In Part 3 of 3, Casey and Jarrod dive into more detail about what areas our complimentary assessment covers. They talk about the final two options available: Mergers & Acquisitions, and Transitions.
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 the Millionaire Dentist podcast in studio with co-host Jarrod Bridgeman.
Jarrod Bridgeman:
Hey, good afternoon. How are you?
Casey Hiers:
Full of tryptophan.
Jarrod Bridgeman:
Yeah?
Casey Hiers:
Trying to get off that turkey lull that happened recently.
Jarrod Bridgeman:
Oh, yeah.
Casey Hiers:
What a nice time though.
Jarrod Bridgeman:
Spent a lot of time with your family?
Casey Hiers:
Yeah, yeah, no doubt. Got to spend time with friends and family and it was good. Nice time to refresh and reflect and all of those things.
Jarrod Bridgeman:
I made my first-ever pie by hand. I did a kind of pie. I did a cranberry tart. Ended up being really good. I was very happy. It wasn't the prettiest whatever. I'm not great at making the dough look super great, but...
Casey Hiers:
Can you just add sugar to make it taste awesome?
Jarrod Bridgeman:
It's a lot of sugar and a lot of butter.
Casey Hiers:
Thank you. People are complimenting how good different things were. I'm like, "Well, yeah, add more of this butter and sugar." It's not hard.
Jarrod Bridgeman:
That's the secret.
Casey Hiers:
Yeah. Well, deep-fried Turkey, a little smoked turkey, it was delicious.
Jarrod Bridgeman:
All right, so in the last two podcasts, we've covered different parts of our complimentary assessment, our financial assessment that we're doing for practice owners out there. And we just have a few topics left I thought we could cover that today.
Casey Hiers:
Which ones are they?
Jarrod Bridgeman:
I know we've got mergers and acquisitions, and then the second one would be transitions.
Casey Hiers:
Gotcha. All right.
Jarrod Bridgeman:
Yeah. And you are the go-to expert with a lot of things. Hey, you go out there and you speak and people love hearing you speak.
Casey Hiers:
Through experience, yes. I've gained some insights, we'll say.
Jarrod Bridgeman:
So let's just start with the first one. Let's talk about mergers and acquisitions.
Casey Hiers:
Yeah, no. What specifically would you like to talk about?
Jarrod Bridgeman:
For those of you, I mean, it's very obvious what it is, but when we look at the numbers and when we do these kind of things, what benefit do we bring to the table when someone's looking to buy another practice?
Casey Hiers:
Yeah, I just had a conversation this morning about that actually. Some big decisions being made and when I simply ask a handful of fairly straightforward questions, so many practice owners are unsure. They're unsure of their numbers, they're unsure of data, they're unsure of really the true direction they want to go, and they just go down a path and the next thing you know they're neck-deep in it.
Jarrod Bridgeman:
Well, and a lot of that could be, too, they get so hopped up emotionally, because it's exciting. It's an exciting time to the thought of branching out and building your empire.
Casey Hiers:
Well, we've said this line before, but there's a lot of cheerleaders for practice owners out there who want to go buy land, build a practice, and anytime you're borrowing a lot of money from a financial institution, and then you need a whole bunch of other companies to build out something and nothing but cheerleaders. And so as a practice owner, you're out again feeling a little bit alone, you kind of wonder, "Is this a good idea?" So where we get involved is, anytime you're merging practices or acquiring practices, number one, we make sure it's the right timing, it's structured in the right way, that, oh, I don't know, about 89 different data points and really important items get covered, discussed, analyzed and advised on in a way-
Jarrod Bridgeman:
We really base our opinions on the actual numbers, the hard facts.
Casey Hiers:
Yeah, yeah. No, I mean, listen, hey, it's a beautiful piece of land. It's in a good part of town. There's a nice parking lot, and we're going to build out a nice building.
Jarrod Bridgeman:
Right.
Casey Hiers:
That's great. I mean, that's what it should be. That should be a starting point for you. But so often that's where it ends, and I'll just sum it up like this. Done the right way it can propel practice owners and their whole entire situations. Done the wrong way it sets them back and they almost just are in this perpetual debt. What's the next big thing that I can do to try to get where I want to go?
Jarrod Bridgeman:
So if you're in the middle of thinking about doing this, and maybe you already have a place in mind or a practice in mind to purchase, signing up for this free assessment, this financial assessment, might be a good idea to get some free advice on that very important move.
Casey Hiers:
Well, one of the biggest things I think with acquisitions, too, we've seen, and I think we had a podcast a while back on it, but sometimes people want to grow. They want more patients and they want to talk about marketing. And there's a lot of times where you can acquire a practice from, let's just say, an older dentist or specialist, and ultimately you're basically buying their patients. But there's some strategy behind that as well. It can be tied into, I want to maybe drop some insurances, but I also want some good patients acquiring a practice like that. I think that that's something that could be looked at. But, yeah, there's a lot of nerdy data things that need to be addressed anytime there's a merger or an acquisition that unfortunately they're not. And so then what you have is somebody that basically had an idea, had a thought, did a little research, all of a sudden had a whole bunch of people really excited for them to borrow a whole bunch of money and do these things, and they didn't actually look at all of the implications to the practice owner's finances, to their long-term picture, to their short-term picture, what it's going to do to overhead and cash flow and debt position. If you're a shop that's taking all the insurances in the world and you're going to go build another practice with more overhead to continue to take a haircut, maybe that is a good decision. There's a lot of times it's a terrible decision and nobody's out there to tell you that. Again, we tell our clients what they need to hear, not what they want to hear. This assessment, obviously we wouldn't spend a hundred hours going through a merger and acquisition, all the data points that our clients get, but we can certainly from a high level give some general direction on-
Jarrod Bridgeman:
Exactly.
Casey Hiers:
... this makes sense. Watch out for this. These three things may be of concern. There's certainly a lot of advice out there, but-
Jarrod Bridgeman:
Have we ever straight-up told somebody, "No. Not a good idea."
Casey Hiers:
Oh, all the time. Our clients that come to us and say, "Hey, I want to buy this practice," we're like, "Great, we'll get all the information, our team looks at it and it would be a bad idea. It would be negative across the board." And then the next practice, it's, "Yeah, that's the one. We're going to help this happen." But it's just like anything, emotion versus data and having trusted advisors out there telling you what the information says, not cheerleading you to just spend more money.
Jarrod Bridgeman:
And at the end of the day, you're still your own boss, but why would you shoot down expert financial advice like that? I wouldn't.
Casey Hiers:
And then, well, then transitions. And that's important on both ends, the younger and the older. But again, 80% of associates don't become partners. Similar principles trying to transition into a practice or out of a practice, there's a lot of things that need to go into it. A lot of questions that need to be answered. A lot of times they're not. It's just an emotional decision.
Jarrod Bridgeman:
I feel like one of the things that you might come away from in getting an assessment done on transitions may be, "Ah, you might want to wait a few more years."
Casey Hiers:
Yes and no. Unfortunately, a lot of dentists and specialists that want to retire start to realize they don't have what they should to retire, and that stinks. But part of that is understanding that a little bit more, how long you need to practice. But those are conversations that the younger dentists when they go in to buy, is it a walk away? Is it six months? It is a year? Is it 18 months? That needs to be really clearly defined. But from a transition perspective, yeah, being the older dentist, can I retire? Can I transition? Do I need to practice a couple of days a week? What's that look like? From the younger person, making sure it's structured the right way, the right timing. So many details go into it. But yeah, those are big questions.
I just talked to somebody and there's 50/50 partners. Well, they started out as sole owner, then they have a 50/50 partner. They have an associate they like and they're discussing bringing them on. And I go, "Okay, but as the OG of the group, how do you feel having 33.3% of the vote?" And they go, "Oh. Well, I don't like that at all." It's easy to simply think about one thing, having a singular focus on whatever that thing is. And this, it would be the bump in cash flow that you're going to get from bringing on a partner. What you might not be thinking about is, the 18 other things that are lurking around the corner. Again, that's why our firm-
Jarrod Bridgeman:
Maybe those two other guys want to do something that you don't.
Casey Hiers:
Exactly.
Jarrod Bridgeman:
They outvote you. Yeah.
Casey Hiers:
Well, no, that's exactly right. I mean, there's so many decisions that need to be made or could be made, and now you've brought a lot of cooks in the kitchen if you will.
Jarrod Bridgeman:
And who knows? You might find out, partway through the process, you didn't like this person as much as you thought you would.
Casey Hiers:
Yeah, no, that's-
Jarrod Bridgeman:
Even if everything, in the beginning, went well.
Casey Hiers:
Yeah. I mean that's why, ideally, you are looking and thinking about these things years and years out. And the associate, you are learning about them during a period of time, and right at the beginning, you say, "The goal is for you to buy in. Maybe it isn't, maybe it is, but time serve production. Hey, after two years we're going to revisit this." Maybe it's 18 months, but have those things in place ahead of time so that you know what the roadmap is so that there's no surprises. If one of you is like, "I don't want to buy in. I want to have my own practice." Oh, well, that's probably good to know sooner than later. From the older person, "I don't want my patients working with you because you don't practice dentistry the way I like to practice dentistry." So a lot of that goes into it, but ultimately having enough to retire and transition out, what's that structure look like? And as a younger dentist, some of these people are overpaying for heavily insurance-riddled practices.
Jarrod Bridgeman:
Yep. That's-
Casey Hiers:
Know what you're getting into.
Jarrod Bridgeman:
And they have a lot less experience in the business side of things potentially to not catch it right away.
Casey Hiers:
Yeah, yeah. Year three, they go, "What the heck did I buy? I'm exhausted producing a ton of dentistry. I'm not my..."
Jarrod Bridgeman:
Got yourself a lemon?
Casey Hiers:
Maybe. Yeah.
Jarrod Bridgeman:
Yeah.
Casey Hiers:
These two options for the assessment, Jarrod, they're bigger buckets. These are once in a career, twice-in-a-career things. Unfortunately, they're as intricate or more intricate than any of the other things. But, man, so much time is wasted. So much stress and worry, it's wasted because these aren't handled well. And so, again, if you're going through these things, why wouldn't you want to have some complimentary advice that may start you on a path for success instead of a path of potentially making a huge mistake? Hey, there's a lot of people out there that do this the right way and do it correctly. Some of them are just massive producers and winning is a great deodorant. Massive production is a great deodorant, but as we've seen the last couple of years, it's been harder to produce for a variety of reasons, hygienist being one of them. And so just being able to produce your way through mistakes on the business side of dentistry isn't good enough anymore.
Jarrod Bridgeman:
If you the listener are interested in getting a free financial assessment for your practice, please visit fourquadrantsadvisory.com/assessment. It's a great place to start. You can schedule a call with Casey himself. Isn't that nice? You get to talk to him personally, not just to hear this famous voice on the podcast there. Velvety smooth is what they say. Also, we will be in Charlotte, North Carolina next week. If you are in the area, go to our website at our events page and you can go and hang out with Casey at Topgolf and learn more about the business side of dentistry. Thanks.
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.
