What to Do When One Partner Invests in Growth and the Other Wants Cash Out — Cash Flow Strategies for Dental Partnerships

Partnerships promise shared success — but in reality, they often fracture when partners want different things from the same pot of cash.
Since 2019, working with dental partnerships from £500K single-site clinics to £6M multi-location groups, I’ve seen this paradox repeatedly:

• One partner wants to reinvest into new chairs, scanners, or expansion.
  
• The other wants to maximise drawings for personal income.
  On paper, the accounts show healthy profit. In practice, liquidity vanishes when reinvestment and drawings collide.
  

💬 From my lived experience as a Dental CFO, partnerships rarely fail because they lack profit — they fail because partners pull cash in different directions without a cash flow framework to manage both growth and income.

What is DentPulse?

DentPulse™ is the UK’s only financial management platform built exclusively for dental practices — and uniquely designed to handle partnership cash flow conflicts.

For partnerships, DentPulse doesn’t just track profit. It models scenarios where one partner invests in growth while another withdraws cash — showing in real time how liquidity, reserves, and stability are affected.

Powered by proprietary frameworks:

• MAP Method™ — Manage, Analyse, Project 13-week forecasts that include drawings and growth spend.
  
• CFFP™ — Cash Flow Future Pairing of NHS/private inflows against reinvestment, loans, and drawings.
  
• APEX™ — Associate Performance Efficiency Index, vital in partnerships funding growth from increased clinical output.
  
• PPBT™ — Personal Profit Before Tax, showing what each partner truly keeps after costs and reinvestments.
  

💬 Every framework comes from lived client work: reviewing partnership agreements, reconciling Xero forecasts, and showing partners how “growth vs cash-out” decisions play out in the bank — not just on paper.

Fast Takeaway: Why Growth vs Drawings Creates Cash Flow Stress

💬 Insight: From my experience as a Dental CFO since 2019, growth vs cash-out isn’t a profit issue — it’s a timing issue. Practices collapse into overdrafts when both partners expect the pot to serve different purposes at the same time.

TL;DR – Growth vs Cash-Out in One Line

When one partner invests and the other withdraws, liquidity drains from both ends — leaving the practice cash-poor even if profit looks healthy.
To protect stability:

• Forecast growth spend against inflows before approving it.
  
• Ringfence one partner-drawing cycle in reserve.
  
• Formalise rules on reinvestment vs withdrawals.

Bottom line: Without rules, growth vs cash-out becomes an argument. With rules, both can coexist.

1: Why does reinvestment strain partnership cash flow even when profit looks healthy?

Reinvestment strains partnership cash flow even when profit looks healthy because growth costs are upfront, while returns arrive months or years later. From my experience as a Dental CFO since 2019, I’ve seen practices showing £200K profit on paper but still struggling to pay suppliers because £80K was tied up in new equipment purchases before income increased.

💬 The misconception I hear most often: “If we have profit, we can afford to invest.” In reality, profit is retrospective — it doesn’t mean liquidity exists today to fund both reinvestment and drawings.

Case Study — Two-Partner Private/NHS Practice (South East England, 2022)

• Reported profit (year-end) = £320K (£160K each).
  
• Partner A reinvested £60K into a scanner and marketing campaign in July.
  
• Partner B continued monthly drawings of £12K.
  
• By September, cash reserves had dropped to £18K with payroll due at £46K.
  
• The scanner delivered ROI over 18 months, but the immediate outflow forced overdraft reliance.

Lesson: Profit on paper ≠ liquidity in the bank. Growth costs today reduce cash available for drawings tomorrow.

2: Why do mismatched partner priorities destabilise liquidity?

Mismatched priorities destabilise liquidity because one partner values reinvestment while another prioritises personal income — draining reserves faster than they’re replenished. From my experience as a Dental CFO since 2019, I’ve seen partnerships collapse not from lack of profit, but from one partner pulling for expansion while the other pulls cash out.

💬 The mistake I see: partners assume “we both want the practice to succeed,” but success is defined differently — for one it’s growth, for the other it’s take-home. Without rules, cash flow becomes the battleground.

Case Study — Three-Partner Mixed Practice (Midlands, 2023)

• Annual profit allocation = £450K (£150K each).
  
• Partner A wanted to reinvest £80K into a new surgery.
  
• Partner B insisted on maintaining £12K/month drawings.
  
• Partner C tried to mediate but NHS payments ran 3 weeks late in September.
  
• Result: £68K payroll + £14K labs fell due with only £42K in the bank.
  
• Resentment grew as Partner A blamed drawings, Partner B blamed overspending.

Lesson: Liquidity isn’t just financial — it’s emotional. Mismatched priorities create mistrust that destabilises both reserves and relationships.

How can practices balance growth investment with partner drawings?

Balancing growth investment with partner drawings requires aligning both to cleared cash rather than treating them as separate decisions. From my experience as a Dental CFO since 2019, partnerships run into cash flow stress not because growth or drawings are bad, but because they collide at the same time without planning.

💬 The misconception: “If profit is there, we can fund both.” In reality, large capital spends (scanners, chairs, refurbs) often hit at the same time as drawings — draining liquidity before inflows arrive.

Case Study — Three-Partner NHS/Private Partnership (South East England, 2023)

• Scanner investment: £40K upfront in June.
  
• Each partner also drew £10K that month (£30K total).
  
• Payroll: £52K due on the 28th.
  
• Bank balance after all outflows: just £12K — overdraft was required within 10 days.

Before/After Snapshot – Growth Spend vs Drawings vs Liquidity

Key lesson from my experience: it’s not about choosing between growth or drawings — it’s about staging growth spend, fixing baseline drawings, and holding a buffer so liquidity remains intact.

How to Forecast Cash Flow in a Dental Partnership With Multiple Principals

Cash flow forecasting in multi-principal partnerships is harder because inflows, outflows, and drawings multiply. From my experience as a Dental CFO since 2019, I’ve seen practices with three or four partners run into liquidity crises simply because drawings weren’t mapped alongside NHS disbursements and private inflows.

💬 The misconception: “More partners = more stability.” In reality, more partners = more drawings, and if they aren’t forecasted against inflows, the shared pot empties faster.

For the full playbook on forecasting across multiple principals, see: How to Forecast Cash Flow in a Dental Partnership With Multiple Principals

Your Next Steps — DIY or Done-for-You

DIY Approach: How to Balance Growth and Drawings Without Draining Cash Flow

You don’t need DentPulse to stabilise this — here’s the exact framework we use with partnership-led practices that you can apply manually:

1. Build a 13-Week Forecast Including Growth Spend
   • Map NHS disbursements, private inflows, and all fixed outflows (payroll, rent, loans, labs).
     
   • Add planned growth spend (e.g., scanners, new surgeries) into the same calendar.
     
   • Highlight the weeks where drawings + growth spend exceed inflows — those are your liquidity red zones.
2. Separate Growth Spend From Drawings
   • Treat reinvestment as a separate “fund” — not mixed with distributable profit.
     
   • Example: If annual profit is £300K, ringfence £60K for growth and £240K for drawings.
     
   • This stops one partner’s investment decision from draining cash earmarked for income.
3. Adopt Fixed + Variable Drawings
   • Set a safe fixed monthly drawing at 60–70% of forecast profit.
     
   • Add variable top-ups quarterly once cleared cash confirms reserves are healthy.
     
   • This prevents one partner from over-drawing during a “good month” while growth costs are still being repaid.
4. Ringfence a Capital Buffer
   • Maintain at least one month of drawings per partner in reserve.
     
   • Example: If each partner draws £10K/month, hold £10K × number of partners in a protected capital account.
     
   • This ensures liquidity doesn’t collapse when growth spend and payroll collide.
5. Track Retained Cash Weekly (PPBT™ Logic)
   • Every Friday, calculate what remains after fixed costs, growth spend, and drawings.
     
   • Stability target: 10–15% retained cash.
     
   • If reserves fall below this buffer, pause drawings or delay growth spend until inflows catch up.

📎 Download: [Growth vs Drawings Cash Flow Planner (Excel)] — pre-built to model growth costs, partner drawings, and liquidity buffers across 13 weeks.

Done-for-You With DentPulse (Optional)

If you’d rather not juggle spreadsheets, DentPulse automates the entire balance in under 2 weeks:

• MAP Method™ forecasts that model growth spend, partner drawings, and NHS/private inflows together.
  
• CFFP™ calendars aligning reinvestment costs and drawings with payroll, loans, and disbursements.
  
• PPBT™ dashboards showing what each partner truly keeps after costs, growth spend, and drawings.
  
• Alerts when drawings or growth spend risk draining liquidity below safe levels — before the cash gap hits.

👉 [Book a Free Partnership Cash Flow Review →]

💬 Bottom line: You can balance growth and drawings manually with the DIY framework. DentPulse just makes it faster, automated, and always accurate — turning potential disputes into data-driven agreements.

FAQs – Growth vs Drawings in Dental Partnerships

1. Why does reinvestment by one partner create cash flow strain for the whole partnership?

Reinvestment creates strain because the spend is usually taken from shared partnership cash — not a ringfenced growth fund. From my experience as a Dental CFO since 2019, I’ve seen one partner approve a £40K scanner purchase while another expected a £10K monthly drawing. The scanner tied up liquidity, leaving payroll and drawings uncovered.
DIY fix: Always ringfence growth spend separately from distributable profit.
DentPulse option: MAP Method™ forecasts growth spend against inflows, so partners see the impact before approving.

2. Can a practice grow and still maintain stable partner drawings?

Yes — but only when growth spend and drawings are separated. In partnerships I’ve worked with, growth projects without forecasting typically reduce liquidity by 20–30% in the quarter of spend. Practices that used a fixed + variable drawing model maintained both stability and investment.
DIY fix: Cap fixed drawings at 60–70% of forecast profit, and release quarterly top-ups once cleared inflows cover growth spend.
DentPulse option: CFFP™ calendars show when both growth repayments and drawings can safely be scheduled without overlap.

3. What’s the most common mistake partnerships make with growth vs drawings?

The most common mistake is treating growth spend as “shared practice expenditure” while still releasing drawings as if cash were untouched. From my experience as a dental accountant since 2019, this double use of cash is the fastest way to trigger overdraft reliance.
DIY fix: Deduct growth spend from distributable profit before calculating drawings.
DentPulse option: PPBT™ dashboards automatically adjust distributable profit after growth spend, showing each partner their true take-home.

4. How can partners prevent disputes when one wants reinvestment and another wants income?

Disputes arise because “fairness” is undefined. One partner values future growth, the other values immediate cash. Without formal rules, both feel short-changed.
DIY fix: Add a growth clause to the partnership agreement — e.g., “10% of annual profit ringfenced for reinvestment, remainder available for drawings.”
DentPulse option: Partnership dashboards model growth vs drawing scenarios, creating transparency and removing subjectivity.

5. Can partnerships protect liquidity during big growth projects (new site, scanner, refit)?

Yes. Liquidity protection requires pre-building a capital buffer. In practices I’ve worked with, holding at least one month of drawings per partner plus one month of fixed costs prevented growth projects from destabilising the bank balance.
DIY fix: Build this buffer before approving spend — not after.
DentPulse option: Real-time buffer tracking sends alerts when liquidity dips below stability thresholds during growth phases.