Must-Avoid Mistakes as a Practice Owner with Dr. Kevin Kenny

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. 2 Learn dental associate. So let's light it up.

Welcome everybody to another episode of the Associates on Fire podcast. I just want to start off by giving a just a reminder of the content we have on our Associates on Fire webpage www.associatesonfire.com for those of you you who don't know that this podcast is a part of a bigger program with the goal of producing financial intelligence for dental students and early stage associates and even new practice owners. And on the website we have educational videos. We literally have about 15 hours of short video clips on all things financial, from dealing with student loans to dental insurance, to buying your practice, informing your team to addressing insurance credentialing. Just a lot of rich content on there as well. And please fill out the associate profile form so we know a little bit more about you and can help you as you sort of navigate your early career. That'd be an honor for us. Well, on the show today, I'm pretty thrilled about our guests on this program. This will be a unique one and I'll tell you why here in a moment. A few weeks ago I was invited to speak at a, at a study club event on a lot of the current government stimulus for the COVID period. It's called ppp.

Some economic loans and what's going on with all of that. And it's, it was called the Patriot Study Club and it was founded by Dr. Kevin Kenny, who is our guest today and he has a colleague, Dr. Dan Hutchinson as well, who both are. Their names definitely preceded them. Now I didn't work with them. They recently sold their practice and I have heard about their practices and they have a great reputation. Well, in that presentation I was doing with them, I think it was before or after the show. Dr. Kenny, if you remember, we were sort of joking and you were saying how, oh, all the dumb mistakes and lessons learned over the years. Well, me as a newly minted podcaster, I thought, well, there's some good substance. I want to hear about it. I mean, who doesn't want to hear about the dirty details? It's sort of true in life that we like to overemphasize the success and the glamour and we under emphasize the failures. I mean, just look at what we post on Facebook and social media, that's the way we are. However, I think we can learn a lot when we let the cat out of the bag and be honest about a few things. And so I asked, hey, Dr. Kenny, I know you've had a ton of success, but would you be willing to just unpack a little bit of dirt for these young doctors so maybe they can learn some experience and not have to get so dirty themselves early on? I will say it's these lessons have probably been a, I mean, these mistakes, probably a huge lesson for you over the years. That's why I think I really want to emphasize and talk about these sort of in a story format. So I'm pretty excited about this. Welcome Dr. Kenny and Dr. Hutchinson to the show.

All right, all right, here we go. Listen, everybody out there in cyber world, go grab a cup of coffee and get ready to have a few laughs, okay? A little bit of background, all right. You hear this accent here. I like to tell people I'm from the south, the South Shore, Long island suburbs of New York City. But my good friend Danny Hutchinson here, he's a true Southerner. He's from Georgia. But like a lot of us in San Diego, we practice in San Diego. Here's the deal on San Diego. We were all in the Navy. We all were coming out of school, we didn't know what we were going to do. In a nutshell, we all joined the Navy. We stuck around in San Diego and we all stayed. And then it was the blind leading the blind. We had no business background whatsoever. The Navy gave us great clinical training, but minimal, minimal to zero business background. So. But we all dove in there and it was like time to learn. A lot of us did what I call your, you know, your, your two year mba. We didn't get a Master's of Business Administration, but we started working on our major bank accounts at the expense of other dentists. We were associate dentists, like many of you guys, listening and then actually, you don't realize how good and experienced that is because you can watch other guys make mistakes and learn from it and you're going to make your own. And now I'm sitting in Dr. Hutchinson's former office right now and this is a drop dead gorgeous office on Coronado Island. It's a little on the upscale side. This is a place that you would be definitely, as a dentist, you'd like to say, this is the office that I go to get my teeth done and refer people to. My practice was a middle class practice in a middle class neighborhood. Kind of where I grew up and we had a lot of school teachers and military families and two different types of practices. Both, I'd say, if you want to look at the numbers, very successful. You will be successful too. Don't doubt yourself. If we could be successful, I'm cracking up. You will be successful. Just get that in your head. But instead of sitting around bragging about how well we did, a lot of times, you know, having a drink or sitting out on a golf course, somebody will bring up some bonehead move that we all did. And I got a list of them here. And we're just going to go down some of this stuff. And like, us Irish guys like to talk. We're going to tell stories. All right, now we're going to go right into catastrophic business mistakes. I mean, things that will. This is beyond a financial bounce check. This is catastrophic. Ruin your life. Listen and listen closely. Can you get your fire extinguisher in less than 5 seconds? Can you? If you can't, then you better have a dress rehearsal. We had a fire. While I was treating a patient, one of my long term employees came in very calmly and said, Dr. Kenny, we have a problem. So what's the problem? We have a fire.

Where?

In the garbage can outside. Now, I said very calmly, go into the lab, get the fire extinguisher, go downstairs, hand it to Robert, that's the downstairs dental assistant. He'll know what to do. He was in the Navy. Christine went downstairs. Somebody was smoking cigarettes outside. They threw a butt inside the garbage can. For all of us guys that grew up in the northeast at this time of year, we would get a Christmas tree and go down to the pond. We were ice skating. And the first Christmas tree that somebody threw out, we would throw it in a fire. It goes up 30ft in the air, burns. Unbelievable. That's what that garbage can did. But Robert put the fire extinguisher and put it out. And those guys, I mean, everybody's like, there's a fire. It was done that fast. But Danny will know. We know of two offices I could talk about in San Diego that burnt down.

The dentist freaked. What could you do? Their offices burnt down. You need to know where your fire extinguisher is. Here's another one. Come in. Monday morning, 7:30 in the morning. I had the upstairs suite in a professional building. The ended on us had the downstairs suite. Their office managers looked like she just saw a ghost. Dr. Kenny, we have a flood. I opened up the door. I'm not kidding. The water was above my ankles and 1800 square feet. I rolled up, took my shoes off, rolled up my socks and pants, walked through the water, Kept going to where I found it. There was a hose leading out of the wall from the plumbing to a dental chair. And the hose came off. The water was. Everything was left on. Over the weekend, the water was more than 6 inches high in the office. Destroyed all their computers. It wicked up the drywall. Now, you ready for this one? Okay. Mistake. They didn't shut the water off. Seven years later, the second flood upstairs, Monday morning, I come in, I go in, the model trimmer was left on. The water pressure built up in the model trimmer and that little tiny, stinky little hose that leads into the model trimmer popped off and just. It was spraying water for 48 hours on the second floor. It leaked down through the ceiling again and destroyed the downstairs office. Over $200,000 in damage. Plus. So the moral of the story, do you know where the water switch is to your office? Do you shut the water off every night and make sure that there's no water on? Now, patient comes to me, goes, I'm an investor, I'm an important guy, and I want to invest in real estate. Dr. Kenny, I'm thinking about buying a professional building that has doctors and dentists. And I said to him, listen, you might want to think twice about not buying that building if you have dentists as tenants, because dentists always have floods. And then I'm not making this up 10 days later because, hey, Dr. Kenny, you wouldn't believe it. I drove by that office and all those dental chairs were out on the lawn. They had a flood. Yeah, no kidding. Do you know where the water switch is? I didn't even know that such a thing existed. I had a plumber install one for like $300, 200,000 loss on that downstairs flood for a $300 plumbing job.

Now, I'd like to interject here. He's talking minor leagues with hoses that leak. Because where you really get in trouble, as happened to a friend of mine, is if the pipe where it joins the solenoid, that shuts off the water. If that springs a leak, then it's more like a water main. So even if you have a solenoid, I recommend that that solenoid switch be right where you will pass it on your way out the door.

But the other thing to bear in mind is he's talking about property damage. You're going to be shut down for a while. And do you have insurance against that? And you're going to wind up having your office phone forwarded to your receptionist's home so that she can keep the business running and hopefully keep some income coming in with receivables. But it's not just the property, it's the downtime as well.

Yeah, I want to comment on that. Making sure you have proper insurance around this, I think is a. Is a given. Although I, you know, and a lot of banks need this, of course, when you get a loan for the practice, so you should have it, hopefully you have enough. And maybe even not just getting the minimum, it's usually not terribly expensive. You can get, get the right amount of insurance. But you're right that downtime could possibly be the more difficult economic challenge when you're being displaced like that from your office. And by the way, I do have a number of clients who have had flooding and fires. So I've seen this myself among my own clients. And I've always sort of scratched my head. Thought seems to be happening more than your average business. Well, kind of makes sense given the nature of a dental office.

Now, years ago, I was reading a business book and it had a great quote and it said in there, that had nothing to do with dentistry. It was strictly a business book. And it said, anything that can happen in your business will happen in your business. So you might as well plan on it. So start thinking, if we have a fire, what are we going to do? If we have a flood, what are we going to do? And then what happens afterwards? Are you properly insured now, both times on these floods? Yes. They got $48,000 in lost revenue because they couldn't see patients. But, you know, you just want to skip this chapter in life. This is one that you don't want. This is catastrophic. This is like beyond firing somebody. This is just ridiculous. But this could be prevented. Just got to think ahead, plan on it. Where's that fire extinguisher? Where's the shutoff list? Now.

One other little thing to plan on. When I said that you have a solenoid switch by your door so that you turn off your water headed out, try to have your coffee pot switch somewhere close by too, because there's a lot of coffee pots that get left on overnight or over the weekend that can cause a fire.

Yeah. You almost just got set up a, a protocol where someone in your office just, it's part of a checklist. They just turn these off, you know, whenever they leave.

Here's the next thing. We had a written checkoff list in our lab that had to be checked off and initialed before the people could go home. And it was a list that, you know, there was stupid stuff like, did they vacuum? Did they take the trash out? But it was. Is the water shut off? Like. And make a checkoff list of what you need. Then we're going to quote some famous people here, Ronald Reagan, trust, but confirm. Then, as the captain of the ship, you have, before you go home, you double check that that list is done. You don't leave anything on. Now you trust that your main assistant, they want, you know, you're seeing patients, but they went around and they did all these things. And then before you walk out the door, just walk through again. Is the suction off? Is the compressor off? That was on our checkoff list. Is the water off? Is everything off? Is the alarm system placed on? Is the answering machine on? Like, all these stupid stuff. Make a checkoff list. And I'm sorry. Just make it in writing, typed up. And make your main dental assistant responsible for making sure that that's done so you don't get any of the finger pointing. I thought Donna did it. Who said Debbie was going to do it? And you're the captain of the ship. Before you walk out that door, check. These are catastrophic. Let's get on to. Oh, neophyte things. Funny story. You got to break out laughing. Okay, I get out of the navy, and I'm going to go to practice with a friend of mine that I met in the Navy. We were good friends and all that stuff. We'll cut to the chase. What do we know? We're going to sign a lease on a commercial spot. I know. Yeah, we're going to have a lease, and we're going to be. Dennis. We're going into private practice. So we signed this lease, and then it's like this. It's San Diego. It's like, it's always hot here. So we're in an upstairs suite, and, like, it's getting, like, 80 degrees in the office. I'm like, I'm dying. So I go to my buddy, hey, Doug, turn on the air conditioner. He comes back, like, five minutes later, goes, hey, Kev, I can't find the switch. I don't know where it is. Geez. We call the owners of the building. I said, well, we don't know where the air conditioner switch is because that's. Because there is no air conditioner. That's your responsibility in San Diego. No air conditioning. Now. We were broke, guys. We had no money. $6,500 later, there was an air conditioner placed on the roof that we paid for.

Don't sign a lease until it's reviewed by an attorney. I mean, you could. Because we don't do these things. They'll pick that up, the stupid stuff. I mean, how could you get a no air conditioner in San Diego? It's like having no heat in Alaska.

And even then, I'd recommend to read it through yourself because the lease will have a section that states landlord responsibilities and tenant responsibilities. Sometimes the language can be a little cryptic and you're trying to decide is this and that side of the ledger or the other side of the ledger. But it's good to make sure that there's nothing glaring at and that you understand what that is. So if something does break apart, there's not going to be unexpected. You know, be unexpected and you can address it the right, the right way.

All right, this is kind of a negative thing, and I don't want to throw anybody under the bus, but this happens. And just be aware.

When I was sitting in the attorney's office all distraught, and then the attorney says to me, Dr. Kenny, partnerships are sinking ships. You can enter into a partnership with all the best intentions, but this is a sad situation. How many people get divorced, right? You go in with good intentions, but partnerships are rough. And my ex partner, he's a great guy. I have nothing but respect for him. But the situations can change when money gets involved in things and the practice really started to grow. There's always one guy that's going to produce more. There's always another guy who's a little more into vacation. It's human nature. You're fighting human nature. You will lose. If you're going into a partnership, you're going to go in with good intentions. And now there's a lot more group practice. And I have many, many friends that went into partnerships and it worked out just fabulous. It was a great, great way to go. But not all the partnerships work. We had nothing signed with a lawyer. We were good friends and we did it on a handshake. Huge mistake. Things change when money gets involved. When women marriage gets involved, wives get involved, the situations change and it can get unexpectedly ugly. Okay, so your. But this will never happen because we're best of friends and blood brothers and we were in the Navy together and all. No, it's a sad, sad situation. I got a lot of stories like that. You go through them. Yeah, go right ahead.

Because we, we work with partnerships and the, the statement, partnerships are sinking ships. I've never heard that. But there's a lot of truth to that. The, the rate at which partnerships form is the, the same rate that they dissolve and they don't have a very long life on them, just on average. And there's three things I always say that need to be in place to make a partnership successful is, number one, there has to be good chemistry. You have to get along. But the thing is, is everybody who's going to form a partnership, they all have that. Otherwise they wouldn't even be talking about a partner. It's, it's, it's a, it's a friendship, it's somebody you've known since dental school. It's a family member, whatever. There's, there's good chemistry there. The second thing is the importance of having a shared clinical philosophy and a trust and a belief in each other clinically. Because if you're forming a partnership, you're sort of each on the hook for the others to some level, and their clinical ability, that's number, number two. Now, neither of those two is usually the problem with partnerships. It's the third one, which is how do you allocate the profits correctly? How do you get the money decision? Right? And partnership agreements, and even, even attorneys will put sort of standard language in a partnership agreement. And, and then they give it to the doctors or they give it to the cpa and, and then it's almost never followed and it's rarely followed because there's nobody who sort of institutionalizes the language that's in the partnership agreement. Nor was there a thorough discussion before forming the partnership how the dollars were going to be allocated between the two doctors. And we have a very distorted view of the value that we put into something. Everybody's going to view their value in a, in a different way than maybe others view that value. And you're going to view somebody else's value different than they perceive their own value. So this relativity of, of contributed value is something that creates a lot of conflict. And one person might be doing different types of procedures. One person might want different equipment or supplies that are more costly. And these differences have dollar signs attached to them. And then it, and then when it comes time to take money out of the bank, there's oftentimes a disagreement. So the way that I recommend for partnerships to get around that is that they need to do a thorough due diligence before signing the, the partnership agreement saying, here's how we're going to allocate profits. And who knows, Maybe it's like 33% of your own production, then you split the net profits after expenses, 50, 50. There's a continuum of, of eat what you kill to a communistic approach. And you have to find where it makes sense for you guys. We do a lot of that partnership consulting for, for doctors. But one thing you said on this subject of partnerships is absolutely right. I mean it is right on the head of the nail. My uncle had been in many, many partnerships and he's worth probably 35, $40 million. And he said, Wes, the one thing I learned over the years is that it's oftentimes not the partners themselves that lead to the conflict, it's the partner spouses. And the reason why is the spouses tend to be the biggest advocate for their, for, for their spouse, for the partner. And, and they're the ones who are only seeing sort of the outcome, what's coming out and going to them. And they're also seeing what's going to the other person, at least by the type of house they drive and the car they drive, and I mean house they live in, the car they drive, et cetera. And they don't understand the full story of what's happening inside the operations itself itself at all. They're only getting sort of a one sided view of it at least. And so it just amplifies whatever conflict is there. It amplifies it, it stirs it up even more and it's, it's just, it's just kind of a delicate thing. Now if it works, partnerships are amazing because you have two producers with one streamlined, ideally streamlined overhead and the profits can work out great.

Oh, I just want to say one final thing about partnerships. It's like when you run into an ex girlfriend 20 years later, you know, you're really nice and everything. My ex partner went off and made a fabulous practice just up the street from me. And we get along fine. Third parties cause more problems than the friendship between the two doctors. But the dissolution of a partnership, it just wreck a good friendship. It does. So, but we get along fine. And we could go on and on and talk about skiing, hanging out, the golf course and all that stuff, but it was an ugly chapter in life and you got to do the preventive thing. You will be paying lawyers. You might as well pay in the beginning because you will be paying in the end. Lawyers will be involved. Don't think you could cheap out on this one because you get along well. Pony up and get it done.

And my last comment there is that whether that's a CPA or consultant on Partnerships, have somebody extrapolate out or project out what the income will be to each of the two doctors based on scenarios. If Dr. A produces A, Dr. B produces A, B and hygiene produces C, and your overhead structure, you spend this percentage in labs and supplies in your facility and your marketing and your admin, what's left? Have somebody model that so that you have expectations. Because usually the conflict arises when expectations aren't met. So run that out in your head, make sure everybody's good and clear on that, and then go and do it. And if you do that right, then you have much higher probability of a long fruitful partnership.

Oh, get ready. We're going to shift the fourth gear here. Now we get an interesting story. Okay? Okay. It's a little bit about labor law. Okay. No matter what state you're practicing in, I want you to know that the labor laws are different in your state and they may be different than the federal government. Okay? There's federal law and state law. And I had to learn the hard way. Okay, with all good intentions. I was coming out of New York, in the suburbs of Philadelphia, moved back to California. The California labor laws are way different than the federal. I found that out when I was before the labor board. And I don't want to get into it now, but you're going to have to look into this. We always worked in alternative work schedule. Everybody does in New York because everybody's in the city. And then they come out to the suburbs. And our dental offices were open to 10 o' clock at night. And guess what? It was crowded because everybody was in Manhattan all day long. They come home, I got to go to the dentist tonight. That's just the way it was. So I came out. I used to work 10 hour days, you know, 40 hours a week. And then I'd add, you know, whatever I did on Fridays, you have to blow it off, just see big cases or clean up the office or whatever. Then I found out that the overtime laws is eight hours a day in California, not 40 hours a week. I was taken before the labor board because one of my good employees, who I got along with really well and we really liked each other as people, but her husband was whispering in their ear and they saw it on Channel 8 news and the six o' clock news, that $4,000 overtime to them, that was $4 million. And I went before the labor board, you know, I had this complaint and I went down. I was in a state of shock. I was like, somebody stole my car. I couldn't believe it. I Went down to the labor board and I said, you know, listen, I'm not here to lie or weasel. Here it is. I did this like I got a speeding ticket. I did it. What do I need to do? And they said, bigger than a bread box. Dr. Kenny, you seem like a good guy. See if you could cut a deal. The deal was I owed overtime for three years. Now, this was a brand new dental practice. I was making money, but not like, not like a 55 year old dentist. I was making money as a 35 year old dentist. It cost me $10,000 in fines. Now this is a 30 year old story. That $10,000 was huge. Oh, yeah. Now guess what? I owe the money. I did it. I was wrong. I did not know the labor laws. I didn't do the preventive. I was going on. I was 100% wrong. And I admitted it. And I paid the $10,000. I paid it. They all got the overtime. They would do. But some people were like on the Dr. Kenney team and some people weren't. And then I had to clean house. We had to get rid of some employees. And then the lawyers told me that I couldn't just fire people. I was creating a hostile work environment. I go, what? I can't even get rid of this one. I can't even like fire her. I can't. They said, you can't even move the stapler. I'm like, oh, I'm held hostage here. It's a long story. The bottom line is make sure you, you know, dot your I's, cross your T's, make sure you're doing it correctly. Because those great employees, when the money becomes involved, and as well as you get along with them, they'll take the shot. The money is huge to them. They will sue you.

Can I make a couple comments about that from my experience as well? I have a client, this is, this is actually going on right now, who before COVID let a hygienist go because the hygienist was sort of making some demands he didn't feel comfortable. Comfortable about. Let the hygienist go. Hygienist talks to an attorney. And. And it. You do not want an attorney looking through all your payroll history records if you haven't had a pretty robust HR platform or consultant, make sure that you're doing exactly what Dr. Kenny just said with your eyes and your t's. So what happened was come to find out that this doctor had been paying a bonus to the hygienist for a number of years. And this was on top of her per hourly rate. Well, this was something that I actually didn't know about. And I think unless you're really into labor law and are in a labor attorney, most people don't know about this. Now, maybe I'm just naive, but what happened was when you calculate overtime for somebody, it is, as you know, on the eight hour a day basis. Now that I knew. But when you look back, when you're filing payroll and you're calculating how many, what their hourly rate was, you have to spread the bonus out across all of the hours worked to determine what the base wage is, to then determine one half of that for overtime purposes, if that makes sense. You can't. So, so if a hygienist is paid 50 bucks an hour and then they get at the end of the end of the month a thousand dollars bonus because of the practice. Did, did. Well, everybody worked as a team whatnot. So hourly wage is 50 bucks an hour. And there were a few days there where that hygienist worked 10 hour days. And so let's say you got, let's say you got four days during the month with an extra two hours a day. You've got eight hours of overtime there. Well, you can't just use $50 when you're determining 1.55 times the rate for OT purposes, it's not going to be 50 plus 20. It's not going to be 75 dollars, it's going to be 50 plus that bonus of a thousand dollars spread out over all the hours. So it might end up being $52 or $53 an hour. Now that is what you have to multiply by 1.5 to arrive at what the overtime pay should be. And so all these years you're sort of, you're sort of giving this bonus to the staff that was above sort of the market rate, saying, good job, thank you for being a part of team. Thank you for working so hard. I'd like to give this to you. Well, the staff leaves, finds an attorney, and now the doctor is being punished because he had a.

An additional compensation system like that in place. Then what happened is two of the other hygienists decided they wanted to leave, or at least they didn't come back after Covid. And so they are all talking, well, guess what? They get recruited with the same attorney and now he's got three lawsuits against him from all of his hygienists. And, and now there's, you know, a settlement. It's going to be a lot more than $10,000 in four, unfortunately, because that. That, you know, because the labor law was there. So it's kind of hard to know all the layers of compliance that. That a small business needs to be. Needs to adhere to, especially here in California that just has, you know, a stack of labor laws as high as your ceiling. And that's why engaging maybe a good labor attorney early on to come in and evaluate your whole HR program process. And yes, it might cost you $5,000, $7,000 or whatever, but it might be a great idea because an ounce of prevention. Right? An ounce of prevention. And this is a great case where that's gonna. That's gonna apply.

Oh, I'm just biting my lower lip and I. You learn something every day. Glad I don't own the office anymore because, yeah, I was paying hygiene bonuses all the time. There's another way they could come and nickel and dime and come after me. Okay. We're going to just talk a little bit more about employees. Then we'll tell some funny stuff, too. Okay? This is a great quote from business. It comes from one of the best businessmen I know, my younger brother, who's a businessman over in Europe. It's not the people you fire that hurt you. It's the people that you should have fired. Once you fire somebody and they're gone, oh, they're gone. But when you're. I had a tendency. This was a mistake. I would adopt stray puppies. I would hire people. I felt sorry for them, so I would give them a job. If they're not that bright. When you hire them, they're not going to suddenly become superstars. They're just not that bright. And then five years later, they still can't make a temporary crown. They're just not catching on. And you know what happens? Five years later? You land up firing them anyway because the associate dentist doesn't want to work with them. The other employees don't want to pick up their slack. And guess what? Some of these people, they're very, very nice people, but they just could not catch on. And, like, you know, I'll make the temporary. I'll make the guess what. Later on, you're busy. I got to get out of the room. There's people waiting. I'm falling behind. You got to make this temporary. Well, I don't know how. I've only been here for four years, and I can't figure out if they can't catch on within 90 days. Just now, I. I'm a New York guy, so I don't have I'm not that nice on firing people. I had a hard time with it. It always was like a problem. But you just have to wish, wish. And it's just not working out. We're going in another direction. I want you to be happy and just let them go. And they know it's coming. It's not, it's not like, oh, you fired me. I can't believe you did it. They know it's coming. Fire them. If you keep. I made huge mistakes keeping people on for five years and they never caught on. And I was just annoyed to see them every day finally after I fired them, like, oh, I should have done that five years ago. So slow, slow to hire faster.

Fire one of one comment on that, if you don't mind. I like to share a couple of my own experiences over the years there. And I know from my own firm, actually what we do is, is I, I bite a bullet and I pay a severance to somebody when, when we let them go and they, but with that severance, they sign a document that states that they're not going to come back for any litigation against me. Crossing my fingers. But we've always had a sort of a, a positive parting if, if, if any parting can be positive. And, and so sometimes I'll pay out 5,000 here. Our recent one was larger, and I paid out over $20,000 for one of our team members who left, who had been with us for a little while and also helped leave on good feelings. But that way, I feel myself like I don't need to worry because as much as I try to be compliant and honest with the way we do payroll and following the rules, there's just a lot of them out there, and I don't know what I don't know. So I almost like to put this blanket protection over me from, from doing that. The other thing, too is it is hard to let people go, as you say, I, I struggle with that same thing. The thing that makes me sort of get the courage is remembering how critical culture is in any business, and this is very, very true of a dental practice as well, that when you are, when patients are in that office, they need to feel a camaraderie, they need to feel an energy, they need to feel a rhythm. And if you have a bad apple in there and it throws that rhythm off, it just hurts the practice all around. And so dealing with that early and fast is really, really important. I couldn't agree with you more on that, Dr. Kenny.

I just want to throw this out because all Right. As a dentist, and you're sitting around and you're. Okay, let's just say you ran into some dental school classmates or your buddies at the golf course or your girl power group or whatever you've got going on. And you're sitting around and you're talking, and we're all going to go to, like, the lecture from the attorneys to make sure you don't get sued by patients. And you're practicing the best you can. And the reality is, sometimes the porcelain broke off the distill of the bridge. That root canal. Am I long enough? When I did I find that canal? And you're doing everything you can. And so I'm going to refer this out because maybe I can't find the fourth canal or this person's vertical or whatever it is you say. You know, I'm going to punt. I'm going to send it to the specialist because I want to make sure that all my work is good. And this might be tough to reach that standard of care. Maybe I need a microscope for this Endo. And I'm just going to send it out. And I went through 35 years of practicing. I never got sued by a patient. But bam. You're not going to get sued by patients. Now we sit around all this baldy geezer guys, and we sit around, we'll talk about getting sued by employees. And these are the people that you were, like, buying Christmas gifts for, paying that hygienist a bonus. And then you don't know what goes on. You have to look at your employees as, like, potential ex girlfriends. Now, here's a funny story. Remember that girlfriend in college, you know, she was so wonderful, and I can't believe it. I'm in love. And two years later, you stand on a street corner, she's yelling F bombs at you. You go, whoa, where'd this come from? That's sad to say. That's going to be one of your employees. Now, it's a tough one, but beware. It's dot your I's, cross your T's. Things I learned after I sold the practice. What Wes just talked about. The protection. We'll call it the protection sheet. One of my buddies with a dental consultant at the end of the year when they're doing a little Christmas bonuses and everybody loves everybody, he had them sign a sheet every year that they received all their overtime, that everything was wonderful, that they were happy. Basically said, I love my job. Then he had it in writing. Because when something happens and they sit down with some labor lawyer and they want to sue you. They start going over, like, those sheets. I'm sure those hygienists were very happy getting those bonuses. But then when they found out they can nickel and dime the dentist later on because they asked for $55 an hour and the dentist said no, and they feel bad about it. Now they want to sue you. Yeah, you really got to watch the employee situation. And then later on in life when, like when you just can't hide, you can't hide the money, you can't hide the success when you land up buying a new Mercedes and a power boat and a beach house. And they know about these things. Later on when you. Early when you're broke, nobody cares. But later on, they're looking at you and it's like, he's got all this money. They're going to take a shot. And when they sit down with a lawyer, guess what? There's ammunition. There's things. You just don't know what they're going to throw at you. And the lawyer, they're going for the throat. And there's nothing nice about it. It's really ugly. And get ready. Now, when I sit around with all my friends, we talk about employee problems, not patient problems. We're all conscientious practitioners, and we did the best dentistry that we could and work with. We did everything right. But there's curve balls there you don't see coming. It's going to come from the employees. Hey.

Modern world stuff. Get ready to laugh before you hire somebody. Before you hire somebody. Now, I'm not, like, posting on Facebook. It's not my thing, but other people are. So now here we go. I'm going to clean this story up a little bit. I need to hire a hygienist. So, okay, we're going to run it with go on Craigslist. Put the ad out for the hygienist. And here they come, and the hygienist comes in. She's really nice and she looks very professional. And she says, Dr. Kenny, I really want to work in your office because you go on humanitarian missions. And I want to work for a doctor who does humanitarian work. Okay, great. You know, the interview is going really well. And she seems really good in this and that and that and this. So finally, I wake up like 3 o' clock in the morning and she has a working interview scheduled. I said, you know what my gut feeling? So I go in the next day. I'm not an Internet guy. I'm never on Facebook. I have no interest in it. But other people are. So I go to my office, a manager says, do me a favor, go on this one's Facebook and take a look. Now we're cleaning this up. Now, I didn't know that you could post things like this. There was.

Illustrated porno. There was all this pornography on her Facebook. I was like, what? You could put this on? Like, I thought this was against the law. It was all animated porn. And like I was looking at it with my office manager. Like, I'm super embarrassed. Like, get this thing off. So, no, now what? Well, just call her up and cancel the working interview. I guess we're just going to go in another direction. So look on the Facebook. This was a really, really ugly chapter in my practice. So. Well, Dr. Kenny, he's not computer literate. He hardly ever goes on the computer. But my wife has a master's in technology and my house looks like an Apple store. So I go home and I got some vibes on an associate dentist that was with me for years. And I really like working with her. And I still do. I still do like her. I forgive her. But she made a big mistake. She was looking to move up and she got an associateship at a high end cosmetic practice, boutique type thing. All they did was high end veneers. And hey, great. I had a family practice. We saw kids. But she advertised on her Facebook that she was going to be associating in this high end cosmetic practice. And she encouraged everybody to leave my office to go to another office.

And I showed it to Dr. Hutchinson, who's here today, the next day. And I said, look what I printed off the Internet. And he was like, oh my goodness, you have to fire her immediately. I had to fire her that day. And it was traumatic and it was really bad for the associate dentist because the other dentist, Kander, it didn't work out. And then she was unemployed and it got kind of sad and it was hard to get another job. And I paid really well. She was making like a thousand a day as an associate. Then she went around and working in these scrap clinics for 500 today. And it got really bad. And I forgive her. I 100% forgive her. And I wish we could sit down and have a glass of wine and yuck it up, but it'll never happen. The damage was done. And it was. The firing was emotional and it was ugly. But I had a business and I had 11 employees had to protect my business. And she was stealing. She got caught shoplifting. So don't say anything before you hire anybody. Look on that Internet. Now for all you young doctors that like to live on the millennial, what a bunch of crap. Okay? Go on your Facebook and get rid of all those photographs where you doing beer bongs and stupid stuff at the ski resort? Because guess what? Guys like me are going to look at it. You are going to be judged by what's on that Internet and you are going to be judged. People don't want to see you partying down with Jack Daniels and all your pals at the hunting lodge or whatever it is. You got to make sure you look professional. That is a doctor's website, okay? Your Facebook, it's doctor. It's not you and the boys. So get that stupid stuff off of there because people are going to look at it. And that is your reputation and you have to protect it. That's my Internet rep. Very true.

I know when I hire, I'm checking out some Facebook sites myself.

Yeah, look at that thing. Irish guys. This is a cultural thing, okay? You look at just. You find these Irish guys, these second generation blowhards from New York. It's cultural. We all talk and never stop talking. The Blarney Stone is in Ireland. You kiss the blinding stone, you get the gift of gab. All Irish guys talk. It is cultural. We are learned as kids to talk, talk, talk, talk, talk. But don't talk to attorneys. Only attorneys talk to attorneys. If you get a phone call from an attorney and you think you're a smart guy and you're going to tell that attorney what you think, boy, get ready. They are taking notes and they are recording it and they are going to use your words against you, okay? So if you get a phone call for an attorney, that has to do with something that happened on your property, somebody slipped on a banana peel, which I had to deal with this. I slip and fall or something like that, you have that attorney talk to your attorney. Attorneys know how to talk to attorneys and they know where they're coming from. But when attorneys talk to laypeople, they're setting you up. And you will put your foot in your mouth and your own words will be used against you. So remember, like when you hear people getting arrested and they read the Miranda law, it says, you know, you have the right to remain silent. Shut up, Shut up. Don't say a word. Notify your attorney immediately. Now, I want to talk about attorneys for a second because we get a lot of legal issues. We keep getting back to attorneys.

You need a team right away. You need a team. You need a board of directors and this is your board of directors. Well, I don't want to. You know, I'm just graduated from school and I don't have any money. You have a doctorate degree. You need a team. You need a cpa. You don't do your own taxes. All right? That's ridiculous. You hire the best CPA you can find, preferably one with dental knowledge. Not some guy doing in his kitchen doing tax returns off of some software program or whatever. Some guy at H and R block that's not a CPA. Because.

The CPAs, they have worker bees to do the actual taxes. You need access to their brain because they know what's going on financially. You need a CPA to protect you against yourself from doing dumb financial moves. You need a lawyer that's familiar with dentistry that will help you review a lease, sign, all these things. And these lawyers, they're on your side. You're paying them 400 bucks an hour, maybe more, but they are protecting you against yourself. You make these dumb mistakes like we talked about earlier. Signing a lease, not being reviewed, going into a partnership, not being reviewed. These are mistakes that I made that were costly. You need a financial advisor. Like, I don't know what to do with the money. The financial advisor will say, do you have a Roth ira? Do you have a SEP ira? Do you know the percentages? You'll end up paying taxes unnecessarily. Guys go out and get a degree in finance and you get become certified cfp. These guys go to school for this. They know things that you don't. You need a financial advisor. And don't go low end. Don't go with Fidelity. Fidelity and Schwab are great while you're in college, but when you start making real money, you need real advice. And Fidelity and schwab, they're like McDonald's if they were restaurants. You need a financial advisor to give you good advice on investments and where to put your money. And it starts immediately when you're 26, 27 years old. You don't want to start when you're 50 and you find out you, you know, you have no money for retirement.

Let me comment on that if I can real quick. Obviously that's in my space. And just a few thoughts on that is when you, when you find somebody. Well, let me even back up and say that right now. Investing has become so accessible to anybody. With Robinhood, for example. Robinhood. I don't know if you're familiar with Robinhood, but it, but it's an app. It's a, it's an online website that makes trading accessible for people who didn't really have the ability or the knowledge to do it prior. And so you have a, a whole new sort of generation of people in investing now. Even my, even my 10 year old son, I gave him a hundred dollars so he can start learning some investing. And Robinhood just makes it pretty easy to do that. And even e trade makes it easy to do that. And when the market is rising, maybe you've heard the term that a rising tide lifts all boats. Well that's very true with the stock market in a year like this, ironically, even though it's Covid and unemployment has been horrific and our GDP has suffered, the stock market has done quite well and tech has been on a euphoric, euphoric rise. And so I know a number of people who have invested in some technology companies and now suddenly, or they invested in Tesla or they invested in Apple, kind of these big names that, who isn't investing in those at some level. And now there's this idea that hey, I know how to invest money. I'm pretty good at this. I got a 20% rate of return this year or I got a 40% rate of return this year because I put all my money in Apple or whatever that is. Well, the markets don't always work like that and they fall even sharper than they rise. And if I go back far enough, they're in other sort of declines. People have felt the sting. But when the decline has been so far in our rearview mirror that we don't remember it or you were too young to experience that, people really suffer. I was talking to a doctor on Monday of this week who sold his practice a few years back. I'll obviously keep it unnamed, but lost had $750,000 of the sale proceeds invested in the market in a few stocks that he felt were going to do really well a few years back about three years ago. Well now he's got $10,000 in that account. Lost all of it, Virtually all of it. And why? It's because what drives people's investing decisions who are not really in that space is emotions over intellect. And emotions are your greatest enemy when it comes to, when it comes to investing. So what I tell people is look, if what you want to do is you want to have your safe bucket and go index, go diversified, you know, get your a large number of stocks, whatever, but have somebody really help you do that, of course, watch your costs on that. And then if you want a sandbox where you put 5, 10% of your growing wealth over here. And you can play with that. That's, that may be, that may be okay. But a lot of people these days are very concerned about investment management fees. So what you're saying, Dr. Kenny, is go get professional advice. What a lot of young doctors are doing is they're reading the White Coat Investor, which I like the White Coast Investor. In fact, talking about keeping your investment costs low is, is really important. But I have a brother in law, actually former brother in law since his wife got, and they separated. This is my wife's sister's husband. He's the CEO of a, of a very large growing tech company. And he's literally worth about four or five billion dollars. And he said, the reason why I have an investment advisor isn't because I think they necessarily know a whole lot more than I do. I follow this stuff. He's been on Mad Money himself. I mean, he's, he's up there, but he goes, because I need somebody to help me control me. It's like, why does Tiger woods need a caddy? Why does he pay a caddy hundreds of thousands of dollars when I jump out of the stands for free and carry his bag? It's because we need somebody to help us walk through the emotions, get a second opinion and step off the ledge at times. And in many ways that's what a good financial advisor these days will do when investing isn't technically as difficult as maybe it was at one point point, given the sort of target date funds and index funds and the like, it's more people to provide a, a, a financial sort of psychology counseling to you as you go through these big decisions or just even small decisions. Because most people lose their wealth by simply allowing emotions to get in the way and cloud their judgment. Happens all, all the time. All right, Back to you, Dr. Kenny.

I just want to say this. We could go, maybe another time, Wes. We'll sit down and just talk about investments. We'll talk as business people and we won't talk about dentistry at all. Just about, hey, let's cut to the chase. We're going to make money here. Now, we could go on for hours, but the financial advisors were going to get you into REITs. Alternative investments. Protective treasury bonds are still, I don't understand it, but bonds, I mean, you could go on and on and on. If you are in your early 20s or late 20s right now and you say, well, I just want to get in the game. When I was in the Navy, I took $200 and I opened Up a fidelity account. Guess what? I was in the game. I bought my first mutual fund. You got to get off the bench and you got to get in the game. And then I started to learn and I learned a lot. There's a book out there by Anthony Robbins called Money. Okay. It came out about five years ago. And if you just want to learn some stuff really fast, I wish I could read a book. Go out, go down to Barnes and Noble, go on Amazon. Anthony Robbins, the big. How can we describe Anthony Robbins?

Motivational speaker, number one motivational speaker. He went out, he interviewed Ray Dalio, he interviewed Sir John Templeton, he interviewed Warren Buffett. He interviewed everybody. And the interviews are in that book. And you'll learn a lot in like one weekend. Power through in this book. It's a great read. Now we'll go on to something else. Let's talk about money in your dental office.

Get ready. There are a lot of stories about embezzlement. Now, fortunately, I was never embezzled from that I know of. But the stories that are out there are really horrifying. I can't mention any names, but a well known ended honest in San Diego was embezzled $250,000 by her office manager. You ready? Who was her sister?

Okay, now this is like maybe the older guys out there will get this one. It's like the old Smothers Brothers. There was a comedy act in the 60s, the Two Smothers brothers. They were twins and they would go, mom always liked you best. You don't know what's going on inside somebody's head. Your own sister would steal from you. You gotta, you gotta really keep an eye on things. Now this is a Dr. Kenny thing. I made this up. You want to find out how honest your people are. It costs you $20. And you're going to find out how honest your front desk is. Up front, there's a cash box. And inside that cash box is like 40 or $50 of petty cash, 10 25s and singles. Because somebody's going to have a co payment and they just pay cash. And you got to make cash. The mailman comes in and the mail somebody, yo, $1.35, you got to make change, okay? And then they make petty cash, and then they write down where that cash went. Take a $20 bill and put it in that cash box and don't say anything. Now at the end of the month, when they balance out that $50 that's in there, there's an extra 20. Now, thank goodness for me, my Office manager came up to me because I had two people working up front, said, Dr. Kenny, this doesn't balance out. We have an extra 20. We don't know where this came from. I know where it came from. I stuck it in there to see if you'd come to me and say, There's 20 bucks in there now for $20. If they tell you. If they tell you nothing and they pocket the 20, then you know that you have a thief. A thief will steal. It's only a matter of time. So you got to make sure you watch yourself. I could go on and on and on and on and on. There's a million stories of people getting stolen from and huge scams. This is the latest one I heard. Okay. Young doctor overhears the dental assistants talking in the back. Okay. You could just happen to hear them chit chatting, saying, yeah, in my last office they gave us free orthodontic care because they had a visiting orthodontist. But what we did was we billed it to the insurance and had the insurance check sent to our house.

Okay.

They had to fire that person. They knew they had a thief. You got a thief. You got a thief in there. They are going to steal if they.

On that note, let me put a plug for. Our last podcast we did was with David Harris with a company called Prosperity and he was the founder of it. They're basically the. The preeminent, possibly the only dental embezzlement or expert is the way they label themselves that, that I'm aware of. They have a lot of employees and growing just because of the huge demand in this. And they have this on their website, prosperitant.com the link that says our hall of shame. So if you want to see some of the creativity out there and even the types of relationships that between the doctor and the, and the embezzler, they're usually pretty tight. And he talks about some really interesting stories. You can, you can listen to that podcast and, and check out that website while you're at it.

The associate that I was referencing before, who I still like as a person, but so she, she has a great office. I mean, I would go there as a dentist. Her office is just. It's a fabulous dental office and she's doing really well and she works really hard. And then I found out last year that she was embezzled by her office manager. Oh, oh. And now she really. It was like a one person up front, the office manager with the girl power and all that. And we're working really hard and that person's up there stealing from her. And it was a gut shot. It really hurt her. And she even put it out on Facebook. I can't believe she did this to me. Be aware, it happens. And guess what happens to these people? They go get hired at another dental office and they do it again. So you really, really got to watch and watch closely. Know the numbers. I could go on and on and on about this, but be careful.

On that note, on our Associates on Fire website, on the resources page on FuelCell 3, there's a PDF that can be downloaded. Now you have to complete the associate profile questionnaire, but it's free. You can download it. It's called the Embezzlement Protection Guide and it has explains the motives, some of the ways that embezzlement is, is completed. I don't want to put this in the hands of anybody but the dentist, but a lot of really important ways that you can create a control structure around the flow of your cash.

Okay, we'll do a little clinical thing here. Okay, we're going to talk about labs for a second. Now.

Don'T hire a crappy lab and don't hire a guy who's doing this out of his garage or something like that. These were mistakes I made because I would meet these people in the Navy and they would get out of the Navy. You're in the Navy? I was in the Navy. You know, yay, all that stuff. And then guess what? They're really not that good. And then, then all of a sudden you have like this personal relationship with their family. They're inviting you over for Christmas and all this other stuff. And all of a sudden the crowns, they're not good. The quality is not there. Just skip those small time guys right away. Find out who's the best dentist in your neighborhood and call up their office and say, hi, I'm Dr. Newby and I would like to get a referral from Dr. Good Guy. What lab does he use? And they will give you a referral to a high quality good lab that the smart dentist is already using. And use that lab even if it costs you a little bit more because you won't have the redos. That lab has already vetted out the technicians. You've got the quality control, they've got the new CAD CAM crown generating gizmos. They have all the technology that you need now. And they're not doing it like it's 1950 waxing up and all this nuttiness. Now it's all computer generated. You need to hire a top quality lab. It'll save you time and money later on and then it's strictly business. It's not well personalities and this and that. No, it's business. You pay them good money, they give you good work and then you get on that phone. If that is not up to the standards, you get on there and get on them. But you don't want to try to give second rate labs a second chance. Just don't go down that route because this Guy's crown is $5 less than the other one. Or they gave you a crown for free.

Free.

Or you nickel and dime in it. Pay the money and get and pay for quality and then give quality to your patients. You will be very happy. When I started using high end labs with high end lab technicians and it was amazing what I was learning from them. It was amazing what they were learning from me. And then we were doing bigger cases and then everybody was happy. They were making money, I was making money and the patients looked great. Use a good lab, the best you could get going to go on to a real estate thing right now. Okay? All of my friends that were able to buy the real estate retired early. All of my friends that didn't own the real estate are working late. Let me put that out there again. Buy the real estate.

Buy the.

Try to get in a situation where you could buy the real estate. I had the opportunity to buy a professional building. It was all run down. I had to put hundreds of thousands of dollars into getting it up to standards at the ADA Standards and all that. But it was well worth the money. And I recently sold the building and I told the young dentist who used to be one of my dental assistants, I said, this thing is like compound interest. It goes up in value every year. Now if you're running your practice. My Practice ran at 65% overhead. I mean, and we used to really crunch numbers and I made sure I stayed in that. Those appropriate accounting principles I really like. Watch the numbers now. If you're running at 65% overhead and your rent is 6, 7, 8%, you're paying rent to yourself. You're taking the money out of your left pocket and you're just sticking it in the right year after year after year after year, it adds up. Until you own a building, it's just like if you're doing really well and you go, you're going to live in a little apartment with your wife and three kids. No, you're going to buy a house. Buy the building. All of us, whether it's in a condo complex. Get the real estate. This is a business transaction. Get that real estate. It pays in the long run. Now, all those guys, I sat down with a huge consultant 30 years ago, and the guy said, hey, I want to have lunch with you at a dental conference. I sat down with the guy, and he was a practice. His practice was in Corvallis, Oregon. I don't want to mention the name of the guy, but half the people already know who it is by just saying, corvallis, Oregon. And he said, why would you want everyone to own the real estate? Banks don't own the real estate. I'm thinking, well, I'm not living in Corvallis, Oregon. Wherever Corvallis, Oregon is. I'm living in Southern California. This is a great place to live. Own the real estate. It goes up in value every year. And yes, it flatlines a little while because real estate goes in cycles, and then it goes up again. Now, my friends in Oregon that owned the real estate, they sold the real estate. They did great. Every single guy that I know that owned the building, whether they made their practice in a house, in a professional center, in some form of real estate, did great. And all the other guys that were in a strip mall, they were always worried about losing their lease. Oh, am I going to lose my lease? Going to lose all that tenant improvement I put in there? And it happens. That's a loser's game. Get in and own that real estate. Now we'll talk about a movie that was out a few years ago. Wes, help me out. I call it the Ray Kroc movie. The McDonald's movie that was out like three or four years ago. I know. You saw the thing, the Marlon. No, no. It was out in a movie house with Michael Keaton. It was a movie on Ray Kroc. I forget. You know, it's about the McDonald's and finding of the hamburger thing. I could have wrote the script because I read all the books. The money's not in hamburgers. The money is in the real estate. They only make 15 cents on a dollar in a McDonald's. It's a lot of hamburgers. But they get huge rent from the tenants. That McDonald's is paying rent to McDonald's Corporation. It's all about the real estate. Own the real estate. Get that building. Now, if you're in a professional center and you're building a practice. Well, I'm in a professional center and I, you know, I have a nice spot, and I'm in here with all the 30 other dentists. Well, build up your practice and then start looking and buy real estate. A lot of my friends started out and they didn't get the real estate till 10, 15, 20 years into being a practice. And then they bought the real estate and they all go, I'm glad I got the real estate. It's a winner's game. Get real estate.

And it's very much a winner's game because you, number one, if you're in your own spot, you got 100% occupancy. Now, if you own a broader building and there's other tenants, you might have to deal with some vacancies. But if it's just your building, you got 100% occupancy, so you don't have to worry about those vacancies. Secondly is that it's leveraged growth. You might put down $100,000 on a, I don't know, $500,000 or a million dollar piece of property that's going to grow by 3% every year in just a pretty appreciated value. And you get the full appreciation on that million dollars, even though you only had to put down 10 or 20% of the money. And so the return relative to what you put down is amplified because it's leveraged growth. It's one beautiful thing about, about real estate.

Buy the real estate. Buy the real estate. Buy the real estate. It's unbelievable. Buy the, the real estate. It's a smart business move. Hey, we all have limitations. You may have some limitations. All right, Here's a clinical story, and every once in a while, like, you did something clinically and you go, I really regret doing that. It didn't work out. When in doubt, refer it out. And don't let patients talk you into doing something that you're not comfortable doing. I seriously regret doing this one. Okay? Lady comes in and she's not the brightest lady or anything, let's put it that way, okay? She's not stupid, but she's not the brightest person. And she has a marginal job and she has some, some cheapo dental insurance. And she needs endo on number 18. And I look at this thing and this is before nickel, titanium, this story is 25 years old or whatever, okay? And I look at this thing and so I don't know if I could get down those meso canals. They're really curved. So then it turns out if you go to the endodontist, they get more for a molar than a general dentist did. That's just the way the insurance is set up. So then she's like, oh, Dr. Kenny, can't you do it? Can you please do it? I don't want to go. And the lady's begging me. She's going on and on and on. And you know what? I said, all right, I'll do it. So then I go down in there, and I'm down those mesial canals, and I go, man, I just can't go. I can't. This is not coming out well. And when I was done with that root canal, I go, you know, this is just not good. I don't know what's going to happen with this. Then you start rational. Well, maybe I'll luck out. Maybe it'll work, maybe it won't.

Nine months later, it needs a retreat. Said, okay. Now we got to go to the retreat. Said, okay. I called the endodontist. I got egg on my face. Then, yeah, I met the endodontist in the meeting. He's still a good guy and everything. Not in my neighborhood. So it was like, you know, downtown San Diego, a few miles away. I said, listen, this lady's in there. She needs a retreat. This and that and that and this. Yeah. He goes, I said, listen, send me your bill, and I will pay it, whatever it is. You know, you get eleven hundred dollars from Mueller, great, I'll write you a check. Let's just get the thing fixed and call it a day. Well, my relationship with my. My financial relationship with my patients is my business, and nobody else is. Like, what are you talking about? Now? The lady comes into my office after the root canal is done with the wife of an attorney. Can't believe I'm telling this story. I must have had, like, something in this coffee. This is the truth that's coming out with the wife of an attorney, okay? And now they want me to give them $2,500 for pain and suffering because she needed a retreat on this crappy endo that I did. Guess what I had to do. Write that check for $2,500 to make them go away because I didn't want to get sued. And then they basically, it was extortion. They said, if you don't give this lady this poor person who begged you to do this thing that you. I felt like I was doing her a favor saving her money. She turned right around and turned on you. So the moral of the story is. And I really learned from that lesson, it saved me a lot of heartache and headache later on because I never got sued. However, if I had any doubt at all of whether I could Get a great result. I referred it out. When in doubt, refer it out. You're looking at some wisdom tooth. Hey, these three are easy, but maybe there's tough ones. Refer it out. When in doubt, refer it out. You'll sleep at night.

And you just don't even take the chance. So some of your younger dentists, geez, I'm broke. I got these crazy school loans. When in doubt, refer out. Because I didn't lose any sleep over doing bad dentistry. And that one, that needed to retreat. I should have never done it. I let the patient talk me into it. Oh, please, Dr. Kenny. I fell for that crap. No, just be firm and say, I'm looking out for your best interest and refer it out. Watch it in pedo. Also, because all of a sudden, you know, I had a family practice. I saw lots of kids, and you see some kid, you know, he's. They're dancing around in a chair. They got, you know, nursing bottle syndrome. This kid needs to be sedated. Please, Dr. Kenny. They're not really. The parents are, like, begging to save money. And because you know, that specialist is going to get a good buck for this. So I said, listen, it's in the best interest of your child. That's the end of the argument. They can't talk you in. This is in your best interest. No, I don't want my best interest. No, don't let people talk you into doing something that you're not comfortable doing. And hard lesson to learn cost me a few bucks. And I really. I mean, it's 30 years later, I'm still upset about it. So don't, you know, Kevin, get over it. No, these things hurt. They hurt. At the time when I had to write that check, I felt bad. My dentistry wasn't. I felt bad about everything. So when in doubt, refer it out. I could talk for on and on and on and on. Something that I did in practice that was really smart. And I learned this from the Navy. Now roll this. Because I was in the Navy. Look at this great haircut. Well, you can't see it. It's a podcast. But hey, listen, I look like a guy was in the Navy.

In the Navy, we'd work in these big clinics. I worked in a clinic with 54 doctors that made your dental school look like nothing. Buses would pull up from the ship. So many patients. That's where we learned those great dentistry. In the Navy, you had endless supply of guys to learn on. However, the clinic would be running a certain way, a certain department, and you. You'd Open up a drawer, and it was full of endo files and stuff all thrown around. And then all of a sudden, it's the military. We're going to have a white glove inspection. What is a white glove inspection? No kidding. The admiral's coming with a senior chief, and the admiral has a white glove glove. And he goes around and he reaches up above that door jamb and wipes that white glove and looks, that thing better be immaculate. We had inspections, and this is throughout the military. And when those inspections were coming, unbelievable. Did things get straightened out fast? And it's, whoa, look at this clinic now. It is spick and span. And where that drawer where they were throwing charts in, or those, all those, like, not sterilized instruments that are just dumped somewhere. Everything was done the way it was supposed to do. Have inspections in your own office, and this is how you do it. I always hired dental consultants. Well, I don't want to pay. I just unfortunately heard she passed away. She's a great lady, Sally McKenzie. I don't want to pay Sally McKenzie a zillion dollars to come to my office. There are local consultants in your area. No matter where you live in, in America, that will come in reasonable. Now when you sit down to hire a consultant, this is what you say, listen, my AR is out of whack. And they don't make these ar, they don't make these phone calls until I get upset because they're kind of friendly with some of these patients and they're uncomfortable asking them to make their co payment. And people owe me like $200 for half a year. And it's pages of this now. When an inspector is coming in, a consultant, and they're going to look at this ar, all of a sudden they're making those collection phone calls. It's getting done. That drawer up front where they throw those charts in, and they don't tell you about that, you know, about later on, because you go in your own office and you look around when no one's there, you realize these insurance forms haven't been sent out or whatever it is. All that stuff gets straightened out. When people realize that a second set of eyes is coming in to look at their work, they get it straightened out. So I would use consultants like the Navy would do inspections, and I would tell the consultant, listen, this is areas where I think we could improve. We could improve on the ar. They let some of this stuff go a little bit too long. It gets past 90 days. It's hard to collect money on people. I think that they should be making these phone calls no later than 30 days where it's non confrontational, where you, instead of like trying to beg for money, now it's like your insurance paid this and you, you owe $104. Would you like to do, you know, check or we'll take a credit card over the phone. They need to make these collection phone calls. There's all sorts of areas throughout your office and a third set of eyes coming in. And when you, the young ladies that's working for you or gentlemen, they know that somebody's coming, is going to check up on them, suddenly things get done. Now I use consultants throughout my career and early on I realized I did not know a lot about the business side of dentistry. So I hired consultants to come in and get my front desk straightened out and get my office system straightened out. And then I would work with a certain consultant for maybe three or four years and then I would learn everything I could from that consultant. And then we'd go a few more years with no consultants and then I'd hire another one because we knew we'd need things to look at again. And a new consultant would come in with a different view and they would see things that I didn't know. And I learned a lot from consultants. I used the consultants. 99% of the consultants were used just for the business side of dentistry. The consultants never came back to check how I was taking out teeth doing fillings. No, I went to like spear classes to keep my clinical stuff up to snuff when things changed. But the consultants, hiring a dental consultant, you're not going to lose money. You're investing in your business, you're investing in yourself and you're going to make a lot of money off them. And then as you're going through, maybe this will be the wrap up thing. Don't become complacent in your business. I'm going to say that three times. Don't become complacent in your business. Don't become complacent in your business. If your business, this comes from Roger Levin, a big time consultant. If your business is not growing, it's dying. If it is not growing, it is dying. It is a growth business. You want to see growth. Maybe you don't want to see rapid growth. You reach a point where like, geez, I'm working hard enough as it is, but you want to see that new patients are coming in, that your practice is growing to some degree. If not, it's dying, you got to close the back door. You got to make sure that you're not losing patience and take a look at other businesses. This comes from a friend of mine. There we go. I'm supposed to shut this. Hit message this off. A friend of mine said this. He goes, I was always trying to copy other dentists to learn how to run a business. I would have been better off copying other businesses to learn how to run a dental office. Now I'm going to crack up. When we were kids, when I was a young guy and you went to the dentist, like junior high, high school, even college, you went in the dental office and there was a lady behind a glass window. It was like pre Covid. They were already behind plexiglass. And they go, have a seat. They never even said hello to you. And you sat there like a lump looking at National Geographic magazines, which, forget it, to this day, I will not look at when I'm bored out of my mind with that. And then you just sat there. Now we got rid of that. Who wants to copy that model? I mean, our model, it was all about customer service. I had it more like a Starbucks. I mean, everybody was greeted. You want a friendly office? Look around at businesses that you like to go to. Or when you go in a business that impresses you with customer service and copy that. Don't be copying, like, mediocre dental offices run by some dentist. There's a lot to be learned from other businesses. Every time you walk into a business, take a look around, see what the customer service is. Hey, they have flowers up there. Put flowers in your office. There's coffee. Put coffee. Do. Do what you need to do to make your business successful. Wes, I will be quiet as we can. Wrap it up. Or maybe we could just go for a second into the study club.

Yeah, that'd be great. I was just looking at my book called hug your customer that one of our other guests on our show, Weston Spencer, gave to me. And it talks about that culture, that feel, that vibe that runs in your practice, and it's just making your patients feel so welcomed and like you're. They're. They're more than just teeth coming in that need to be fixed. They're human beings with a name and a family and a life and interests, and you learn those things about them, and you make it more of an experience than, you know, than. Than just fixing, than just fixing the teeth. A lot of really good comments, and I had a lot of things I thought about as well. But I just wanted to give you the podium with all the. The years of wisdom and just the way you sort of projected out there. And it's very educational. So I really appreciate you being willing to.

Uncover the dirt a little bit. And it's clear you've been successful. Let me, let me just say these, these mistakes are perhaps the reason in some ways why Dr. Kenny has been so successful. He's. He was at least, at least the way he responded to them and learned from them and changed and adjusted led to a lot of good things. He's started a private foundation that's given to various charitable causes. The sale of his building was really influential on sort of his financial situation and giving him some freedoms, but also just the general success of his practice as well. So even though we focused on the dirt, there is a lot of, a lot that we could complement and talk about with your practice if that were the theme of the podcast. So thanks for being willing to do that. Your study club is called a patriot study club. One of my, I think concluding questions for you is for those young doctors, early stage doctors, I guess any doctor who wants to start a study club, because there is value in that. What is that experience? Like, what advice do you have for that, for that doctor, your study club has got up to 120 people. It's consistent, it thrives, it's known here in San Diego and even I think, beyond a little bit. So what advice do you have for that doctor?

Yeah, listen, for everybody that's out there right now, you're driving around in your car and you feel kind of isolated and overwhelmed. And guess what? We were all there.

But the future is so bright. Remain optimistic. Now, early on when I got out of the Navy and I had no idea what I was doing, but I had a dental practice and I would go there and I was doing my own hygiene. I had no patience, but I had a dental practice and I had some friends, a couple of guys, Dr. Hutchinson was one of them. And I said, listen, I just bought this Howard Ferrand 30 day MBA thing and some Gordon Christensen how to do a filling tape. And so this is on vcr, says, why don't you guys come over my office and we'll order some Mexican food. That's a big thing in San Diego. You all eat Mexican. Taco Tuesday is like a holiday here. And we started out three guys in the office, then, you know, watching videos and talking about our practices. My wife called it group therapy for dentists. But I only did it with a couple of guys, you know, my good friend non competing. So we were very open about Everything that was going on. And then, you know, like once a month we'd get together like a Tuesday night. And then guy called up, said, hey, could I come? How much does it cost? Doesn't cost anything. You like Mexican food? So then it was five guys, seven guys, then 15 guys. Then someone said, you ever thought about doing it in a restaurant? I said, yeah, sure. So then the first one I did in a restaurant, I got 70 doctors to go to it. I almost fell over backwards. I said, there's a real demand for this. So then we speed up the story like over a 25 year period.

We started having these in meetings. We started meeting like in a steakhouse when we. Where everybody said, listen, it's a chance that we could get out. Our wives are going to say, sure, you're going to go and talk about gum disease at a steakhouse. Go right ahead. So guys started coming and we got a lot of fellowship. And then one guy would invite another guy, he'd meet another fella. Oh, there's lots of lady dentists there too. There's plenty. It's packed house. It's definitely in plenty of lady dentists who are in the study club. And then I found out that I could get national speakers willing to speak. And then I found out that I could actually get sponsors and make money at this. Now I didn't need the money. We gave it away. We were the largest contributor to make a free clinic at Veterans Village. It's a place where like homeless veterans could go in San Diego. University of California, San Diego has a big pre dental society with free clinics. Every year we write a check, $10,000 to keep the clinics open. We raised money for hurricane relief. I gave scholarships because every time we have a study club we make about 3,000 bucks. And I do 10 of these a year. And then I gave the money, I would just give the money away. And then I learned that that's against the law. So I had to become legit. We made a foundation. The last time I checked, we gave away almost 140,000. So. And it's growing. It doesn't stop. We gave $11,000 recently to the San Diego food bank because of the coronavirus thing. And we haven't had a meeting this year because of Corona. We still made money even without having meetings. Did a charity golf tournament had to go. Everybody came out yesterday. We play golf, write a check to the university, $10,000 to support the free clinic. This is a great thing, but we started out small. You know, there's a. Let's put it this way. Near your practice, up the street, four miles away, there's another guy who's a good guy. And you met him one time, he's a good guy. Call him up and say, hey, listen, you're a good guy. You want to get together and go over some dentistry when this Covid thing lifts and you could get together again, meet for coffee, meet for burritos. That's how we started this. And it grows, and it turned out to be like a great thing in my life. Even today. As soon as we're done, we've got this giant toy drive going on. It's the 25th year we've partnered with the military. I could go on and on and on. Then we started doing humanitarian missions that goes on every year, traveling to Central America. There are neighbors, they happen to be in Central America. It's a phenomenal thing to go to Southeast Asia and help out just poor people who don't have access to care. It's a great, great, great thing. I could go on and on and on. But, yeah, get together, start small. Start with a couple of friends, say, listen, I got a case. You want to help me? Look at this case, get the specialist to look at it. And all the specialists jumped on board because they got access to the general dentist. So we had all the specialists there showing us stuff. It was a great learning experience, dental wise. And then it turned into a great philanthropic thing, which continues, even though if I sold the practice and we're getting ready to transfer the study club to some dentists that are in their mid-30s, and they came to me and said we could keep this going for another 30 years ago. Great. So even when I'm long gone, this study club will continue to go. But I just want everybody out. There's a closing thing. There is a dark side to dentistry, and at times you could be overwhelmed if you hit that point where you hit a serious bump in the road and you don't know what to do. I'm serious. You get in touch with me, I will help you out. Because I do know a couple of dentists that committed suicide. Bad things happen to good people. And if you're. If you're going down, if you're having a bad time, if you're having a rough time with your practice or something, there's help out there. Get in touch with me, call me up, I'll talk to you, I'll give you advice. And if I don't know what to do, I know somebody who does, because I have a great Rolodex. But your future is so bright in this, it's unbelievable. I loved every day of going to practice. I felt bad when I aged out and I had to sell. It was time to move on, let the younger dentists take over. But every day of private practice was wonderful. You meet so many good people.

Just be optimistic about your future. It's your life. And then Wes, I guess I'm doing a webinar. I'm being sponsored by Citibank and we're raising money for the free clinics in San Diego and at UCLA Dental School. I'm speaking to six dental schools and whoever else wants to see me on the Web January 19th. If you want to get more information, I guess Wes will post it. But hopefully I'll see you out there in cyberspace and everybody. Merry Christmas. And just remain optimistic. Your future is so, so bright.

And Dr. Kenny, how do they hold of you?

Oh, easy. Patriot Study Club, San Diego Gmail. It's patriot then SC SD stands for studyclub san diegomail.com or Google me. And the Dr. Kevin M. Kenney foundation pops up on the web.

The.

And you can get me through there. The email, everything address. And I'm good on the telephone. You call me up. It's old school. I'll call you back. So, yeah, any advice at all? You just don't know what to do. You have no one to talk to. Just give me a call. I'll talk to you. I love it to hear everybody being successful. I get upset when I find out that somebody's struggling and having a rough go. It doesn't have to be like that. All of us dentists that are now Medicare card holders, AARP members, we want to see the young dentists do just as well, if not better than we did. And we don't like it when we hear somebody struggling with school loans and all this stuff say, we'll help you run a business. We'll give you advice when you need it and we'll help you stay clear of the landmines and trouble that's out there and get you going. There are a ton of young dentists that are doing just great and you will be one of them. You just got to decide that that's going to be you say, I'm going to do this. I'm going to be successful at this business side of this. This could be learned. If you could get through college. Physics and organic chemistry, you can learn this business side. The business was way easier than some of these classes we had to take. And yikes thinking back to that 19 year old up 3 o' clock in the morning memorizing Huckle's rule for conjugated dienes and all this stuff. Normally you ever use it or think about it, but you did it. You could learn this business. You can be successful at this, you will be successful at it.

And we see that every day with a lot of the clients, young clients, young associates, young early stage owners that we work with, that they're able to find success. There's still a lot of success. In spite of consolidation corporate dentistry, there's still a lot of success in the private practice area for, for you doctors who are seeking ownership and want to be able to sort of control that, that, that domain. Dr. Kenny, thank you very much for being on the show. Landmines is a good word. And I'm hoping that out of a podcast like this, Early Stage Associates can take some of these lessons and say, oh, okay, I'm going to set this in place. I'm going to avoid this pitfall and find that success perhaps a little bit faster because of some of the wisdom that you've shared. So thank you for being on the Associates on Fire podcast program.

You're very welcome. Merry Christmas to everyone. Happy Hanukkah.