111: How Much Should You Pay for Your Accounting Services?

Welcome to DSO Secrets. I know what it's like to be an entrepreneur in the dental industry. I've had my ups and downs, just like you. There's so much opportunity to be excited about, but so few resources to get answers. From here on DSO Secrets, we get you those answers so you can change the lives you're meant to bless and achieve your personal success.

When I was working as an associate

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You have this natural talent, this unique ability. Happy day to you. This is Ken Kaufman and I am thrilled to welcome you to another episode of DSO Secrets. I am your guest host today, filling in for the ever illustrious Emmett Scott. And I'm very excited to introduce today's guest, Mike White. Now, Mike's been in and around the dental industry for a while, but just to set the record straight, because there's all kinds of rumors. No, I'm kidding. No rumors are going on about you, Mike. But he started his accounting and consulting firm, Mike White and Associates, or MWA, back in 2007. A couple years ago it was purchased by CLA, which is now. Is it top 10? Top 12?

Top 8? Yeah. Top 8 termination accounting firm in the

United States, which is amazing. And Mike has stayed on and taken the role of healthcare principal and within the entire organization, his primary. He's the one that's primarily focused on the DSO industry and dental at large. He has a bachelor's and master's degree in accounting. He's a cpa. He's a sought after speaker throughout the dental industry. Just a real thought leader. Appreciate everything he's done there. Mike, thank you for joining today's show.

Oh, thanks for having me. I'm so excited to be here. I listened to the podcast as well. So excited to finally be on the speaking side of it. So this is going to be fun. And Kenny, you and I have always had great conversations, so I think today's gonna be a lot of fun.

Yeah, it will. Look, I've been looking forward to this for sure. So I like to start off with this question, Mike, and I think you'll get a kick out of this. What led you into this DSO industry and what in the world are you still doing here?

Well, the first one, oddly enough, and you and I have chatted about this. It's actually Emmett Scott's fault, I say jokingly aside. But he gave me an opportunity. He gave me an opportunity for some Ideas of creativity, what we were already doing in the solo dental practice space. And I saw what he was building. I was so impressed and empowered by what he was doing, his knowledge base, and still am. But he gave me an opportunity to jump in. And shortly after we started working with Emmett. And still to this day we continue to line up a few other DSOs and made that a since 2010. And now our team has various CFOs and COOs, if you will, from 10 to 15, 25 years in the DSO space. So it's been fun. Why I'm still here is I think there's still so much work to do. You know, it's funny seeing how far we have come since 2010, but still how far there is to go and how much education and opportunity there is to further this industry for ultimately the clinical care and patient care that we all seek. So it's gonna be a fun ride for the next 10 to 15 years as well.

Yeah, that's right. It's been a great 10 to 15, and there's a great 10 to 15 ahead and probably a lot more than that. Yeah, I appreciate that perspective. So, Mike, I want to jump right into a topic that I seem to get asked a lot. And we know that dental group leaders, you know, dental group practices and leaders of these types of organizations that are trying to build up, you know, more than one or two locations and bring on associates they love to benchmark. They want to know what percentage the costs are of all of these different things on their profit and loss statement, which is good and helpful, can be a little misleading sometimes. So I'm going to ask this question, maybe a little bit tongue in cheek. I ask this all the time and it is, how much should I be paying for accounting? And usually they're looking for some quick percentage to try to get to. And so let's take a little bit of time and unpack this concept. How would you start to address for somebody when they say how much should they be paying for accounting?

You know, it's so. And I think the unpacking is going to be so critical and I'm sure we could spend two hours on the variations of where people are in the life cycle of their DSO or multisite group. You know what the average dental practice or practitioner I get to start working with? You know, dental bookkeeping, I'll call it. Let's just start with the foundation. Bookkeeping was such an afterthought. A spouse did it, a CPA down the road, a friend, family, or they even Tried to do it themselves in many cases. Cases. So their average annual spend was maybe $3,000 a year on a million dollar practice. So negligible at best. But as you know, when you start building a dso, so if we go straight from one location to three locations, we may be not at a DSO yet, but we're starting to build infrastructure. We're starting to really want to know profitability by location. And so some of those benchmarkings, to me that's even in CFO level or higher, a little bit higher level. But we're starting to know, okay, is a regional manager at she at corporate or he or she at corporate or you know, still attracting a bookkeeper and HR person, one per location. Right. You know the global answer. When I benchmark a percentage, I look at 1.24% just for the accounting function. And I've looked at 7,000 plus practices to arrive at that number. And that seems to be an industry average. Not even just with our firm, but when I've talked to peer firms and all that. And you know, Ken, you and I were just talking about a few of the peers in our marketplace that, you know, we're all friends and we keep up with each other, but 1.254% is kind of that industry average for just the bookkeeping function and what that entails. If you outsource it or even bring it in house, you're starting to bring on accounts payable clerk, a senior accountant to oversee that and maybe do the basic level foundational reporting, a controller who's going to oversee, make sure you're in compliance, do the reporting that's necessary for your bank covenants. And those are multiple layers. I mean in between there, depending on how big you are, could be multiple accountants, multiple AP clerks and really driving that function. Then you layer on the strategy, the CFO. And to me that could be another half percent to 1% higher depending on where you are in that lifecycle of growth. A lot of times when we work with groups, there's efficiencies to be gained as you build out your systems and processes, but the same task per location have to be done. So the efficiencies you're really looking for are software driven. So getting from QuickBooks online to a Sage intact to maybe a Netsuite in time and really seeing what integrates today and kind of working through that. And I'll pause there and see if there's questions to build off that.

Yeah, so this is a great start to start to break this down and unpack it so one and a quarter percent roughly. And then when you want to add anything strategic, you've got to start to look at maybe another half to a full percent. And that's usually within the package of a CFO or a fractional cfo. What do you see out there? Because a fractional CFO is an interesting concept, but then when you actually go to find somebody or a firm that could execute on it with a little bit DSO experience anyway, what are you seeing out there and trends for? Because again, I get asked this question a lot. Hey, Ken, how do I, I want to get to the next level. I think I need better reporting. I want to do some forecasting, some forward looking, and how do I, how do I get there? And that fractional piece could be so critical. What, what trends are you seeing there? And opportunities exist.

Well, it's a big core piece of our business, as you know, and we actually just added another gentleman in Pasadena with 25 years in PE space and CPA and all the like. So we're excited to continue to build our CFO team out as well. But you're starting to build an evolution. You're wanting to tell the story, you know, as you know, Ken and I think it was on one of your earlier podcasts where you talked about financing with Nathan Chitty and Ben Hernandez and you start talking about, you know, getting the sophistication of a budget build or forecast, a trend analysis. That story you're building and the sophistication of your financial is important, but I always tell people, look, we can get the basic bookkeeping done and we got to tell the right story. So make sure you're in EBITDA format, make sure you're capitalizing things that shouldn't be expensed and driving that valuation of your business. So the bankers, the lenders, the investors, even your future partners understand the value that you're bringing and what your practices are driving day to day. You know, when we talk about benchmarks, it's not just about the accounting spend. You know, we look at marketing dollars, new patients to active patients, collection ratio, staff wages, that hygiene assistant, you know, front office as a correlation to income. You want to know all of those correlations and that information so you understand what you're doing with this. It's one thing, Ken, for you and I to prepare a financial statement and if we just email it to them or drop it off in the mail or whatever we may do and they put it in the, you know, the closet, if they don't do anything with that information which is where the CFO comes in to say hey, directionally we made these decisions, this is how they paid off. And that's where I think it's so critical to overlay and start bringing in that practitional services and cla. We do it, we have a great team. There's a few other players that I think do a really great job in the industry as well. There's not many, and I will say that not being arrogant or anything, but there's just a lot of a few of us that have really made this a core focus and I think that's where you really have to spend your time. There's a ton of dental CPAs and they're incredibly intelligent. But that CFO strategy place you of understanding the DSO space and taking people to the next level. I think there's just a good handful of folks that can do it.

Well, yeah, fair. It's a great point. I want to stick on this for a minute. I've always said, and this is an oversimplification, but I've always said accounting is about what happened yesterday in the day and as far back as you want to go before that. Finance is about what's going to happen tomorrow and beyond and gets into some of the strategic elements and the planning and forecasting. And of course, you know, big industry refers to it as financial planning and analysis or fpa. At what size and at what point, I'm curious, triggers and because there's size, there's complexity, there's trajectory, there's, you know, do you have a senior lender where you've got bank covenants and some complexities there. I'm curious, when do you see it goes from that bookkeeping focus to okay now bookkeeping is the baseline and now we're going to start building strategy and doing analysis and starting to look forward. When do you see those organizations hit that and how do they, how do they structure themselves around that?

It's great question. I'm going to unpack it a little bit if you don't mind. You know, you start thinking about these layers that you're going to bring in when we come into a new relationship where we're at three locations, let's say we understand from three locations to 20 or 3 million in revenue to 20, 25 million in revenue, what the evolution and when they should be hiring key roles are and where it makes more sense to outsource versus insource those you respective roles. When we take on a three location group, we go back to we're going to have an accounts payable clerk. Well, if you just go get one on your own, 40 to 45,000 a year. We're going to have a senior accountant. Well, in today's marketplace are highly sought after. So 75 to 85,000 a year. We're gonna have a controller at 125 to 150,000 a year also on your team. So if you're wanting to replace every one of those people that we have done on a fractional basis, you start really building up your bench which you're blowing through 1.24% of your spend. So what we've always and then out a CFO at 250 plus in this industry it's, you know, you really start adding that strategy side. But when you start looking at those pieces, we always looked at those inflection points at three locations or three million of revenue. Seven locations. At 15 at 22 and really every eight thereafter there's these, you know, at three you're bringing in a regional manager. We need to get our bookkeeping right where you're not just splitting cost evenly across practices. We truly know what our accounting is at each location. We possibly have a management company even if we don't have a dso. Your banker is going to say okay, you hit three locations pretty quick. Let's wait a minute before we go to four. And we all know this. And then it happens again at seven locations. Well now at seven we're starting to think okay, we need a little bit more sophistication. Maybe we bring an accountant in house because I want things a little more real time than a fractional person may do and I want to be able to walk down the hall and talk to that person. So we bring in a senior accountant or an AP clerk in house. Then at 15 locations now our banking is getting a bit more sophisticated. We're starting to have the conversation is QuickBooks the right software is do we need a controller full time? Should we be going to accrual basis? And at 20 to 25 million revenue, I'm saying yes to those. Let's, let's start looking to accrual basis. Let's get to sage intact. Let's, you know, let's add to our sophistication of our accounting systems and it can maybe bring in that next person, a heavy controller, a light CFO at that point to continue to build out that debt. Now Ken, with that being said, we have three locations going on four that are well over 50 million that we do everything from accounts payable to CFO, we do it all for them. It's abnormal. And we love those roles and love that responsibility, but that's the way they wanted to build their model and we support them fully, of course, in that. But those are those typical inflection points. But there's always exceptions to that rule.

Yeah, because I've always said. And by the way, Mike, what you just laid down there was brilliant. That's worth its weight in gold. And you've now given me. Every time I get asked this question of when should I hire a cfo, I'm going to say just go listen to this podcast episode because I found a lot of truth in everything that you said there. I find there's a couple of other levers. One of them is trajectory. Like if you're three locations but you're going to be 15 next year, you probably need to break that one and a quarter percent number and get or else you're going to have a massive mess on the other side. So trajectory. And I say up and down because I've been in a couple of turnaround situations and if you're going down quickly, you also need to get a little bit more firepower around you so you can see more clearly and get more real time information. So trajectory is one and then the other piece, I'd say and are you

truly implementing a dso? So many of us listen to these conferences and Ken, you and I both spoke in so many, many of them now over the past half decade or so. And I think people think, well, if I just go get a dso, you know, dicomyer Parsons, or somebody goes and does these documents, I'm done, I have a dso. But the reality is the heavy lifting, no offense to the attorneys, they do a lot of work to get there for compliance, legal and regulatory. But the accounting, we've got to maintain it to make sure there's a standard that's upheld and those legal documents are good for you. And with that you see these spikes in implementing the dso, as I call it, reading the legal, legal documents, understanding the value of the services you're providing, understanding the services you're going to provide. Is there a sub DSO or not? Are we doing market level, you know, regional basis, if you will, on taxation. So you have these spikes in projects. Are we going to implement a new software? Okay, we got to layer up a little bit and there's going to be some additional cost. And I think that becomes one of the under underappreciated or under conversation, if you will, where people don't understand Enough that it takes a heavy lifting just to implement all that stuff. We've had many conversations where it's like, all right, Mike, we gave you all the documents. Can we meet on it next week? So it's just education, and that's why you and I love doing what we do here and getting that with the word out.

Yeah, that's right. So the trajectory is one piece and the other piece is complexity. And implementing DSO documents is absolutely one of those things that if you're doing, you've got to get some more firepower around you because. And I've come across a lot of groups where they say, hey, I've got my DSO created and I'm good to go. And I asked the question of, okay, great, so tell me about your equipment use fee and how you're charging that from your sub DSO down to your practice. And then they, you know, deer in the headlights and all of a sudden you have a dso, but you're not compliant with it. And actually you're, you're breaching the agreements that you put in place and signed. And there it's a heavy lift. Especially when we entity up like we do in dental and to consolidate and look at all and still be able to see your financials and get good, good accurate reporting, that complexity goes up dramatically. So if you're a three or five practice group and you're putting your DSO documents in place, you probably need to spend more than one and a quarter because you need a lot more than just a bookkeeper to get that, to make that happen. What do you want to layer on there, Mike?

No, I think that's absolutely, absolutely correct. I mean, I don't know that I can say it any better from that standpoint because it's. Everything you said is so critical layering into that. You know, if we're going from three, and I have a few of these that I'm talking to today that, hey, Mike, we're doing three, but we anticipate being 30 by the end of next year. And let's say 30 ends up being 20 or 25, but it maybe ends up being 40. Great. Well, we're going to start with Sage intact from day one. We're not going to layer into that. We're going to go ahead and start with the right accounting system. We're going to go ahead and start hiring and talking to John Fiddler or some of these other folks to get them in there to get the right people on board so we can facilitate that process a lot faster. And then it gets really into the strategy, that CFO side. All right, how are we going to go from 3 to 25? How are we going to get the funding to do it? How are we going to cash flow it? What's our distributions to our investors? Are we doing distributions? And you get into the fun part of what is your story and what is your DSO is as Jake Poole says, you've seen one dso, you've seen one. And I think there's a lot of truth to that statement.

So much truth to that. Awesome. Well, I think this has been a really great exercise in kind of breaking down what all this means. And you and I, like you said, we could probably go into two hours about the finer details of the different roles, the backward looking, the forward looking, the analytics component. The next time, your financial forecasting elements. We'll probably leave that for another day.

Next time, next time. Yeah, absolutely.

We'll have to do it next time. But I've got a few more questions I want to ask you about. And it's around trends because one of the places where you are at an advantage from the operators of a DSO is you're looking at many every day and you have an opportunity to sort of look and see a purview or have a purview of what's going on in the industry. What are some of the trends you're seeing right now as it seems like we're starting to put Covid in the past and we're all looking forward, optimistic about the future.

Yeah, and I think that's it. Optimism coming out of COVID the rebound in dentistry, the health of the industry and the valuations that are coming from it. Trends this year, certainly going into the rest of this year, it's been heavy M and A. We're looking at a lot of transactions, we're looking at a lot of consolidations. I remember you and I both wrote an article in 20, you know, predicting 2020 and then of course predicting again 2021 and, and I think the pent up demand, what we all anticipated in 2020 was going to be a big year, is building up to be 2021 plus 2020 all in one year. So the amount of activity we're seeing, but we're also seeing a lot of new formations, a lot of new creativity platforms being created, a lot of, I'd say new ideas, innovative ideas and some cash flow. DSOs, meaning we're not building to sell, we're building to truly run a succession based business, which I love. You know, we all want to have some of Those be around for a long time. But you know, with possible tax legislation changing at the end of the year, you know, we won't speculate, but of course we can speculate. I think this is going to be a really heavy year with the importance of that. More and more outsiders, investors, private equity, you know, lenders are looking at this space and they're wanting to see the sophistication level of accounting go up. So we're doing a lot more quality of earnings, we're doing a lot more reviews and budgets for our clients and we already did a lot of those. But now the level is getting a higher level of depth, which has been fun to work through as well.

That's a great overview. Let me jump into this. What trends have you seen in DSO formations? Do you find more organizations are pushing toward that or has that trend slowed down at all?

No, I still think there's been quite a few that are forming DSOs. I remember if I look back two or three years ago, it was, do I want to do a management company or a dso like I want to do one of the two? Because I want to bring some of those managers or regionals out of the practice. We're starting to see people jump right into dso and I'd say in some cases a little too early because they don't understand the complexities and the amount of spend it's going to be. I mean, if you're 4 or 5 million in revenue and you're wanting to build a DSO, you may have $100,000 ahead of you and you want accounting fees to get it built. And I think that's a number that.

Not to mention maintain it.

Yeah, and then maintain it. Of course, that 1.24 early in your process may get stretched to one and a half to 1.75. And yes, I can quote you benchmarks all day long for everybody listening, because we've tested it, we measure it, we look at it every day because we hold ourselves to the same standards. We hold the vendors as well.

Nice. What are you seeing from private equity interest at this point? Do you find it's flat compared to last year? Going up, going down?

Definitely. Definitely going up. I'm seeing some new names and of course we're seeing some of the same. I'm seeing a lot more bolt ons. I mean, if we look to the heartland and ADP ideal, I think we'll see more of those. I think we'll see consolidation at the top and probably going in two to three years from now, we'll probably see that mid level consolidation, those 50 to 100 location groups starting to consolidate up as well. But there are still new private equity names that we hear from. I am interested to see more groups coming from Canada, coming from Europe. We have a couple that we're talking to coming out of Asia that are wanting to get into the US space and in some cases they're wanting to build, it's almost a test market where they want to build it in US to then take it back to, you know, Japan or Asia or Europe or whatever it may be. So we've been seeing a bit of that which has been fun. We've seen a lot of activity out of Canada and I think we'll continue to see that.

Yeah, interesting. Yeah, there's been some big deals in Canada recently. What about on the debt side? It just, it seems like that when I say there's been a lot of activity with the lenders, but they're not doing a ton of deals. They're like people are moving back and forth, they're buying each other. There's a ton of activity. But it still seems like it is a massive lift for the spirit for the smaller groups to be able to get the senior lending. And I'd just be interested. What are you seeing? What are you hearing? Because I know you're involved in helping people get debt placed all the time.

Yeah, we place over $100 million a year in debt for our clients through our budget process and running alongside. So it's, we're very active in that space now and we do it as part of the relationship. We don't take fees off of that. But with that being said, you're right, there's a finite, I mentioned a finite group or a small group of CFOs that are really good and I trust. And in this space, I would say the same thing with the DSO lenders. You're going to get some community banks that are, you know, you're in that small west Texas town, you're in that small town in Oklahoma, in California, Pickett, and they've grown along with you and they, they, you know, they've worked with you to get you to a certain point. But at some point they're like, yeah, you know, really would like you to add more real estate to your portfolio and not so many practices and they're wanting you to almost change your business model a little bit. So you're having to go to a lender like a Live Oak Bank, a Citibank, you know, that understand this space. I do see you know, there's a few lenders that are doing more than their fair share of deals and there are some that aren't, you know, are looking at a lot of deals but aren't getting anything done. So we're starting to talk to a lot of even call middle market mezda players or brokers, you know, that have, you know, put a lot of pieces together and put those deals together where they're almost participating out to a couple different banks. And that becomes really key. If you have a solid business plan, you're leaving money in the business. And of course this gets into that strategy side. I think those are where the success comes. I get asked all the time and Ken, I'm sure you do too. What is separating the three location group? Trying to get the 15 to the 100 location group that was there and passed past it and it said they invested in themselves and their business. They didn't maximize the distributions they took. Every time there was a step up in profit, they didn't take more homes. They almost looked at a two to three year lag. So what I, what I made two to three years ago within my business is what I'm going to make now. So I'm building up my balance sheet on a constant basis so I can reinvest in the deals. And I remember early on in talking to Emmett and those conversations we would have, that was such a critical part of that investment strategy and what he saw in the success of the DSO space is you got to be able to put up your money when a bank's not going to be doing it. So it's important to know.

Yeah, that's, that's great advice if you want to grow. I know that even the really, really small groups where you have the DSO leader or the dentist and CEO trying to, just getting out of the chair and getting, getting income replaced can sometimes be so difficult and then sometimes that income becomes so comfortable that getting to the next level requires you to have to keep like stepping down income to invest and to go. That's why it's been referred to Emmett's the one that coined the phrase as the dark tunnel because you have to go backwards so that you can ultimately go forwards and pass where you're at.

And Ken, you and I have both been in ownership situations where we've been those entrepreneurs, we've been those, you know, and I'm an owner shareholder at cla and proud of that. But we reinvest in our firm too. But it's those hyper growth years where you are Making less money than you made the year before. And sometimes you question, why am I doing this? So that's where that cfo, the strategist, the big picture of what are you trying to get to? And if you're just trying to get to 20 locations because your buddy got to 20, let's talk about what does it mean to you? Because your 20 may look different than 20. Your profitability at 10 may be incredible. I remember talking to somebody at a conference, and they had one location, and they were personally working two days a week making $3 million a year. And, like, I think I want to do a dso. And I was like, why? And they're like, well, everybody else is doing that. I'm like, okay, but let's talk through your situation, and do you need to. And it was. It was a fun conversation. And those are always great conversations to understand your individual vision. It's always great. I would say, go to these conferences, listen these podcasts, listen to me and you talk. Ken, be inspired by the conversation, but make sure you take that inspiration and do your homework for your own passion and vision.

Awesome. So my next question and what you just said, there probably would be one of your answers to this. What are some of the biggest oversights or mistakes that you see folks making in the dental space? Again, just because you have this purview, right, you have the benefit of seeing and you can pick up these trends.

You know, I think the precipitous of the conversation today is the cost of accounting. I'm going to, of course, utilize. I think accounting is highly undervalued in this industry. You know, we've seen so many deals where basically the same story, the financial statement before and after the work we've done increased the value of that business millions of dollars. And I remember I do a free analysis at every new client I work with. And I still. It reminds me, there's one. It's like, all right, we can completely overhaul your books. It's going to be a 20 to $30,000 investment, but it's going to add. I could see it. Five million in story, right? Five million in value. And they said, no. They said, I don't want to spend that much. And it sticks to me because it's such a powerful example of how it's undervalued. It's like, it really is important to tell the right story. And I know for this industry, I think they're starting to learn. And you asked me earlier the trends I'm seeing, I do believe the sophistication is continuing to grow and people are starting to see the importance of. People are looking at ebitda. They're looking at the value of my business, the cash flow and how to drive that performance. That's been an exciting evolution from where we were 10 years ago.

Yeah, no question. That's interesting. So the advice there would be don't undervalue and invest where you need to.

Invest where you need to.

Yeah, that's great. What about for others that are listening in that have an accounting or finance role, whether it's a leadership role or a middle management role, or they're new to the space and they're learning about it? What advice do you have for them about what are some of the things they can be doing to add value to their organizations and do a great job for their ownership?

No, I love that standard operating. If you're at that level and you're starting to build processes and procedures, I would say standard operating procedures. How do you replicate what your success has been in the first one location, the first 10, 15, 20? How is your business model replicating that? What is the playbook, if you will? You know, who are the key leaders? Who's accountable to what number? I'm a big accountability for those of you are listening and know me, have worked with me. I'm an accountability person. So every key performance indicator, I want somebody to own it. Every P and L chart of account item, I want somebody to own it. So if we miss that metric, we know who's not to yell at, but know who. Okay, what are the results based? Right. Why did we miss it? What could we have done different? Did this marketing strategy not work? Did something along this line pivot? Did our patient base change? Did our payer mix change? So to me, at that level, you're really getting into the widgets and understanding the correlation between your key performance indicators and your P and L and balance sheet and truly understanding what drives those metrics I think is a critical thing. And then of course, who within the team is accountable to each one of those?

Yeah, I've always liked to say that ultimately the finance leader in an organization becomes the protector of the business model, the innovator. They should be figuring out ways to innovate around the business model. But the finance leader and the finance team ultimately ends up with the understanding. They can see what's happening. And the business model starts to just emerge right off that spreadsheet or right off the page and you see where those levers are and the knobs are the KPIs where you can be pulling these different levers, sometimes with very little effort, create a lot more earnings. Sometimes it points that there are some heavy lifts or it's hey, we've got to take a step up to a next level platform in order to really achieve the scale. But yeah, being the protector and the innovator and contributor to the business model, I love that advice. I think it's spot on.

And last one I would say is, you know, I'm going back to the new person, new person in the role who wants to day one, make an immediate impact. When you start getting into this space and you see the financials, you're gonna be like, oh my gosh, we gotta do this and this and this. And you're gonna overwhelm the system in the process of, you know, I always say, pick one thing, focus on it. 90 days. It's almost a play off the EOS strategy, which dsos.eos seems to be so prevalent in this space. So it kind of works really well. So whether it be, hey, we're gonna put controls in a purchase system around dental supp supplies, work that for 90 days. See what our results were. Do we need another 90 days or do we keep going? Look at lab, when was the last time we negotiated our crown spend and all that good stuff. Marketing, who's owning that? And let's look at the ROI on our investment. So little by little you work yourself through those big move items within that first year of the P and L and then you also identified somebody to own it. So that's to put a little more layers onto it. That's what I would do. That's almost a lot of our playbook of what we do with our clients.

Very nice. Well, Mike, we're to the fun part. Well, it's all fun. We're to the funnest part of the interaction we get today in recording this. And that is what we call the lightning round. So I've got about questions. I'm going to hit you with back to back and we'll see how this goes. So what are you currently working on?

I have nine M&A deals that I'm currently working on and working on consolidations of some really exciting DSO strategies. There's two, two really large groups, over 50 locations that we're pulling together the entire back office for. So that's been a fun project because we're building the accounting systems out, we're building the software out, the KPIs, the team, we're basically building the playbook for the Next two years to hand it over to their internal team. So those are some fun projects.

That's awesome. Tell me, in your life, what are you the most proud of?

You know, my team. I mean I've surrounded myself with incredible people, you know, that were with me today and that have been with me in the past. And I just like you, Ken. I've learned so much from the industry. It's given me so much and I hope I've given a little bit back. You know, I hope as I look back, I mean I got 25 plus years left health hope. I know a lot of people thought when I sold I was going away, but that's not the case. I'm still here for many, many years to come. But I'm proud of the legacy we're building here. I think it's fun. We put a lot of education in the community and and hopefully we can keep doing that.

Yeah, that's awesome. Appreciate your thought leadership through the years. How about your favorite sports team?

I'd love to say the Cowboys. We'll see how this year goes. You know, Cowboys guy. I'm a Dallas, Texas grew up, you know, I like to watch the Rangers. I was a baseball pitcher growing up all the way through until I threw up my shoulder like every good left handed pitcher does. But still like to call strikes and pitches. I would have thrown in that situation. So a little bit of that too. So nice.

How about your favorite hobby?

Man, I wish I had more hobbies, Ken. I'm here in Colorado at some Airbnb which is a lot of fun. So we're going to do a little hiking. I'm going to take some time off next week, do some hiking and I love off road vehicles. Kind of passionate about that and exploring some new areas and spending time with wife. We're getting back to traveling so we started booking trips and traveling was a big part of my life and I'm looking forward to getting back to the that.

Very nice. Good for you guys. That's awesome. How about a favorite app on your phone?

I am ADD is all be out. So it's got to be some simple game widget that I can play around with in the mindless times that I'm trying to think through something. And I will go through those things like candy. I mean I just go through it every week, find something that pops up and chase it from candy crush to you know, bubble buster or whatever it may be. And then of course I've gotten really into podcasts over the last year and listening to my Fair share as well.

Yeah, it's such a powerful medium. Right. It's. You're on that or you're working out

at the gym and walking or working out or.

Yeah, get some perspective. Get some good content to think about. I'm the same. All right, so we're getting real close to the end here as we've been talking. Is there any parting advice or anything that sticks out to you that you'd like to share with our listeners as they're contemplating this DSO world and how they, how they should grow and what they should do? Any parting advice for these emerging groups and DSOs?

Yeah, spend time with your financials. I mean, I think the theme of today is accounting fundamentals. And what does your story tell you? So often I ask for. I always ask for financials. And if I'm talking to a new person and it almost seems like it's the first time they've looked at them when they're sending them over. So ask questions about your own financials. I mean, Ken and I would love to provide advice. And I know, Ken, you give a lot of thoughtful advice when people ask you. And, and, which is great because I always hear, hey, Ken told me this and I love that. But take a moment to look at your own story and does this make sense? Because a lot of us, our dental practices and our groups, we're so passionate about our business we're building. We want to talk about the theme and our replicability and why we're doing what we're doing, the markets we're in. And then you hand over your financials, which is what numbers people, private equity and lenders and bankers who are going to give you money to invest in. Look at this and like, hey, this all sounds amazing, but I don't see this on the paper at all. You're saying you're doing so great, but this shows that you're losing a half a million dollars a year. So spend time and ask questions of your advisors, and if they don't know how to answer them, then seek advice from people who do. Understand not only where you've been to Ken's earlier, you know, CPAs and bookkeepers, we can give you where you've been, but where are you going? And make sure you're seeking that right advice. You know, that would be my biggest thing. And stay true to what you're doing. It's so easy to see that, you know, CDP is doing this and MBT is doing this, and I want to go do that. And I had this conversation yesterday. It's like, well, great. That worked incredibly well for them. However, how are you going to be a little different? Like what are you going to do that sets you apart from the incredibleness that they've built? So, you know, know your story as well.

So yeah, awesome. I that's great advice and timely advice and just to make sure if there are any of the listeners that want to reach out, what's the best way for them to connect with you?

Yeah, I'm one of the rarities that's not on Facebook. Sorry about that. But I am on LinkedIn also. You can email me at mike whitelaconnect.com and I'm happy to give my cell phone 214-498-5941 and I am anally responsive. For those of you who do know me, I pride myself I'm in the service business. So if you have a question, I'm going to get back to you timely and I, you know, that's what our expectations are in the team as well.

So that's awesome. Perfect. All right, so key takeaways. First one is we now have an answer to the question of how much should I spend on accounting and what everything that Mike said, what I heard him say was it depends on, on a lot of different things, but bookkeeping wise, you've got a good number there and then it just depends on how fast you're growing and your complexity. So got a lot of great takeaways and some great industry insights and trends going on. Mike, I just, I can't thank you enough for joining today.

Yeah, thanks for having me. I'm so excited to be here and I'm excited to be here. Thank you so much and thanks for everybody who's listened today.

All right, well, many, many thanks to all of you who are listening in. This is a wrap on how much you should spend on accounting and so many other great pieces of advice and wisdom from Mike White. Happy day.

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