in place. Look at your cash flow and prioritize what needs to be done so that you can get back on your feet.

Dentists, I know you're going to rebuild your business -- but I also know it's going to take some time. So start working now and be prepared. It's important to have cash on hand so you can pivot, if needed.

The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.


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