THE MILLIONAIRE DENTIST™

Cheerleaders VS Coaches: Proactive Finances for a Thriving Dental Practice

EPISODE TRANSCRIPTION

Announcer:
Hello everyone. Welcome to The Millionaire Dentist Podcast, brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry finances and business practices to help you become the millionaire dentist you deserve to be. Please be advised, we do speak with an honest tongue and may not be safe for work.

Casey Hiers:
Hello and welcome. This is Casey Hiers at The Millionaire Dentist Podcast in studio with co-host Jarrod Bridgeman.

Jarrod Bridgeman:
Casey, I'm so excited to see you today. You just got back into town just a few days ago from the Florida Dental Convention. You've mentioned a few times how that's such a well-put-together conference. It's such a big one that it's comparable to national-level ones, even though it's the state one. How was your experience this year?

Casey Hiers:
Damn good meeting.

Jarrod Bridgeman:
Yeah?

Casey Hiers:
Yeah. We talk about that one a lot. It's just very well run. Well, how do you do that? Well, you have a lot of members and you have a lot of money, so you can spend a lot of money. But yeah, great meeting. It's interesting, I may have reminded the attendees at our course, "Hey, you attend one of the best meetings in the country." It's like a kid who grows up in a 15,000 square foot mansion versus one that grows up in a 1,500 square foot house. You don't know the difference sometimes. They're just used to it. So I actually spent some time, I'm like, "By the way, we go to a lot of meetings and this one is one of the best ones." And you can tell some of them, younger people, are saying, "Whatever."

Jarrod Bridgeman:
I heard a quote once where it's sometimes you have to eat a Big Mac to enjoy a steak.

Casey Hiers:
Yeah, there you go. That was a nice, clean little-

Jarrod Bridgeman:
You like that?

Casey Hiers:
... little quip on your part.

Jarrod Bridgeman:
I'm excited that you guys got to go down there, you and some of your team. I know you had an actual, it was a two-hour course on Saturday?

Casey Hiers:
Yeah, it was Saturday afternoon. People could have been at the pool, they could have been at the water park, they could have been at Disney because a lot of families come, and a lot of people decided to attend this course. Well, why? Because it's underserved topic and it costs practice owners millions of dollars over the course of their career. We talk about that a lot on this podcast. But it's evident when people are spending their time in a classroom for two hours, and it's not because of, you know.

Jarrod Bridgeman:
The things that you guys talk about in your course, some of these things, our practice owners out there, our dentists out there, know they may have an issue with, but it's always on their back burner. There's always something, a fire to put out instead. And so I think when you guys talk about these things, it really is like, "No, no, no, this is what needs to be done sooner than later."

Casey Hiers:
And there's some young people in there because they actually have the awareness of... Because when you're in it, it's hard to almost admit you need help because there's some shame, and there shouldn't be shame if you're not mastering the business or financial side of your practice. The only shame should be if you trick yourself into this isn't a big deal. But a lot of younger people in there, "Hey, what mistakes can we avoid on the front end of things?" And ironically, the first one was, "Know what you want your vision for your practice to be." And it was almost like I had cured cancer with that. You could just see people, they're like, "Wow, that's fascinating." Because sometimes they feel like they just have to buy this practice or get in this practice and just ride out the wave and see how it goes, versus.

Jarrod Bridgeman:
They kind of keep it how it was, however, the last owner had it.

Casey Hiers:
Sometimes that's okay. If you do a startup, what's the strategy? But seeing young people understand the seriousness of this topic was absolutely encouraging. And then, of course, people in the middle of their careers, it just hits them right between the nose. You could just tell. They're just like, their eyes get bi,g and they nod or they slouch in their chair. They're frustrated. A lot of photos being taken, not of me, but of these slides and different things that were impactful.
But again, the whole point of this is to educate the dental community. Obviously we met a lot of good people who would like to speak with us one-on-one, because we can't solve your practice problem in a room full of 80 people.

Jarrod Bridgeman:
Right, right.

Casey Hiers:
But no, it was a good experience.

Jarrod Bridgeman:
If you could, boy, you'd be a magician right there.

Casey Hiers:
That magic wand would be important.

Jarrod Bridgeman:
When you're talking to these people and they come and talk to you about, maybe they already have a patchwork piece together, external team, maybe a CPA over here, a financial investment advisor over there, how many times do they come and tell you, "I'm not really sure what they are doing," or, "I'm feeling like I have to do more to get them to do their job," kind of concept?

Casey Hiers:
Yeah, sometimes you just don't know what you don't know. And a lot of practice owners they provide a very high standard of care in their practice for their patients, and they assume that the people they employ, their external team, to help them with these things, have that same level of expertise. A lot of these people they're nice, but they're doing it in a vacuum.
We've talked about this before. But sometimes they just don't know. They have a feeling in the pit of their stomach. Then they have a crossroads. Do I address it? Or do I put my head in the sand and keep producing dentistry? And ultimately when people have an inkling or a feeling, when we engage with people and look at things and either confirm they're doing great or find the holes, some of the holes we find are unbelievably large, and yet the practice owner's like, "Well, I kind of felt like something wasn't right, but I wasn't sure." And again, they're producing a lot of dentistry. They have a life. It's not a knock on them. But there's a real gap there with what people think they're getting from their external team, again, versus what it's costing them if it's not being done masterfully by people who understand dentistry and are talking to each other.

Jarrod Bridgeman:
We've talked before about sometimes, let's say, it's a sales rep trying to sell you a piece of equipment and things like that, and they end up being called what we refer to as a cheerleader or a team of cheerleaders, people who will just say, "Yeah, that is a great idea. I thank you for bringing that to me. You're going to spend money, and I get part of it? Let's go. Rah, rah, rah." How does that fit into the world of accounting and financial planning? Are there cheerleaders in that aspect as well?

Casey Hiers:
Yeah, specifically Section 179, which people are somewhat familiar with in the tax code, and again, is a wonderful part of the tax code that, under the right circumstance,s is fantastic to acquire things you actually need in your practice.

Jarrod Bridgeman:
Right. It's great to use when you need it.

Casey Hiers:
Yeah. I've heard this recently, and I've heard this for a long time. Somebody comes to them and it's basically positioned as, "You need to go spend $150,000 on fill in the blank to help your tax situation." Most practice owners don't ask four more questions to understand the why behind it. They just trust that that tax professional is giving them really awesome advice, and it gives them a green light to go spend money. That is something we come across quite a bit. And again, deep down, they're like, "Huh."

Jarrod Bridgeman:
On something that could end up being a coat rack in the corner.

Casey Hiers:
"Why in November do I have to go spend $80,000, $100,000, $150,000?" Sometimes that does make sense. Most of the time, that's a huge red flag that something's not being done. And ultimately, when practice owners go to spend money on fill in the blank.

Jarrod Bridgeman:
Whatever it is.

Casey Hiers:
Right. Sometimes it's, "Oh, I need to go buy a new vehicle. Put it under the practice. I need to buy a new piece of equipment. I need to buy second location," whatever it is, cheerleaders, because people look at the dentist or specialist as the smart high achiever. They've obviously done their research. They've done their research, and so ultimately the people helping them spend their money are not giving them good proactive strategy. They are enabling them to do this thing that at the core of it, many times was not-

Jarrod Bridgeman:
A great idea to begin with.

Casey Hiers:
... a good idea. It was a Hail Mary to fix a root problem. And as a practice owner, you need to be asking, "Okay, help me understand why in November I need to go spend all this money."

Jarrod Bridgeman:
And that's the case with accounting, and I feel, we talked about this before as well, proactive versus reactive in terms of a CPA, in terms of accounting. A proactive accountant is someone who, to refresh people's minds here, is an accountant who works with your best interest in mind, someone who brings things to your attention in terms of whether it's stuff back in the COVID time, the PPP loans, or any upcoming changes in the tax laws. A reactive accountant obviously seems self-explanatory, but they just react to whatever's brought to them at the time. So it's you maybe reaching out and saying, "Hey, I just saw a news article about this new tax code or this new thing that happened. What do I do to get that done?" And they're like, "Oh, yeah, we probably should work on that."

Casey Hiers:
That's exactly right. Many practice owners tell us they are bringing ideas to their CPA. Here are three things that you can just ask yourself and do a test on. Am I getting good proactive tax management and strategy? Number one, look at the year before. Look at the prior year. Look at the highs, lows, numbers. The safe harbor estimate divided by four, there's your quarterly estimates. But then, are you also doing a forecast at the end of the year for the following year? Sounds pretty basic, but most don't do that. Is the following year going to be exactly the same? Probably not. Are you going to have a child? Are you going to go to Europe? Are you going to have a surgery? Is there something going on that we should be aware of? Let's forecast out the following year. And then you have two pieces of data: historical data and future data. And then at minimum, every quarter you're meeting to review those three months, and you're making adjustments throughout the year. If your tax professionals are not doing those basic three things, there's your sign.

Jarrod Bridgeman:
And again, it was a couple years ago, but bringing up COVID again, you assume that you're going to be relatively steady and busy throughout the year, but there are cases outside of your control that may make your practice take a quick and make a nosedive, whether it is everybody's quarantined, or let's say a pipe-

Casey Hiers:
Your practice floods.

Jarrod Bridgeman:
... yeah, that's exactly what's going to bring up. You need to be able to adjust and look at your quarterly estimates because you brought in more the first quarter than you normally do, but then quarter number two, you've got this outside influence that affected your practice, and now you're under.

Casey Hiers:
Yeah. Again, those are three basic things. But let's quantify, okay, so if that doesn't happen, what are some examples of then the downside of having a lesser standard of care in just the accounting portion? Well, we've seen this recently, going back and looking at prior years' taxes. We've gotten people refunds of $38,000, $45,000, $50,000. We've also saw somebody that had a $200,000 tax surprise that they actually in conversation weren't that wound up about, because the way it was positioned is, "Well, this just happened, but we'll just roll some of this. There's things we can do to adjust it." Which, again, go spend more money to then cover a $200,000 tax surprise. But the implications of this, again, some practice owners have $300,000, $400,000, $500,000 in a practice account, so they tell me, "I can write the check, but it just doesn't seem like it's being done the right way." It goes back to they don't know what they don't know.

Jarrod Bridgeman:
Especially if they were paying quarterly, like they were supposed to. And maybe those numbers are based on not even last year, like two, three years ago. Who knows? And now they're severely underpaying obviously their taxes. And then, as you said, a $200,000 surprise hit,s and that wipes out half their cash flow.

Casey Hiers:
Yeah, that's an extreme example, but that's one that-

Jarrod Bridgeman:
That happens.

Casey Hiers:
... that has happened recently that we saw. And again, the practice owner should have been irate, but they were just like, "Well, I guess that's just-

Jarrod Bridgeman:
I'm mad when I owe any amount of taxes.

Casey Hiers:
... the cost of doing business."

Jarrod Bridgeman:
$200,000.

Casey Hiers:
Yeah.

Jarrod Bridgeman:
Casey, let's pivot to the financial advisory side of this. This one seems a little different, at least in my mind, so maybe you can kind of help me wrap this around. What would a cheerleader in that financial advisory side kind of look like versus a coach?

Casey Hiers:
Yeah. And again, all these are connected, right? Your external team should be. That's why our business model is structured the way it is where it's comprehensive. But if you're getting a $38,000 back because the right team finds it $50,000 back, well then, okay, what's the strategy? How are we going to use it? If you're getting smashed with a big tax bill, that's going to affect you in a negative way.
But regarding retirement and investing in general, it's maddening, some of the stuff we see. Again, here's some basic questions that if you don't know, then your personal financial planner and investment advisor probably are a lesser standard of care than you should be enjoying. Number one, when do you want to retire? How much do you need to save to retire? How much do you spend now, forecast how much does spending look later? What's the debt position? There's a lot of things you need to get really granular with, otherwise you get the people that they don't know when they can retire. They don't know how much they need. They don't know how much they need to save. My analogy has always been, it's like playing darts in a dark room. When the lights are on, it's really hard to throw a bullseye in the game of darts. When the lights are off, it's laughable. It's not going to happen. Go buy a Powerball ticket and claim you have a retirement strategy because that's what you're doing.
However, most practice owners don't know the answers to those questions. Again, that's okay. You're not trained in that. But if you're settling for somebody who will, I really like them. They're my patient, they're my neighbor. Maybe they're a relative or a college friend. They're a nice person. But if you don't know the answers to those questions, you are experiencing a substandard of care. You start to add these things up, it goes back to what? You're going to work years longer and have millions less because these things you're giving your team a pass on to not know basic questions, those three things with accounting.

Jarrod Bridgeman:
So you may yourself not know exactly when you are going to retire technically, but you should have had a conversation with your planner to be, "I would like to potentially retire by this time. What do we need to do to start implementing that plan into place?"

Casey Hiers:
I mean, if I went to... I'm actually going to the dentist today.

Jarrod Bridgeman:
Hey.

Casey Hiers:
But if I went to the dentist and I'm like, "So do I have any cavities?" "I don't know. What do you think? Your teeth look fine. You're great." "Are you sure? So my teeth look better than who, like people who have-

Jarrod Bridgeman:
Terrible teeth.

Casey Hiers:
... terrible teeth? Compared to what?" Ultimately I'm going to the dentist for them to take x-rays, get in there, and really look around to confirm either, "Hey, you need some work. This is what's going on."

Jarrod Bridgeman:
Or your morning routine is great.

Casey Hiers:
"And by not fixing it, you're going to have bone loss and there's going to be a lot of negative implications down the road." Well, in dentistry, a dentist goes, "Well, yeah, that makes sense. I don't understand why patients don't take their oral hygiene more seriously." And dentists get pissed off. Well, we get pissed off at the business side because the same people aren't asking basic questions of the people they're going to for these answers. It's the same thing. It's maddening for a dentist where they care more about their patient's oral hygiene than-

Jarrod Bridgeman:
The patient does.

Casey Hiers:
... they do. It's wild that sometimes practice owners, they need to be more concerned about it. And if they're not having massive success and if they don't see income go up and overhead go down and stress go down and the retirement picture being improved. You can look at our dozens and dozens of client testimonials, and what's the theme? "I retired five years earlier. I accelerated my retirement 8x, 9x, 10x, 12x." That's what good looks like.
Anyway, I'll get off my soapbox, but as a dentist, you would be frustrated-

Jarrod Bridgeman:
I'm glad you brought it up, though.

Casey Hiers:
... with that kind of patient. For us, when we see some of these egregious things that are massive mistakes, it's our job to educate practice owners on it, but it's incredible the pass that they'll give their current team, who, again, nice people, they like. But maybe they only work with 10 or 15 dentists, so they don't know that well.

Jarrod Bridgeman:
And they give you very little other time.

Casey Hiers:
Yeah.

Jarrod Bridgeman:
So what's a coach look like? I don't want to mention... I want to say in terms of "coach," not-

Casey Hiers:
Practice owners need to be told things that they need to hear, not what they want to hear. And if you team is telling you, "Oh, you're doing great. You're fine, you're fine." Compared to what? And we tell people what they need to hear. High achievers appreciate that. Some people can get a little sideways because their feelings get hurt, but are your feelings worth millions of dollars? You got to ask yourself that question. And then how much are these relationships worth? "Well, I like my accountant. I like my investment advisor and my personal financial planner." Okay, great. Is that relationship, are those worth $2 million each? Because over 12 to 15 years, that might be worth $5 or $6 million more dollars than you're on track for. Is that relationship really worth that?

Jarrod Bridgeman:
... I know a guy, a friend of mine, he's a decent buddy of mine, but he's a terrible employee. I met him through a previous job and he's not a great employee, but he was a good dude to hang out with.

Casey Hiers:
Yeah. There's so much left on the table in dentistry for practice owners. We see that. And again, as a dentist, you'd be like, "Wow, somebody can have an amazing smile. They just need to follow these things. And if they do these things, their smile's great." Versus they're going to have to have extractions, or.

Jarrod Bridgeman:
Well, and at the end of the day, a coach is there to help show you where things need to be fixed. Here's the play we should be doing. It's still down to the dentist at the end of the day to either listen to their coach or not listen to their coach. And if they don't listen to the coach, more than likely they're getting benched. Or in terms of a sports analogy, they're getting hurt out there.

Casey Hiers:
Phil Jackson and that coaching staff on the Bulls coached Jordan really hard. They could have just said, "Wow, he's really good. Let's just let him do what he wants." Which I guess if you use the LeBron analogy, well, LeBron has lost many, many championships because of the coaching staff were more cheerleaders. They were almost scared to confront things that needed to improve. Jordan took coaching, they coached him hard, and the results were much better. He's the greatest of all time. He is six for six in championship games. He took coaching. There was hard coaching. That's what winning looks like, versus others that they do the opposite. And again, what is left on the table for practice owners?

Jarrod Bridgeman:
He did what he was good at. He listened to his coaches. He became the greatest of all time. And the times that he didn't listen to his coaches, he became a baseball player. Do you remember that? That didn't work out so well.

Casey Hiers:
Yeah. I mean, from an offensive perspective, they ran that complicated triangle offense. Well, some players would be lazy and not want to learn the triangle offense. He realized if he did that, they would win more championships. As a dentist, some of these things to be a multi-millionaire in dentistry and retire on your terms, it's not easy, but you're going to have to put some work into it. You're going to have to, I'll just come out and say it, contact us and go through a mutual vetting process. You're either going to learn you're crushing it or you're leaving a lot on the table. But you have to put some effort into it. You have to be coachable. You have to be open to criticism. You'll even say it. The best players coaches are typically the hardest on because they have such potential. We already have people that come here making, not collecting, making take-home income $600,000, $700,000, $800,000 a year. Well, they should be at $1.2 or $1.3.
All these analogies come back to the whole thing of you don't want cheerleaders, you want coaching. You want good coaching, hard coaching. And this isn't to be confused in dentistry like your practice manager or your coach, rah rah. That's great in the practice for your staff for a period of time. But long term, you need people in your life to do these important things like, I don't know, taxes and retirement. And there needs to be honest conversations. That's how you're great. That's how you get to retire much sooner than your classmates in dental school.

Jarrod Bridgeman:
With way more money.

Casey Hiers:
With a lot more money. You don't have to decide where you want to live. You can have multiple homes. It's endless where you want to go with this.

Jarrod Bridgeman:
Casey, thank you so much for stopping in today. I appreciate it because you are also a bit of a coach to me in terms of my professional life here and my personal life. Whenever I have a question about being married or saying stupid stuff, Casey's right there to show me the path and show me the light.
Casey, for anybody else out there that has yet to see you or your team speak, we are hosting several more events throughout the year. We're going to be in three different cities in Indiana. Well, I say cities loosely. Dyer is kind of a smaller town. But we're going to a really nice restaurant there. We're going to be in Dyer, Indiana; Bloomington, Indiana; and Fort Wayne. Outside of that, we're going to be in Kansas City, Kansas on the Kansas side this time, as well as Wichita, Kansas. We're looking at a couple of places in Virginia. We're going to be in Grand Rapids.

Casey Hiers:
Nashville, Knoxville.

Jarrod Bridgeman:
Nashville, Knoxville as well. And Grand Rapids, last time we were there, we went to Bowdie's. I think we're going there again. That place was just fantastic and phenomenal. So if you're in Michigan and you want to go to Bowdie's and hear something good and learn more and have an amazing meal, that's the place to be. Fourquadrantsadvisory.com/events. We hope to see you out. Be sure to subscribe and like us and give us reviews and all that kind of good stuff.

Announcer:
Hello everyone. Welcome to The Millionaire Dentist Podcast, brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry finances and business practices to help you become the millionaire dentist you deserve to be. Please be advised, we do speak with an honest tongue and may not be safe for work.