THE MILLIONAIRE DENTIST PODCAST

EPISODE 36 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 back. This is Casey Hiers. I'm joined once again in studio with Jason Ewers. Jason, have you ever decided to do something yourself? A project, a task, and then looking back, you probably should have had help from the experts?

Jason Ewers:
Oh, do I? Long story short. I'll shorten it up for just podcast timing. I consider myself somewhat of a handy guy. I put my floors in, redid my kitchen. I do a lot of stuff around the house, so I thought I could replace my rear French doors. Well, I then did a little YouTubing, did a little Googling, tried to figure out if I could do it on my own. I thought I could do it. I thought I could knock it out in one day. Went and bought the sliding door that goes in. Supposedly, one comes out, one goes back in. Well, it's not necessarily that easy. Spent all day doing this. Nighttime started creeping in, Casey. Door's not in yet. Storm's moving in.

Casey Hiers:
Wait, you got a hole in the back of your house where your door's supposed to go, and the weather was less than sunny.

Jason Ewers:
Weather was less than sunny and running out of daylight quick. I called my neighbor who's pretty handy himself. He's done some stuff at his house. He came over and he's like that's above his pay grade. I was at a loss at this point in time. I'm getting that evil stare from the better half looking at me like, "Are we going to live the night unsafe with a no back door security system?" We ended up doing that, that way. The next day, got on the horn the following day, and reached out to a professional who knew exactly what to do. Within probably about 24 hours, I had a beautiful new door put in with beautiful trim and it was well worth the expense.

Casey Hiers:
Yeah. We call it what? DIYers?

Jason Ewers:
DIYers, yeah.

Casey Hiers:
Do it yourself. Even though you're handy, you may have bit off a little more than you could chew on that one.

Jason Ewers:
Yeah, absolutely.

Casey Hiers:
DIYing it on certain things can be good.

Jason Ewers:
Here's the other good thing about that. When you have professionals do it, they do it right, and it lasts a long time.

Casey Hiers:
That seems to be very true. And so, the title of our podcast today is When Doing It Yourself Can Cost You Millions. Jason, our examples are small potatoes. You had a hole in the back of your house where the door was supposed to be. There was some stress and some pressure. As a practice owner, we hear and see all too often, they try to master the business side of their practice themselves. They're doing their QuickBooks, they're trying to lower overhead, they're trying come up with compensation structures for their staff, for their associates. "Should I build, should I grow?" Dozens and dozens of things, and they do it themselves. It costs practice owners millions of dollars.

Casey Hiers:
That's what we're going to talk about today. Our perspective is helping practice owners nationwide. And with those folks, we know the before and the after picture financially, but we also hear from practice owners when we present continuing education. One of the biggest areas we see people do this DIYing is a practice-owning dentist or spouse trying to do it themselves. Instead of trying to find the expert to help them, they attempt to do that.

Jason Ewers:
Let me stop you there.

Casey Hiers:
Sure.

Jason Ewers:
Just because we both have spoken to prospects in the past, dentists and specialists, whose spouse is doing the business side of the practice. The tension and the animosity between the two is... There's not even a word to describe that. I don't think they even realize it until we get them on the phone and we start talking about it. And then, it is, I don't want to say "comical," but...

Casey Hiers:
Oh, I can say it's comical. Listen, some spouses don't know where the office is. Others help a little bit. Others are in there and they work together. For some, that works really well.

Jason Ewers:
Yeah, absolutely. Yes.

Casey Hiers:
However, you're right. I've been on a phone call where practice owner and spouse are arguing because they don't have these conversations around the practice or the finances or the reality of it. They try to piecemeal it together themselves and they're having cashflow frustrations, ultimately. And they get into huge arguments. There's a whole bunch of tension. We felt it, you're right. And so, there's not only a financial gain to having practice owners find experts to help them and not do it yourself, but boy, the psychological and relationship between potentially practice owner and spouse can really change.

Jason Ewers:
There are situations like that and then there's the complete opposite to where there's an amazing working relationship between the spouse and the practicing dentist. I don't want to make people think that way. We've had that experience before.

Casey Hiers:
It exists. Sure, it exists. No, there's no doubt about it. And listen, as a practice owner it comes down to what are some things that you might DIY? I heard somebody the other day, they listened to a podcast and they have a feeling and they're making major strategic decisions within their practice because of that. You can learn a lot from a podcast. Hopefully, our listeners do, but that doesn't necessarily mean you go and implement something you hear on a podcast. But one strategic direction, if you have about moving, add an associate, buying some technology, doing some CE, the role of insurance in your practice, overhead, QuickBooks, investing, retirement planning, income structures, on and on. Listen, if people are trying to do it themselves, they're ultimately not going to master it.

Casey Hiers:
And again, in this situation as a practice owner, millions of dollars are on the table. But if you could find somebody like you and I did to do the job, to do it well, and for it to last better, our examples are small potatoes. As a practice owner, with the right people and the right proactive advice leading to the best profitability, that's where you want to go.

Jason Ewers:
Oh yeah. Speaking to those who facilitate, how many practice owners have we talked to, Casey, who have a friend, a neighbor, a fraternity brother, a relative who is their financial planner, their accountant, their investment guru, or even their business advisor?

Casey Hiers:
A ton of them.

Jason Ewers:
Absolutely.

Casey Hiers:
We hear that all the time. And listen, we get it. Most people utilize and work with folks that they know and like and trust and respect and things of that nature. Here's the rub. If you are a practice owner, you're talking about seven or eight digits in the course of your career. Most of the time, these people you've mentioned, they're good people. They're not dental specific. Having 15 dentists that they work with, doesn't make them dental specific. And what happens is they all are working in a vacuum individually and they're not getting the most out of the practice. And unfortunately, there's a price that's paid, sometimes, when a practice owner utilizes these people who aren't dental-specific or aren't comprehensive. And you're right, we see it all the time.

Jason Ewers:
I was always told, "Don't work with family or friends." My dad always told me that and it's something that always stuck in my head. Don't ever work with family or friends. It makes it too difficult.

Casey Hiers:
When significant money's involved, I think there's a lot of wisdom that your dad had there. And why does it matter? Well, here's why. It's simple data. Here are things we've come across that when people try to do it themselves or piecemeal it together with a nice team, but maybe an average team, their shareholder loans on the books that they're not aware of. I would say about 35% of the people we talked to, once we start looking under the hood at their data, they have a shareholder loan on the books. So what happens is, if you don't have a proactive team doing quarterly tax estimates, looking at everything monthly, so on and so forth, at the end of the year, that could be a nasty tax bill. CPA doesn't want to give their client a nasty tax bill so they can create a shareholder loan as long as there's equity in the practice, which there typically is.

Casey Hiers:
The problem is the practice owners aren't aware of it. It's kicking the can down the road. You have $150,000 shareholder loan on the books. If there's not a plan to get it off the books, there's some negative IRS implications. If you go to sell your practice, that's a surprise you don't want. And so these shareholder loans are very prevalent, except the practice owners aren't aware of them. Just from our experience, again, I'd say 35% of folks have them on the books and have no idea. It's above board, but the problem is they keep getting delayed, extended, and they stay on. That is not a position you want to be in. But the DIYing, again, tax surprises. How about bringing on an associate just on a hope and a prayer? And then they're gone within 18 months and all that happened was some ill will and less pay.

Casey Hiers:
There's a whole bunch of areas, but everybody needs to be pulling in the same direction. And listen, talk about the opposite of a DIYer. At our firm, we have a $5,000 rule. If you're going to make a $5,000 decision, why not have your external CFO dental-specific team there to help you? Think about how many $5,000 decisions a practice owner makes in a year, Jason, and think about how many of those may be wrong, or may be a mistake. Where having a team using data to help guide you eliminates so many issues.

Jason Ewers:
What about even having the confidence of knowing that decision? You may make the right decision, but just having a second set of eyes on it to say, "Yeah, that's a great idea."

Casey Hiers:
Well, and listen, a second set of eyes on "I want to redo my lobby" is a lot different than a second set of eyes on "I'm looking at land to build a new practice." Some of those big decisions that many practice owners face, you're exactly right. How much better to have a team comprehensively who knows your situation, give you the right answers instead of just DIYing it on a hope and a prayer?

Jason Ewers:
So I'm going to guess the question here is why do we see so many dentists and specialists trying to do it themselves?

Casey Hiers:
They just don't know any different.

Jason Ewers:
Yeah. I think that really is what it kind of comes down to. There's some factors that go into that as well. They don't know what it's costing them to begin with. We just had a podcast about how do we stack up against your peers. You just don't know, you just don't know. Pride has a big factor in this. You guys are all high overachievers in all areas of your life, so why not try running a business or the finance side of your practice?

Casey Hiers:
Yeah. I think that's a good point. A lot of practice owners, they've been very good at most everything they've done and so it just makes sense that they can figure out being a business owner, being a practice owner, and all that goes into that. And there's going to be sacrifice somewhere. You're either going to sacrifice time away from your family or your hobbies, or you're going to sacrifice high overhead, low income, lack of retirement strategies, and you're going to be in a situation where dentistry is not what you think it was going to be. It's odd because you're really good at so many other things, especially dentistry. Why can't you be good at DIYing this? And I would just say an incredibly low percentage can do it. I've probably seen one person out of thousands who was able to sort of do that. But again, some people only need three hours of sleep at night.

Casey Hiers:
Yeah, it can cost you millions. And let's wrap this up. It comes down to this, do you want to be the practice owner who has poured your blood, sweat, and tears for two, three, four decades into a practice and be looking at a $4 million retirement? Or do you want to be somebody who's maximized it along the way and you're looking at an eight, 10, $12 million retirement? And that really is the difference. When we say working with a dental-specific team who masters these things, it's a seven or eight-digit decision. And it's hard piecemealing it with your friends or your neighbors or your relatives, doing it yourself, or finding the best team to help you maximize it. If you look at those three options, from our perspective, there's one clear answer that leads to millions of dollars more.

Casey Hiers:
We'll end it with this question, do you want to be the DIYer? Do you want to be that DIY champion or do you want to achieve the most you can in the most efficient manner that you can?

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 Dentists 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.