Dentists Who Invest Podcast

How Finance Has Change Over The Years with Ray Cox [CPD Available]

• Dr. James Martin • Season 4 • Episode 426

Share episode

Check if your dental practice qualifies for capital allowances here >>> https://www.dentistswhoinvest.com/chris-lonergan

———————————————————————
UK Dentists: Collect your verifiable CPD for this episode here >>> https://courses.dentistswhoinvest.com/smart-money-members-club

———————————————————————
Ownership is back on the table—and not just for the fearless few. We sit down with finance specialist Ray Cox to unpack why more UK dentists are walking away from corporates and building practices that reflect their values. From cultural tailwinds to smarter lending, the ground has shifted in favour of clinicians who want control, flexibility, and long-term upside.

We compare squats and acquisitions with clear-eyed criteria lenders use today: headroom for growth, realistic demand, and operational discipline. You’ll hear why a well-planned squat can be less risky than an overpriced acquisition, how healthcare specialist teams at banks now evaluate dental cash flows, and what makes a business plan bank-ready. We also tackle refinancing—how owners who launched five to seven years ago are securing better terms, freeing cash, and leveraging equity to open a second site.

Beyond finance, we dig into the strategic moves that build resilient private practices. The frenzy for align-bleach-bond is fading as new owners double down on family dentistry, prevention, strong recall systems, and measured expansion into specialisms like implants. The NHS vs private decision is decisive among younger owners in England, with membership plans increasingly used to stabilise income without sacrificing clinical freedom. Add in interest rate dynamics and inflationary headwinds, and you’ve got a candid field guide to starting or scaling a modern dental practice.

If you’re weighing buy versus squat, plotting a refinance, or designing a patient-first model with durable cash flow, this conversation will help you move with confidence. Subscribe, share with a colleague who’s ownership-curious, and leave a review with your biggest takeaway—what’s your next step toward running your own practice?

———————————————————————
Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.

Send us a text

Dr James:

Welcome to this episode of the Dentists Who Invest Podcast where I'm joined by expert on finance to dentists, Mr. Ray Cox. This episode is a little bit of a contemplative, reflective episode over the history of dentists, their mindset whenever it comes to entrepreneurship, looking back to see how trends have shifted as time has gone on, and then also looking forward to the future to understand what we might expect whenever it comes to dentists, their dental practices, and also their implications of that whenever it comes to their finance or their practices and equipment. As ever, you can claim your CPD for this episode within the official Dentists Who Invest Smart Money Members Club. Smart Money Members Club also includes multiple mini courses and webinar series on finance for dentists, including how to become as tax efficient as possible, as well as understanding investing. All of this content comments as verifiable CPD, and you can download your certificates there and then upon completion of each lesson. In addition to this, we also include a whopping 10% discount on your dental indemnity and 5% discount on lab bills for dental principals, amongst other perks and discounts for members. Please use the link in the description to claim your verifiable CPD for this episode. And you were telling me just off camera before we shot this podcast episode that you reckon there's been a little bit of resurgence in dentists wishing to be their own boss at B T O B, be the B B your own, no B Y O B, be your own boss. And you reckon that it extends a little bit beyond the them wishing to make extra money. There's a little bit more to that, right?

Ray:

Yeah, I think um when I came into uh when I came into dentistry, which is uh back in 1973 now, but I I always joke at this point as I was a child propagy and I was only 10, 10 years old. Um but I don't think many people who know me would believe that. But yeah, uh that time um dentistry was a was a private uh private uh entity. Um uh limited amount of private work, it was mainly NHS, but dentists owned their own practice. So the the theory, the notion of corporatization was uh was virtually unknown. And that stayed that way for a long part of that 40 plus years that I've been involved in dentistry, and corporatization in the way that we know it now, really only I think is is something like 25 years old. And um what we're seeing now is that it it came and it's going to a large degree because lots and lots of dentists are going back to that original model of wanting to run their own practices, own their own practices, and be responsible for their own uh uh their own futures. Um and it's a completely different mindset from the generation of dentists that we've seen, you know, over the last 25 to 30 years that you know largely embraced the concept of corporatization, working, you know, for you know, a salary and the sort of benefits that they're they probably saw colleagues uh graduating from university with them had, um, and without all the risks of setting up your own business. Um but it's back. And we, as I mentioned to you earlier, at uh in events and seminars and exhibitions that we attend now, probably seven, six, seven out of ten uh inquiries that we get from dentists that come and seek us out and want to talk to us are about starting their own practices. And it's um it's a big sea change and and and and and and frankly it's it's one that I think is uh you know should be encouraged and we and that's reflected across the the world of money because uh you know the banks and financial institutions are getting really interested in it, and to raise money to start a dental practice now is immeasurably easier than it was seven, eight, nine years ago. Probably probably as recently as five years ago.

Dr James:

Hmm, and I'm interested because obviously you've got a little bit, I know that you've been doing what you've doing for a little while now, so you've got a little bit of context in that. What makes you say that it's easier nowadays?

Ray:

I think there's a there's probably a greater degree of this is a personal opinion, I've got no data on this, but you know, there seems to be a across British society a great uh a greater desire for um to start your own business. I mean, we know that the um the statistics on the number of self-employed people in the UK, I mean, is is phenomenal compared to many other countries. And we know, I think I I saw some statistics recently that the number of registrations of new companies at Companies House, um, I mean, I think in in August topped a hundred thousand in the month ever. Um and I think there is a general feeling. I think people are they don't necessarily view working for a big organization um with the safety and uh and um uh that that they once did. Um and that um you know that there is there is an opportunity out there to start your own business, and many, many of them are doing it across all walks of life and all professions and all trades. Um and I think dentistry is is just uh reflecting that in in the market that you know we know and understand.

Dr James:

So your observation would be there's a jet there's some general tailwinds there, or certainly that's what you've noticed, general tailwinds in terms of culturally uh people in the UK being more open-minded and wishing to run their own business, and that has transcended, that has transpired into dentistry as well. And I guess that leads on to the next question or the next thing that might be interested to know. Have you noticed the majority of businesses coming to you these days? Is it these brand new, these kids uh a lot of the time who are wanting to set up their practices and maybe a little bit wet behind their ears, but they're they're for what they lack in experience, they they they overcome it by sheer enthusiasm and willpower. Is that fair to say?

Ray:

Yeah, I think I think to a to a degree. I mean, I think all of them recognize that you know you have to uh having qualified from dental school, or you know, you have to learn your craft, as it were, uh, and the corporate, and working for a corporate as it used to be, working for an existing practice as an associate is a good way to do that. So we find very few coming to us, um, as I as I gather is is still the case in North America, uh, coming to us straight out of dental school, um, you know, and start wanting to start then. But it's usually those with, you know, three, anything from three to five years experience behind them. Um they've they've they've known how to do the job, um, they've seen practices being run, um, whether they consider that that's they're being run well or or not isn't another matter. Um, and they've got the confidence to say, right, I think I can do that for myself now. And there is an ever-open door from the institutions that uh that says, come through it, we might be able to help you. Um is is it is it is it you is it easy? No. Uh is it guaranteed that you're gonna get the money and the backing that you need? No. But you're a lot more likely to than you would have done five years ago. That's for sure.

Dr James:

Hmm. And five years ago, uh you're you're referencing coronavirus?

Ray:

Having coronavirus was probably a C you know, generated a sea change in all sorts of things. Um whether it was coincidental that off the back of the the uh uh coronavirus, off the back of COVID finishing, we saw an uptake in uh in dentists wanting to start talking about their own practice, I'm not sure. I'm not sure. I suspect it might have happened anyway, but I think COVID caused uh some seismic upheavals in society in general, um, across all walks of life and all professions and all businesses. And so I I suspect there was some, uh there could be some uh some of this new interest laid at its door. And you know, that that I think that's almost certainly the case.

Dr James:

Tamares, here's a fun question. Since how can we say this, maybe since you started out uh in in your profession as offering practice finance to dentists, do you feel that the products nowadays are generally more favorable uh by way of the products that existed way back when, or is finance can be attained more plentiful and at lower interest rates, or is the opposite true? Has it become harder on that front?

Ray:

Interesting question. I mean, I think Yeah, I mean, I think as dent as as dentistry back in the back in the day, I mean, banks were banks, they had no specific interest, well, not as far as dentistry was concerned. Um, dentists were considered uh extremely good risks, as they still are. Um, and probably any dentist walking through a bank's door 40 years ago um would have got a pretty good uh hearing, not least of all, because you know those were the days of bank managers. The dentist was probably going there um uh not only with his own professional qualification, but with maybe some family connections to that bank. Maybe his parents were dentists, maybe his parents were other medical people, they would know the bank manager in a different way than bank managers, even where they exist these days, um uh you know, were positioned. And so if anybody was going to get that money to open a business um probably 40 years ago, 50 years ago, dentists stood up a much better chance than than many. The situation's the same, but different now in the sense that the banks themselves and other financial institutions uh have taken a lot more interest specifically in certain types of business and certain types of uh profession. And virtually all the banks, not all, but most of the banks now will have healthcare specialists. That's indeed they might have agricultural specialists and engineering specialists that take an interest in those specific markets that the bank wants to be involved in. Um and and and that that I think certainly in relation to dentistry uh and other professions means that it it there is a more open door. Those people that that are in the bank aren't gonna give you the loan simply because you are a dentist and your dad was a dentist or your dad was a doctor, other sort of favoured professions. They're gonna do it because uh they have taken the time to understand the business of dentistry and how lucrative it can be not only for you if they support you, the dentist, but how lucrative it can be for the bank as well.

Dr James:

I see, understood. So is that a yes then? It's it's it's it's become easier. No? Have I got that right?

Ray:

Yes, absolutely, yes.

Dr James:

Yeah, I think it is.

Ray:

I probably alluded to that in a couple of other answers, but yes, I i I would say it is absolutely, yeah. And and the same would apply if we see, although dentists are is our primary and main market, we also do business in in pharmacy, we do business in veterinary, and exactly the same trends are happening there. It's a mirror image. Young vets want to start their own practices, young pharmacists want to start their own practices. Um and that that's that's an inestable fact. We see the evidence every day.

Dr James:

Interesting. And let's just scrutinize that a little bit further. Let's just delve in a little bit more. Squats or purchasing a practice that has already exist. What do these young guns want to do? I know we're painting with broad strokes here. UK Dennists, Dennists Who Invest now has an official platform where you can learn about finance and obtain UK compliant, verifiable CVD at the same time. The only platform that exists on which you can do both. The Smart Money Members Club has hundreds of hours of mini courses, webinar series, and live day recordings on all things finance slash tax efficiency for UK dentists. This includes complete courses on how tax works for UK dentists, finance so that you can invest and grow your own money, business so you can improve your profitability as an associate or principal, and for those out there that want it, there's also a mini course and how you can responsibly enter the crypto space using measured amounts of capital. I've gathered this content from the best of the best I could find in each respective area so that you know that this is how people at the forefront of each field advise their clients. The Smart Money Members Club also contains discounts on common things that UK dentists need to pay for on a regular basis. This includes a whopping 10% discount on dental indemnity, the offer to beat your income protection deal no matter what you're paying, and for the principals out there, 5% discount on lab bills and 10% discount on practice insurance. These are designed to offer hundreds, if not thousands, in annual savings. The purpose of this members club is to not only boost your monthly income but also manage your outgoings as much as possible and therefore create more profit. To celebrate the launch of the Smart Money Members Club, and given that the CPD deadline is coming up soon, I've decided to offer the first month of this platform entirely for free. This offer will end in the coming weeks as soon as the current CPD cycle is up. To collect your CPD for this podcast episode using the Smart Money Members Club, feel free to use the link in the description of this podcast.

Ray:

I would say in the context of the young dentist we've been talking to up to now in this in this podcast, I would say squats. Um largely been because of the cost of buying an existing an existing practice. Um I think the the the the the cost of existing practices has uh to some extent um you know been been skewed somewhat by the corporate market probably over the last 10-15 years. Um dentists selling their practices now, quite right, you want to get the best possible price for them. Uh, whether the there are still corporates about willing to pay the sort of prices they were pre-COVID and even post-COVID for those practices. But all that mitigate mitigates against the young first-time buyer um buying an existing practice. It happens, yeah, absolutely it happens. And the advantage they have, if they can raise the money, of course, is that they have got an established practice with a with a with an existing sort of income stream which hopefully they can build upon. If there isn't the ability there to build on it, then the banks generally don't take too a kind of view. If the practice being sold is almost its optimum point point of success, and there's no growth and expansion there, then the bank is far less likely to support the young guy wanting to buy it because obviously where what are you going to do with this? Where are you going to go with this? Um and so in many cases, um they're almost more amenable to the a pure squat star.

Dr James:

There we are. There we are.

Ray:

There is less amount, there is less money for the for the for the young dentist to buy, uh to to borrow. The bank's risk is it's an interesting thing. In one sense it's greater, in one sense it's less. They're dealing with a totally new entity. But of course, the borrowing requirement is likely to be a lot less than funding the purchase of a very successful existing practice. Um so that's a that's an interesting sort of uh scenario that um uh there's no there's no yes uh or right or wrong answers to that. Each case is literally on its own merits.

Dr James:

Because from the outside looking in, I would have said that they were less keen on squats because there's more moving parts. The the business hasn't even proved that it's viable yet.

Ray:

Yeah, the well we're we're back to we're back to uh the the situation that is the case, but you've got to get that existing practice at the right at the right price, and that the bank can see that it's going to get a return on its money. But um, you know, over time, there's got to be somewhere for that practice to go. If it's just gonna get bought for a price now and has no expansion potential, then that's not gonna do a a lot for the for the guy who's taken it over. Um, and it's not gonna do a lot for the bank because there's there's not there's no potential future borrowing there. Sure.

Dr James:

Yeah, I guess sorry, just to what I should have said just then was um what I should have said was that I would have thought the fact that there was no proof whatsoever that uh the business was yet viable would have overridden all other factors and have meant that they would basically lean away from that sort of thing or you know make the the the borrowing very unfavourable. But apparently it's a lot more uh they're a lot more welcoming uh to that than uh one would have initially suspected. So there we are. And yeah, I think the whole squat thing fits in with this wider narrative that we were talking about just a second ago, which is that people want to be either be the entrepreneur, blaze their own trail, create something from scratch, from the ground up, make it their own, all of those things, everything along those ones. This kind of wider theme of independence.

Ray:

I've I I I I expect I think many young people now today today, in whatever walk of life, don't see the security in working for large corporate institutions or even working for anybody. I mean, their uh security of job, you know, is is very tenuous these days. Um and in fact we know that lots of employers, you know, because of uh costs and you know, national insurance and other ancillary costs are very reluctant to enlarge their workforce anyway.

Dr James:

You know what? I think it's I think that's a very important uh thing to touch on because I think it's a little bit the the the common the the narrative I guess or the kind of common consensus or commentary on working for yourself versus being employed that one is safer than the other. You know what I mean? I don't even know if that's true, you know. Like how do you define safe? Define safe is what I would say. Anyway, that's probably probably a podcast for another day. What's hot in finance at the minute? What are you seeing a lot of out there? People I know we touched upon um people, uh how can I say this? uh you know wanting to set up the practice for the first time so there seems to be more business on that front. You were saying refinance off camera is hot right now. Is that right?

Ray:

Yeah, I mean I think a lot of and and and and driven a lot by young young dentists who took the uh the to you know the the mantle of wanting to start their own practice you know in the last maybe five or six or seven years um were able to get it get started but maybe at terms that looking back now they consider um weren't that favorable and they could do better now by refinancing. And the other thing is that many of them are looking for their second practice now. Their first one has been successful they're looking to move on to their second and often that can be helped by leveraging reborrowing at better terms on their existing loans and using that as a springboard to help finance the uh the second practice. So we're seeing a lot of that and a lot of pure refinancing simply to do nothing but secure a better deal than the one they were able to get you know five, six, seven years ago.

Dr James:

And is the fact that interest rates now are s seem to be slightly coming down not not consistently but they're a little bit lower than what they once were is that something that plays through into practice finance as well do we generally seem to see seem to see lower lending rates as a consequence of that I know it's not quite as simple as that yeah I mean I think I think dentists like everybody else keep an eye on the uh on what the the you know the the national news is relating to uh to interest rates and I think it's generally accepted that that they are they have come down I think they will come down a little more yet I think industry and business has been disappointed that they didn't come down sooner and faster.

Ray:

And you know like with everything else the who can who can crystal ball what the economy's going to do um I mean there are some worrying trends out there that I think might slow the reduction in interest rates even further. There is a school of economists that says that you know with some of the some of the headwinds there are in the economy they might even start going up.

Dr James:

I mean certainly mortgage rates in some areas uh have started to creep up a little which is a worrying trend um but I I think looking trying to look on the optimistic side I think uh they are lower than they were I think they've got a little way to go yet um all things all things being equal hmm okay so let's be optimistic it's all about taming the inflation base at the minute right which is being a little bit more stubborn than a lot of people anticipated I guess NHS versus private we talked about the young guns earlier how many of them out there are buying NHS practices or does that does that really ever happen nowadays if from well I've got that there might be you know the odd occasion but what what themes are we seeing what trends are we seeing especially with the young people with the young people that we've been talking about primarily in this podcast James um zero um zero literally zero yeah I mean we asked the question I mean because it's it it can be in interesting to the borrowing you know that if they um it might make their borrowing easier with the bank if they were able to obtain a an NHS contract if they were able to if they were seeking one but the answer almost universally when we ask the question is do you intend doing uh NHS treatment and the answer is an emphatic no almost in every case.

Ray:

Wow just they just I mean I I'm sure not because they've got different systems in Wales and in in and in Scotland that may be different but it's certainly in in in in England that is most definitely the case.

Dr James:

And you know what a very interesting question to answer someone like you who has their ears to the ground so to speak once upon a time a few years ago everybody was borrowing I mean I don't I don't know how much insight you have into uh the business proposition or the business model that these practices have I'm sure they you're involved in that to a degree they run it by you at least you must you you obviously you give that to the bank right um so I'm interested to know once upon a time it seemed to be that a line bleach bond practice were just you know every new practice was an ABB practice uh I'm wondering is that still are they still as popular any shifts in business plans over the last few years that you've noticed or picked up on j just refine slightly refine what you mean by ADP? ABB is you know like the align bleach bond as in cosmetic dentistry. Oh I see yes you m do you remember at one point there was Instagram dentists uh they were absolutely everywhere they you know they were just springing up everywhere you know what I mean and they were all their business model was a line of teeth bleaching and whitening whitening and then they would do some bonding on top like cosmetic bonding or composite bonding or something along those lines I don't think it's as fashionable now I mean I think the the I mean we see a lot more feet on the ground uh from young squat dentists now um in terms of general dentistry you know the the the the the the routine run of the mill the sum of things that brings most practice both most patients to the practice um a lot of interest in family dentistry you know getting being the old family dentist to the whole family that seems to be important to them and then yes moving into to specializations I mean implants obviously is these is the main one um and so all you know all of that and that all goes into the into the modern sort of squat business plan but a lot of the more I think as you were referring to let's call them more esoteric types of treatment that would have been a major part of a business plan 10 years ago uh that they've lessened shall we say interesting and that's I can I think the I think the kind of wheels came off on a lot of those practices and treatments because people realized you know you you have to have a lot of lead flow you have to have constant new patients coming in and one those treatments became less popular because everybody basically well the narrative is that uh people had a lot of money around about coronavirus because they were just basically pent up in the house so they could splash out on their teeth. Um that happened and then also I think that basically well you know people kind of saw those businesses for what they were in that there was very little recurring uh returning business from those sorts of patients they're not really beholden to you they generally have a general dental practitioner and they come to see you one of the treatment and then they go back. So it's very hard to build a business where you're constantly having to generate leads all of the time those are my thoughts. Anyway I'm sure there'll be somebody out there who has a different narrative or who thinks to themselves actually that wasn't the case this was the actual reason why but that seemed to be my perception of it anyway just sharing that out of interest.

Ray:

And I do understand that just finishing that off there is a there is a I would say specialization there's a lot of interest in future specialization that they they seem to uh articulate um you know they there seems to be a great desire to at some point in time specialise in one particular avenue of dentistry we've noticed that coming through in their business plans interesting so they're they're kind of planning this from the get-go like we're not going to do implants straight away but we want it we want to scope to do it at some stage or something along the way fine good to know Ray thank you so much for that input and wisdom and those insights shared from many years being in the dental industry if anybody wants to reach out to you about sorting some practice finance how are they best off finding you uh they can get us uh they can get me personally at uh rcox@ medifinance.co.uk they can get the company at info at medifinance.co.uk and they can even phone me at 07785 75782 um and like the old like the old bank manager we don't uh knock off at 530 if they if they want to phone me in the evening because it's important to them then that will be important to me and to us and my other colleagues and uh so if that's when they want to phone us we're very happy to take calls at that time.

Head Shot

Dr. James Martin

Host