Single Doctor "Nuts-and-Bolts" Dental Practice Owner Sells for $1,850,000. How'd he do it?

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.

I welcome everybody to another episode of the Associates on Fire podcast. I'm excited for our guests. Say yes. Guests. We have two today. It's two for one. And it'll be an interesting show because we're going to get the perspective of a dentist who recently sold his practice. One of the most cash flow positive gp. Just sort of your core nut and bolt GP practices that I've seen as a dentist. And he's here in San Diego. His name is Dr. Bob Marcus. Welcome. Thank you. To the show. Thank you, Bob. And I know Bob because we at Practice cfo, one of the things we do is we help doctors sell practices. And so Bob came to us and I actually didn't work with Bob before you sold your practice, but you sold your practice. You're young, you're energetic. I'd like to hear a little bit of your story as to why, if you're okay to share that. And Bob is now doing some coaching and consulting to practices, and I give him two thumbs up because I've seen what he was able to do in his own practice. So he's an easy endorsement for me to recommend Bob in helping doctors in their practices. But he comes with the CEO of the company that he's now working with, Darren Caberna. Welcome, Darren.

Thank you so much.

Darren is the CEO of a company called Accelerate My Practice. And Darren's got a long history pretty much right out of college. You've been in dental your entire career and you came out of College in what year?

97.

And you were with Patterson for a period of time, then you went and got your MBA While working for Patterson. While working for Patterson. And at some point you left Patterson and started a practice management consulting company called Accelerate My practice?

Yep.

Great. And that's where you both are today.

Correct.

And you have Bob that you've recruited and you guys maybe knew each other a little bit beforehand, and now you're working as a team helping doctors to thrive financially, which is the whole point of the Associates on Fire program is helping doctors make the right financial decisions in their early career so that they can thrive financially as well. So I want to start off with you, Bob. Dr. Marcus, tell us about Your story, you ran an incredibly successful dental practice. It was approaching. If you don't mind, can I share?

Sure.

It was approaching 2 million, 50% overhead.

Yeah, we were actually over 2 million for a couple years. The last year right before I sold was, I think, just a touch under, because I was away for an entire month with my wife in Spain, Portugal and Morocco. Other than that, I think we would have been over two that year as well.

So my question is, how did you do it all those years?

You know, it's a good question. And I think, looking back now, the way we became so productive was by. Was through honesty. And by honesty, I mean every single patient. I don't care what he looks like or she acts like, or whether I think they have good insurance or have a lot of money or whatever. I think, whatever their background is, I never judge. I offer every single patient the best. And I don't just offer it. I sit down with every single patient, regardless of whether they need something major or minor, tiny. I sit down with them alone in a room that's not the dental room. I sit down in a consult room and chat with them. When a kid needs a sealant, a sealant that's even covered 100% by insurance will result in no expense at all to the parent or to the insurance carrier. Well, insurance carrier, I guess it would, but to be insured, I still sit down and I talk all about it, say, this is what we need, this is why. And to me, that leads to bigger cases, better case acceptance, and. And that's where the success is. If you went in your software, in any practice, a lot of dentists, you say, hey, what's your case acceptance?

How much percent?

And they'll say, oh, 80, 90, 100. Everybody listens to what I say. The truth is, statistically, that's not true. There was a huge study done, I believe, by Howard Foran of Dental Town, and he determined it was in the 30s. The fact is, patients aren't doing what we recommend. And I was good at that. And I was good at that by doing it myself. I didn't delegate it by understanding it, by using proper narratives to help patients build value.

That was why that's so relevant. And it seems to me like there's a lot of relationship you had with your patients.

And they thought I was their friend.

I always find that the practices that just have a higher case acceptance, they do better. There is a strong element of connection between doctor and patient, so that the trust is so strong that they provide clinical recommendations. The answer is Generally, yes.

Yeah. And I encourage any doctor to go in your software if you don't know how to do it, you know, let Wes know and he'll find me and I'll tell you how to do it. But in every software, at least in every software I know there's a way to pull a report on your case acceptance. And sometimes it's pretty shocking. And it teaches us a lesson that we need to figure out how to get these numbers out of the gutter and to improve. Not only does it improve our bottom line, that's not what it's all about. We improve the health of our patients. I always feel that if I can prove the prove improve the health of my patients, then every other success will follow. Instead of thinking about insurance first, how much are they going to pay first, how much is this case? First I think about what health goals do I have for this patient? How can I help him or her understand it and then buy it?

You know, on that subject of case acceptance, I want associates to know and owners, all dentists to understand this financial concept where it's a pretty thin margin between unprofitability and pretty and healthy profitability in a dental practice. And what I mean by that is because most of your cost structure is fixed that once you have collected enough for the month that you've now met your fixed costs, 100% of your overhead was 100% of your collections went to your overhead up to that point. But after that point, your profit becomes 80, 90% because you have labs and supplies and merchant processing fees are sort of your only true variable cost.

Agreed. And that's something we figure out as a coach. That's one of my jobs, is to figure out what is that number. And also that's your job too, Wes, to figure out what is that number. How much do I need to make every month in order to keep the lights on and pay the rent, pay my payroll, how much is it? And a lot of people just don't know. Once you know that, it becomes easier to set your practice goals.

And once you pierce that, it's if you get your case acceptance up, I've run these numbers. You get your case acceptance up by 10 or 15%, which with, with some work, that's not a terribly difficult thing to achieve. I don't believe now I'm not in the dental office, I going to look to you guys to confirm or deny that. But if you get that up 10 or 15%, the impact on your, on your bottom line and I again, I know it's not all about the bottom line, but you also have student loans. These associates listening to our podcast, student loans, a lot of expenses and they went to school for a long time. So we need, we do need to have an eye on the finances as you grow your case 6 or increase your case acceptance. It's unbelievable how that flows down to the impact on your bottom line.

Agreed. And that's not all of what I do now as a coach. That's one part of it, but that's a very important part and not just for the doctor in the hygiene department, in the perio department, in other treatment we can provide to improve patients health. It's a lot more than just that one number. That's a big part of it though. There's front desk that has outstanding insurance claims that they never chase down. All these little things are part of coaching to help the practice improve its bottom line without having to over diagnose. I've seen people out there who call themselves a consultant and their goal is to teach you how to trick people into doing treatment they didn't really need. Well, that's completely unethical and those people should be ashamed of themselves. And that's not the way I or we behave. We behave by saying, hey doc, you already diagnosed this. You diagnosed it before I even met you. Let's figure out a way to help you talk to the patient in such a way that they will accept care and move forward.

One of the things I've noticed in practices that tend to really thrive are the ones that have a team that operates well together. Maybe they've been around for a longer period of time. There seems to be some loyalty to the practice and to the doctor. I sense that was the case in your practice. I think that's an outcome of culture and leadership. Tell me about how you or what advice do you have for doctors who are planning to be an owner at work or a new owner on the concept of leaders?

Well, here's my advice. First of all, as a dentist owner and I was the only dentist in the practice, there were eight of us, really seven and a half because one person was part time. But we were a team of seven and a half, let's say total in your practice. Total. Two hygienists, two assistants, two and a half at the front desk and me. That was the group. And as the leader, as the, as the, as the boss, let's say you're always walking. I want you, I want you to imagine this. Imagine a balance beam that's like five feet off the ground and you're going to walk across. If I drew a line on the ground and told you to walk on this line, you could do it, but on a balance beam. I don't know about you, but I'd be a little shaky and I'd be worried I'm going to fall off this way or that way. And there better be a soft mat down there somewhere. And I see being the, being the dentist in our situation as walking that beam. And on one side of the beam or one side of that line is the friend side. That's where if I err too close, I'm everybody's friend and on the other side is the boss line. And if I err too, too far that way, then I become a jerk and nobody wants to listen to me. So you have to walk this tightrope or balance beam all the time where I want to be their friend or friendly? There's a difference between being friendly and friends. Right. I want to be their friend and their boss simultaneously. Everybody has to get treated with respect. We don't beat people up as a boss because you get, you tread too far, you fall off the balance beam, if you will, onto the boss side. So I see myself as walking that balancing. Does that come naturally for some people and not others? Yes. Some people need to be taught how to walk that balance beam. Some people just naturally walk it. These are the doctors that walk out of school and have a successful practice in no time without. Without blinking. That's weird. That doesn't happen a lot. So how to be an effective leader? I treat everybody like a friend. Ethically. I believe in overpaying. I know it's going to sound dumb to people who are worried about their bottom line, but I believe that their staff is there for one reason. They're not there because they love dentistry. They're there to make money. And I believe that they should get paid well. I believe that if there's a dentist next door, we should be getting paid better. I believe in bonuses. I believe in social. I believe in all the things to keep them happy to the point where they would actually bring their own sister, brother, mother, whatever into the office, which we had a lot of or they would recommend to patients. And I say, hey, can you stay late today? Sure, I can stay late today because I know I'm being treated well and I'm happy to help out.

The interesting thing about that is, as I mentioned, your overhead was 50% correct, which in San Diego is hard because your facility costs are higher and your labor Costs tend to be higher as well. And you pay, but you pay. And you paid your staff well. And I've seen this in a few other offices, too. Even though you paid them as a market comparison to other, say, a hygienist in another practice, even though you maybe paid them a little bit more, your overall labor cost as a percentage of collections was lower. Which is a.

It almost doesn't make sense. But the reason why, when you dig, it does make sense, is because if you have a team that's doing their job.

Very well and they're getting people in the chair, they're helping you get patients to say yes to treatment, they're billing effectively on it. In other words, the production is so much more out of your team than even if you overpay them, and as, say, an hourly rate as a percentage of your collections, it can still be in alignment with what is considered a well.

And you nailed it right there. You know, when people in business, they take. There's two possible approaches to profitability, right? One is, well, I'm not going to change what I sell. I'm just going to reduce my cost. I'm going to beat up my Patterson rep to drop my cotton rolls by two pennies, okay? Because I really want to. I really want to drop my cost. And the other way is to increase your top line to increase your production. So did I beat up my Patterson rep? Well, no, but we had a relationship where, you know, we were smart. But I don't think you can nitpick your. Your lab bill to the point of higher profitability. The only way is increasing your production. And the only way to increase the production is to look in the mirror. We, as dentists, it's interesting. We went to school forever, we know everything. But a lot of us are unwilling to look in the mirror. We, when we're alone, and say, what can I do better? Without blaming it on my assistant, my lab, my technology, my rep, what can I do better? And what you can do better is this. And I've said it a billion times. I've said it to my staff, I've said it to Darren, I've said it to doctors all around the country.

As a dentist, you're really like two people almost at once. You're a dentist and a doctor, okay? People call you doctor. A dentist is something who does dent, right? It's like an artist does art. You're a dentist, you do dent. When you pick up a drill, you're doing your dent. You're in there, you're drilling something. You're filling whatever you're doing. That's the easy part. I honestly think that I could probably train a 14 year old to be a good dentist. Just the dentist part, the doctor part, is tough. A doctor takes care of a human being, a person who deserves your attention, your respect, your ethical behavior. To me, the best doctors are the ones that thrive, not the fastest dentist. So we didn't do it by being exceedingly fast, but I kept my overhead low by producing a lot and I kept it low by. And I think technology helps too. I think if I take a digital X ray, it doesn't take me 10 minutes to develop like in the old style. If I use good software and I could pull up the information immediately without the patient being on hold up front for 10 minutes looking for the chart. I believe in CAD CAM, I believe in 3D cone beam. I believe in technology to, let's say, make the appointments quicker and easier. But in the end, it's just being a good doctor, not a good dentist that really matters to making the practice.

Super thrive most of the time. In my experience, the problem with the lack of profitability is not what I call bottom line, which is your profit after overhead. It's a top line problem. Of course, top line being your collections. What are you collecting? And you do need to watch everything between the top line and the bottom line. But a lot of times the natural instinct is to say, I've got to cut, I need to cut, cut, cut, so my bottom line goes up. When sometimes I think that's because it's the easier approach. I can go negotiate this, you know, it's very tangible. But to say, how am I going to grow my collections by 30 or 40%? Takes a lot more creativity and a different type of skill set.

And mindset.

And mindset. A lot of it, it is, it is a mindset.

It's like I've seen Dennis say, oh, well, my hygienist had two cancellations today, so I'm just going to tell her to go home early so I can save on paying her for two hours. That's very shortsighted. Why don't we have the hygienist go and look through a bunch of charts and try to reactivate some patients who haven't been in in a year. Why don't we look through and find out a treatment plan that she made for some periodontal treatment and the patient didn't come back. What happened? Maybe it's just, maybe he's a phone call away, maybe he's not so there's so much more we can do without trying to control this bottom line, to prove the top line. And by the way, when I sit here and talk to you, I know a lot of people listening are going to have the same question. I don't understand. You're 50 years old, you got a 2 million dollar practice, you got a low overhead. What happened? Well, what happened to me, as you know, Wes, and the reason I approached you in the first place, and John, is I developed a problem in my eyesight that prohibited me from doing dentistry. I'd still be drilling right now. Well, today's Friday. I would have been drilling yesterday, but I can't anymore. I think the thing about, you know, dentistry is we don't know what's coming around. I have my own personal Covid forever. You know, some people miss two and a half months. I miss the rest of my career. But I still have a lot to give to dentistry. I love it. That doesn't mean every day was great. I had crappy days too, but doesn't mean I've had big failures too. But generally speaking, if you go with a mindset that I'm going to do good things for people today, I'm going to treat them well. I'm going to be their doctor, not their dentist. It's a win, win every time. It's very hard to fail once you set your mind to succeed.

Tell me about one of your failures that you learned from.

Oh my gosh. I had this. Okay. I can't say any names, of course, but anybody, if my staff is listening, you're going to recognize this one. I could say her first name. I better not, huh? It began with a J. So let's just call her J. This lady J comes to us for she. She wants her teeth straightened. So we do Invisalign. It's a very hard case. In hindsight, probably would have sent it to Ortho. But I was young and I could do anything right. So I put her in Invisalign for three freaking years. We went through about five refinements and lo and behold, her teeth, which were everywhere, started to unwind and unravel and it looked pretty dang good. And we were getting to the end and she was so nice. She would bring us food and give us a big hug on the way out. Just sweet little lady. She couldn't have weighed 90 pounds maybe. And everybody just loved when she came in and her teeth were getting better and better. And it was a happy festival. It was a joy fest towards the End of the treatment. One day she comes in with her husband, who's a large, overwhelming, loud guy. And he comes in and he goes, I need to talk. I'd never met him. He wasn't a patient. I need to talk to you in private. That never ends well. You know when somebody says that, it's like principal's office. So we go in the consult room and I shut the door and I'm like, can I bring my office manager in here? Because if I ever have a discussion about patients or care, I like to have her in here as an observer, like a third party. He's like, fine. So she comes in and the three of us sit there and he says, I hate the way my wife's teeth look. I hate her smile. I liked her before you did all this. You ruined her. We have a loss of intimacy, which, by the way, in California is a legal term I now know. Yep, Loss of intimacy is actionable. How do you like that? So we have a loss of intimacy. I can't even look at her. I want you to put them back where they were. So I thought he, I thought it was like a joke. So I'm like, you know, and I, I always joke around to diffuse the difficult situation. I tried joking first. It didn't work. I was like, well, she could just wear her trays in reverse order. I thought that was kind of funny. Good solution, right? Go back from, from Trey, like 100 back to the beginning. But he didn't like that. And he's like, I, I, I, you've ruined my marriage, blah, blah, blah. So, and then you. So I want you to figure out what you're going to do to make things right for me. And he left. So of course I called tdic, the risk line. I'd never been in a situation like this before and like, what the heck do I do here? And they said, well, we have a letter for this. You know, have him sign this letter and just give him his money back. I'm like, give him his money back. This Lady's had like 80 follow up visits over three years. She's been in so much. I must have, I already am losing money on the case. I mean, at $5,000, I probably spent 10 on this lady just in staff time. So I was, I was like, oh, fine. So I call him up, I said, look, I have him back in. I said, look, I don't agree with you. I think your wife looks super. Look at these pictures. He wasn't having it. I said, but here's a paper that says that you will. You don't hold me liable. You're willing to sign that, and I will refund the entire case. I have a check ready. I think it was like $5,400 or something crazy. And so he signed it, and I gave him the money. It was so painful. But when he left, I learned a big lesson. Sometimes you just fail. This was not a failure. I did the dentistry, right? It's not like I screwed up the drilling. I just failed in a patient's eyes, and that's a failure.

And I think, though, there's a really valuable lesson in that. And sometimes it is a. The harder thing was to pay that, because you're sort of acknowledging, in a sense, to that person, you're agreeing that your clinical outcome wasn't good, when in reality it was. But the right decision was to walk away from that pay and walk away.

And I called the. You know, all of these malpractice companies, all dental malpractice companies have a helpline, a risk line. You call them up and say, what do I do here? And they have a lawyer that says what you ought to do, because they don't want to. You don't want. First of all, even with malpractice insurance, had this patient sued me. Thankfully, it didn't happen. Even if I won, I think I'd be up at night, I'd be stressed out. It would just suck and would probably go on and on. So in hindsight, looking back at it now, and this has got to be at least 10, 12 years ago, looking back at it now, it was like the best $5,400 I ever spent because I made something horrible in my life go away and I could sleep at night. So I don't know what I learned from. I don't even know if I learned a lesson. I learned that some people just suck, and you have to be willing to fail because you can't please everybody. I guess that's the lesson.

It reminds me of reviews. Every once in a while, you get a negative review. It's a Yelp review, something. And a lot of the tendency I've seen doctors do is they keep responding to that review. They keep trying to justify or to clarify, to create context, and it just goes on and on and on to the point where it just looks like bickering. And I think the more professional approach is saying, I'm sorry that you feel you had that experience. I'm here to come in my office. I would love to make this right and just leave it at that and move on and you don't think about it again.

And I think it legitimizes you too sometimes. If I see Dr. And they have 555 star reviews, let's not say a doctor, let's say a business, and they have 500 five star reviews and not a single anything else, I'm thinking, wow, they know how to fool the algorithm. Having a bad review. You know, we had a lot of great reviews, but a couple of ones that just didn't get along with us, whatever. Usually it's about money. You know, they screwed it up because my insurance didn't cover it. Like, no, no, that was your insurance that didn't cover it. Not our problem. But still they leave you a bad review in the context of 50 good ones. I think it kind of legitimizes you, it makes you human.

Yeah. Bob, thanks for sharing some of your experiences. Darren, let's move over to you. Really excited about this. I want to start off talking about the industry from high level for a minute. And you've been in the industry for so long now and you've seen it as a service provider, both as a rep at Patterson and now coaching doctors. And a lot of conversations I have with young doctors is about the changes in the industry and working for large group practices versus finding and working maybe in two or three private practices just to sort of fill their schedule. And what's going to, what's dentistry going to look like in 15, 20 years, etc. What, where, what trends do you see happening in dental and what are the forces behind those and how should a young associate approach their career given some of these changes that are happening?

You know, a lot of questions there and you know, I wish I had a crystal ball to be able to answer all of them. You know, the most recent trend that I think is impacting dentistry and has a whole lot of people nervous are the formation of the larger groups. I don't see them continuing in the long haul. And I could be wrong on this, but here's why I say that. Do you, do you have any, are you, do you have any clients in these big groups that you do the accounting for?

I generally know because I'm all private practice, but I do have one client who is a part owner. Some of the large groups allow ownership up to a certain percent, usually 49%. And I do have one client who owns 49%, I believe of three offices in a very large dental corporation.

So the reason why I ask is when I look at the finances of like a Dr. Bob's practice. And granted, he's an outlier and maybe we should just use an average one. Let's take a million, million three practice 60, 65% overhead. You know, so in a case like that, they're, they're four or five hundred thousand dollars of net income at the end of the year. When I look at the big group practices and I look at their ebitda, which for those of you who aren't maybe familiar with that, if I just look at what the, the net income of the business is, to use more English terms, I don't find it is anywhere near the same percentage. It's generally speaking, somewhere in the 5 or 10%. Maybe some get as high as 15%. I don't think I've ever seen one over 15%. So what I see is as outsiders over the last five years, you have all these financial companies going, man, look at the income of these practices. It's three, like 45%, holy cow, we should all get into dentistry because we can all make 45%. And what I think they're all thinking is that we can get these economies of scale of better purchasing volume and discounts for labs and supplies and all this stuff. And yet their net income is 5 or 10% at the end of the year. So I think what's going to happen is they're going to all get frustrated. I think the bubble is going to pop. I mean, I think it's going to continue for a while because it's still in vogue, it's still sexy, it still looks good, you know, worked in medical. So let's continue to get into dental. I predict, and I could be way off base, but I predict somewhere in the next five to ten years the bubble will pop and you'll see a mass exodus. Unless there's somebody who's an insider, and I have a theory about that. An insider who gobbles up a bunch of like a supplier or a huge lab or something like that, somebody who has inside knowledge already and then they can leverage the entire food chain up and down versus just being an outsider trying to make a passive income off of the practices. I just don't see it continuing and feel. Do you have any financial experience with that company?

Well, I know the way that they structure their ownership. I know the way they incentivize their doctors. It was actually started BY A dental CPA, I think, back in the 90s or so. And.

There'S always some things you look at and you say, well, perhaps that isn't the most healthy operation or structural operation for a dental practice in terms of patient care. But then I look at some things and I say that's a well run business. And the way that they are able to dissect their business and their numbers and communicate it to their team and set goals and distribute those goals, there's a lot of admirable things about that as well that I think a private practice owner could really learn from. In fact, I think associates coming out of school, working for a large group practice or dental corporation can actually take some valuable lessons from that into private practice. But a lot of them don't want to continue there because I think they want to practice dentistry a little bit differently than they do that they sort of are required to do at some of those practices. Now, I don't want to paint anything, any company as, as neg, as, as negative. It's just that the nature of larger businesses is there's sometimes a little bit more pressure to meet certain goals because there's a lot of people expecting those goals to be met financially, especially when you have outside investors. So talking about that concept of ebitda, there's. Over the past decade or so there's been a lot of money looking for a return. In our economy, it's been a very healthy economy. Other than, of course, a couple of years in 2008 or so, by and large, it's been a very healthy economy. And in dental, Even, even a 5 to 10% EBITDA is so much larger than other places where they can put their, their money. And they're saying, okay, if we can take 100 dental practices, merge them together, streamline their P and L, and then your, your EBITDA goes up or your, your valuation multiple, I'll simplify that term goes up because now you're really an enterprise as opposed to a practice. And therefore the risk of one of those practices going under is pretty low to the overall picture of things. And so there's a lot of private equity money going into the space of dental right now. And there's a lot of dentists who are trying to create that. Although the ones that I'm seeing generally that are finding success really are the people who come from more of a business background and start that up and then they find a strategic doctor sort of partner with them in that. But I am seeing that and I'm formulating a little bit what my opinion is and recommendation for doctors who are now being offered opportunities to go work for more local group practices that have maybe 5, 10, 15 offices that are really trying to do a good thing in their practices and for their patients. But they're also trying to get some of that benefit of scale, which is, I think, a different context or environment than working for a practice that has a thousand offices. You can find, I think, good opportunities in all of this. But I think doctors, when I ask them, do you want to own your own practice? Most of them still would like to own their own practice, but the pressures on them are increasing in some ways. And I'm curious from your perspective, that's why I asked the question is how do they cope with those pressures? Are they going to be around for the long run and how can they still succeed?

I don't think the corporate dental environment's going to go away entirely by any stretch of the imagination, because as you indicated, even a 5 or 10% EBITDA is better than they can perhaps do somewhere else. And one of the reasons I think that they do have a higher EBITDA than some other thing, actually let me back up one of the reasons why I think it can work. And one of the terms that most doctors don't understand is a term called return on assets, which you, as a finance guy, really understand. And to make that clear for the average listener, you know, the average dental practice is open for eight hours a day, four days a week, so 32 hours a week. By contrast, the average factory, especially in this area, where there's probably a lot of people making stuff, they're open 24 hours a day, seven days a week. So their return on assets is astronomically higher because of the amount of hours they work. Now, what's interesting with the corporate dental model is generally speaking, those facilities are open much longer hours, many more days. So their return on assets is a lot higher. That is one of the efficiencies that they are going to always have over the solo practitioner, because the solo practitioner doesn't want to work 60 hours a week. The reason why they went into this is so they could work 35 hours a week and make a good living. So I see because of that paradigm or that distinction that I think the corporate environment will continue and continue to be around. But I don't see it overtaking to where it becomes 80% corporate, 20% privately owned. I just, I don't see it happening. Perhaps I'm wrong, but I just don't think it will.

The interesting thing is I have a good friend and he is a. He is the cto, the chief technology officer for a medical practice management software. So the equivalent of Dentrix or Eaglesoft, but for medical. And his company signs up, he said, over 200 doctors a month and all they service are the doctors who own their own practice, the medical doctors who own their own practice. So here's a space that's already gone through the consolidation, it's already gone through the roll up and coming back. And yet there are still so many medical doctors who don't want to be a part of the larger platform. They want to be independent. And I think that drive is even larger in dental. So I always believe that even if this Trend continues For five, 10 years, there's going to be, I don't know if it's going to land at 50%, 60, 40, I don't know where it's going to land. But I think there's always going to be dentists who still want to own their own practice and have that independence of creating the culture and the experience in their life and their career that they can dictate 100%. And I'm hoping so obviously because practice CFO, my company isn't here to service the large organizations because they have, you know, they already have a in house accounting and in house CFO and all of that. We're trying to provide that at an outsourced, what's what we call fractionalized CFO service in a way that's accessible and cost effective for them. But I think that, I think you're right in that sense. I think there's definitely a trend and a bit of a bubble right now that at some point will either slow down or pop, I don't know.

And I think, Wes too, that there's a component to that of just patients. You know, patients aren't, they're not stupid when they go to a place and they have a different doctor every time. I think if, if you make a relationship with the patient to the point where they want to come back to you.

It will grow your practice every time. Because medicine lost that these days here in San Diego. If I said to somebody, who's your doctor? A lot of especially young people say, well, I don't know, Scripps, ucsd, Kaiser, they wouldn't even give me a name. But if I say, who's your dentist? They'll probably come up with a name. Dentistry avoided this conglomeration to becoming just a commodity where my services are just a filling. And I do fillings. A filling is a filling and I don't care where I go. We've avoided this so far at least I think.

And here's the cool thing is that the buyer of your practice, who I know, yes, he has a debt on the practice and it's a decent sized debt because you had a, you had a great practice and he paid I think a little under market value for it, but it was still a good sized debt. But even after paying his debt pre tax, we're looking at 700,000, $750,000 of pre tax take home. And that is still, that can still be done today.

It can, absolutely. There's so many people where there are enough patients to go around. We had two other GP offices in my building. Literally you could walk down the hall and have a new dentist. We there's. So if you look statistically at how many, what percentage of people go to the dentist, even what percentage of insured patients go to the dentist, it's shockingly low. And if you give somebody a good experience and they're willing to actually take it back to work or to the backyard party and mentioned they had a really good experience, it generates new patients every time. We're not running out right. People feel like I'm. I've never felt like I'm in competition, especially in the SAREC community. The Sarah community in San Diego is a very tight community. I have some very close friends who are essentially my competition. But we never felt that way because there's plenty of patients that go around that want high quality personalized service. It's still there. I mean it's there in the whole country and little tiny towns that Darren and I have been to, that just a little five block town, they have dentists that are just killing it because they're offering amazing services and patients are responding well.

I think in some geographies, I don't want to make it sound like it's easy. I think what you built wasn't easy. And I think even running your practice today is still going to take by that buyer an energy and a leadership to carry on that legacy.

And that's why we have the Associates on Fire program in some ways is to try to give some of the knowledge that's required to be a good business owner and a good financial person in terms of your financial management decisions. But with that knowledge, with that learning and that ability to lead and I think the right coaching of what it means to be a leader, to focus on yourself and to create an amazing culture, if you can do that, then I think these numbers that we're talking about are still accomplishable. But if you don't nurture that side of your professional life. And you think I'm going to have a job and surround myself with some people and go and fix some teeth and then go home. And if that's your mentality, you're probably going to languish a bit financially as a practice owner. I think the shingle days in most areas is over, that you hang up a shingle and they all.

That's why Darren, and accelerate. My practice exists because a lot of doctors go, look, I'm, I'm a good dentist, I'm a good person. I'm just not meeting the successes I wanted. You need a coach. I always tell people say, well, why do I need a coach? Here's my answer. Every professional sports athlete, Michael Jordan has a coach. Now, Michael Jordan could probably beat his own coach at basketball, but he has a coach to point out where he can improve, what he could do a little bit better, what he could tweak to do better, to improve his performance. That's why I'm out there. And I can't do dentistry anymore because of my medical issue. But I can help other dentists do it and do it better. You don't have to be an MBA like Darren is yourself. You just have the right help. That's why I'm bullish on this whole idea. I didn't just hang it up, as you know, Wes, I could have hung it up. Even Darren said, why are you working? Why not just retire? And I said, I have more to offer the industry and I want to hook up with somebody who has my same ethics, my same ideas, my same drive. And that's what fostered our relationship.

So, Darren, if you were to on day one, step in the office of a brand new practice owner, just closed on it the prior day. Sellers out, new doctors in. What are the top priorities that you would coach that new doctor on and why?

My whole philosophy is, I don't know. First off, I don't have a stock answer I can give you and I'm not being evasive. So I'm going to answer from a generic perspective. But my real answer is every single practitioner, every single owner is going to have a different problem. It's kind of like a patient walking in. The patients all need some version of dentistry, but the what dentistry they need. The specificity of it varies a lot. So I personally am a big, big believer in custom treatment plans for each practice and for each practice owner and for all of their employees. But if I were to answer on statistics and what are the big ones that we run into, the first one, I would Hit and you guys already touched on is leadership. And to me, there's a huge difference between leadership and management. And I like how Stephen Covey put it in 7 Habits of Highly Effective People. And he used this metaphor of imagine an army marching through the woods. A manager is going to make sure we're marching. We're marching at the right pace, we're accomplishing the goals, we're traveling the distance we need to go. A leader is going to climb a tree and make sure we're going the right direction. And I find so many doctors in general just get their heads down, spinning a drill, doing what they're supposed to be doing, and they forget to climb up to get a vantage point to see if they're going the right direction. And I think to validate Dr. Bob's response of, everybody needs a coach, part of that is because you have that outside perspective to be able to go, dude, you're going the wrong way. And without that perspective, it's really hard to assess. You know, one of the challenges I run into all the time, and you guys already touched on this as well, is I have all these doctors coming to me going, I need new patients, I need new patients. I need new patients. And if you're a brand new practice, of course you do. But I love to look at someone like Dr. Bob before he sold his practice and go, hey, if you kept every single patient you ever had, would you ever need a new one? And the answer is no. And I know the stats. 1 to 3% of your patients are going to die. Another 5 to 7% of your patients are going to move and go somewhere else. Then 13 to 18% of your patients are going to switch practitioners because they had a lousy experience. Now, if you keep that 13, 18% and you only lose the bottom seven or eight because of death or moving, why do you need so many new patients? And the answer is you don't. You just need to take care of the ones you've got. One of the other points that you guys made that I wholeheartedly agree with is if you just give the patients the best health and they say yes, you will never have to worry about finances again, ever. And so I don't need to go in and try and teach people how to be unethical and more aggressive and how to sell the undercoating on a car, if you will. It's ridiculous. You shouldn't need to do that. Just communicate more effectively. That is where I see the biggest thing that falls. If I were to pick one topic for every brand new doctor, it'd be communication. Whether it's to your team, whether it's to your patients, you've got to be a wonderful, wonderful communicator. And if I try and give you really good specifics with that, because I know one of the whole keys, and I love what you guys do with your philosophy with your podcast here, is to really make sure that everybody listening has some actionable thing. So here's your actionable thing. Write this one down. Speak in English. When you go talk to a patient. Don't say you need a do on this tooth number. Don't use dental terminology. They have no idea what you're saying. Don't show them an X ray that looks like the Rocky Mountains at dusk.

Speak to them in English. Ask them what's important to them. In fact, one of the easiest things you can do, and I'll give you a silly example, one of the easiest ways to get a case accepted is when you come walking in. If your team has an intraoral photo up of whatever the problem is, and you walk in and you're kind of jovial like me, go, whoa, what happened? The patient's gonna go, what do you mean? And it's gonna call their attention to whatever's ugly on the screen. And then you just look at me go, man, what do you want to do about that? Do you know what the average patient will say? I don't know, fix it. You tell me. And what they just did is handed you the baton of influence. But instead, what do we do? We tend to walk in and go, you've got a cracked something or other, and you need an mod on this tooth number. And your insurance will cover it like this. What do you want to do? And they don't understand a thing you just said. You just spoke a foreign language to them. And what most of them do in that scenario, there's generally two personality types, one like me or Dr. Bob, where you're going to sit here and answer my 20 questions and you're going to be 20 minutes into your next patient, we're going to screw your schedule up. Or what the average person probably says is, I want to think about it. What I want to think about it means to me from a psychology perspective is I don't have any clue what you just said, and you're going to repeat this to me in six months again. And I'm going to say, I want to think about it again because I'm starting to understand, but I don't want to look stupid Like I should laugh at your joke because it looks funny because everybody else is laughing, but I don't really get it. So I'm just laughing and pretending to laugh. That's what the patients say when they say, I want to think about it. That's truly what I believe from a psychology perspective, they're saying. So I think the best thing you can do is ask great questions to me. The quality of your life will be dictated by the quality of your questions. If you can ask great questions of your patients, of your team, your life is going to be a lot better than the person who only makes statements, I promise you. I'd be willing to bet if I walked into Dr. Bob's practice, he would sit down, ask questions of his patients, get them engaged to where they're diagnosing themselves. Because if I don't have a high level of trust for him for whatever reason, and I'm not going to believe his diagnosis, but if he asks me the right questions where I diagnose myself and it just so happens to be in alignment with his diagnosis, is there any conversation to be had? It's my diagnosis as a patient. I'm probably going to accept my own diagnosis as a patient. And now, if it's something I want because I diagnosed it, how big of a factor is the insurance now? Whereas before, it's everything, right? Does my insurance cover it?

No.

Okay, well, I guess I'm not doing it then. Whereas now, if it's something I want, Think of it. What's the last thing you bought? The last cool thing you bought?

That would be a, let's see, a new tennis racket.

Tennis racket. Now, was it a cheap one at Walmart or was it a good one?

No, it was a 200 tennis racket.

So at $200, was it a hard decision for you to make?

I love tennis. Because I love tennis, the cost is.

Just less relevant for me.

It was important to you?

It was.

It was important to me. I needed this racket.

Are you playing better with that?

Needed this racket.

Correct. So now, by contrast, if I make the assumption you're not into a horse and I try and sell you a horse, how impactful is the cost of the horse going to be?

Significant. Correct.

That's how dentistry is. The patients, every patient, every person has a wish list of stuff they want to buy, right? New tennis racket, new horse, new car, new vacation home, new vacation wedding ring. We all have this wish list. Where on that list is dentistry?

I don't think it's on the list at all.

It's not on the list until Dr. Bob comes in and says, I need a crown. And now all of a sudden, I'm like, oh, crap, it's on the bottom of the list. And now he's trying to have a conversation with me to bump it up the list. So my belief is we make changes for one of two reasons. It's to avoid pain or gain pleasure. That's it. The easiest case. I'll ask Dr. Baugh, what is the easiest case to get accepted in your practice?

Easiest case to get accepted. So you mean I tell them and they just say. Absolutely. I would say somebody that walks in and they're already in pain.

Yeah. Their face is swollen, they hurt, and they're dying. They don't care what it does.

They want it done right now, no matter what it costs.

Correct.

What's the second easiest case to get accepted?

I would say somebody that walks Major Case. I would say somebody that walks in saying they want to change their smile. And then we offer them cosmetic care.

Totally agree. Now, what's the hardest case?

Oh, that's easy. The hardest case is what I call the clueless patient. And I don't mean they're a clueless person. I mean, they walked in thinking there was nothing wrong, and now five minutes later, I told them there was something wrong.

And it's.

They didn't know it didn't hurt. They don't see it.

It's in the back, and it's three to $5,000.

Yeah, that's tough.

That's hard. It's in the back because I'm not going to gain pleasure from the cosmetics because it's in the back. I'm not going to avoid pain because it doesn't hurt. I didn't even know I needed it. And if it was $100, it's okay. Right? Everyone's got some threshold with which they'll spend money with. No big deal, right? $200 tennis racket. You probably didn't need to go ask your wife's permission.

$50,000 tennis racket. And I realize I'm being silly about that, but, you know, there's some threshold with which you got to go have a conversation with your wife or you risk getting in lots of trouble. So we all have that number that we can handle. So now you go drop three to $5,000 on a patient that they're not going to gain pleasure by it looking prettier, they're not in pain, and now they got to talk to their spouse because it's in that it's over that threshold. Now, by contrast, if we were to lead them to the conclusion that we are after, which is they have this issue, because I walked in and went, dang, look at that picture. Now all of a sudden, we call attention to it, and we did it in such a dramatic fashion. And I realized half the people listening are like, dude, there's no way I'd ever say that.

Another option. There's another option that I used to say a lot. I didn't actually do it that way. I'd love. I love that, actually. I wish I knew that, like, 10 years ago. What I do is I have the big picture on the screen. I'd say, hey, dude, let's play a game. What do you see there? And they go, oh, that right there. It looks like they go, yep, you nailed it. That is not the way. You know, if. If it looked like this six months ago, I would have showed you six months ago. I only show pictures of stuff that's different than last time I saw you. This is different. See that? That's a problem.

This.

I love the dang thing. That's awesome. But you have to. You have to be a strong person for that, too.

Well, you got to be. You got to be a little bit boisterous and silly as well.

Agreed.

But I think what this drives home for me is I think a lot in my life about this concept, and I was talking with you about this, Bob, of marginal thinking, which is the belief that it's okay to neglect a small but important decision because the effect of that negligence is harmless. Of that one time, it's harmless. I didn't exercise today. No big deal. It's fine if I go eat this today or if it's whatever that is that plays itself out in relationships, in our health. But here I find that so many patients, probably including myself, will wait until the moment of crisis before I decide that I need to get that tooth fixed.

And it just got way more expensive at the moment of crisis.

Yes, exactly. It gets way more expensive. So one of you're talking about leadership and communication. It seems to me like important or good communication is going to help the patient overcome this concept of marginal thinking as it relates to their oral health and sort of close that gap so they see that now's the time to fix this, not the moment of crisis. So you're elevating the value of this above that trip to Hawaii, which they really want to do, which before talking to you, they would have chose that trip to Hawaii way before fixing Those two teeth that they really needed to. Why? Because that trip to Hawaii just felt more valuable to them.

It's fun, right? Gaining pleasure, people. Why did you buy your tennis racket?

Yeah, it's fun.

You wanted the pleasure of being able, hopefully to beat your son, who's a good tennis player. Right. Or avoid the pain of him rubbing it in your face when he beats you. So I'm going to go spend $200 on the absolute best racket I possibly can, hoping and praying that just this will give me the edge. That this year, just this is the year. This is the year I'm going to. I'm going to beat him again. Right? You were hoping to gain the pleasure and avoid the pain of him going, haha, dad, still gotcha. And that's how people think. That's consumer psychology. Really? If I. What I like to teach doctors is what is the psychology of your. You call them patients, I call them consumers. Because your competition is the tennis racket. It's Apple, it's Carnival Cruise, it's United Airlines, it's whatever it is you want to spend your money on. How can you compete with all these other areas where they understand? Because they've spent millions and millions of dollars to understand the psychology of their audience. But we've not spent any of that money on that. In fact, we didn't think about it. In fact, I believe, and most of your younger listeners won't necessarily understand this, but to me there was a shift. I'd be curious to hear your thoughts on this, Bob. To me, there was a shift about 2008. Before 2008 and the bubble burst in the real estate world, it seemed like the average dental patient. You told them what they needed, they said yes. You were like the oncologist. They just did it. After 2008, somehow dentistry became a discretionary elective service that I'm going to put off as long as I can so I can still take the vacation and you know, maybe, maybe late. This is the thing with my kids. Later, I'll do it. My kids are always doing this and I'm trying to teach them the cost of procrastination.

Right?

You and I in the business world call that opportunity cost. I always like to look at patients and go, man, procrastination is expensive. That little $250 filling is going to be $2,000 at some point. I don't know when it is. I don't know if it's six months or five years, but I promise you it'll become a root canal. In a crown at some point if it's left alone.

Yeah, we tell patients all the time, you know, we say, you know, that patient has no teeth left. They have a denture now. And you have, you have good teeth. You have the one problem I'm describing, that patient who has the denture, he didn't go to bed one night and his teeth were perfect. And he woke up the next morning and he needed a denture. Didn't work like that at one time. The teeth that nature gave this person were fine too. He had one problem, probably neglected it. And it was three, maybe didn't get that. And it was eight problems. And we lost our first tooth. Now it's, we lost our third, our fifth, and then nine of them, and then all of them. It's a downhill roll. It's like that snowball that goes over, down the hill and you just can't stop it. It keeps getting bigger and bigger for the. Well in San Diego, nobody knows what I'm talking about. I'm from Connecticut, I get the snow. And he's from Colorado. He gets the snow thing. But to me, telling the patient the consequence of inaction is important. It's an important part of the treatment plan. But also not just telling them, this is going to really suck for you if you don't do it, but more telling the benefit of action. This is going to feel great. It's going to look great. You'll be able to use it immediately after I'm done. You know, new technology has made it so it can. When you smile real big, it's going to look just like the other ones. You won't see any metal in there, et cetera, et cetera. I like to appeal to the positive a little better rather than negative. But when you get somebody says, no, I'm going to wait a year, that's when it's a conversation. Let me talk to you about what waiting a year did to the other lady that was just here five minutes ago. She was having a root canal. She waited a year.

Do you guys remember there was a documentary, it came out like maybe eight, ten years ago called Dollars for Dentists. It was a, it was a, just a, it was a critique on the whole dental industry.

And it was like that Reader's digest article. It was a kind of modern day version of I went to nine dentists and I got treatment plans ranging from nothing to a million dollars.

Yeah. Was it like, was it Frontline? I don't remember.

And I went to a dental school and they had a dental School, school from Harvard or something. I can't remember what it was. Identify what you really needed. And then they went to a bunch of private practice dentists. And some were aligned with that and some were overly aggressive.

And what it was trying to depict is that dentists are out to get every last dollar out of your pocket. People believe they can. And it was. It was showcasing a lot of the big ones I think they had. Aspen Dental was one of their big ones on there. And it was. It was a pretty scathing review of the dental world, but led the viewer to believe that all dentists are there for your money and not for your oral health. I think it was a complete disservice, I think, to the dental industry, of course. But I remember there was this one lady being interviewed in her house, and she, you know, she was missing a bunch of teeth and she was on the verge of crying because she couldn't afford the dental work and how it was too expensive. And in the background was all of this really nice, expensive furniture and this really huge big screen tv and just. And I thought, well, where are the priorities in how you allocate your dollar?

Right. And it's the dentist's fault that she got to that point, and it's the dentist's fault that she got to that point and now she needs a billion dollars of the work. That's our fault. Yeah, but you know that a program like that never hurt me personally or people like me, because, you know, that's one thing that I like about. I don't want to sound like an ad here, but that's one thing I like about what Darren and I do. A lot of people that help dentists call themselves consultants or whatever, and they help them to, you know, let's use tips and tricks to trick people into something they didn't really need. We're gonna make a lot more money now. It's like what you mentioned with the undercoating or the. Or at the car at the point of sale of the car. That's not the way we operate. We go with what you ethically and honestly already would have said. Just make you say it a little better.

Right.

There's a difference there.

This has got to be one of the most important, I think, concepts for a dentist to understand is that there as. As none of us want to be depicted as a salesperson. Typically, I'm a cpa. We dislike that notion of I'm a salesperson as much as I think a dentist does. But even in my world of talking with dentists about how they manage their financial affairs. In the same way, dentists need to talk with their patients or their consumers. As you say, there, Darren, is there is treatment that they need. And they don't teach this to you in dental school, but you forget about this, that it takes a skill set simply to get them to say yes to what they already need. It's not like, because you showed this amazing X ray and the cold, hard facts are that they need some restorative work, that they're going to say yes. It's just not like that. And it's a romantic notion. If you think coming out of dental school that if you're that good of a clinician and you show the X rays, that everybody's going to say yes, it's very far from the truth. So learning that skill set of communication is one of, I think, the most valuable skill sets that a dentist can learn. And what is said between the patient and the dentist is such a make or break in, I think, the finances of a practice.

I don't have any problem with the words. I know the word sell sometimes has a negative, like used car lot.

I wanted to jump right on that.

I like, if you're selling something that's ethical and honest.

Yes, sell it all day, sell away.

If you're not, then go home. You ought to be ashamed of yourself. But I have nothing. You bought the tennis racket from a salesperson. Were you angry at him?

Well, I bought it online, but.

Well, he still bought from a salesperson. Somebody sold it to you. But I don't believe that selling is bad. If you're selling something ethical and honest that you truly believe as a doctor, it's correct for the patient. So I don't know if you agree with me.

It's the stigma about, I don't want to come across as pushing or selling.

That becomes a personal mindset, that if you have the mindset that I'm a salesperson and that's a stigma, then maybe you're guilty of unethically selling. I don't have a problem with selling in an ethical way, or we just.

Need to unpack the connotation of it. I had the same conversation with a doctor in Kansas once, and I looked at him and said, you know, here's all your treatment plans for last month. Right. I just walked in here today. Here's all your treatment plans for last month. Is there anything unethical here? He said, no, God, no. I said, so what is wrong with selling this? What are you selling? If everybody said yes, to this. And he paused for a minute. I said, well, ideal Health. I said, so you're embarrassed to sell Ideal Health to your patients. You should be screaming that off the rooftop. So I guess the other piece of advice I would give any listener here who's brand new is if you have discomfort around this stigma, I would unpack it, because it will hold you back for an entire career. Because all you're trying to do is get somebody to choose Ideal Health.

And outside of insurance, here's what's funny. You have a cute little iPhone right there. If you drop that in the toilet tonight, right? It. What day is today? Friday. If you drop in the toilet tonight, are you going to go buy a new one tomorrow?

Probably.

What if insurance doesn't cover it?

Yeah, I need my phone.

What if insurance doesn't cover it?

I'm still buying it.

And you said you need it 15 years ago, did you have one of those phones? Did you survive? I mean, are you. How are you alive? You didn't have that phone 15 years ago, but now you need it. Now, which one do you need worse? That phone or the ability to chew, to smile, to be intimate with your wife? Which one of those is really more important? But yet what is the patient going to choose? Oh, sorry, I can't do my crown right now. I just dropped my phone in the crapper last night. I got to get a new phone. So to me, it's about priorities and passion. I see no problem with being passionate as can be about promoting ideal health. I got no problem with it. I'll sell it all day and I'll sell it proudly. And if you got a problem with it, call me, give me 15 minutes, and I'll break you out of that pattern, too, because it's all patterns we have, right? Some people in dental school probably had some practitioner who was teaching in the dental school. And I'm going to rant on this for a moment. So if you're a dental school instructor, forgive me, who couldn't make it in the private sector, who thus went to teach in the schools and said, yes, cell in dentistry is horrible and unethical. And it stuck with them. And now it stuck with them so much that they're now carrying that baggage with them for a lifetime. Dear Lord, put that bag down, leave it behind, check the advice of where you got it from and maybe pick up a new bag, a new bag of. I'm offering Ideal Health to my patients and I am proud to sell that all day long because I think it's worth A lot more than that phone you're going to drop in the toilet tonight.

I think that ability to communicate effectively is two components. One is the mindset, as you've spoken.

About, Bob, that's the meaning and the.

Belief that you're selling ideal health orally. And then there's the practical side, which is the how do I, what do I say and how do I deliver that communication? One of my favorite people, I'm going to have him on the show. His name is Dr. Landon Libby. He does role playing all the time. And he does it with his team. He does it with. He has an associate, does it with his associate. And it makes people feel uncomfortable to role play and to do a lot of it. And he is so big on role playing. But his practice, his ability to close that gap of unaccepted presented treatment is unbelievable. One of the highest I've seen. And he does a lot of big cases. Big, big cases. People fly out from different parts of the country, literally. They'll stay in his guest room house. And they met him online.

You know why? Because he's coaching them. And to me, that unaccepted treatment, you know, there's always going to be, as we look forward practices, there's always going to be the insurance claims we screwed up and we got to figure that out and get that money. There's always going to be, the patient didn't pay. We got to chase them down. But that's not more production. You're just hoping you can collect those. You try your best, you're not going to, you're not going to give up on those. But I always said to my staff, I don't even care how much production I do today. A lot of dogs. How much did we produce today? How much did we produce yesterday? You know what? My number is important to me. How much money did we put on the future schedule today? In a dollar sign, okay? In a dollar quantity. This is a business. If you have a problem with making money, then get out of business. It's not worth it. It's okay to make money ethically, to look in the mirror and say, I did the right thing for everybody today, then it's okay. But if I have a $20,000 production day, I do zero treatment plans and I put zero onto the future schedule. My future just decreased by 20,000.

So we always want to put on more than we take off on a daily basis. So ask yourself that. How many treatment plans keep. Keep a ledger, get out a piece of paper. Every treatment plan you present, every I would say go in your software and get that number. If you're not keen on that, then go to the last 100 hygiene visits and see how many people. Or the next 100 hygiene visits, the next 100 hygiene visits, how many of them came in with a treatment plan undone. That's quick and dirty method. It's not even a dollar method, that's just a number. Any treatment plan and you'll be shocked how much money is just left on the table. Because we don't communicate, we don't help patients understand, we don't promote ideal health. We instead diagnose their capability to pay or what their reaction is going to be. We've heard the word no before, we just don't want to hear it again. So I'm not even going to put the question out there because I'm afraid of hearing the word no again and I don't want to hear it. So I'm not going to promote ideal health. I'm not going to give that patient what he just drove 20 minutes to get here for. I'm just going to give him the basics and I'm going to be an average basic dentist and that's good enough for me. And that's just. There's no ethics there. Sell it.

And then as a patient, I'm going to go Google search and find this other doctor and I'm a fly across the country so I can go stay in his guest house to do a great big huge case. But yet the patients don't have any money. They say it's interesting.

And some people will say no on the basis of cost, in which case we respect that decision. But there's a lot of people that will say yes.

For sure.

All right, let me ask you this, and then we'll come to a close here is.

I want to ask this to you, Darren. If one of the. One of the challenges doctors I work with face is as we help them through the purchase of the practice, then they step into ownership, is there's. They see a lot that needs to change right away, behavior of the staff. A lot of things in the culture might be stale and they just want to maybe add new technologies, change the workflow and do all of this stuff. And yet there's a tremendous amount of reluctance to change.

What should be their strategy. Should they push that change and lead that change, or should they be patient and just change it over time?

Great question. One of the first things I would suggest. I'm a big fan of Stephen Covey and one of his first Concepts is begin with the end of mind. And from a clinical perspective, this is something that the average dentist does great. I walk in with count Chocula teeth and in 30 seconds Dr. Bob can tell and visualize exactly what my smile is going to look like when he's done. And he reverse engineers it to and he calls it phase one, phase two, phase three, Phase four, treatment. Whatever the examples are, what I would suggest for every doctor is the same thing. Sit down, close your eyes and ask yourself in a quiet room, where do you want your practice to be in five or 10 years? And I say five or 10 years because nobody can dream on under five years. It's too short of a time frame, right? There's no way I could double my practice in two years, but in five, yeah, I probably could then. So I would start off with where do you want to be in five or 10 years? What kind of patience do you want to see? What kind of procedures do you want to do? What do you want your team to look like? What do you want your income to look like? What do you want your hours to look like? Design your dream and then reverse engineer to phase one. And what I like to teach is what I call leveraged activities. What are the ones that are going to generate the biggest bang for your buck the fastest? Those are the ones you should do first. You know, I'll give you an illustration. I had a friend once who was getting ready to start in H vac business. And if he was like the average person, what he would have done is gone and rented a building, got some trucks and you know, got some inventory and hired some people and got a desk with a ficus plant in the corner, see, like that one. And he would have been all, he'd have been all set up looking pretty. And how much revenue would he had had up to that point? Negative, zero, Negative really Negative net income. Anyway, now this guy was a pretty brilliant guy. So instead what he did is he took out a full page ad, you know, best sale of the summer in air conditioners. Operator standing by, the operator was he and his wife and a cell phone. He had nothing. In fact, one of the phone calls he got was from the building department saying, you're not even a licensed contractor. He's like, oh crap, you have to be licensed. I'll have to remedy that. I haven't broken any laws. All I did was take out an ad so far. But he had his modality was leveraged activities. What is the first thing I can do that would generate the biggest bang for the buck. And what he got was 30 phone calls and 30 appointments set. And I don't know if it's 30, I'm making that up. But a lot of appointments, a lot of people responded to that ad. So the moral of the story is, if you're a brand new person, starting out is dream for what your long term will be, and then ask yourself, what is the most important thing I can do right now? And you know it with patience. Right? You prioritize effectively with patience. With prioritize the same with your business. Now, relative to your question was, how do we get the team to accept this? I think the right answer, and I'm going to come back to this word on purpose, is to sell it to them. The best way to sell it to them is through asking them questions. I think if you force it down their throats, they'll follow you because you're the boss, but they might follow you reluctantly. If, by contrast, you sell it to them.

They'Ll be the champion of it. They'll lead it. And the best way to sell is through questions. So I would sit down with a team and I go, hey, guys, if you were to inventory our business right now, where we're at and how well we're performing, what are the top five or ten things you think we should change? The odds are it's going to be one of yours. And then you look at them and go, okay, great. That's awesome brainstorming. Here's the top 10. Which one do you think is going to impact our business the fastest? And when I say impact, I want to be clear about what's most important to me. My priorities in my business are, first and foremost, I want to take care of my patients. I want my patients to choose ideal health. Secondly, I want to take care of my team. I want you guys to be rewarded handsomely for working hard here, for helping our patients get healthy. Thirdly, I want to make a good living myself, too. So through that paradigm of those priorities, we. Which one of these top five or ten things should we start with, do you think? And let's brainstorm it. Let's all kind of banter back and forth. Not that one's right, one's wrong, but let's banter back and forth a little bit on this over lunch today and see if we can come up with which one's going to get us the biggest return in those three areas. Because if we take care of all the patients and all the patients choose ideal health, guess what kind of an income you get to make an amazing one. Right. Because there's more net income at the end of the year. And you know, my funny illustration of that is sometimes what happens in practices is the doctor ends up to be the bad guy, right? So the team walks up front with the patient and the treatment plan that Dr. Bob just gave. And you look at me, the front desk, and you go, what do you think? And I'm thinking, man, there's no way I could afford that dentistry. I don't know that I'd do it. And so you look at the patient as the person in the front office. And I'm not trying to pick on. Anyway, it's just an illustration. And you go, hey, you know, what if we just do it for the insurance portion or we give you a little bit of discount? And the patient says yes, and Dr. Bob never knows I even did it. But at the end of the year, all of that adds up to $100,000. And now that $100,000, where'd that come out of the bottom? Right. That was Dr. Bob's income. He just lost $100,000 personally. Rough numbers. Anyway, so now all of a sudden is the front desk person. I go up to Dr. Bob like, hey, Dr. Bob, can I have any raise? And he's like, there ain't no money left. And she's thinking that he made a million dollars because it's a million dollar practice. Do you know how many employees in the offices think that the top line is how much the doctor makes?

It's staggering. They think you do a two thousand dollar crown, you put two thousand dollars in your pocket and take it home and buy something.

Yeah. So when they let the patient walk away without paying that extra $100 or whatever, no big deal.

It's not that they're stupid, it's just they've never been taught. They've never been taught.

But it's like you said earlier, it's marginalized thinking. Right. So that hundred dollars times 2,000 employees, I'm sorry, 2,000 patients, what's that add up to? Quarter million dollars just shy of it. Right. So it adds up so so fast that it blows people away. And they don't realize that those little decisions they're making are impacting the their own income. So what I would suggest is if you want to sell this to your team, you do it through the methodology of what's in it for them. What's in it for you is a raise. What's in it for you is we can put together a 401k for the office and you can have a retirement plan. What's in it for you is I can pay for you to go back to school. What's in it for you is all kinds of stuff. But that only comes through us getting the patients to choose ideal health and running a smart, efficient business to where we have extra left at the end of the year.

Guys, a lot of good wisdom. Thank you for being on the show and part of the Associates on Fire podcast and for taking the time. Appreciate it.

Thank you, Wes.

Our pleasure. Thank you.