How can you get back to normal when the world isn’t normal?
As we all make plans for a post-coronavirus world, businesses are reconsidering what normal operation looks like, and how to cope with our new reality. Of course, for a while, things may not truly be normal. How will your dental practice be changed? What does it mean to reopen during this time? How long will you be able to financially withstand this new reality?
Judson Crawford, a CPA and partner at Cain Watters, navigates these types of questions for more than 90 clients. All of Judson’s clients are small businesses and most have received PPP loans to weather this unusual time.
“Some practices, even though their states say they can open, are kind of taking a wait-and-see approach. There are some commonalities in concerns among dental professionals as they either reopen or watch practices in other states go through the process.”Judson Crawford, CPA
Here are a few observations from the reopening process:
Demand and productivity
Among Judson’s clients who have reopened, most patients want to resume seeing their dentist.
“Most of our clients have a good level of trust with their patient base,” explains Judson. “Many people are ready to get out and do something that’s not sitting in the house, even if it’s something we would have considered mundane in the past.”
However, how will COVID-19 impact new patients and productivity?
“I think practices are going to experience an initial high amount of demand for their services because people have been waiting for weeks, without having any dental services,” Judson notes. “From my standpoint, the bigger question is how strong will new patient flow be? It’s one thing for somebody who knows and trusts their doctor to go in. It’s a whole other thing for a new patient – both financially and from a trust standpoint – to go into a new office and ask for new services.”
In addition, it will take more time to safely and properly prepare for each patient and procedure while ensuring new safety measures are properly followed. A delicate balance between safety and productivity will need to be determined for each patient.
Judson says this is important to track: “The slower pace of dentistry and the increased need for equipment will cause the cost of dental procedures to rise. At a minimum, owners need to assess this and make sure their fees are at the appropriate level, which may put extra pressure on practices that may not have raised fees in some time.”
Understanding requirements and PPE usage
State to state, requirements for reopening dental practices vary and each business owner will want to evaluate and decide on additional safety procedures to avoid the spread of COVID-19.
PPE suppliers are having a difficult time keeping up with demand, causing them to limit and ration orders. Fraud has exploded in this segment of the industry and overall prices for PPE equipment have gone up. Overall, dental professionals are spending more time and money acquiring the necessary tools to stay safe.
“We cannot just reopen and put this behind us. COVID-19 is going to be a major concern for patients for the next six to 18 months or longer,” Judson says. “I think the reality is that we’re going to see a spike in busy-ness in reopening; but it will plateau, if not go down a little bit. We must expect changes as we go through this and actually see how this virus declines or spikes in certain areas.”
Bringing back employees
“Most of our clients furloughed their employees during this time. Each practice will need to consider individually how to bring staff back,” explains Judson. “It doesn’t make sense to have people sitting around from a financial and social distancing perspective.”
Also consider that staff members may have a difficult time coming back to work due to school closures or they may be the primary caregiver in their family. Because older employees are at higher risk of COVID-19 infection, Judson has also seen a trend in early retirement as some decide returning to work is too risky.
“If you have furloughed your staff and certain people don’t want or can’t come back, they’re technically still on furlough, which means they can continue to receive the unemployment benefits they’ve been receiving,” explains Judson.
The newly expanded federal employment program under the CARES Act provides a benefit of $600 per week through July 2020. However, for staff to qualify they must be eligible to receive at least $1 in state unemployment.
Judson cautions that employers have to be conscious of their state’s rules as they bring staff back: “It almost makes sense that if you have 10 staff members and need 50% back today, then you hire five of them back full-time and leave five furloughed. If you bring all of them back part-time, depending on your state, it may reduce their benefits to zero. It may do more damage as a whole.”
PPP loans and forgiveness
While PPP loans are extremely helpful, Judson notes that much of his client’s financial anxiety is related to the program in two ways: “One is maximizing the potential forgiveness they can have during the qualified eight-week period. And there has been limited guidance on the forgivable portion. We are using the insight we have right now to guide clients on how to spend that money to maximize forgiveness.”
Recently released guidance explains that business owners must maintain the number of full-time employees on payroll or the equivalent through June 30, 2020 to achieve the maximum amount of forgiveness.
“If you have employees who can’t come back, it doesn’t have to be the same people,” encourages Judson. “So, you can have a new hire on board June 30 replacing somebody else, which would bring you to the same full-time equivalent. With upwards of 30 million unemployed in the U.S., there are many potential candidates, if you need to hire.”
Do you have these concerns or others? You’re not alone.
If you feel discouraged and uncertain, you are not alone.
“Everyone has been affected and it’s going to take time to come out the other side, but we are confident we can help you make it through,” notes Judson.
CWA is here to help navigate these unusual times. Our team of advisors can help you navigate the ever-changing landscape of COVID-19 and position you for a strong comeback. For more insight into how to prepare for reopening and save money in the process, listen to season five, episode one of the Accumulating Wealth Podcast with Judson and fellow CWA planner Hunter Satterfield.
Our team is available to support you during reopening at any time.
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