Starting your own laboratory. By Richard Lishman

STARTING YOUR OWN LABORATORY

By Richard T Lishman Managing Director of the 4dentists Group of companies

Richard Lishman, award-winning Founder of The IFA’s – a specialist firm of Independent Financial Advisers that provides guidance and advice for some of the wealthiest individuals in the UK and around the globe, heads this series of editorials for lab technicians.

Now you’re an experienced Dental Technician

(Part 6 of 10)

In the previous editorial of the series, our character, Bridget Crown, got married and started a family. Now, her focus is firmly on her career as she starts her own laboratory.

As expected, a significant change to her life such as beginning her own business will require a lot of planning, but what are the key financial aspects of this decision that Bridget needs to bear in mind?

Taking the first steps

Alongside performing market research and gaining an understanding of how a business operates, one of the first steps that Bridget will have to consider on her quest to begin her own laboratory is registering her business. There are multiple options here, and Bridget will need to decide whether she wants to list the business as a sole trader, a limited company or as a partnership.

These choices will impact how the business operates at a foundation level. For instance, if she does decide she’s a sole trader, setting up her business will be straightforward, but it also comes with the burden that she will be completely responsible for the business’ financial debts and accounting.

On the other hand, registering her lab as a limited company does mean that her finances will be separate from those of the business, but this comes with its fair share of management and reporting duties. One benefit of this decision is that it would allow her to hire an accountant to deal with a lot of the financial responsibilities of the business moving forward (such as payroll, taxes etc.).

There is also the option for Bridget to register her business as a partnership, but this would require her to join forces with another business savvy individual. Similar to being a sole trader, Bridget would remain responsible for the business’ debts (though this responsibility would be shared between partners).

So, let’s pretend Bridget has chosen to register her business as a limited company. To do so, she would have to follow a relatively easy process on the UK government website, and pay a small fee.

Funding

Of course, to set up a business the vast majority of individuals will require funding. There are multiple available, but Bridget will likely take out a business loan to secure the necessary funding. Business loans can vary hugely in amount, so Bridget will have to create a business plan to estimate the funding she will need and then apply for appropriate loans. These will all come with their own terms and conditions, so it’s important that Bridget looks at the small print and is fully aware of what the lending terms are and whether these are sustainable in line with her business plan.

She may also look to see if the local council in her area is running any initiatives to support new businesses. There are often grants available for companies that are just starting out, but these will have certain qualification conditions attached.

Bridget will also need to consider how much of her personal savings she wants to tie into the business, and what this will mean for the financial security of her family. Starting a business is always a gamble, so Bridget needs to have a strong handle on her finances before proceeding.

Property, staffing and more

So, now that Bridget has secured funding, she needs to make her business a reality. This will mean furnishing her new business property with the necessary technology, equipment and more, and hiring staff to work for the business. Though exciting, this is often a lengthy process and will require a lot of time, energy and financial planning to achieve. Purchasing new property will involve insurance and other necessary considerations, meaning that Bridget will require an accurate plan to ensure that she is budgeting everything correctly.

Another aspect she will have to bear in mind will be finding dentists to work with. Unlike a vast majority of businesses, dental laboratories can’t rely on general customers and need a network of dental professionals to work with in order to be successful. This will require a big marketing push on Bridget’s side, which will inevitably require strategy and funding as well if she wants to advertise her business in the right places.

A rewarding new venture

This is only a rough guideline to some of the important aspects Bridget needs to consider as she sets up her new business. It’s essential that if you are thinking of setting up your own dental laboratory that you receive high quality, tailored financial advice such as that given by the IFA’s. This way you can assess your finances properly, receive advice and have all the guidance you need to ensure that your business starts off on the right foot.

For more information, please call 0845 345 5060 or 0754 336 8478 or visit www.theifas.com