142: The Executive Session - Scaling Without Utter Chaos

Foreign. Welcome back everybody, to another episode of the Dental Boardroom. And we are continuing on our executive session. This is episode number two of the executive session. The executive session is unique because it's more of a panel discussion. And I have Megan Shelton with Shelton Solutions talking about all things operational and coaching. And I have Michael Anderson, founder and founder and CEO. Michael, is it you or your wife who's the CEO of Wondrous?

You know, we still are both co founders, so we haven't, haven't leaned into those titles at all. So we both run the business together. Depends on the day.

Sounds like a well run marriage right there. You share in all responsibilities. Okay, so you guys are CO CEOs, but you guys started Wondrous, which is a marketing agency specific to dental. It's great, grown like crazy and you guys have done some really incredible things. So I won't introduce you again. If anyone did listen to the first executive session, which we did about two or three weeks ago, you can go back and listen to that. And that was sort of outlining some of the main issues in dentistry today and how we're sort of the issues we're seeing and how we're attempting to help our dentists be successful in overcoming those issues. Well, today is a subject that's near and dear to my heart. Having been a dentist, founder of a business practice, CFO and growing that business over the past 10 years with people and processes and marketing and onboarding and trying to deliver a quality service. And sometimes the chaos behind the scenes, sometimes the analogy I'll use is, is when you're building a business, it's almost like that massive Christmas tree. And from the front it looks beautiful. It's lit and orange ornaments. It's just great. Just, you know, it's just, it's a, it's a, it invokes the holiday spirit. But behind that tree sometimes are a thousand courts. Think of like the tree in, in Times Square, right in New York. Is that where it is behind these trees is just sometimes can be a mess. And so it's like you're trying to, you're trying to deliver this quality service as professionally as you can and care and you know, be involved, create outcomes while at the same time holding it all together behind the scenes as you scale. Because scale invites challenges. And that's what we're going to talk about today is scaling without chaos. Systems before growth. And so I'm going to be the panelists asking the questions and then we're just going to talk. But before we do, I Want to kick off a. I kind of want to frame this subject a little bit, and I want to frame it from a book I read called no Man's Land by a guy named Doug Tatum. I went to this conference. It was called Birthing of Giants, and it was about entrepreneurs trying to grow their business. And I met Doug there, and he's a professor at a university in Florida, and he wrote this book. And the main theme of this book is that as you grow, you go from being small to big. If you're small and you're boutique and you're giving a really good, high quality service, what does that do? It attracts more clients because people, at the end of the day, they're just. They're fishing for somebody that is good at what they do, that they can trust. And it's. Sometimes it's hard to find that person in our spaces. Help me find a marketing company that really works, that really gets in my numbers, gets in my practice management software and helps me track and measure and find the right channels for marketing. You know, that's what they're looking for. Or help me set up a management platform and a communications and a leadership platform in my business. I need somebody who cares about me more than, you know, their own P and L. They just care about me. That's what I care about. People are looking for that all the time. And when they find that, it's just. It's just so valuable. And I'm always looking for those things. And so the book talks about this as you go from being small to being big, because you're small, you're boutique. You don't really rely on a lot of systems and technology. It's just you. It's Megan Shelton. You know, it's you getting in there and everything about your company, your brand, everything is Megan Shelton. There's no decoupling from your business from Megan Shelton. Right. And that's when I started. Of course, that's very much how it was for me as well. But eventually, if you're good, you start to drive a lot of traffic. They start to refer, oh, you got to use Megan. She's been amazing in my practice. Or you got it. You got to use Wondrous. They're a newer company and they've really helped me grow my revenue. And next thing you know, you got a bunch of clients, and now you have a bunch of clients and you're just like. You're just like scrambling every day to not drop a plate that you're spinning. You're just. It's just it starts to feel a little bit chaotic. So you start to hire people and now you have people and you're trying to get them to replicate what you do. Are you looking to buy or sell a dental practice? If you're a seller, how do you find a strong list of potential buyers? There's no MLS or Zillow for dental practice sales. In such a fragmented market, many dentists selling their practice feel discouraged. That's why I built practiceOrbit.com practice orbit is modernizing how dental practices are bought and sold. It's a platform technology. Y' all know them Zillow, Airbnb, Uber, and OpenTable, just to name a few. These technologies do two things. First, they help match buyers and sellers by centralizing the marketplace. Second, once the match between buyer and seller is made, these technologies help them navigate the sale to a successful close. Here are a few of the features inside a Practice Orbit users can determine a reasonable sale price for practice in just minutes. All they need is the most recent business tax return. Practice owners can use the directory to find important service providers like practice brokers, attorneys, accountants and bankers. Practice owners and their brokers can invite those service providers into the platform so all parties are coordinating the sale together. Practice owners will have a beautiful digital listing of their practice like a home on Redfin. And importantly, the listing will be anonymous and personal information like your address, name and pictures are only released after an NDA is signed and approved by you or your broker. Practice buyers can create saved searches to be auto notified when new listings come on the platform that fit their desired specialty and location. And hey, dental practice brokers, you can list all your practices on the site for free. By doing so, you'll get access to Practice Orbit's large pool of buyers, all of whom have created profiles and saved searches to be autonotified. When new listings come for sale. You can use the platform to introduce your listings to a targeted set of buyers. Additionally and optionally, you can use the platform tools such as a built in NDA, a customizable loi, and a workflow tool to navigate the sale from LOI to closing. In fact, you can manage all your listings on the system, from listing the practice to NDA to loi, and finally to closing the deal. Create your free account today at www.practiceorbit.com. And that's not as easy, especially because they're not the owner and nobody's going to love your business and care for your business as much as you the owner. So eventually you get fast forward. You start to get all these clients. And now it's chaotic and everything starts to falter. So in this book, no Man's Land, the main theme is there's a point where you're too small to be big, but you're too big to be small. And I kind of want to outline that, that, that journey, that sequence of events that goes through this, this life of, of a business owner, which dentists are. So the first one is the founder and owner is still. They're the bottleneck. The business is dependent heavily on the owner for decision making, for culture, for problem solving, clinical production. If the owner steps away, the whole thing falls apart. Number two, growth has outpaced infrastructure. So now there's growth. Revenue is increasing, but systems have not caught up. The practice is bigger, but still running on informal processes, tribal knowledge, ad hoc scheduling, inconsistent patient experience. Number three. So you're still holding it together, though. Number three, complexity starts to multiply. More patients, more staff, more moving parts equals more complexity. Common symptoms, communication breakdown, more mistakes, higher stress, more management issues. Suddenly you have, you know, 10, 12, 15 employees and it's starting to feel really chaotic. Number four, the practice needs managers, not just helpers. So in small companies, staff pitch in, but you start to get to a place where you need an office manager who starts to not just do insurance claims, but to start managing people and performance and opportunities. And, and you need to start to, to have somebody who acts as a proxy for you to delegate to some of these management decisions. Because as soon as you get pulled out of the operatory, guess what? Collections start to drop. You being in the operatory is a key place that you need to be at least enough in order to drive the financial growth. Number five, cash feels tight even though revenue is up. And I can't tell you how many times over the years I'd hear, Wes, I feel busy and I feel like I'm making money, but why does my bank account always feel so thin? So one thing we did at practice, cfo, is we created a word in my cash go report that shows exactly where every dollar went. So the dentists are collecting, collections are strong, but you feel like you have less breathing room financially then you get into the sixth place, culture starts to shift. Early stage culture is personal and family like, but in no man's land, when you break out of this small category, but you don't have everything in place to, to support a big business, you're in this, this no man's land, which is where, by the way, the vast majority of entrepreneurial businesses in America Fail is in no man's land. And in no man's land, new hires are coming on board. They don't get it, they don't get your culture, they don't get your processes because you don't have anything in place. Team cohesion, weekends, clicks start to form, turnover increases and the vibe changes. When you grow beyond a small tight knit team, then let's say you start to break through that. Now the business must become process driven. Small companies run on relationships, big companies run on repeatable processes. So in no man's land, you're forced to build things like SOPs, which are Megan SOPs, statements of procedures, standard operating procedures. There we go. Standard operating procedures, training systems, KPIs, standard patient flow. You can't rely on, quote Sarah just knows how we do it. You can't rely on that knowledge anymore. So now you start to get these SOPs, training systems, KPIs. Now the company is in a new place. You're no longer able to simply be boutique, but you're not yet an enterprise. Questions arise like are we a solo practice or multi provider? Are we building a group? Are we scaling for exit or scaling for lifestyle? What does success look like now and in five years from now? And so you're no longer just a simple private practice, but you're not a DSO either. So why this stage is so common in dental practices? Private practices hit no man's land. Typically I find around 1.5 to maybe 2.5 million and they start to get another doctor in place. That's sometimes the inflection point is they bring another doctor in place and now they have to make sure the system is strong enough to support that doctor. So the doctor is essentially stepping into an operating system that's already operating. And at this point the practice can't be run casually, but it doesn't yet have sort of an executive structure. So then the ultimate question that we're going to talk about today is how do you go from founder centered to a company centered? And there's key shifts that need to take place around building leadership layers, implementing systems, defining role click roles, clearly measuring performance and not relying on heroics. And the owner becomes the CEO and not just the producer. And this is something so that, that, that's my, my staging here, setting the table for the conversation around growth and keeping it together. But that's one thing that I kind of told myself is I have to fire myself as an entrepreneur and I have to hire myself as a CEO. And I've learned it's A very different skill set. Like, it's a very different skill set for me to do financial planning, business consulting, personal financial planning for doctors. And than it is to run a business that has, you know, 30, 40, 50 people in it. It's so different. The role of a CEO. And I'm not necessarily advocating that dentists step out of doing dentistry. I'm more advocating that they need to layer in a whole new set of knowledge and skills that have nothing to do with the patient, at least the patient physically in the chair. And so let's talk about that. Here's my first question I want to throw out and. And Megan, I'd love it if you would kick off a response here. And I wanna talk about the first break. The first thing that gives when an organization is sort of scaling. What is that first thing that breaks, sometimes quietly, that nobody wants to admit?

I would say in the three facets of a practice. I love to look at a practice as we have our wealth wheel, which is the cash flow and the practice and our teams. We have our leadership wheel, our culture, how we're showing up as a CEO, and then we have our health, which is how we're taking care of our clients, our patients, if you will. So what I see breaking first in each of those is one for the dentist CEO. It's an identity crisis, right? They've gone from a chairside operator to having confusion and going, oh, shoot, I now need to actually step in and lead and create systems. I've never been trained to do this. You know, at best, most dentists, their knowledge from a business standpoint is some level of, like, high school business, right? It was like, here's a P and L. You've seen it. Maybe you were my age or older, so you knew how to balance a checkbook. But people younger than me, they don't even know that, right? They're not looking at bank statements. Those things are all virtual. And when it's virtual, we don't check it. So identity crisis. The other thing I would say is when it comes to culture and team psychological safety, so things get chaotic and we grow really fast. And all of a sudden, like, no one knows what's going on. So the other area is our diagnostic consistency. We start seeing our schedule busy, and instead of staying with what got us there, we start to kind of let up or we get lazy or we get swayed, we get in our heads about it. And so I believe that humans are very sensitive to inconsistency and teams will feel instability before leaders can name it. And that shows up in our identity, our psychological safety for our teams and our patients and our diagnostic consistency.

Yeah, I feel for me, when I was in 2013, when I started practice CFO, I'm. I'm like the eternal optimist. To me, I'm like, oh, everything's great. You know, the client's happy because, you know, I'm meeting with a client and we're, we're digging into the numbers, and it's very productive. But behind the scenes, I start to hear some grumblings from, from the team, like, Wes, you didn't tell me about this. Or, Wes, you got to be more consistent about this. And the culture starts to fracture a little bit, sort of behind the scenes. And I'm like, what are you all talking about? This is fine. We're good. And I've learned over time that I. They're like my bellwether. I have to listen to my team because they're experiencing things that, that I. That I'm not experiencing a lot. And so for me, I would say the first thing that quietly broke was the culture. And that's when I learned pretty early on that culture matters a lot. It's like the water that, you know, that we as fish are swimming in, it's just all around us. And it's the vibe and it's the. The flow and it's the energy. And I learned that I had to curate that very, very carefully. So every month I'll do a visionary message. I send out, I do a loom video, and I send it out to everybody in a monthly bulletin, and I try to inspire them and go back to our core values and all that stuff. Michael, anything you want to add to this one? What's the first thing that kind of you. You felt broke at wondrous or that you see breaking in dental offices to the extent that you have that. That insight? Yeah. Wow.

Two. Two totally different questions and lots to say on both. But I'll keep it short. I think for our clients, you know, the thing we often see is when marketing starts, there's a hustle approach to marketing. You know, whether it's a scratch practice or, you know, an established practice, you have someone that kind of comes out when they're new to marketing. And there's a lot of hands on, boots on the ground work that's done and that is so critical, but it often does not scale and get you where you want to go. And so I think one of the first things that I see breaking is intentionality of identity and how we stand out. Right. So that really can be two different things. This idea of what makes you different is very hard, and it breaks for most people. And I actually increasingly like to say, what is your signature thing in an office? Because it gets people closer to what you can use in marketing. But the other one that really stands out early on, when you're in a hustle culture, you're just doing anything you can to get out there. You don't care about metrics, you don't care about the metrics that matter most, and you don't track metrics well. And so frequently we see those front desks that really important question, where did you hear about us? You know, we'll get back. Insurance. Insurance. Don't know. Don't. It's just. It's all the same. There's no press, there's no understanding of where new patients are coming from. And so getting good data up front is so critical to marketing. And often it's one of those things we have to talk about a lot of with practices that are new to marketing, because without data, marketing just does not work. And so that's one of the earliest things to be challenged in most practices.

Is starting to track. Track some things.

Yeah, tracking the right data. You know, I think a lot of times with marketing, you'll be inundated with data from a marketing agency there. You know, there's clicks, there's rankings there, and it feels like there is lots of data. But if you were to ever ask anyone, what's your roi? Nobody knows. And that's kind of your first bellwether, that something's wrong. Right. You should have an idea. Even if it's not the most sophisticated system, you should have some idea of how much you're spending. You should have some idea of how many new patients you're getting and what the ROI is ultimately by the different bets you're placing on marketing. Is social media the right place? Is Google Ads the right place? What about those mailers? And oftentimes what we'll see is these things extend for months, if not years, and people will have no idea what the real ROI is. And that can be very frustrating for a practice owner. And often they'll throw their hands up and say, I don't know what to do. And they just continue to do what they did last month.

You know, I want to go back to Megan on this a little bit as well. I feel like there's these modules within the business that don't relate to the clinical side of running a dental practice. So there's all, everything Michael just said around, around marketing and tracking the marketing and all of that for me. There's setting up your P and L and your balance sheet and managing your bank account and cash flow and debt structure and tax planning. There's all that, there's all these systems, right? There's systems around patient recall back in for hygiene. There's all these systems, right? I feel like the very first system is simply defining what is and what triggered this was Michael, your comment about identity. What is our identity as a practice? In other words, why do we exist? What is our why what are our value statements? And this is something that I learned over the past 10 years. I probably rolled out my first kind of value statements and mission statements maybe two to three years after I started. And I learned pretty quickly that nobody listens to what I say the first time. Oh, this is Wes. It's another visionary idea. It's another Wes idea is what it is. Because you know, business owners get all these ideas, right? It's another idea and it's, you have to, you have to stick with it and repeat it so many times before they realize that this isn't just a tagline from Wes, that this is the DNA of the company. So our, our mission statement is to, to make your journey remarkable. To help make our doctors journeys remarkable. Using their, their, their finances and their, their, their money to have a remarkable life. And so it's very much about life planning and personal financial planning. And then from there we go down into our values that we listen, we care, we innovate, we get it done and we have that whole system. Would you say, Megan, that one of the first things that doctors should do is lay out that almost like thesis of why they exist as a dental practice. Do you ever feel lost in your practice finances? And how about your personal finances? Ever wonder where your hard earned money goes and why you're not seeing the financial progress you work so hard for? If so, listen up. As a dental CPA and financial planner, I've created our company practice CFO just for you. With almost two decades of experience, Practice CFO integrates great CPA services, services like accounting and tax with customized financial planning, both business and personal. Think of it this way. Our dental focused CPA services give us the X rays we need to clinically plan your global finances and be effective financial planners. It's a highly customized approach we call the CFO model. Historically, having a CFO or chief financial officer was an advantage of large corporations only. But today practice CFO gives that Same advantage to private dental practice owners. As a client of Practice cfo, you'll be assigned one of our dedicated CFO advisors. You'll receive insightful financial reports each month, have regular financial review meetings, reduce taxes, grow your wealth, and feel more in charge of your numbers. Because we believe that in the competitive landscape of dental practice ownership today, you have to be an effective business owner, not just a capable clinician. Reach out to learn more at www.practicecfo.com.

Absolutely. I, I go into a lot of practices or I speak with a lot of doctors and they'll say, I don't like the woo woo or kumbaya. I don't want to sit in a circle and hold hands. And I agree, I don't like that. But what I will tell you and what I know is that taking time to identify what you believe and who you are and what you're going to stand for as a leader, as a dentist, as, you know, a person at home, in your life, professionally, you really have to define your value system. You have to define your mission statement. And values can be how we're going to treat our customers, but values should be also how we're going to treat each other, other. And oftentimes that's forgotten. Like we'll say, like we're going to treat from a place of integrity. I'm like, okay, well what about how are we going to show up together? And that creates a real safety net because as we get into more of talking about scaling, that's a place we can come back to and say, look, as a team, we talked about this and that doesn't align with what we said we are. So when you're making choices, decisions for your business, if you're running it through this filter of this is my mission, these are our values, this is our cultural guides. If we don't check those things, then this is not the path or the decision we should be making. Right. Or does our mission, has it evolved and do we need to have a recalibration? And that's fine, pull that, take that two hour time to do that with your team and say, okay, we've, we've evolved into a new identity.

Yep. I found that I have to embed our mission statement and our values into everyday conversations that it's not just once a quarter. Here at Practice cfo, we have something called the state of the company. It's a one hour moment where the whole company comes together and we talk about where we are, where the issues, where are we going, all of that stuff so everybody feels a part of the. Part of the momentum and the vision and every case. I'll sort of reiterate what our mission and value statements are, but I find that what actually drives it home in their head is when we're talking about a specific scenario with a client or internally that something broke down. And I revert back to that mission statement of value statements as a. As the underpinning theme of why it needs to be corrected.

It becomes the hitman, so that it's not about feelings or emotions. It becomes a standard. And this is. Okay, let's go back to what we agreed on and what we defined as success in our practice. And this doesn't mirror.

And I think that's one bridge that every great dental practice has to cross at some point is going from this like, hey, everybody, drink my Kool Aid to know, hey, everybody, your existence here depends on compliance with this. That's how important this is. This is in our DNA. And if you don't fit with that DNA culturally and, you know, systematically, then we probably don't have a good fit here. Together we've gone so far. Now when we interview and hire, we actually go through our. Our values with them, and we have a questionnaire to see if they map to our values. Well, so that on day one, we're trying to prevent people even coming in the door who don't embody at least some of those values and can be shaped to embody all of them over time. Michael, anything you want to add to this conversation around mission statements and values and kind of big picture themes in the practice?

Yeah, it's been a huge part of Wondrist. We, I think, at a very early point, worked on our mission statement and our values. And what we do at Wondrist is we have a quarterly camp where our whole team comes together. And for years, we've started those camps by going through our values. And we always have a theme for camp. So the last one was Olympics, and so we had little, you know, cheapo Olympic medals that you get for kids birthday parties. But we'll read through one of our values, and then we'll ask the team, you know, there's 60 people in a room or 70 people in a room. We'll say, hey, shout out a few people's names who are really embodying this. And it's a great way to start the day. But it's. It's, you know, the fact that we keep coming back to it, the fact that we're acknowledging people, you know, it lets you Know that this matters and we expect this to be be a standard. And so I agree. I think the problem with all of this is it can feel a little woo woo to people. Right. And if you start out, one of the big problems is a lot of people think, hey, aren't we all the same? Like, you get that, right? Our values are we take care of our patients and we treat our team well. Like, can we move on here? And even little details like, well, what order do you put that in? Are you going to focus on making sure that uncompromisingly you take care of your team before anything or do you take care of your patients before anything? That's a big conversation that can really change a practice. And that's the stuff that I think if you dig into it, you give yourself the time to do it, don't move too fast, it will change the way you think about your business. And I will agree. And say it again. There's a nuance to what Megan is saying. We love facts, not feelings at wondrous. And I think anytime you sit down with someone and you have to give them a difficult conversation or you have to part ways. I found the first couple people I had to fire. I realized at that time I had not established enough expectation up front to make it not awkward for me because they were saying like, well, I'm not sure. I feel like I didn't know that. And when it comes down to value, say, hey, listen, we agreed getting back to clients in a timely manner is something that we do not compromise on. And you've had three warnings. And at this point, we have to part ways. I sleep well at night knowing that we've talked about it numerous times. You knew what the expectation was. And so all it takes is one or two times doing that, saying I was not clear before. You realize values actually matter quite a bit.

Yeah. That's fantastic. We, when we do our quarterly events, we will issue a couple awards. I'll give what's called the West Visionary award, which is people who have sort of reflected our vision. And then there's one where everyone votes anonymously for somebody who has reflected the values at the company. We really try to embed this so people just, it's in their subconscious. It's a part of our DNA and how we think and operate at the firm. Well, let's go on down to this question. I want to talk about quality. As you scale, it's challenging to maintain that quality. So how would each of you define quality in maybe the different segments of growth and how do you know when that quality is slipping? I mean, you can always just look at the revenue, right? Is the revenue keep going up and the growth goes up? Oh, quality must be good. That's not necessarily the case. And if you don't deal with the quality ahead of time, the revenue will start to slip, or at least at a minimum, it'll stop growing. So I'd love to hear about both of your experiences. Think culture, team development. You both had a lot of growth. And I can highlight dental practice aspects as well of what I see. But I want to hear from you. What are, what are those measures of quality quality? What should they be looking at to say my quality is intact while I'm growing?

I, I can jump in on this one. So for me, from a marketing perspective, it's going to be quality of leads, right? That's going to be one of the number one things that we look at initially. And I think what often happens for most marketing agencies is the standard that's set is the volume of leads. More leads equals good, right? That's, that's often how we, we want to think about things. And one of the problems for marketing agencies is without having any connection to what happens after the lead calls or sends a form, more does seem better, right? You just say, great, look at this. Cost per conversion is down. What that means is we're spending a thousand dollars and we got even more leads than last month. Things are good. And I'll tell you, in my career, I've had many conversations with clients where you go in and say, this is going to be a great, great day. We generated a lot of leads for you, and all of a sudden they're not happy. The leads were not good quality and they were not converting into the patients that they expected. And so I think the answer for this is to be able to integrate marketing again. This can be through a sophisticated system. It's what we do at Wondrous. We integrate through practice management software. Or it could be the discipline of taking your practice management data, putting it in a spreadsheet, and going through the leads. Both of these things are important. And what's important about this is at the end of the day, you can say, well, what leads are the most important here? And how do I focus on those leads and how do we shut down the leads that are not ultimately good for our practice? So it's not about more, it's about higher quality leads. And I think that that makes sense to everyone. Everyone agrees to it, but without having two different datas, talk to each other. One from the marketing agency, one from the practice. You cannot actually reflect, define the quality. And that's something that most marketing agencies and most dental practices are not doing today in their marketing.

I want to draw a connection. I want to hear from you, Megan, on this, but I want to draw a connection between what we've just been talking about around your. Your why you exist and your values and who you are, your identity as a, as a practice, to the marketing leads coming in. I'm going to draw a little relationship here. One of the things that I have struggled with and I am continually attempting to refine is what I define as a client that fits my strike zone. And I have, I've created a list of, we have a new client committee and every, every prospect that comes, we probably get one or two leads every day. And I would say maybe half of these end up being a good fit, another half don't, and for different reasons. But I've had to define my strike zone because one of the things I did early on is I took anybody and everybody. I needed people in this, in, in the chairs, so to speak, and, and I took on a lot of clients who didn't fit. The things that I need to help them succeed. I need a doctor who's coachable. For example, if we set a budget together, they don't keep going into their practice and pulling out money to live to, to do the extra spending like a backup atm. It's very difficult for me to do a cash flow projection accurately and a tax forecast and how much can we pay off debt or fund our 401k and all of those things. I need a doctor who's willing to be disciplined enough financially to make meaningful progress. And so there's, there's other things in there. You know, $600,000 practice revenue wise, doesn't need a CFO model. They need a traditional accounting bookkeeper model. They need you two to help grow it. They don't need me at that point. Once they start to get to a million plus, now they have more complexities, so they start to fit my strike zone. Once they start going dso and they're trying to grow three, four, five offices, they're out of my strike zone. I'm a private practice serving provider. That's, that's my space. And so I. And I've tried to entertain a few emerging DSOs, and I had to decide, am I going to build a whole business model around this? Because they have vastly different needs than a $1.5 million single location doctor that's very different needs than a 3, 4, 5, location practice. And so I had to define my strike zone. So when it comes to marketing, and I'm rolling out more marketing efforts now, I'm trying to be very clear on what my business serves and stands for here. How do, how do dentists. How often do you find as you work with dentists are actually defining a strike zone? And how important do you think that is, Megan?

Oh, my goodness. Absolutely. So important. So I think quality comes back to your identity. What is your definition of quality in your business? And so that's going to be defined by predictability, clarity, and who we're serving. So I hear all the time, dentists, like, I want to do no prep veneers. Cool, super sexy on Instagram. I love it.

Why?

Well, it's conservative for who do your patients fit that need? Do you have that demographic? Do you have that skill set? Do you have a plan for intaking those calls? How are we going to attract those patients? They're like, I'm just going to learn to do it and then the cases will come. Well, no, actually, the doctors that are doing that, their marketing is specifically designed to target people with smaller teeth in a certain demographic, in certain areas, in certain adjusted gross incomes and certain zip codes, all of those things. It's very specific, targeted marketing. It is not like I'm gonna send a mailer or start posting and sharing on social media. That's. That's not how that works. And, and the other thing is, you know, clinical excellence, it's not going to just happen. Right. And it's not. It doesn't equate to quality either. So quality shows up when our teams have predictability and consistency. And so quality could be a reflection of if we're retaining all our patients. So if we're only tracking the patients that we're gaining, but we're not tracking what's going out, then we need to question quality when it comes back to marketing. The other thing you said, Wes, was about who your ideal client is. That's something I think about all the time. And so when I'm onboarding or even interviewing a prospect, they're interviewing me and I'm interviewing them. And what I see on a lot of doctors websites and is a generic new patient form request. This doesn't establish what you believe at all. You're not setting the expectation that you are of higher standard. You're asking them if, you know, they prefer Monday through Thursday morning or PM when you only have new patient blocks on this day so why are we even asking them these questions? And I think really all the systems are so linked together and people often overlook that.

I want to talk about what we measure. We've both been talking about data, using data for marketing, and there's that quote. How's the quote go? What we measure improves. What gets measured, gets managed. Quote. I want to talk about this concept because I do find that sometimes what I feel intuitively doesn't align with what the data is reflected. And I don't want to discount kind of that gut feel of the owner. I think there's some, some real value to that, but that can also mislead a doctor commonly. So let's, let's talk about kind of what could be ways or tools to measure this quality as we go. Going back to this question, how do we define quality as we scale? And some things I wrote down are having a. A business intelligence software. So if you're listening, as a dentist, never heard of the term BI or business intelligence. That's. That's essentially an operational dashboard of sorts that gives you intelligence into the operations of your business. And there's a few out there in Dental. Dental intel is a big one. A lot of people know Dental Intel. There's Practice by numbers. I think there's one called sika. There's a few of them out there. I, I wrote that down here. A few other things I wrote down are what are your patient feedback and reviews? I wrote down what's just your. The vibe in the office. There's a vibe and we feel the vibe in our office. How is our patient retention? How many retreatments are we having to do because it wasn't done right by the associate or whatever. Staff turnover. Staff turnover, I think is, is a, Is definitely an indicator of the health of the practice. Yeah. And employee satisfaction. How burnt out do you feel that may mean that we don't have good systems of delegation and accountability. And then at the end of the day, how's the cash flow looking? How's the cash flow looking? So those are some of the things I wrote down. Megan, as the practice management consultant here, what are some of the operational measuring tools that you guide doctors to use?

Yeah, so measurement, super critical. One of the first things that I implement in a practice is I love them to work with a dashboard. Prefer, you know, there's no one to be locked in a box. I work a lot with Dental intel or Practice by Numbers, and some of the softwares integrate really nicely with those from a KPI standpoint, case acceptance and through our case acceptance, we're able to diversify if they're existing clients or new clients and see what our acceptance rate is with both of those. But further diving into that, we can even look at our standard of diagnosis across providers in that treatment acceptance that we monitor using Shelton Solutions monitors. And we'll be able to tell are both our hygienists co discovering around the same amount week by week or is someone slipping? Is someone pushing the threshold? And that gives us a baseline to know when to calibrate and when to jump in and re educate and re inform our team of what our standard of care is. Right. And so without those numbers, I'm just speculating that my hygienist is nice and the patients like her. And nice doesn't equate to quality. And so when we have three providers diagnosing the same patient differently, quality is compromised. And so using that case acceptance, we're able to observe that and make adjustments from data.

Got it at practice. CFO one of the most important items we use to measure tools to measure is called Streti and Stretti is how we implement our management system called EOS Entrepreneurial Operating System, which I go to the EOS conference every year and I've definitely met a number of dentists using the Entrepreneurial Operating System, a book series, even hiring what they call an implementer. If they have you, Megan, I think they could absolutely pair up what you do with some of the tools there. Maybe you are already implementing the similar types of tools and methodologies of, of that. But Stradi has all of our, what's called our vto, our Vision Traction Organizer. It has our vision, our why our values. The organizer is what are we accomplishing in the next year? What are our big rocks? And this is something that I've had to, I've really struggled with a lot is saying no to a lot of good things. And there's a quote from Warren Buffett where he says, write down the top 25 things you love in life that you want to do, then identify the five that are the most important. And then the other 20 make a plan to not spend any time on those. You have to intentionally filter them out even though you want to, and they're good. If you don't do that, those five things are going to get neglected or at least not get sufficient attention to make meaningful progress. And maybe then you get a point where you've you sort of delegated those and they're operating well. And then you can add on another, another five which is kind of of how our EOS and study system works is every Tuesday, 10 o' clock, we open up Strady and we start a 90 minute meeting. We address the rocks and the, the milestones within those rocks. We address any what are called IDS items, which stands for identify, discuss and solve, which are, it's like a pin board. Whenever there's a problem, we, we can't just stop operations to address it. So we pin it there to the IDS list. And then before that meeting, everyone in the meeting goes in and they vote on which issues are the most important and then we work through it very systematically. So that tool, there's other tools out there for management platforms is, I don't know how we would organize it, track it, execute on it without having a tool to maintain that level of organization. All right, let me go on to the next question, which is what systems need to be in place before we start to scale? Because if we don't have those systems in place before we start to scale, we're just going to create chaos instead of freedom. So what are the essential systems, Mike? Michael, do you want to kick off a thought on that?

Yeah. So from a marketing perspective, there's kind of three critical systems that I like to think about. The first one we've talked a bit about already, which is you have to make sure that you can track the results of the marketing. And again, so frequently people are spending marketing dollars and they're not doing this and they're surprised later when, when they want to know if things are working. So you've got to plan for that. The next one is intake, Right. For me, it's not uncommon to talk to a doctor and they have this new idea and they forget to talk to their front desk about what that new idea was. So having a plan for intake, what happens when there's a question about pricing? You know, how do we progress? Someone who's a qualified lead to the right place, who's the person to talk about this? Do you need a treatment coordinator that's going to be taking these calls versus someone who's at the front desk? All of these things often do not get enough, enough time and attention. And then equally as critical, once we have that need any conversation, what is the plan for follow up? So frequently you get a case that is qualified, it's a $20,000 decision, a $7,000 decision. It's a big deal for someone. And it's, I think a lot of us want to say, well of course they, you know, teeth come in clenching a credit card and they swipe it and you know, this is so great, but we know people need to go home, they need to talk about it. And I think a great question to ask any dentist is to say once you have that conversation about Invisalign, about a full arch case, about no prep veneers, how long until you follow up with them and watch the wheels start spinning? Well, we'll catch them at the, at the next hygiene appointment in six months. Like that is a problem. And then it's the quality of follow up. Right? Is it an automated text that goes out from one of your patient management systems that no one's ever looked at or was there intent? So if you can come up with that whole system I just talked about, you can track, you can intake someone in a meaningful way that gets them to the right person, gets them to a need, any conversation, then you can follow up in a meaningful way after that. You're going to see much better results from marketing.

And this is one thing I love about Wondrous is you guys have a much better end to end visual of what's happening. And it's not just about getting the phone call. It's, it's, it's tracking what's working, what's not, and follow through and all of that. I think Wondrous has a definite leg up in the tech that you've built. That's the thing I love about Wondrous is you have in house developers, you've developed tools that a lot of marketing companies simply don't have, that has given a huge competitive advantage to your, to your, your form of marketing services. Megan, what's your take? What are those systems that the doctor, let's say the doctor's at 800,000 revenue, which you can handle that without a whole lot of Systems. I think 600,000, 800,000. A little bit of a very boutique sort of like just yell over your shoulder to get something done kind of thing? You don't necessarily need as many systems in place, but to go from that to $1.5 or $2 million practice, what are the things that you got to say? You got to have this in place now before you go to launch. What are those things?

Clarity around everything, right? So diagnosis. We need a clear standard of care data acquisition. When do we take what data records, what frequencies? How are we going to charge for it? How are we going to convey the message that it's necessary and it's based on health and it's not based on your benefit plan? How Are we going to overcome those objections? So what's, what's the science behind it? What's our verbiage to dive into that? And what are our exceptions or are there any exceptions? Do we want to make exceptions? Are we creating non ideal patients when we do that? And are we creating lack of trust in our leadership when we make exceptions or excuses? Treatment, how do we treat it if we see a crack too tooth? Are all doctors and all hygienists discussing it in the same capacity? Sure, it's personalized to patient risk factors, but there needs to be some level of clarity around that language. The language we use is either leading our patients to make a choice that's going to help them improve and optimize their health or our language is creating doubt and uncertainty and confusion and they are going to go home. And because most practices don't have a follow up system system that is effective, we will see them again in six months. So we need to have language that's going to inspire them to do what's best for them. Because naturally humans are prone to say no Metrics. We have to have the metrics in place to know if all these systems are being held accountable. And without metrics, you're guessing, you're guessing it. If your team is doing it and you're having to ask them and you're going off of a trust system and maybe you don't have trust because you're having to ask them. So you're creating doubt and you're demonstrating that you don't trust your team. So I think the metrics are really key. They're not just giving us patient data, but they're giving us clarity and accountability. If our team is following the system and the protocol that we have established. I would also say payment standards that comes up quite often or scheduling scheduling standards. You know, the, the new front desk will come ask a doctor in the middle of a procedure, which is mind blowing. Can I put so and so here? It's, you know, now you've compromised all your values with that one action and they had to ask you, which is that because you weren't clear, you didn't provide the accurate training or do they not align? Right. Or did you waiver that one time you created that one doubt for them and now they think they can come ask you every time and that you're going to make an exception so that they don't have to have the honest conversation with the patient of where the scheduling opportunity lies.

Yeah, and I want to encourage doctors to get a Megan Shelton in the office. Could you DIY this? Could you do it yourself and build out these systems? Maybe. Doctors are some of the most intelligent people on earth. No doubt about it. A lot of it is a matter of efficiency of your time and your dollar.

Absolutely.

I, I, this is something I talk especially with young doctors about. All the time is less is more less. In your personal life, try to live on less money so you can conserve more money in the practice because you don't have outside capital. And outside capital comes in two ways. Equity capital from investors or debt cap debt financing from the bank. Now, you most likely got debt financing to buy the practice. That's true. You bought a cash flow stream. That's true. Maybe some, some financing to buy some equipment. That's true. But in terms of this leadership structure and system structure, you don't have outside capital for this. And so the only way to do this is you have to a, create enough revenue in your practice to have some cash flow and then B, you, you have to then use the surplus cash flow as you're the investor in your business. You're the, you're the one providing the capital to the business. And we in the finance world use the term capital to basically say your resources, your money, and that's, that's capital. And so this is a constant tightrope. I walk at practice cfo, which is because we don't have external financing either is how much should I expect to retain of cash flow in my business in order to reinvest for future needs? Because you have to spend money for a lot of things before they produce financial results like hiring ahead of the curve. For us to hire a new CFO advisor, it takes them about a year to kind of get current and ready to start advising a client effectively. And in dental practices, there's certain learning curves that you, sometimes you got to hire ahead of the curve, you got to pay for that new build out ahead of the curve. And the marketing, sometimes you have to outlay some money on the marketing, even though it may be a little bit of time before that outlay and the patient actually start collecting on patients resulting from that marketing. So the huge emphasis I have for people to get their systems in place beforehand is try to live frugally in your personal life to leave more room in the business cash flow wise to invest in these things like Megan and Michael operationally and marketing. And then I will also just say that I think a couple other key systems are getting reviews. I think reviews I found just matter quite a bit. I'M sure, Michael, you would have thoughts on that. But getting reviews, I think, getting your. Your meeting pulse, I think is incredibly valuable. How often do you meet as a team? Is it every morning? How often are you meeting with your office manager? How often are you meeting with your finance team? How often are you meeting with Megan? How often are you meeting with Michael around marketing, But a cadence around those meetings, and the cadence itself creates accountability and a constant moving of the needle. And it's these little movements of the needle every month, every quarter, every year that aggregate into big gains over time. I was just with somebody yesterday at Prospect. Said I had a financial advisor when I was in my early 30s. They were wanting me to put away money. It felt a little too uncomfortable. And so we fired them. And I'm now 53, and I wish we would have never done that, but it's incremental gains there. Okay, let's go on to scaling lies. So, Megan, you're in dozens of practices every year. What's the most kind of lie that owners tell themselves as they. As they scale?

The most common lie that I hear would be, I don't have time. And I know the three of us sitting here could say that time is precious, but we do have time for what we value, and if it's important, we can find it. The other one is they'll say they want growth, and really what they want is relief, and I need more team members.

Gosh, I feel like that all the time. But then I look at my labor costs, I'm like, well, maybe not necessarily.

Data says, maybe not.

Michael, anything you want to add?

Yeah, I think when we have those first conversations with clients, I'm always amazed. In fact, for years, I took it at face value when people would tell me how their marketing was working. My website's great and really good at SEO, and I'm not kidding. For years, I said, okay. And then I remember it. It was at a conference. I asked, I said, hey, pull up your website. He pulled it up, and it was one of the worst websites I'd seen. And immediately he agrees, like, oh, I know the website's terrible. I gotta get a new one. And so for me, it just comes back to having a realistic assessment of what your marketing is even doing and how it's performing. That's a big one. And then the other one that we just see time and again is having a connection to the metrics downstream. What's your reappointment rate? What's the lifetime value of patients? You know, how often are you Reaching out to the leads after they come into the office. All of these questions usually get a bolder. So I think our reappointment rate is like 100% and then you look at the data and it's often quite different. And so I think it just comes back to having a realistic assessment of. And we all find this in our businesses. My whole job at this point is looking at business dashboards and it creates accountability for the things we're working on and clarity for the things we're working on. And for me, there's nothing wrong with standing on the scale and saying I'm 20 pounds overweight. I know how many pounds overweight I now want to lose. And so really connecting to the reality of your business through data is frequently the biggest lie that all of us business owners tell ourselves.

Totally. And a couple, I'll list off three. Number one is two offices equals two profit, double the profit. I think that's a, I think that's a lie a lot of dentists tell themselves and they don't understand that 80% of their costs are fixed and there's only one of them. And so a second office means double the overhead. And one of you, and I've seen doctors actually lose, make less money after they open the second office and had twice the stress. And, and so I always say focus on your one office and double your revenue and you're going to quadruple your take home. Okay, that's the second one is I think DSO promises. Now I don't want to, I don't want to be negative against the DSO here. That's not my, my place to say that, but I will, I will, I will say this. There's a lot of wealth accreting to the DSO suits. We call them the, the PE people, the business people. There's a lot of wealth that's accreting away from the dentist to them and there's some very kind of smoke and mirror pitches offers that a lot of times dentists don't understand. What is an equity swap? You know, what are the terms of this stuff? What is an earnout and what are the guarantees? And there's all these, these things that are not in a private sale. And again, I don't want to, I don't want to say that there's not a place for, for the, the large dso. But in my space, I'm very much a proponent of protecting the, the, the private practice because I find that a well run private practice doing $1.52 million with a 40% profit margin over any five year period is going to, is going to be a better financial move than even that big drop on day one. And then you get paid a lot less after that. And now you're essentially working for the man who wears a suit in the back office somewhere that you don't even know because private equity is back there and private equity knows how to make money. They always aggressive, they do the house always win. So I think there's a lot of promises that are made around going dso that are constantly unfulfilled. And I have doctors who have buyer's remorse afterward all the time. And then there's some cases where a seller can't find a private buyer. It's too big, it's too complicated and they have to sort of get an institutional platform to take over. So, but, but I will just say, not saying it's, it's, it's, it's not for everybody or it's for everybody, but that there's a lot of promises out there on what going big means and what the benefits are of going big. The last one I'll say is a lot of doctors say I can't go fee for service. There's no, there's no way. And I think that's a lie. I think if they learn the proper approach and how to brand their practice and themselves the right way, they can go to fee for service. You want to make good money and have a good life, figure out how to go to fee for service practice. All right, last question. Then we will end. This is actually, this is, this is a, this is a question we don't necessarily need to answer. But I want people to be thinking about this question as we, as we end here. I have in front of me a picture for those watching on YouTube. It's the life cycle of a business and it starts off at birth and then you become a toddler and then an adolescent and then a, what does that say? A fully managed business. And then the optimal state. The optimal state. And then if you're not careful, you get so big you sort of neglect the business and it goes to decline. And there's life cycles of businesses that have followed this to the T. How do you get to that optimal state? That's kind of the question around scaling and scaling with quality. And at birth you, you just started toddler, you get a few things going on, you're learning the ropes a little bit, you're hiring some people adolescent, you start to have a culture in place, but you don't have enough money. To sort of grow fully managed. Now you got some systems management team is working. Optimal state is the company runs without you day to day. So that's where I kind of want to leave off. I'm not saying dentists should leave the practice and become passive owners of their dental practice. I'm not saying that. But from a theoretical standpoint, I think this matters a lot. If you did not wake up tomorrow, what in your practice and they plugged in another dentist, they just stepped in, they found somebody on indeed Dr. Steps in, what's going to continue to operate and what is going to completely break right away. To the extent you can say, I think my practice will survive my non existence, my, my, my death or my. Whatever that is, I think my practice could survive because A, B, C and D is in place. What is A, B, C and D? And what would fall apart? All right, final, final parting words, Megan and Michael. On this subject of scaling without chaos.

I would offer that the first step is getting clear on your identity, what you want and your, your tolerances and how disciplined are you willing to be. Because to get where any of us are, discipline is a huge part of everything. And it's discipline to say yes to the right things, discipline to say no to the wrong things, and discipline to show up consistently for our teams, even on the days when we don't feel like it.

So for me, when it comes to taking that next step and creating independence in your business, there's two very connected things I want to focus on. And I think it's something that we all know about. It's not a new thought, but it's very hard. And the first one is taking a big step into delegation.

Right.

It's something that oftentimes, especially for new business owners, there is that element of I can do everything, I have to do everything and my hands will be in everything. And here's the thing. This is what's so tough about listening to people's advice for a period of time. That is true. You have to do that, I think. But then there comes this moment when you have to delegate and give things away. And I think often what I hear and I found in my own journey is that you say, well, I don't trust people to do this. I don't think other people can. And this is where I get to that other thing. Selecting your team is so critical because often when you get to that point where you need to delegate and you say, well, I can't give it to this person, well, that person is not the right person. To be on your team, you chose.

Them stopping you, right?

So you can hire people that will allow you to delegate. And you know, Laura and I have grown from a two person company, the two of us on a couch, to one today that is, you know, close to 100. And my job has changed 10 times, you know, and more than that. And at every juncture it was me giving things away and feeling a little bit like it might not go well. And I'll tell you, there's many parts of the business where I gave something away and they don't do it the way that I would have done it, you know, but you have to be at peace with that. Depending on your goals, you can say I'm a practice where I'll do the hygiene because I'm very specific on how it needs. Okay, that's the practice that you want to be. But if you want to grow to 1.5, 2.2, at a certain point, you can't answer the phone anymore. Now I'm picking an easy one here. But delegate and delegate through great team selection.

And it's a process of delegation. There's like tranches you go through where you, in the beginning you're wearing so many hats. I mean I wore every hat when I first started and every year it's like what three hats can I take off my head? And the next year what three hats can I take off my head? And the more hats you remove, the more you're freed up to focus on the things that have the most impact. And what people pay for in life, I, I feel like is impact that you make to them. People will pay for impact. And I think profitability, and I mentioned this before, is a downstream indicator of impact. Figure out how to create a system between you, your team, your tech, your service providers that makes a huge impact. And then it's easier to go fee for service or it's easier to get a case acceptance to go up. It's easier, easier to be successful that way. So my final words would be, I love this delegate. Thank you for ending on that one on Michael. Delegate and elevate is an, is an EOS term that we use here at practice cfo. It is about letting go of the vine. They say is is letting go of that vine and then creating a structure that gives people the resources they need to be elevated. It doesn't mean you just let go and close your eyes. No, there's follow up, there's nurturing and encouraging delegate and elevate. Number two, I would say is that roster Is one of the most important things you can do is your team roster. Think of a sports team. It's how, it's not only how good each player is, but how, how do they all fit together culturally. And it's curating constantly that team roster. And if there's one person who is like the naysayer, I'm telling you ripples threat everybody else. And everybody's like well so and so isn't doing this or so and so isn't reflecting our core values. And it creates an opening for every tolerance allows that. And you have to be completely intolerant of people who don't live your value and your, your culture and the, and I, when it comes to people and hardware, I, I've just learned that I really look for, for the hardware in the person. I, I'm less concerned if they don't have the exact skill sets I need on day one. I can train the software, but I can't train the hardware. Are they thankful? Are they humble? Do they exude some good energy, are they thoughtful, that kind of thing? If they have that, you know, of course they need to be able to learn. I can teach the other stuff. I don't mind if it takes six months or even a year sometimes in some positions. I just want somebody who the hardware is really good and the only way to make all this happen. My last statement is doctors, you've got to create time for this. If you go in, go straight to the chair, maybe a five minute meeting with your staff, you're out of the chair operatory and you immediately go home. And that's the extent of your business leadership. It ain't going to happen. It ain't going to happen. And so that day off on Friday or whatever day that is, you just got to make it a habit. Like habits of highly successful people, Stephen Covey or atomic habits. You have to make it a habit and you'll, you'll over time create a system about the way that you manage the business that may be pretty unique to you. That's okay. But you've got to create that system and only be done when you are intentional about the use of your time to allocate, allocate on non clinical aspects of the business. Well team, thanks for being here. We got some more exciting topics coming up. We're attempting to do two a month, right? Two a month. And we've accepted that there will be some months where we don't get into because of holidays or schedules or whatnot. But we're committed to you listener to come together as a multi, multi disciplinary approach to these needs of dental practice owners. So I just want to thank you both for being back on the show. Until next time, have a great one. Thanks, Wesley.