205: CEO Series: How Brannon Moncrief Built a Leading M&A Firm

We've now sold over 1500 dental practices across the country. A lot of those being traditional practice sales, doctor to doctor deals, and then over 200 DSO and private equity transactions.

Hi, I'm Emmett Scott, and just like you, I've had my ups and downs in the dental industry, but times are changing. The DEO has built a map of how to succeed in one of the most challenging industries to navigate. On this show, we talk to dental industry leaders, solve problems, and get you the answers you need to face these challenging times and thrive. Welcome to DEO's Growth Secrets podcast for dental organizations. Now let's get started.

All right. Hello, everybody. Welcome to another episode of DEO's Growth Secrets podcast. I'm Jake Boole, the CEO of the DEO, and today we're going to do something a little bit different. We're calling this our CEO series. All of you know that within the dental industry, us at DEO have relationships with a lot of our industry partners. These are partners who come in and are trying to help your business, trying to, you know, save you time and money so you don't have to hire entire teams to build out softwares and build out, you know, all the complications that it takes to run a dental group and dental practices. And we want to talk to some of those leaders and see what it's like to be a CEO for them. Right, because we often forget as you're working with your industry partners and your dental offices and the people the company supporting you, you know, those folks are entrepreneurs just like you, and they're, you know, finding the same challenges and trying to figure out how to grow and scale just like you. So we thought it would be cool to bring on a few of our best industry partners and talk about that. So today I have Brandon Moncrief, CEO and principal of McLaren Associates. So McLaren Associates is a close partner with the DEO. You guys have been supporting a lot of our members who are looking to exit or prepare for an exit or understand what they need to do later on to exit, build a vision for exiting and transacting. And so, Brandon, you've been working with our members for a while, but today we're going to talk about something different, which is your entrepreneurial journey. So, Brandon, do you want to give yourself a little bit of an introduction and give folks on listening here and understanding of what you're, who you are, and what you're all about?

Yeah, absolutely. Thanks, Jake. Good to see you. And thanks for having me. So, as Jake said, I'm the principal CEO of McLaren and Associates. My journey in dentistry started about 23 years ago. I've spent my entire professional life in dentistry, and I have a finance degree from Texas A and M University. So back When I was 21 years old, I interviewed with about 80 different companies as I was graduating from college and took a position as an underwriter at a small finance company that specialized in lending money to dentists all across the country to acquire, start, and expand practices. So I thought it seemed like a cool industry. It was a small company. I was going to get to use my degree every day rather than just taking some random sales job straight out of college, and started there as an underwriter, just getting to know the business of dentistry and the financial inner workings of practices, and worked my way up over the course of about nine years to becoming the director of business development. So at that point, my job was to develop referral relationships with brokers and CPAs and attorneys and consultants that serve dentists on a daily basis. And they would refer those dentists to me if they were looking to buy practice for a loan to fund that acquisition. So was essentially running the dental lending division at that company. And nine years in, I realized that I really wanted to get out of banking, but didn't want to leave dentistry. I wanted to kind of stay in the M and A space within dentistry, but wanted to move on the sell side and become a broker, become a sell side advisor. And it was kind of a unique evolution of banking in the dental industry that occurred. You know, when I started with that small finance company. It was all small finance companies out there lending money to dentists. There was about five or six small finance companies that worked specifically in the dental space. And by the time nine years went by, my competitors, I was still at this small finance company. My competitors were bank of America, Wells Fargo, some of the largest banks in the world. And I knew that being a small finance company, we were going to get pushed out of dentistry just because of the sheer competitive nature of these. In the size of these other lenders. So I approached Paul McLaren, who owned McLaren and Associates at the time. Paul was a former dentist that developed a hand disability and was really one of the first dental practice brokers in the country, based in Texas. And he was working with his son. I approached him about partnering with him or acquiring his business. I basically said, hey, I'm going to become a broker. I'm going to move from Houston to Austin. We can work together or compete against each other. Is there an opportunity for us to work together? And it was perfect. Timing. He said, look, I've been wanting to retire for a couple of years. My son, David McLaren, not quite experienced enough to take over the business. Why don't you guys partner 5050 and buy the company from me? And that was 13 years ago. So about 60 days following that conversation, I moved from Houston. Austin purchased McLaren Associates with David McLaren, the founder's son, and we started to kind of re engineer the business with the aspiration to grow it at that point. And we spent six years together growing the legacy business that I took over, which is really kind of the traditional practice sales, doctor to doctor business. We went from doing about 10 to 12 practice sales a year to doing about 50 practice sales a year across the state of Texas. And I remember this vividly. But following Thanksgiving one year, David came to me and said, hey, man, this was my dad's company. It's not my passion. These deals wear me out. It's a very stressful business, and I want to travel the world and pursue photography. And, you know, even though we're doing great, you want to run really hard. I'm kind of a free spirit. I want to exit the business. If you'll buy me out, that'd be great. And at that point in time, I invited my brother, who's now my business partner for the past seven years, to come over from Patterson Dental. He was also in the dental industry. Buy David out and become my partner. So for the past seven years, Ryan and I have owned the company and more recently brought on some minority partners, some really talented people that have been with us for a while. We rewarded them with equity, and we're now a team of 13. We're nationwide, have offices in Austin, San Diego, and Atlanta. We've now sold over 1500 dental practices across the country, a lot of those being traditional practice sales doctor to doctor deals, and then over 200 DSO and private equity transactions. So that's been the biggest change in our company. About five years ago, being based in Texas, we were kind of on the forefront of a lot of the consolidation that occurred early in the dental industry. And a lot of DSOs are based in Texas. It was a DSO friendly state, and it was a favorable environment for DSOs to start to consolidate the marketplace. So we started seeing that happening in our backyard, and we were like, all right, we need to get educated about private equity, and we need to build out a process to represent large practice owners who are looking to go down that path rather than the traditional doctor to doctor practice sales pack. So that was really a shot in the arm for our business. It was really, really fun to build out the team, build off a process and expand the company over the past five years. And you know, it's been very rewarding emotionally, financially for us and for our clients. So that's the sandbox that I play in every day. I lead our DSO and private equity team, you know, as well as kind of oversee the, the operations and the development and scaling of our business.

Yeah, I love that story. A few things about it that I love. So first, I love that if let's, we can either compete or be on the same team. I think that's something people don't think about enough. Right. Which is when you're opening something out, you know, you really can look around and say, is there anyone awesome around me that I can just hook onto, like a little, you know, a little attached to that already, you know, in motion rocket ship rather than starting over. So that was, sounds very smart. Sound like you guys were in alignment. And then I kind of, I'm very interesting too. One of the graphics that we show a lot in the DEO is when you talk about DSOs consolidating a similar industry was actually banking. Right? It was. If you, there's this, there's this chart if you look on Google, just search like bank consolidation. It's got all these banks and lenders and everything here. And over the past 20, 30 years, you see the big fish have kind of gobbled and it's kind of the smaller fish and it's kind of settled into a consolidated marketplace. And so as, as Dental's thinking about the way the consolidation goes and what, you know, all those types of things, it's interesting to look at banking as an example of how that went. So it sounds like you lived, you lived that you saw that coming and you decided to, to kind of get in the other end of it.

We stayed small and independent. And looking back as far as the dental lending environment, that was a mistake.

Right, right. You, you know, so, so kind of a, a lesson in just teaming up with, with people who were in alignment, you know, but also are on the same rocket ship that you're on. I, I, I love that. So, so you're a CEO and you've actually grown this business. Not only have you grown it, you've kind of transitioned it. Right. You've taken it from small mom and pop, which there's a lot of folks, a lot industry partners out there in dental who still have yet to do this. There's, they're still only working with mom and Pops because they're afraid of this transition. They're afraid of, am I going to upset the traditional industry, my current clients? It's like the innovator's dilemma, right? Am I going to upset my current clients if I go and work with these other people? So you led through that. Were there any challenges in doing that? I mean, this is essentially like change management, the whole different direction of the company.

Yeah, I mean, there were some significant challenges in it, I think, just in general, you know, DSO was kind of a four letter word for a long time. Right. So with a lot of our clients, we would even bring it up for fear of being run out of their office. So the way we run our company, we've always been very buttoned up and we want to make sure that we can deliver an incredible product and experience for our clients. And so we spent about two years really getting educated about private equity, ebitda, EBITDA multiples valuation through the lens of that marketplace and then going around and meeting with all the executives from all the DSOs to figure out, you know, who's who in the zoo, who's legit, who do we believe in, who do we not believe in, who do we want to allow to have a seat at the table and bid on our practices? So we spent quite a bit of time kind of building the infrastructure, building the team, building the knowledge base before we actually launched and started going to practice owners and saying, hey, this is who we are, this is what we can deliver. So there was a learning curve there and there was an investment that we had to make in time and resources and people. I think one of the things that I wish I would have done sooner is expand our team and delegate. That was one of the things that I was very, very protective of, protecting the reputation of the company, protecting the work product and really having too much on my plate where I was, if you will, chair side, right. And didn't remove myself from the chair soon enough to be able to lift my head up and expand my company and delegate, had I done that, you know, a couple of years sooner, I think we would be, you know, even bigger and, and more well known than we are today.

Yeah. So another cool thing that I think you did there, which I've actually been thinking about that a lot lately, which is this idea of when you first become an entrepreneur or a leader, there's all this kind of like, they call it like entrepreneur porn. Right? Like this entrepreneur, like getting you all excited about, like we're going to go and you Know, conquer the mountain and just do all these things. And part of the principles there is like, fail fast. Right? Just get out there and be active. Fail fast. But as I go in my career more. If you think about playing the long game, when you're playing the long game, you do things like take two years to research. Right. And interview dozens, if not hundreds of people. When you're going into a new endeavor, right. And you're doing change management, you're changing the company, you take it slow, you get, you stay buttoned up, you keep your communication in line and you really avoid this like frantic kind of energy and changing in changing course and direction. I think, you know, our members or folks that listen to the podcast would, you know, anytime we're launching some new initiative, right. They're adding a specialty or opening location, sometimes you can take it slow and get the information and do the research rather than jumping into it. It sounds like that's how you, how you approached going into the DSO market.

Yeah. You know, I think there's a balance there. You know, they say that, you know, perfection is the enemy of progress. Right. So you don't want. Everything doesn't have to be absolutely perfect in order for you to scale and expand. But at the same time, I'm not a big, like sage until you make it tight person. So I think there's a balance there that, a tightrope that you need to walk in order to, to be successful in scaling your business.

Yeah. And I think, I think one way to think about it is how much do you have to lose? Right. If you already have this whole company going on that's generating revenue and it's working right. Then, then maybe it's, you know, just take the time a little bit and, and do some research and enter the new thing kind of methodically and deliberately. Right. Which, which I just, I like that you did that. Right.

Yeah.

Your team, your team can't always handle that much change. And when you take it slow, it makes it easier for them to do that. So it sounds like it was successful.

Yeah, it's worked out wonderfully. But I think it's, it's. We had the benefit of having a foundational business that was paying the bills.

Exactly.

Allowed us to do that research and spend that time and forego maybe short term income or profit to play, you know, the long game. And I think a lot of, you know, the DEO members do the same. Right. A lot of people that we talk to have a badass, you know, initial location that does 2, 3, 4 million dollars a year now, that's paying the bills. And once you've built that, it allows you to continue to scale the business, knowing that, you know, you can afford to fail or afford for things not to go perfectly as you scale the business because, you know, you've got that foundational business and revenue source that's there as a backstop to pay your bills.

You got the golden goose, you know, you want to, you want to protect that golden goose. So the other thing that I want to touch on there is in you kind of developing as a leader was this idea of delegation. So, so what did you learn? You know, maybe, maybe even communicate in a way that folks and dental leaders and dental seniors maybe can learn from. Like, what did you learn about delegation? How did it go? Maybe? Where did you trip up? Where did you find success?

Yeah, so about. It was about four years ago, I want to say, where we adopted kind of a little bit of a hierarchy within our company. And I became the CEO, Ashley. Rather than the principal, I became the CEO. And at that time, I thought really hard about what that meant to become a CEO and act like a CEO. So I started, you know, reading a lot and kind of adopting a different mentality that my job was now to develop people and to develop the business rather than have my hands in every single deal and every single thing that we were working on. And once I took that mentality, it was a game changer for one, how excited I was when I got out of bed every day. And two, it forced me to build out the team because I decided there were certain things that I was no longer going to do. I quantified what my time was worth and best spent doing what I enjoyed and what I was really, really good at and really assigned a dollar value to my personal time and professional time. And when I did those things, it just transformed the way I looked at life and the way I looked at my business and forced me to go out and hire talent and make those investments and to train, mentor and delegates. And that's when the business started to grow.

Yeah. You know, an important point there is that the CEO position actually is a. Has a job description. Like, it is a role with, with specific KPIs and specific responsibilities. And one of the largest responsibilities there is to develop the people, right? Build the people who build the business. And when you're stuck doing the, you know, we call it like a player coach or like being a player on the team and not the coach or the gm, you don't have time to fulfill that Job description. So, so it sounds like you're able to delegate out and you know, find team that's doing the day to day, that's doing the blocking and tackling and then you can elevate up and become the true CEO whose job is to develop all the team around them.

Yeah. And through doing that I now spend my time doing what I love and that's talking to large practice owners on a daily basis, just getting to know them and you know, talk about strategy, talk about scaling, talk about what it means to be to build a meaningful business and then look to monetize it and then. Yeah, just talking with my team and developing people and helping them navigate the challenges that they have to navigate on a daily basis. Doing what's within their job description.

Yeah. So last, last thing I want to touch on just as far as a leader and a CEO. How do you deal with the stresses of being the person where it's all on your shoulders?

Right?

I mean essentially.

Yeah. Well, I think that starts obviously with having an awesome team, you know, that that's very talented, that you can trust and having a well versed team that has in each person they have a different personality and a different skill set so that you're all complementary to each other. You know, I think in order to be successful in small business you've got to have a rock star in every seat. So I'm big on recruiting the absolute best talent and compensating those people well so they stay with you because there's nothing worse than investing in someone a lot of time and energy and then have them lead you for, for one reason or the other. So being very careful about how you identify talent, onboard that talent and retain it I think is critically important. And then you know, understanding that not everything has to be perfect and that I think a superpower is staying calm in the face of adversity and just having faith that if you live by the right principles, you treat people well, you put your clients interest above everything else, as many of your D.O. members do every day in their practice. Everything else is going to take care of itself. So being calm and having faith that everything's going to work out is on a daily basis, I think critically important to being level headed and having perspective and making good decisions. Because when you're upset or angry or whatever it may be, you tend to lose sight of the ball and make split second decisions that can have a lasting impact.

Yeah, it's another one of those parts of the job description, the CEO which is to bring calm into the organization bring people a sense of stability and that means not having emotional rants and volatility with ourselves as the CEOs. So I love that. What are you working on now kind of with your CEO skills or personal development? Like, what's on your mind? Like, I need to get better on stage or I need to get better at how I'm communicating with my team, or I need to get my morning routine better. Like what's kind of on your mind right now?

So everything in the business is clicking. I think we've got a fantastic team. The work product's amazing. The client experience is great. The reputation kind of speaks for itself. I think for me now is trying to figure out how to have balance in my life and looking more at the personal side. You know, I have a young family and I've missed a lot of my kids childhood up to this point. So trying to figure out how to have better balance without sacrificing the performance of the business and whether that means, you know, continuing to onboard some talent to take some burden off of myself, or leveraging technology to be more efficient, whatever it may be, and then to be very protective of my personal time. That's kind of what I'm going through right now. How to carve out enough time so that I have time to spend with my kids, my wife, my friends and family, as well as take care of myself physically. Because if you don't take care of yourself, you know, emotionally and physically, at some point you're going to hit a breaking point and everything's going to suffer as a result, including the performance of the business.

Yeah, longevity is really the key. I mean, if we can go hard right now is one thing, but if we can go hard for the next 20 years, that's, I mean, that's the whole other thing. Right. And that's the key is being able to go, you know, keep going. You know, something that we see with our, the folks we work with, you know, as you elevate and as your. The business starts clicking more. It's an interesting thing that we come across as leaders, which is this feeling of this understanding that, you know, our job is just a few small hinges, is this push on a few small hinges, which is different than 15 years ago, which was our job was to like, you know, do a lot of tasks and a lot of like as much done as we could in the day. And then I've seen a lot of leaders struggle with the feeling that they're not doing a lot because all they're doing is Just a few really, really important things that have really, really high impact. And then we're left with like this feeling like, well, I'm, I'm not doing anything, but really, you're doing a lot.

I would love to get there. Jake, how about my, My calendar is busy every day when I walk in the morning.

So I think that's the first step. I think the first step is reducing the calendar. But you know, it's an interesting thing psychologically where sometimes the calendar expands because we feel like it's really getting moving forward. But you know, Alex Charfen, who's a business coach and I mean, I talk a lot about this, he says a lot, that as you grow, it'll, it'll start to get a little easier. But, but as leaders and just kind of speaking what we've seen with some of our members and people work with, it's hard to see that that is actually, like a lot of stuff is actually getting taken care of. But it feels like we kind of have to, to be on it. But that, I think that does come at some point, but. But maybe.

Yeah. And I think that's where having the right people and the trust, you know, that things are going to take care of themselves, that they have it under control. But yeah, that's going through that can be anxious. It can make you anxious, kind of losing control or giving up control. But as a CEO, that's kind of your, your job.

In reality, you're never been in more control. Right. Because you have the exact right people doing the exact right things and the risk is the lowest it's ever been. But it's just interesting as leaders, our brain, it takes a while to like wrap up, like, like understand, feel that. You know what I mean? It just, it's a whole, it's a whole thing. So I love that. I think, I think what you're, what you're experiencing is what a lot of people experience.

Yeah.

And I have friends and I, people, I'm. I'm kind of in the, in the arena too still, so I'm working a lot as well. But I have friends who are on the other end of that and yeah, they're, they have a calm, a calm life and the team is okay with that, you know, because they're, they're getting what they need and the CEOs moving the needles that they need to move, but maybe it's not necessarily at the, at the pace where it was 10 years ago and they don't, they don't need it to be, you know, so it's an interesting thing that I think only people who have been in the position can probably understand.

Yep. Yeah. One day, I will not find myself 12 months from now, 18 months from now, things are going to go this way.

Let's say 12 months. Let's say 12 months. Well, from what we can see and everything you guys have provided for us and our members and our clientele, you guys are doing great. I mean, truly, all of the folks that we work with, that work with, you guys have amazing, amazing things to say, and you guys have been a great partner. You provide a lot of incredible education to our members. So, Brandon, I don't know. From my perspective, I think. I think you can. You can take some time off. I think it's time. Yeah. Yeah, yeah. Thanks so much and thank you for participating in our CEO series here. And it's very cool to hear the story behind McLaren. And, yeah, if you're listening, look them up. You're thinking about, you know, what it might look like to not even exit, to transact, to recapitalize, to inject some money, to take some chips off the table, to prepare for that, to even understand what that might look like, even if it's three to five years down the road. Look up Brandon, look up McLaren, because they're super trustworthy group to kind of guide you down that path. So thank you so much.

Thank you for listening to deo's Growth Secrets podcast for dental organizations. Continue the conversation on our Facebook group and meet other dental leaders. Get questions answered and the strategies you need to succeed. Plus, we have some free resources for you right there on the Facebook page. Remember, you're not alone. Let's do this together. Join DEO's Growth Secrets Group on Facebook. And until next time, keep smiling.