In this episode, Casey and Jarrod are joined by Toby Hampp and John Malone. They discuss the 3 top things that can add stress to the life of a dentist. Listen to find out ways that you can alleviate these issues.
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, back at it at the Millionaire Dentist podcast. Co-host, Jarrod Bridgeman, joins us, and in-studio we have Toby and John. Today we're going to talk about the top three stressors for dentists.
Jarrod Bridgeman:
All right. Thanks, Casey. Guys, work today we're going to talk about the top three most common stressors that dentists face in their practice. Are the stressors anything different than a tongue stressor the doctor uses, right?
Toby Hampp:
Is that what it's called?
John Malone:
A depressor.
Jarrod Bridgeman:
Oh, Depressor! That's I'm always so sad when I'm there. Guys so-
John Malone:
Ba-da-Bing!
Jarrod Bridgeman:
Right off the bat, what's one of the top three?
Toby Hampp:
So a lot of these probably relate to cash flow. And so I think one that comes to mind is retirement savings. Now, we're just coming out of a very large disruption to the dental world and to the world at large. And I think with that, some people kind of probably got off track a little bit in their savings for retirement. So, that date may waiver. That end date, when you're going to hang up the handpiece, may not be the same day that you had anticipated and planned for.
John Malone:
Yeah, and I can speak on that because I've had a lot of dentists that were friends of mine, personal friends of mine, that during the pandemic they hung their coats up. They sold their practices. They got out of it. Things were changing too much. Specifically, I had one gentleman that I've known for a decade or two, and he's a good friend of mine, and he had a very, very, successful practice, and the pandemic kind of broke him a little bit. But he was 52 years old and he had a plan in place early and he was able to sell his practice, hang up his coat and retire on his own terms. He's always been able to live comfortably and he is going to continue to live comfortably. The moral of the story is he took the correct steps in order to put a plan in place to retire on his own terms, and he was able to do that. But I know a lot of people, a lot of dentists and practice owners, during the pandemic weren't as prepared as he was. And they were forced to retire or they were forced to sell. And they're not in the same place that he is.
Jarrod Bridgeman:
And when they sold, they probably didn't get what they thought they were going to get.
John Malone::
Yeah. It's not a seller's market for dental office a second time.
Toby Hampp:
At that time, it's a diminished return. But it underlines the idea of having a plan in place. A plan isn't just a plan for the best, it's a plan for what if. So if something happens, you're sidelined for a reason... Recently I spoke to a doctor that was showing me pictures of his motorcycle trip. And I asked, 'Hey, are you riding motorcycles? You're an oral surgeon. You at all afraid of wrecking your hands?' And he turned white. Because that's what his wife said, 'I don't want you driving motorcycle trips with your buddies because you have to provide for your family.'
John Malone:
But that's what he loves doing. And as long as he has a plan in place, I'm sure his wife will get off his back because he can do whatever as long as the plans in place.
Jarrod Bridgeman:
It sounds like the whole cash flow and the retirement situation, that's not only a stress that they face in their practice. That also can very negatively or positively affect their personal life.
John Malone:
So yes, that brings up another stressor when it doesn't only affect the business side of the practice, but also the personal side. So one of the other large stressors that we come across is paycheck to paycheck living and inefficient income structuring. So what that means is, a practice owner will skip paychecks every once in a while just to kind of get ahead, pay their bills, pay their staff. And they always think they'll make it up into a larger distribution at the end of the year. Surprise, it's not going to happen. I'm trying to think of a polite way to say it, but it's not going to happen. And it affects the personal side of their lives because their family, maybe they don't know what's coming in, what's going out, stress, fighting. Go to work and you're stressed out about the paychecks there and cash flow, and then you go home and got the same thing. So, I mean, who would have like to live that way?
Toby Hampp:
When you're a practice owner, often in your professional life, you're treated just based on your professional life alone. Yet when you go home you don't eliminate those three letters at the end of your name. So you're a dentist, you're a practice owner, yet, the other part of your life, which takes up probably the most advantageous part of your day, is your home life. And that's why we advocate to have that plan in place that covers both. All too often we speak to dentists, to practice owners, who have CPAs, financial planners who aren't communicating. Yet, you're one person. So we should treat you your business life and your personal life kind of as one goal. Those goals don't change. You don't have different goals for your business and your life. If you are planning to go on vacation, it's not you're going on an office vacation. You're planning on going on a family vacation. That's what we talk about.
Jarrod Bridgeman:
I find it very interesting, coming from somebody who did not know very much about the dental world, that you naturally assume they're making good money, which they tend to, but they're still living paycheck to paycheck. I remember doing that in college. I remember doing that right out of college. My cousin is an RN and kind of was making good money right away. I was used to, 'Well, I guess I'm going to have to skip, not a meal, but maybe I'll have Ramen this week.' But it's very surprising-
Toby Hampp:
New show sponsor, Top Ramen.
Jarrod Bridgeman:
Top Ramen.
Jarrod Bridgeman:
But that's something I found very surprising, that the number of dentists that are doing this.
John Malone:
Well, it makes sense because when they went through dental school, they weren't trained to be business owners. They didn't get any education or if they did, it was one, two, or three credit hours out of four years. And it makes sense just because they are awesome at what they do. The clinical end of things, it's an art, it's a beauty. But then there's a whole other side of their practice, the business side. It's kind of like that bear, it's hard to tackle and there has to be a good balance and you have to have a team in place that can help you balance it, and not have you be the mediator between Joe Schmo down the street and Joe Schmo Schmo down the street.
Jarrod Bridgeman:
As you said, Toby, they're not speaking to each other. So one's giving you some advice, one's giving you different advice and both may be valid from what they understand, but it's up to you to then make the decisions.
Toby Hampp:
Right. When you have limited information at your disposal or a limited view... If I'm going to advise you on taxes and tax preparation, I may not be also cognizant of cash flow or cognizant of your retirement savings. I'm purely driven towards your tax bill. And sometimes those are at cross purposes. So having that comprehensive approach or having a team that understands that that gives you a leg up. Also what we see when we talk to a lot of these dentists- John and I talked to a lot of dentists- when they talk passionately it's about cases, it's about the practice of dentistry. They hang their head on this great crown prep that they did that was on a certain tooth, number 30, and they talk about it in those terms. They're not talking to us about, 'Oh, I saved 7%.'. That's not their-
Jarrod Bridgeman:
That's not their passion.
Toby Hampp:
Exactly. You got into dentistry to perform good dentistry.
John Malone:
Exactly. And going back to what you said, Jarrod, 'They should be the mediator between the communication.' They shouldn't be. So moral of the story is, you need to have a team that communicates regularly, monthly, and there's no mediating between the two. And the second part of that is balancing your business and your personal. They're not as separate as you think, especially when it comes to the financial end of your life. So they need to be all tied together.
Jarrod Bridgeman:
So one of the things I often hear from you guys and having interviewed a few of our clients as well, is that pre them coming on board with us, cash flow seem to be an issue. Would that be another one of the top three stressors?
Toby Hampp:
I would say it is. What do you think, John?
John Malone:
Yeah, If not the biggest stressor. If you don't have much cash flow, then you can't do much of anything. And trust me, that's something that keeps people up at night.
Toby Hampp:
And I think the variation, that big swing in cash flow, that's what can cause stress. If you're consistent and you're making certain marks, you understand what that picture might look like-
Jarrod Bridgeman:
And can plan for-
Toby Hampp:
Correct. But as things shift around and...a lot of times the dirty secret is that staff gets paid well. The supply bill gets paid. The light bill-
John Malone:
If you don't pay those things you can't do your own thing-
Toby Hampp:
You can't practice dentistry. But at the end of that, some dentists go without. They're not on a consistent W2. They're not taking distributions consistently. So, that cash flow affects their personal income.
John Malone:
Exactly. And inevitably, we always get asked, how much is enough? Where should my cash flow be? Everybody's situation is different. So we honestly can't answer that completely. You need to have a team in place that can give you the correct benchmarks to get you to where you need to go and be happy, home and business-wise.
Jarrod Bridgeman:
So out of these three stressors, we've got the retirement issues, we've got cash flow and we've got the third one-
John Malone:
Paycheck to paycheck-
Jarrod Bridgeman:
Paycheck to paycheck. Thank you. What out of those three, would you say cash flow would be the one that would deserve the most focus? Because it sounds like that would more directly affect the other two.
John Malone:
Cash is king.
Jarrod Bridgeman:
Cash is king.
John Malone:
Cash is always king and it is directly affected paycheck to paycheck living, inefficient income structuring. You need cash to live paycheck to paycheck living, even if you don't have any. And retirement savings, that's part of retirement. You need cash for that. So I would say that that's top of mind because it's all related in some way, shape or fashion.
Toby Hampp:
I think everything is different for every practice owner. It really amounts to what's most important for you as an individual. Some practice owners may have a wealthy uncle that's going to leave them 50 million dollars.
Jarrod Bridgeman:
Ooo, that sounds nice!
Toby Hampp:
That sounds great. They also may have a spouse that's a dermatologist and their reality maybe is a little different. That cashflow question, while to our ears may sound like that's what is the driving force, there may be some other driving force. There's probably a few dozen that we can hit, but these are the three of the most common that we come up against and come across.
Jarrod Bridgeman:
So if you have all of these stressors- plus more as you said, these are three of the top ones, there's possibly hundreds, if not thousands, of stressors out there- to me, if you let these things bog you down, I can see people burning out quickly. And, 'Well, shoot, I have all this debt. I already have my practice. Here I am, and we might be stuck in a rut.'
John Malone:
Yeah, 100%. Physical and mentally burning out is not fun for anybody. It's not healthy. It all has to relate back to the business side of your practice because you're not owning a practice, you're not becoming a practice owner if you can't do clinical dentistry. That's a given, you own a practice for that. So it all comes back to the business side of practices. It even goes down to patients coming and going and leaving, insurance and stuff like that. It will boil back to the business side of your practice. You need to correctly navigate the business side to bring more patients in, to retain the patients. There's just all the stresses that you can think of, at least the majority of them I can think of off the top of my head, all have to relate to the business side, not the clinical side of a practice.
Jarrod Bridgeman:
Right. Because if you're letting all this bog you down and you're not doing something to fix it, you're feeling down, you're feeling negative, you're feeling alone, your staff will pick up on that. Not only will your staff, even if you think you're not showing these signs, people can read emotions like that. So then your staff's bothered and then your patients pick up on your staff not being happy, as well as possibly you.
Toby Hampp:
It happens all the time. And again, I think, to wrap this up in a bow, if we're looking at these stressors, it more than underlines the fact that you need to have a plan in place, you need to have a team in place that can help you with that plan and to take into account both your personal and your practice-life and lifestyle.
John Malone:
And to go on Toby's coattails a little bit with that, you need to treat the business side of your practice with the same expertise as you treat the clinical.
Jarrod Bridgeman:
Well John, Toby, thanks so much for coming in today and I can't wait to hear more from you.
John Malone:
Thank you.
Announcer:
That's all the time we have today. Thank you to our guests for their insight and for sharing some really great information. And thank you to you, the listener, for tuning in. The Millionaire Dentist podcast is brought to you by Four Quadrants Advisory. To see if they might be a good fit for you and your practice, go on over to FourQuadrantsAdvisory.com and see why year after year they retain over 95% of their clients. Thank you again for joining us and we'll see you next time.
