A Blueprint for Finding and Growing your First Dental Practice by over 50% in Year One

Hey, dental associates and new practice owners. Welcome to the Associates on Fire podcast. Powered by Practice cfo. This is the podcast that teaches you what you never learned in dental school, the financial side of dentistry. We cover topics from planning for ownership, buying a practice, to student loans, taxes, and all things financial for the hungry to learn dental associate. So let's light it up.

Welcome back everyone to the Associates on Fire podcast. My name is Drew Phillips and I will be the host of today's episode for those who haven't had a chance to check out our Associates on Fire website yet, I am a CPA and CFO advisor at Practice CFO and one of the instructors in our Associates on Fire program. Today I'm super excited to introduce David and Kristen Kelly. David and Kristen are the ultimate dual threat. Both are young and hungry dentists who have a laser focus for both clinical and financial excellence. I met David and Kristin in February of 2019, about four months before they finalized the purchase of their dental practice, which is now called Blue Water Dental Care, located in Reno, Nevada. They came to practice CFO seeking buyer representation specifically around conducting financial due diligence for the practice they were purchasing. And throughout that process, we developed a great relationship and continued to work together to this day. So without further ado, let's jump in and get to know David and Kristen Kelly. Welcome guys.

Thanks.

Thanks for having us, Drew.

You both found a wonderful opportunity in Reno, Nevada to buy both the healthy practice and the freestanding building. Before you purchased your practice, you both were living and working as associates in Oregon and at that time, still plotting your course to ownership. There are a ton of factors to consider during the search for a practice, especially your first one. Were there any factors that you all prioritized the most? And ultimately what drove you to settle on your practice in Reno, Nevada?

Oh, man, there were so many factors involved. We have, like multiple spreadsheets that took into consideration all the factors. So Kristen definitely is responsible for doing like, a lot of the due diligence. We had taken a lot of advice from various coaching areas, really on how to do due diligence for certain locations. And so we were looking into cities that we knew we wanted to be in if dentistry wasn't even in the picture. Like, if we were working zero days a week doing dentistry, where would we want to live? And so we looked at places like Bend, Oregon, Seattle, Denver and Reno. And we did a lot of demographics and Kristen put a lot of time into demographics research on patient to dentist ratio, median income, different zip codes, and we really got pretty Scientific on where we wanted to live. And ultimately living in Oregon, we were coming down to Reno to go to Tahoe quite a bit. And so Reno wasn't even our first choice. It wasn't even like our fourth choice. But once we started doing the demographics, we started really, really, really finding Reno very appealing from a business standpoint. And then Tahoe, I mean, we just loved being in Tahoe. And so in. In that process, Tahoe and Reno as a place of business really kind of rose to the top as a place that we could really thrive.

Yeah. Go ahead, Drew. Well, it's definitely. It's a mix of lifestyle and where you're going to be happy. You know, we didn't want to just chase some rural area just because there's no dentist in 200 miles. But we found that, okay, would it be easier to succeed in Denver, where it's slammed, or would it be easier to succeed in Reno, where we can be just as happy and have the same access to the outdoors, but with a lot of perks and no income taxes and a lot of tax benefits? So it kind of all came together.

You know, I think that speaks a lot about you, both as people, but also as business owners, thinking analytically, having spreadsheets. I mean, that's at the core of any great planning. And I love that you guys made a decision that at the heart was financial focus, but without sacrificing your lifestyle today or in the future. And I think that that's also equally as important. It sounds like you guys made a really well balanced decision.

Yeah, absolutely. And in terms of the real estate, we weren't going to hold out forever on purchasing a practice that came with real estate. But we just happened to get connected with a few doctors, and then one of those, I would say five doctors that we had spoken happened to be selling the building, and it was like.

Yeah, and then we're going for that. And then Reno, the. The cost of real estate is significantly less than Seattle, Denver, those other places that we just named. So I don't think that would have even really been on the table had we gone to a bigger city where the cost of real estate's higher. And just one other thing I want to add, too. After doing all that due diligence on those places, we noticed that Reno is kind of a sweet spot because the cities that are desirable are desirable because they have a lot of amenities, right? And anything that has a dental school is completely saturated within, like, 100 miles. And Reno is not even close to Las Vegas, which most people don't realize. And that's the only dental school in the state of Nevada. So we found like a nice city, some would call it the biggest little city in the world. And it doesn't have a dental school. So it's really not that saturated.

Let's talk about some of the specifics of the practice that you purchased for a minute. Initially, when we were looking at this practice, before due diligence and during due diligence, we noticed that the seller's collections were close to 1.1 million consistently over the last three or four years. It was a Delta Premier only practice, and the impact of being downgraded to a Delta PPO plus Premier provider resulted in close to 6% reduction in collections for you guys without any corresponding decrease in production. We noticed fairly typical overhead issues common in older practices that no longer have debt payments going out every month for equipment and practice loans, which were higher wages and higher variable costs in the form of more expensive lab providers and higher dental supply bills. But it had the foundation and immediate cash flow opportunities to eventually position you both where we wanted you to be long term, which was to have a solid two doctor practice. In just a little over a year, we've taken this practice from 1.1 million to right around 1.6 million per year in collections. Now, in large part, the growth is attributable to your relentless effort in providing an exceptional patient experience. And that's just you guys waking up every day, making that a priority. In addition to that, we also made some strategic overhead changes. We optimized some new patient traffic and operational systems. And through that combined effort, we've increased operating income as a percentage of collections from what the seller was realizing at 30% to what you guys are now experiencing at close to 55%. That's powerful stuff. Now, we knew coming into this acquisition, some of these changes wouldn't be able to be realized immediately. Labor changes and staff costs, those are things that just take time to manifest and come to fruition. But how did you guys set the tone from a culture standpoint that may have accelerated the timing of those changes to be realized much sooner?

Yeah, great question. So Kristen and I, when we were going into it, we were really set on saying we're going to give it like four to six months after purchasing and we're just going to observe and everyone's job is secure. And that, we felt, was to get a lot of goodwill and, and keep a lot of the patients feeling very comfortable that only the doctor had changed. And then after that period, we Got pretty comfortable. We saw what we liked, we saw we didn't like. And then we started having team meetings with everyone, and we started talking about our vision of where we were about to go and what we wanted the practice to look like in the years to come. And through those meetings, we started kind of laying the groundwork of these are our goals, these are our expectations. And through those meetings, very, very quickly, maybe within two meetings, within two months span, the people who didn't really feel like they wanted to kind of catch the bus with us and take it to where we wanted to go, they just kind of got off the bus and they weeded themselves out and they handed in their notice and thought, you know, one woman retired. She was. She was close to retirement age. One person decided to leave the profession altogether, and they just kind of weeded themselves out.

What you said about not rocking the boat and being business as usual for the first four to six months or so, I really think that's an important aspect. But I also think being confident and assertive in your role as the new business owner and leader is also very important. It's something you guys have both done really well.

And it's a point that I find extremely important for associates who aspire to own their own practice in the future to start the process of defining what that means for themselves early on or as early as possible. Because the root of that answer is subjective in nature, and it requires time and introspection and reflection. And being able to blend these two features of maintaining the status quo in the beginning was. While also being confident and assertive. It's a delicate balance. In my experience, though, staff and office culture respond really well to business owners who know first and foremost what their goals are, but who also make their goals well defined, measurable, and achievable. And offices that take the approach of winning together, those are the offices that stay together. And if that's not already a saying, it should be now. In your ownership experience in particular. Building this strong culture has led to a dual benefit of sorts, where staff weren't. Who weren't interested in being on a team with high aspirations. They weeded themselves out. And that had the. The downstream effect of bringing labor costs down and more in line with what our strategic overhead targets were. But more importantly, now you have this team behind you that's ready to be in the trenches with you every day, who are motivated and striving to create this practice environment that aligns with, you know, what you guys always envisioned.

Yeah, absolutely. And I mean, it's I, I do want to say that the way that we went about it with these team members was extremely fair. I mean, we don't micromanage. We don't do any of that. We just had expectations laid out and they were honestly just not what those employees were motivated to do. It was the growth and the energy was just a little too much. And so they kind of just left.

They just left.

Let's talk about some of those expectations. What expectations do you feel were most important in getting the office culture where it is today?

So for us, growth has been a huge thing. And so we did a phone training with our front desk staff. And that is ultimately what kind of led to the one staff member leaving was it was just our focus on new patients and the ability to kind of cater to them and get them on the schedule. And I guess just that pressure and that culture of growth and more.

Yeah, that culture of wanting to see more and more and more so that we could get to.

A fully staffed and just a full operation of two dentists working full time all the time. That just really scared her for whatever reason. And she said that to us flat out and was just like, you know, I don't think I can handle this. It's just too much growth. So I think I'm going to retire.

Phone metrics are often overlooked, but it's such an important lifeline for service businesses, even more so for small service based businesses. Give us an idea. What did you two do to hone in on not only how the staff should answer the phone, but but also how you measure and communicate their performance of those phone calls that eventually led to an increase in new patients at the office?

Well, so we kind of touched on it earlier. We did a phone training. It was an all day kind of boot camp, essentially. And going into it, I mean, these women have been answering phones at a dental office since we were in diapers. I'm not kidding. Like they've been doing. And so for us to be like, oh, you need to learn how to answer the phone, they were almost appalled that we would even suggest that, like, I've been doing this longer, you know, before you ever picked up a handpiece for sure. And so they thought they had this. And then so we really had to kind of reel it back and be like, well, Tiger woods has a swing coach. Like, you can always be better at what you do, even if you're already the best. And so we phrased it like that. And we were like, okay, if you think that this is complete waste of your time, then so be it. But we're going to pay for you to be here and I think you're going to get something out of it. And the one, the one front desk staff who's definitely go getter, she loved it. And it taught them how to steer conversations, it taught them how to get essential information out of a phone call and how to create rapport and build up the patient's experience quickly, quickly over a single. So that when some stranger picks up their phone they end up hanging up and we have all the information that we need and they know that they're in the right place. They are not going to keep looking.

And they're on the book.

Yeah, they're on the books, they're on the schedule. You know, they are going to come see you guys and complete the experience Circle.

Exactly. And so in addition to that, we've, we've created digital phone lines. So we've gone over to like a voiceover IP that tracks phone calls duration, it records phone calls and we use that as quality training purposes. As you hear on the line, actually use it as training. And we go over the good and.

The bad and we also incentivize. And so our one kick ass front desk lady that's been with us the whole time, she, when you incentivize her, she will work her ass off. And we love that. So every new that she gets, she gets five bucks. So if she gets 30, if she gets 40, if she gets 10, that's her bonus and she has to write it down and track every single one and they have to show up and basically that's the metric we use and that has motivated our front office enough to double our new patient numbers.

Yeah, that's great. Any strong incentive based bonus program is directly tied to the employee's efforts, which this one clearly does. Every time the front office gets a new patient in from a phone call, they get $5. It's simple and directly correlated with the objective and goal in mind. I like it. What other systems have you all put in place? I believe you recently added practice by numbers. And in combination with your digital phone lines, you're now able to see length of every phone call and conversion rates pretty quickly, right?

Yeah, definitely. We're able to see that, we're able to see missed calls actually, which has been really helpful too. So sometimes, you know, all of our phone lines are busy. We only have two people answering the phones. You can see missed phone call, call them back. But then also you can track who's calling over the Friday Saturday, Sunday, when we're not there, and then you can follow back up with them on Monday, even if they don't leave a message. And so that's pretty helpful as well.

Okay, so now that we have these new patients coming in in the office, because we're more effective in answering phones and getting them on the schedule, what have you done to increase production in your patient experience to drive your top line collections growth? We mentioned earlier that your overhead management is phenomenal in relation to what the seller was experiencing. But what you've also done is grow collections by 55%. We'd love to hear what you've done to increase that top line so quickly and substantially.

So one of the biggest things has been a shift in our competence in diagnosing. So when you first go in, you're in a brand new practice. All the patients have been seeing Dr. X for 40 years and it's a little bit intimidating, but over the last six months, so basically six months into the practice, we invested in some new technologies like intraoral cameras, which is extremely simple but allows you to have an amazing conversation with the patient, showing them what you're seeing and helping to diagnose. And that confidence has really allowed us to treatment plan so much better and just take it to the next level. And our schedule is always full.

Yeah. And then I think along with that, along with the intraoral camera, we invested in intraoral scanner, which I know patients really appreciate. I think as part of the patient experience, one of the things that everyone dislikes is that goopy impression. And as a clinician, we really hate having to potentially retake an impression. Patients love having a neutral oral scanner and they feel like, wow, these new dentists, they're younger and they're bringing all this new technology and kind of like bringing us out of the kind of archaic experience that we're used to.

So it makes, it builds a trust in being a young new doctor, even though you don't have the experience that the doctor you bought from has. They think, oh, wow. Like they know so much because they brought in all this new technology and this confidence and these new procedures and.

It'S making it more comfortable.

It's not uncommon for gaining confidence to be one of the biggest changes to happen in the first year or more of the life cycle of a new practice owner. How many times did you have to see a patient to feel that newfound confidence? Or was it new confidence in your clinical skill sets and your ability to treatment plan more effectively that ultimately drove the change?

So I Think for me, definitely the second time I saw a patient made a huge difference. Because the first time I saw a patient I felt like all I cared about was patient retention. Like I gotta woo this person over so that they love me and they want to stay with our practice. And that was my concern much more than production. And I just, I was a little timid to present treatment that I knew I should have because I knew that that's what they really needed and that was what was best for them. But if it was kind of borderline, I would just, oh, let's watch it till next time. And so I think then the next time it made me much more confident to bring that up, talk to them again and just get them on the books. And I'm not saying that that's the way to go necessarily, but I think those first six months, any new owner should just expect between staff, new patients, new hygienists and everything. You're working with a little bit of that timid feeling.

Yeah, no, I get it. Let's talk more about the patient experience during that first six to 12 months. Because in my opinion, it's one of the most important elements of creating and, and sustaining a successful transition experience.

Well, actually it goes before we even met them, honestly. So we created a really nice letter between a picture of us, the seller, together outside the practice, and then sent like a really nice transition letter to every existing patient, even if they hadn't been there in a long time, explaining the transition. And the seller wrote it and was trying to instill his confidence in us and that he very meticulously looked through a lot of offers and felt like we were the best fit to take over his patients care. And so I feel like that went a long way before they ever even walked in the door when we owned the place, like maybe a month before they even met us, they knew the sale was going to go down, we're their new dentist, and that they should really stick with us because he believed in us. And I felt like that meant a lot.

Yeah. And honestly, he'd been preaching that to the patients for years. Like, I'm not going to sell until I find the right person. It ended up being people, but the right person to care for my patients. And then the staff followed suit and just believed in us and they lifted us up to the patients. Like, yeah, Dr. Francis Gombo, you're going to love these new guys. Like they're just the sweet or they're great, or they take, take great care of their patients. Whatever it is did you have to.

Coach your staff for them to give you that praise? Or is it more of a quality trait of your specific staff members?

If anything, like, at least what we stuck with is we were trying to really say, like, we have the same treatment philosophy. And like, when we first met the seller, that was a big thing that he was looking at, which is very responsible of him, you know, to be making sure that whoever bought had the same kind of philosophy of dentistry so that it would be a good fit. And so, you know, that wasn't bs, that was, that was a fact. You know, he, he felt that was a really good fit. And so we told the staff the same thing. You know, like he picked us over many other offers because we had the same treatment philosophy. And I feel like that goes a long way with patients. Like, they just want to ultimately know that they're in good hands. Whether you're 30, 40 years younger than the guy who used to be doing your dentistry or not. Like, as long as same philosophy and like hand picked, that, that really says a lot.

And now that you're over a year into the transition, do you think that you still have a similar treatment philosophy as the selling doctor?

Yeah, I think we do have the same treatment philosophy, but I think the difference is, is that we are way more accepting of change. And we really wanted, as part of our vision to advance the practice technologically with intraoral cameras, digital scanners and laser. Laser and like those types of things that, that go back to what you were asking about or mentioned about, like the top line, like, we're offering way more procedures. Botox, for instance, Chris, is Botox and filler certified.

Aligners.

Aligners. I mean, we have kept our nose to the grindstone and kept going back to school for years and years after graduating in order to offer more procedures, in order to keep more things in house. And patients really do appreciate that. Whereas I think his philosophy was very like, I'm a GP bread and butter dentist. That's what I was trained to do and that's what I do at a high level.

And he did high level dentistry, but restorative pretty much exclusively. So. Yeah, but I think it was the philosophy. It was overall a great transition.

The philosophy is there. We're just more open to providing more.

Yeah, and I'd like to add something to those comments quickly. Adding services or technology doesn't automatically translate to increased production or return on investment. It's how you deploy those technologies and new treatments that lead to an increase in case acceptance in the overall patient. Experience. Part of my job as their CFO advisor is to help them manage cash flows in a way that allows them to scale effectively and bring in these new technologies at the right time during their business life cycle so that they can maximize the utilization and return earned from those new services and technologies. I believe it's vital that associates come away from this message that you don't have to add equipment and new technology the moment you take over a practice in order to be successful. Every dollar you spend, especially in the beginning, has an opportunity cost attached to it. And what I mean by opportunity cost is the cost incurred by not pursuing an alternative choice. All we're trying to do is minimize the opportunity cost by choosing the options that benefit us the most financially and in turn, expedite the time to reach the ultimate goal, which is financial independence. Every practice purchase is different. Working with an advisor that helps you understand your specific global financial picture from practice to personal is going to allow you to direct your cash flow surplus in a way that allows you to expand and grow your practice responsibly.

Drew, you did a great job of kind of leading us into our first big purchase, which was taking out another loan to get our $50,000 intraoral scanner. And we did it when it made sense. We didn't get it until we were seven months into practice. Even though we wish you would have had it day one, but until you are doing enough restorative dentistry that it makes sense to offset the other fees that you would have not having the scan.

Yeah, I mean, we crunched the numbers, and we were saying, like, okay, on this, at this many crowns per month, a couple months in a row, it would make sense. It was definitely a calculated investment.

Exactly. And same thing with the laser that we just got. We did a lot of research on the roi. And then same thing with. We're looking into the mill, and we're finally at the point where we're definitely hitting that mark of. Of doing enough restorative that it'll make sense. So it has to make sense, but once it does, it. Yeah, it makes life a lot easier, and the patients love it.

Now that we have a great idea for what has made your first 12 to 18 months successful in the practice. Let's take a moment and talk about the financial traits that you hold to be important for yourselves personally. And how have those personal financial goals translated into what you're doing in the business?

Well, I think our personal financial philosophy has always been frugal and saving and always preparing for the next step. And I Think.

As part of that, one of the biggest things that I think your listeners should definitely hear is that we were always under the assumption that paying off your student debt and being really aggressive towards that, because your student debt is such a big debt at such a young age, that that's really important. And thankfully we did do that, but we balanced that with also saving some personal money so that that put us in a position where we had enough personal liquidity in order to buy the practice that we bought. And I think that a lot of your listeners should probably know that having personal money in the bank is a prerequisite before anyone will lend them money for practice.

Yeah, you did both pay off your student loans pretty aggressively before you met me, but you also had quite a bit forgiven through your participation in the National Health Core Service program. NHSC for short. And in Oregon, they have a state program that matched you on the amount that you had forgiven through the NHSC program, which is a nice added benefit. So after you both got out of that program, I think collectively you only had about $100,000 of student loans remaining, which was in large part due to the amounts forgiven through that program. How many years did you guys have to put into this program? And now that you're on the other side, do you think it's worth your time or worth a future associate's time in going through it?

So we put in three years. For us, it was absolutely worth it. We got an amazing clinical experience, got to do a lot of awesome dentistry there, but we basically lived in, like, bfe, Oregon, and you have to be willing to do that. But for us, as like, outdoorsy young people that didn't need to be in the big city for a few years, it was absolutely worth the financial gain and the experience to just go for that. And then it set us up to transition into private practice perfectly and even grow further financially.

For sure, you have to start somewhere. When growing your clinical skill set, the first two or three years, regardless of whether you're working a PDS private practice or something like nhsc, you have to gain your experience. It speaks a lot about who you both are and your views on personal financial growth. Putting frugality and financial discipline at the forefront, you are able to maximize what you're putting away for your future selves now, which some would call delayed gratification. But what it's resulted in is, David, you're now student debt free and you're, what, 31 years old? David?

Yeah, you're 32.

More of the student debt free part.

But yes, I'm 32, but I am student debt free.

32, student debt free, a $1.6 million practice owner, and now officially a homeowner as well.

Yeah. And I think those early years of just sucking it up, living in rural Oregon and driving crappy cars and just doing whatever we could to take that next step to ownership while maintaining the debt really was awesome. And then to me, if anybody is concerned about the financial jump of making it to private practice, of taking it, taking on more debt with ownership.

I mean, the growth potential is absolutely worth the risk because if we were to have stayed in public health, we would have had very minimal potential to do better than we did that first, second, third year out of school. Whereas now our income can double, triple, quadruple what it was back then. Yeah, it's a lot more work. It's a lot more sleepless nights.

Yeah. No, I definitely want to say, like, the, the potential is almost limitless in terms of where you want to go. However.

The young listeners out there definitely need to look at it as you're almost buying a second job. Like, you're no longer just a clinician, you're a business owner. And that whole second, that business owner part is where that other income comes from. The more successful you are running your business, getting your overhead down, you know, getting new patients, training staff, training staff, you know, interviewing staff, all that stuff comes after the clinical hours. But that's where like the, all the difference in income comes from.

It's focusing on small things like getting your staff updated on, on training, on the phones, enhancing the patient experience, giving them a better idea of, of the treatment plan. And holistically, what they're, what you guys are trying to accomplish with them. All of their, everything is interrelated.

You know, the fact that you all.

Were willing to, as your income approaches, you know, we won't maybe necessarily talk about what we're making after tax, but as your income is substantially grown over this time period, you're still living on.

The same budget that you were when.

You were living in Oregon, working through, in the NHSC program. And I think that that goes a long way. And we're in the same budget. You're a homeowner.

I think. What was the purchase, purchase price of.

Your home in reno was like 600ish thousand.

Yeah, it's kind of crazy. Yeah, we bought a $600,000 house exactly where we wanted to buy. It's, it's a straight shot down to our office, and we, we intentionally bought one that had a Detached house in the back. There's like a small, like, like, like tiny home in the backyard. It's called a casita or, or a.

Granny flat, whatever, whatever you want to call it. But yeah, it's, it's, it's an income producing addition to your home.

And so we bought it with that already there and we were looking for that. And so that's generating 1200amonth and that's paying half of our mortgage. And so we are currently saving $500 a month in our new home that we're building equity on compared to the place that we were renting three months ago.

And yeah, we, I mean, we still enjoy life a lot. If there's something we want to do, we do it. But the things that we don't really care about, like having a nice car is super easy to cut a couple grand a month on.

We share one car, by the way.

Yeah, we keep meaning to buy a truck, but then it's just too expensive.

Too expensive.

Well, you know, I, I, I love that.

I really do. And what, when, when I sit in the trenches with them and we're looking through financial cash flow projections, we, the way that we're measuring their success is how, how much time we're taking off between the, the time that they have, they have the decision to either continue working or if they wanted to, to stop. And the track that they're on.

45 is not an unrealistic number for.

Them to have the option to quit practicing dentistry. And these small but important decisions around having one car instead of two or three, buying a house that has a granny flat that has income producing potential instead of buying a $1.5 million home when they could. These all are reflected in the amount of years that they are taking, that they are capturing back and they're bringing back into their lives from a, from a retirement perspective.

And some of it comes with some delayed gratification.

But I think as you guys said, you're still having all the fun that you would like to have and without, without sacrificing that which is important.

Important.

Yeah, yeah, we do. We have our values and we, you know, the things that we care about, we're happy to spend money on and the things we can save. We absolutely do. And Drew, that that is one huge reason why it's been so nice to work with you. Because every month when we're super stressed out and we feel like we're not being as profitable as it could be, this and that, you lay it all out for us and show us that we are being responsible with our spending. And hey, you guys are kicking ass and.

You could retire in your 50s if you want.

Yes.

We're tracking exactly how we want to accord in the plan.

We take our blood pressure down every time we talk.

And it's not just feelings, because when you're in there working clinically every day and working with your team, you just think about how it feels. You don't really think about what the numbers say and how you guys are really doing.

You can be blind to the progress that you're making because of all the, the small trials and tribulations that you're going through. It's. It seems like you're not. You're sort of swimming against the tide, but really you're. You're in a boat with motor and you're getting to where you need to be.

With all that being said, what. What's some financial advice that you would.

Give to some associates aspiring to be owner?

I think the biggest thing is just don't be afraid of jumping into ownership. Just the earning potential that you have in ownership. While it is, you know, a lot more work, it comes with so many other benefits from tax savings and, you know, things that your company can pay for for you. Like, there's just so many benefits of being a small business owner in America that it really is worth it. And the initial sticker price or thinking, oh, I'm going to have to pay off this dead over the next 10, 20 years. Don't look at it that way. You know, your business, you're going to be successful and it's going to make money and that's going to get paid off. And then at the end of it, you're going to have this asset now that you're going to be able to sell on the back end after you grow it for even more.

Yeah, I think.

I was just going to agree with Dave that the biggest thing is like, people especially, I think, are our parents generation. But even so, our generation with student debt is they're just so afraid of debt. I mean, Dave and I are. We're in over a million dollars of debt. We're on almost $2 million of debt really right now. But when you actually lay it all out and look at.

Once you pay.

It off, then like, the business and the real estate are going to become something that we can sell on the market. And I think the real estate in our area is going to go up a lot over our career. And I think that, I mean, we've already grown our business 50 some percent in one year. I mean, that's going to go up. We're going to make money off of that.

Yeah. So the debt can be scary, but you end up earning an even higher income along the way, and then you have an asset at the end.

Absolutely.

And I think that that's such an important aspect to consider is that your.

Practice loan was 984,000. Collections on that practice loan were a.

You know, a little over 1.1.

Does it seem risky on the surface to take on a million dollar loan?

It.

It can. But truthfully, it's less risky, at least.

In my opinion, than buying the $600,000 practice that barely produces enough to keep the lights on. And it's going to take you 24 to 36 months before you could even possibly draw on from a distribution standpoint.

The amount that you're drawing on now.

Day one from this practice. And it's a, it is an element of fear. It's an element of already having substantial student debt, loan balances, and not increasing or adding to that. But if you work with someone that understands how to manage cash flows appropriately and they set a plan with you, truthfully, I think, like I was saying, it's less risky to take on the.

Practice that's not only going to service your personal spending budget now, but it's.

Also going to provide enough money for you to save for retirement.

Absolutely.

Well, David and Kristen, as always, it is such a pleasure to chat with you both. Thank you for taking the time to share your experiences with our associates on fire family. We really, really enjoyed it.

Yeah, thanks for having us.

Yeah, thanks for having us, Drew, Could I add one other thing, though?

Yeah, absolutely, please.

I just wanted to thank you personally because this whole time, the first six months, there's so much uncertainty for us as, as owners, especially kind of treading into some deep water and not knowing which way was up. I think you especially like, we kind of talk to you or we, we refer to you as our business therapist. Like sometimes you just need a check in on how business is going and you just set us straight and you know, there's no bs. You were pretty tough on us up front when we weren't nearly as profitable. And you know, we had not tough, confident, but like, hey, but you set us straight. You taught us like, okay, these are the metrics. These are what you look at. This is high, this is low. This is what you need to work on at your next meeting. And we did that. We followed your advice and we followed like the formula that practice CFO sets out to. To have all of their clients become successful, and one year later, I mean, we couldn't be happier.

Well, it means so much to hear that from you guys. The formula isn't always the same for everyone, but, you know, being able to stick to a formula that we're able, you know, that we prescribe is. Is super important, and I couldn't have asked for anyone more diligent in doing just that. And I think that the. The results that we're experiencing this today is. Is doing in. In great. In large part just from that effort that you guys put forth every day, showing up to work ready to. Ready to be better than you were the day before. And that. That goes a long way. So I. I appreciate. I appreciate those words. I do.

Yeah. I mean, we really appreciate what you've done for us.

Awesome.

Well, we have a.

We have a long future ahead of us.

I mean, I know they're going to.

Retire 45, but that still leaves us with at least 12 years to hang out together, and I'm looking forward to it. So, anyway, it was.

It was.

It was great to have you guys, and I can't wait to hopefully have you on the show again.

Yeah, you guys, you got to come up. We got to meet in Tahoe sometime.

Yeah, definitely. Snowboard season is just around the corner. Thanks for tuning in to another episode of Associates on Fire. We hope you enjoyed today's episode. Thanks for listening.