News & Tech Tips

Choosing Your Path to Practice Ownership: Buying vs. Starting Up – Making the Right Choice

Jacob Courtright on July 7, 2023

As you embark on your professional journey, one important decision awaits you: Should you buy an existing practice or start your own? In this blog, we’ll explore the key factors to consider when making this decision, helping you navigate the path to practice ownership with confidence.

Assessing Your Goals and Vision:
  • Define your long-term professional goals and vision for your practice.
  • Consider your desired level of autonomy, flexibility, and control over the practice.
  • Evaluate your risk tolerance and financial aspirations.
Start-up, if you want to
  • Practice in a particular location or serve a targeted market.
  • Design the office space and brand.
  • Choose your own equipment, systems, and staff.
  • Crave the challenge of growing practice in your own style.
Additional considerations before setting up an office:
  • Be sure your skill set is sufficient. You will need to be comfortable working solo. Be sure your quality and speed of dental services will be sufficient to be successful.
  • Identify your trusted advisors. You must locate a banker, accountant, and attorney prior to beginning the start-up. Business advice early and often can prevent regrets down the road.
  • Develop a solid business plan that encompasses all aspects of practice. Banks will require you to have a prospectus that outlines your demographic study of the location and population, your plans for marketing the practice, and your work strategy and abilities.
  • Make sure you are ready to spend more time than a normal workday during the early years. It takes a lot of effort to establish policies and procedures, secure compliance in all the different areas of business and practice, train staff, keep up with purchasing, etc. If you have life situations, such as an infirm parent or a new marriage or baby, starting a business can add additional complications to an already full life.
  • Evaluate your business every day. Are your plans succeeding? What needs to change? Goals are not enough to ensure a successful venture. Actionable feedback from your advisors will keep you on track to succeed.
Buy, if you want to
  • Rely on existing office infrastructure, equipment, and staff.
  • Generate revenue more quickly.
  • Learn from a seasoned practitioner during the transition.
  • Avoid stressors of construction and purchasing.
Additional considerations before purchasing an office:
  • Consider the reputation of the office. Is the reputation one that reflects your practice style? If the office has a stellar reputation, it will be easy to build on that foundation. If you purchase a practice with a bad reputation, be sure to let patients know that the office is under new management and market to existing patients and new patients on that basis.
  • Make sure you are comfortable with the exit strategy of the current owner. It is important that the current owner commits to transitioning the patients. Owners who linger long at the practice, however, may impede patients from attaching to you.
  • Evaluate the financials with trusted advisors. You need to engage an attorney to review contracts, and you need an accountant to help you understand the practice’s financial position. A trusted banker can help you understand your obligations on loans and lines of credit.
  • Make a new business plan for goal setting. You cannot rely on how the previous owner conducted business. Plan for marketing, recall, patient communication, and compliance. Making goals and evaluating progress are key ingredients to successful business ownership.
  • Be aware that the staff may resist the transition changes. Be prepared for some staff to exit and other staff to stubbornly hold on to the past. Be ready to help navigate the relationship-building process and take the initiative to keep staff members informed about how you plan to assist them during the transition.
  • Make sure that the equipment is well maintained and that you have proper evidence of the maintenance schedule. Equipment suppliers and repair services can inspect the equipment before the purchase.

Deciding between buying an existing practice and starting your own is a crucial step in your journey to practice ownership. By carefully considering your goals, evaluating the pros and cons, understanding the financial implications, seeking expert advice, and conducting due diligence, you’ll be well-equipped to make an informed decision that aligns with your aspirations. Remember, each path has its own rewards and challenges, and what matters most is choosing the right path for your unique circumstances.

This blog serves as a starting point for your research, and it’s essential to consult with your Whalen professional, who can provide personalized advice based on your specific circumstances and goals. Best of luck on your journey to practice ownership!

Navigating Tax Compliance for Remote Workers

Jacob Courtright on July 5, 2023

The rise of remote work has created new challenges for businesses when it comes to tax compliance. With employees working from all over the world, it can be difficult to keep track of where they are working and what taxes they owe.

In this article, we will discuss the nuances of tax compliance for remote workers and provide tips for ensuring your remote workforce stays tax compliant.

  1. Understand the tax implications of remote work

The first step to ensuring tax compliance for remote workers is to understand the tax implications of remote work. This includes understanding the different tax laws that apply to remote workers, as well as the different ways that remote workers can be taxed.

For example, in the United States, remote workers are typically taxed based on their state of residence. However, there are some exceptions to this rule, such as if the remote worker spends a certain amount of time working in another state.

  1. Establish clear policies and procedures

Once you understand the tax implications of remote work, you need to establish clear policies and procedures for your remote workforce. These policies and procedures should outline how you will track the location of your remote workers, how you will determine their tax liability, and how you will determine their tax liability and remittance.

  1. Stay up-to-date on tax laws

The tax laws that apply to remote workers are constantly changing. It is important to stay up-to-date on these changes so that you can ensure that your remote workforce is always tax compliant.

There are a number of resources that you can use to stay up-to-date on tax laws, such as the IRS website, the website of your state’s tax department, or by consulting your Whalen CPA advisor.

  1. Use a tax compliance software

There are a number of tax compliance software programs that can help you to manage the tax liability of your remote workforce. These software programs can help you to track the location of your remote workers, determine their tax liability, and collect and remit taxes.

Using a tax compliance software program can help to simplify the process of tax compliance for remote workers and help you to avoid costly mistakes.

  1. Work with a tax professional

If you are unsure about the tax implications of remote work or if you need help establishing clear policies and procedures, you should work with a Whalen tax professional. A tax professional from Whalen can help you to understand the tax laws that apply to remote workers and help you to develop a tax compliance plan for your remote workforce.

 

Navigating tax compliance for remote workers can be complex. However, by following the tips in this article, you can ensure that your remote workforce stays tax compliant.

By understanding the tax implications of remote work, establishing clear policies and procedures, staying up-to-date on tax laws, and working with a tax professional, you can simplify the process of tax compliance for remote workers and help avoid costly mistakes. Contact us to take the next step.

Strategies for Business Growth and Expansion

Jacob Courtright on July 5, 2023

Growing your business is a challenging but rewarding endeavor. It takes hard work, dedication, and a clear plan. If you’re ready to take your business to the next level, here are some proven strategies for growth and expansion:

  1. Define your goals. What do you want to achieve with your business? Do you want to increase sales, expand into new markets, or launch new products or services? Once you know your goals, you can develop a plan to achieve them.
  2. Understand your target market. Who are your ideal customers? What are their needs and wants? Once you understand your target market, you can tailor your products or services to meet their needs.
  3. Market your business effectively. Get the word out about your business and your products or services. Use a variety of marketing channels, such as online marketing, social media, and traditional advertising.
  4. Provide excellent customer service. Make sure your customers are happy and satisfied with your products or services. This will help you build loyalty and encourage repeat business.
  5. Invest in your business. Invest in your business by upgrading your equipment, hiring new employees, or expanding into new markets. This will help you grow your business and reach new heights.

In addition to these general strategies, there are a number of specific business development strategies that you can use. Here are a few examples:

  • Market penetration: This strategy involves increasing your market share in your existing market. You can do this by increasing your marketing efforts, expanding your distribution channels, or offering new products or services.
  • Market development: This strategy involves expanding into new markets. You can do this by entering new geographic areas, targeting new customer segments, or selling your products or services online.
  • Product development: This strategy involves developing new products or services. You can do this by expanding your product line, offering new features or benefits, or creating new products or services that meet the needs of new customer segments.
  • Diversification: This strategy involves expanding into new lines of business. You can do this by acquiring new businesses, starting new businesses, or entering into joint ventures.

The best growth and expansion strategy for your business will depend on your specific situation. However, by following the strategies outlined above, you can increase your chances of success.

Regardless of the strategies you deploy, we highly encourage you to:

  • Be patient. Growing your business takes time and effort. Don’t get discouraged if you don’t see results immediately.
  • Be flexible. Things change, so be prepared to adapt your plans as needed.
  • Be persistent. Don’t give up on your dreams. Keep working hard, and you will eventually achieve your goals

Accounting Best Practices for Startups

Jacob Courtright on July 5, 2023

Starting a business is an exciting adventure, but it’s also a lot of work. One of the most important things you can do to set your startup up for success is to establish sound financial management practices. This will help you track your income and expenses, make informed financial decisions, and grow your business sustainably.

Here are some accounting best practices for startups:
  1. Use accounting software. This will make it easy to track your finances from anywhere, and it will also help you to stay organized. Many different accounting software options are available, including cloud-based ones, so you can choose one that fits your needs and budget. Need a recommendation? We recommend looking into our favorite one, QuickBooks.
  2. Set up a separate bank account for your business. This will help you to keep your personal and business finances separate, which is important for tax purposes. It will also make it easier to track your business expenses.
  3. Track your income and expenses. This is essential for understanding your financial health and making informed financial decisions. You should track your income and expenses on a regular basis, and you should keep all of your receipts.
  4. Create a budget. A budget will help you to track your spending and make sure that you are not overspending. There are many different budgeting methods available, so you can choose one that works for you.
  5. Get regular financial advice. Connect with your Whalen advisor; they can help you stay compliant and provide you with essential business planning.
  6. Pay attention to cash flow. This is the lifeblood of your business, so it’s important to make sure that you have enough cash on hand to cover your expenses.
  7. Don’t be afraid to ask for help. There are many resources available to help startups with financial management.

Following these accounting best practices will help you to establish sound financial management practices for your startup. This will give you the foundation you need to grow your business sustainably and achieve your financial goals. Don’t be afraid to reach out for help if you need it. Contact Us!

Turning receivables into cash

Jacob Courtright on July 5, 2023

It’s common for high-growth and seasonal businesses to have occasional shortfalls in their checking accounts. The reason relates to the cash conversion cycle — that is, it takes time to collect on customer invoices. In the meantime, of course, employees and suppliers want to get paid. The “cash gap” is currently getting wider for many companies. A recent study by CFO / The Hackett Group shows that the cash conversion cycle increased from 35.2 days in 2021 to 36.4 days in 2022. To add insult to injury, interest rates, and many operational costs are rising.

Fortunately, when cash is tight, small business owners can sometimes turn to receivables for relief. Here are some strategies for converting outstanding invoices into fast cash to pay bills.

Applying for a line of credit

A line of credit can be collateralized by unpaid invoices, just like you pledge equipment and property for conventional term loans. Banks typically charge fees and interest for securitized receivables. Each financial institution sets its own rates and conditions, but these arrangements generally provide immediate loans for up to 90% of the value of an outstanding debt and are typically repaid as customers pay their bills.

For example, a custom manufacturer had difficulty making payroll after two of its large clients delayed payment on outstanding invoices. A local bank gave the company a line of credit for $80,000. To secure the loan, the company was required to put up $100,000 in unpaid invoices as collateral and then repay the loan, plus fees and interest, once customers remitted payments.

Factoring receivables

Factoring is another option for companies that want to monetize uncollected receivables. Here, receivables are sold to a third-party factoring company for immediate cash.

Beware: Costs associated with receivables factoring can be much higher than those for collateral-based loans. And factoring companies are likely to scrutinize the creditworthiness of your customers. But selling receivables for upfront cash may be advantageous, especially for smaller businesses, because it reduces the burden on accounting staff and saves time.

For instance, a wholesaler faced cash flow issues because customers were paying bills between 60 and 90 days after issuance. As a result, the owner used a high-interest-rate credit card to make payroll and spent at least three days a month chasing down late bills. So, the owner sold off roughly $200,000 of the company’s annual receivables to an online factoring firm. This saved the company hundreds of personnel hours annually and allowed it to stop building up high-rate credit card interest expenses, while considerably easing cash flow concerns.

We can help

Before monetizing receivables, banks and factoring companies will ask for a receivables aging schedule — and most won’t touch any receivable that’s over 90 days outstanding. Before you write off your stale receivables, call customers and ask what’s happening. Sometimes you might be able to negotiate a lower amount — this might be better than nothing if your customer is facing bankruptcy. If all else fails, you might consider a commission-based collection agency or collection attorney.

Contact us to discuss your delinquent accounts receivable and other cash flow concerns. We can help you find creative solutions to convert receivables into fast cash.

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