Casey Hiers welcomes special guest Larry Guzzardo back to continue discussing when it’s best to work with a practice consultant and when it’s best to work with an all-in-one financial partner like Four Quadrants.
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:
This is Casey Hiers back at it again. And today we welcome back Larry Guzzardo for part two of when to bring in outside professionals to bolster your practice. Let's just jump in. Talk to our listeners about sort of the before and after impact practice owners can experience after working with professionals, after working with you on your side of it. And then beyond that, once they've cleaned up some of those areas and that blocking and tackling, what other areas do they potentially need to look at?
Larry Guzzardo:
Continue to evaluate their own skills. Are they delivering the services that they want to deliver at the best of their ability? And do they need any other training? Because that opens up the possibility of introducing new procedures into the office. And so again, if you can introduce a new procedure into the office and you can do more with fewer patients, then you're going to be able to grow your productivity, but not have to work a lot more hours to do that. If I'm making any sense.
Casey Hiers:
No doubt about it.
Larry Guzzardo:
The other thing I think they need to also start, if I'm answering your question is really, really honing in on their marketing. When I work with clients, what we discover is how to market their practice and what marketing is the most effective for them. But what they have to remember is I'm using the term marketing, not advertising. Advertising is like a campaign and you kind of run the campaign and when it's over you're done with it. Whereas for a professional, you market your practice because you're trying to attract people to your office so you're doing marketing on a regular basis. And so one of the things they have to be able to focus on, but when you're organized, you have time to consider new procedures and you have time to market your practice.
Casey Hiers:
No, that's rings so true. A lot of times dentists or specialists will call us about what we do and in actuality what they need is practice management and potentially some digital marketing and diving deeper. A lot of times their needs are around that. But then conversely, a lot of times people call us, thinking that they need what we do, but it's in reverse, if that makes sense. And so what I want to kind of do for our listeners, differentiate the practice management with a little bit, let's put it this way, once they clean these things up and start having more case acceptance and better scheduling and cleaning up a lot of that area, sometimes they still don't capture it in terms of income structures, retirement, best decisions, strategic direction. And so I just wanted to touch on that, the place for practice management and then making sure you capture it as well.
Larry Guzzardo:
Well, if I'm answering your question, I think one of the things that they have to look at is do they have the right percentages for their operating profit and their overhead expenses? And many of them have probably heard these percentages, but just for your listeners, I'll say your operating overhead shouldn't be any more than 60% and your operating profit should be 40%, so you have a 60/40 split. But with that, they should find that not only can they pay their bills, buy new equipment, take continuing education, upgrade their facility, they should also find that they have adequate money for their retirement and their taxes.
Larry Guzzardo:
And so when they find that they don't have enough money for taxes and retirement, of course, this is where you start to get involved in because you have to look at the personal spending. Often I'll see a practice that actually is doing what it can do. The practice is actually delivering what it can deliver for you. It may be as profitable as it can be because there's limits to how much we can charge for things and there's limits to how much a dentist can work. But let's say the spending at home is interfering with their ability to fund their retirement.
Casey Hiers:
There are so many things a practice owner has to get right and we see it, the ones that do it right, who are just excellent clinically and find people that can help them in areas that they're not versed in. Dentistry is a beautiful field that can be extremely profitable, but on the other end of that, it's like they get the bonus job of the business side and the financial side. They're great clinically, but I just talk to too many practice owners that are struggling and not just right now because of a pandemic, but they're just struggling with cashflow and income and all those areas. There's so many things they have to get right.
Casey Hiers:
Obviously we encourage folks to seek professional help in areas that you're not strong in with the personal finance or strategic direction, counting on all of those things too, the practice management. But what are some areas that a practice owner can do themselves? There's a lot of do it yourselfers, there's a lot of DIYers out there, those high achieving practice owners. They like to figure things out. What are some areas that a practice owner can do themselves that they should look into?
Larry Guzzardo:
Well, I think some of the things that they can do themselves is number one is just be real clear about their clinical philosophy so they know what to treat and what they can treat and when they shouldn't treat something, when they should refer it out. Because they get into a lot of trouble when they get started on something and then they're not able to complete it or they get a poor result. It doesn't really market your practice really, really well. I think just understanding their limits and being clear about their clinical philosophy and then teaching that to the staff so that the staff understands, this is what we do. This is what we don't do. There's no shame in what you don't do. There's a shame getting started on something that you wish you would've never started because maybe you didn't do a thorough exam.
Larry Guzzardo:
If I could give your listeners one good piece of advice that I know they can do, as soon as they're done listening to this is evaluate their examination. Are they doing the proper thorough examination the way they were probably taught in dental school? And are they doing that for every patient so that every patient is aware of all of the problems that you're seeing?
Casey Hiers:
And communicating it well. Yeah.
Larry Guzzardo:
Yeah. Well, they can learn how to communicate it well, but I find a good exam does a lot of the communicating for you. If you're examining all of your patients and taking time. All too often, I see, particularly now when things gotten tight for some offices, because I saw this during the last recession, that's one of the benefits of being around people like you and I, we were here last time. And when there was a collective pullback and patients stopped going to the dental office, dentists got nervous. And the first thing they did was throw the exam out the window because they felt like I just got to hurry up and get them in here. And I just better get more in here. And when I get them in here, I'll figure out what I'm going to do later.
Larry Guzzardo:
And I'm like, whoa Nellie, that's the wrong way to look at it. You've got to do an exam on every single patient because when you don't have the data, you don't have a diagnosis. And if there's no diagnosis, there is no treatment. You can't talk to the patient about what they need and what they want to do. I'm never surprised even in difficult times, how often patients will accept larger cases when they finally understand what's wrong with them.
Casey Hiers:
Yeah. That rings true. And it kind of circles back to what you had said earlier, but what are some of the areas that a practice owner can do themselves? I just wrote down, know your numbers. I think that's something that's really important and so many don't, but boy, if you can know your numbers, that's going to help tremendously so you can know your weaknesses.
Larry Guzzardo:
If they would just reconcile their checkbook every month, if they would just do that.
Casey Hiers:
It's incredible some of these very big successful practices and their books are behind three, four, five months. They're kind of flying blind and that's when the fruits of their labor and efforts are watered down because then they'll get hit with that tax surprise or something's not in order.
Larry Guzzardo:
Well, it's like I said earlier, Casey, we have too high of an operating overhead. I'm not complaining about it, but we have to recognize dentistry is a very expensive business to operate, takes a lot of cash. And so that's why we don't have a fudge factor. We have to look at it very, very closely because after we get hit after a month or two, that third month is going to hurt if we're not aware of it. We're not like retailers where we know their operating profit is enormous in clothing, in perfume, in consumer products. There's an enormous amount of profit. I'm saying if our expenses are 60%, I'm thrilled. In retailing, if their overhead costs are 12%, you know what I mean? They're angry. There's an enormous in food and restaurants, there's an enormous amount of operating profit. Their cost to delivering their services are very, very low. And so it hides a lot of things, a lot of inefficiencies, but that's not so true for us. It raises its ugly head really, really fast.
Casey Hiers:
One of the quotes I like to say and I'm going to get your feedback on it but when I present in front of an audience, I always like to say, "A group of folks like dentists and specialists, they pride themselves on their clinical skills so much, they're going to their study clubs. They're going to all their meetings. They're learning, they're pouring into CE a lot of them. And then when it comes to the business side of their practice, they just don't treat it with the same pride." And I say, "Start treating the business side of your practice with the same expertise that you treat the clinical." And I feel like if more folks would do that, you can be a multi-millionaire in dentistry and retire on your terms. We see it all the time. But man, it's almost feast or famine sometimes.
Larry Guzzardo:
Yeah. Oh yeah. Oh yeah. And I've seen you guys do it. Yeah, you're right about it. No I'm totally agreeing with you. And here's the key, they really don't even have to spend that much time on it. I recommend to clients, if you spend four days chairside and take just one day and I've seen it happen over and over and over again, if you just take one day to do your treatment planning and then kind of take care of your practice, it just really takes that eight hours a week. If you're committed to that eight hours a week, you can do all the things that you and I are talking about.
Larry Guzzardo:
It's not a full-time job. Dentistry is a full-time job, but running their business, paying attention to their numbers, taking care of their books, treatment planning, talking to specialists, talking to their laboratory technician. If they would just commit one day a week to do that, it would solve an enormous amount of problems because they're always trying to do it in between patients and so all they're doing now is making everybody upset because the doctor is always running behind because he's on the phone with the accountant or he's on the phone with the lab or you know what I mean? He hasn't written up the treatment plan and the patient's coming in for a consult.
Casey Hiers:
And it all comes down to the practice owner. I always say, they wear the hat of at least five C-level executives in addition to providing great dentistry. And it just all comes down on them. And what we like to say is, find people that can do it really, really well and free up your time. I've noticed that so many practice owners, when it comes to the business side of their practice, they almost feel like they're on an island alone. They talk about, they complain about their staff together at these things and kind of ha ha, they'll talking about treatment or cases or things of that nature. But when it comes to the business side, a lot of folks will tell me, they go, "I just don't really have anybody to talk to, understands my a situation."
Casey Hiers:
And there's almost a little bit of shame with it because they don't know as much as they should know about the things that our firm does or your firm does and they're trying to do it themselves and they feel bad. And I tell people, "You're not alone. Just have the awareness that you can do better and if you want to achieve more, it's out there." But I wanted to get your feedback on practice owners kind of feeling alone on an island a little bit and having a little bit of stress and shame when it comes to the things they weren't trained in in dental school.
Larry Guzzardo:
Well there's certainly not a reason to be ashamed of just because they can learn the things that they don't know. And I think if they're not involved in an educational academy, like the Dawson Academy or Pankey or Spear or Kois or anything like that, that gives them a lot of camaraderie and it gives them a lot of people that they can contact because they'll make some good contacts. I also know that in their own neighborhood, there's probably their local dental society, as well as the local dentists in the study club. And don't be afraid to be a little bit vulnerable and say, "Hey, I'm hurting in this area." Or, "I have a question in this area." Because what they're going to find is they're not alone.
Casey Hiers:
That's exactly right.
Larry Guzzardo:
That the other guys, the other women in the group, they had the exact same challenges. You're never alone here. And so get involved in those kinds of groups, but they're not alone. You can learn these things. It's not as time consuming as it sounds. Once you learn how to do it, it's very easy to track and pay attention to. And then once you stay on top of it, it kind of works on its own.
Casey Hiers:
Let's leave with this, I know a lot of the study clubs, dental societies, the groups, they're always wanting clinical expertise. And then I would imagine it's the same with you, after we present the feedback is overwhelming. Oh my goodness, we need more of this. I need to understand this better. But a lot of those groups, they want more of a clinical program, but getting practice management or sort of the business and finance side of things in terms of a presentation or education, that helps practice owners tremendously.
Larry Guzzardo:
It does, it does. This will sound like a selfless promotion, but it's like, even in your study clubs, you can invite people like you and I to come and make a presentation to teach some of these things. They could do that, but you're right. There's a heavy emphasis as there should be on the clinical skills, but they also have to remember these gentlemen and these women are running a business as well. And so they need that kind of help.
Casey Hiers:
Yep. I'll be in the back and I'll listen to whoever's presenting before me on clinical and a lot of the folks are unfortunately on their phones or computers or just sort of daydreaming and I'll have conversations with them and they go, "I know this stuff, I've been through some of these things many times." And then obviously as a presenter, you pay attention to your crowd. And when you see the looks of, they've lost color to their face, or they look like a deer in headlights, you know you're touching on things that they need to hear and their attention is a different level when it comes to that. But again, they got this bonus job of being a practice owner with payroll and that can be daunting, but Larry, I want to thank you for joining us and be well, my friend.
Larry Guzzardo:
All right, thank you so much. Bye-bye.
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.
