Winning NHS Contracts

Through his company Berkshire Hathaway, Warren Buffett has averaged a return of 20.3% per annum since 1965. This may not sound like much, but when compounded (if you are not sure what compounding is, read about it here) over the years he has been actively investing, this is HUGE, in fact this is a return of 336,000% - yes you read that correctly. This phenomenal growth in his company made him the world's richest man in 2008, in 2009 he is now second, only to his mate Bill Gates. You can see Warren Buffet's performance in investing in detail here, in his famous annual letter to shareholders.

Warren Buffett's number one rule is "Never Lose Money". His second rule is, "Never forget rule number one!". Through such an approach to investing and buying businesses he has managed to beat Wall Street.

To read and learn about his other rules click here, they make interesting reading and watching.

But what does he do with his money? Well he appears to live a pretty frugal existence, going to the local diners, and playing online bridge, but also one of capitalisms most successful men, gives much of his money away. He has bequeathed around £19bn to the Bill and Melinda Gates Foundation.

If you look at his website for Berkshire Hathaway, interestingly it is very simple indeed. No fancy graphics or flash animation, just blue writing on a white background. You could call it pretty unimaginative or dreary, but from his perspective, he feels he does not need to spend unnecessary money on such detail, when he can deliver returns of over 20% per annum to his investors.

Now this is an interesting point that perhaps we could all learn from. Rather than making ourselves look nice and paint a nice veneer, perhaps we should all, myself included, look at how we manage our costs.

Warren has certainly mastered the art of how to manage his costs, not just on his website but across his entire organisation. He still answers the phone in his office and has no computer in his office. What could you do in your life? �

Winning NHS Contracts �

To win an NHS Contract is no easy feat. In principle, one would think it would be a matter of filling a few forms and then hey a few meetings later and then you will have been awarded a contract. But sadly, in this competitive world this is no longer the case. The process is extensive, with a significant amount of time and resources required to even submit a worthy submission.

Even after you have gone through the PQQ, ITT etc stages, there is still no guarantee that you will be awarded the contract. In fact, i have seen many dentists who have submitted such tenders fail. Their submissions usually look pretty good, with all the clinical and patient centred activities well thought through and argued. However, it is usually the pricing of the UDA's where i have seen them lose at the last hurdle. Either pricing the UDA's too high, putting them out of the game in the early stages, or alternatively pricing them too lowly, making the venture pretty unfeasible over the long term. Although PCT's want to ensure they are looking for good value for money, my gut feel is they are looking for the most, for the cheapest, wouldn't you?

Many a times, i feel this is not necessarily good business sense for dentists, yet they continue with the contract, until further down the line certain problems arise such as cashflow and cost management problems or the claw back of UDA's. Many a time claw back has meant the final nail in the coffin for the practitioner, but do the PCT really care? Probably not.

So what is the solution? Well in my opinion the answer lies in understanding your cost base in detail before entering such PCT tenders (If Warren Buffett was a dentist i reckon he certainly would understand his projected costs!). By understanding your cost model, you can then determine a break even point, which can then translate into a break even point per UDA. Any price above the break even UDA value is then profit. However, when financial modelling such scenarios, one must take into many assumptions in the model, such as:

• Probable private income. If you price your UDA low, to be very competitive, could you earn a good amount from private dentistry?
• Expected opening hours. If they require an emergency service have you factored in paying more for dentists working sunday evenings?
• Dental Healthcare Promotion. What do the PCT require? How much will this cost you in terms of time and money? ...

Winning an NHS contract is very possible, but in my experience, one must be very careful as to what you sign up to. It may look like a good deal in the beginning, with big figures, but if you have not considered all the financial implications and considered all of your costs and appropriately priced this into your tender, you could be asking for trouble. For those who do the math up front, we usually see a successful NHS practice.

At Samera, we have a team, who not only understand the full cost base of dentistry but also can help with the financial models you require to assess if the venture is right for you. For more information about how the Samera team can help you win the right NHS tenders for you visit here. We can help with the full submission process, or alternatively with building a realistic financial model for your needs.

Give a Little Love 2009

The momentum is gathering, the gifts are slowly beginning to trickle in, we just now need you to help us put as a many smiles on disadvantaged kids faces this Christmas. To get involved, inspire your team and community and find out more how this all works, visit www.givealittlelove.org.uk.

Why Get Involved? Simply, to help others less fortunate, BUT also help your team forge even stronger alliances amongst themselves and your patients. You can read and watch how our team greatly benefitted from this campaign in 2008 here! Go on get involved, and have a laugh at me make a fool of myself online with my kick off video!

Master your Wealth- 4th December 2009- 100% Money Back Guarantee

Finally, this is your last chance this year to learn about how to take control of your own financial investments and destiny in my "Master your Wealth" course. From 2010, i will be increasing the fee significantly from £250+VAT to well over £1000+VAT in 2010, and i will only be doing it once in 2010. Why? Well I know the content is priceless, but ultimately it is about stepping up in your own life and implementing change to grow your wealth. A few have already started off on this journey, if you want to come along for the ride, book your space, before the big price rise in 2010. Take a look at this recent blog post of mine which details some of the tools and techniques i personally use to manage my own money.

To make your booking click here. I am so certain you will find such value, that i am happy to even offer a 100% money back guarantee if after the morning session you feel you are not on the right course. At the lunchtime break you just need to hand your course notes back and we will offer you a full refund there and then if you wish for a full refund. Go on step up, you will not regret it!

Can't make it fairer than that!

Have a brilliant weekend!

Arun Mehra FCA

P.S . Not downloaded our latest Full Incorporation Study?...Then get it here!