THE MILLIONAIRE DENTIST PODCAST

EPISODE 103: YOU MIGHT NEED TO UPGRADE YOUR EXTERNAL TEAM IF...

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EPISODE 103: YOU MIGHT NEED TO UPGRADE YOUR EXTERNAL TEAM IF...

Leaving money on the table every year? In denial that you're stuck on the hamster wheel? Casey and Jarrod present 7 reasons why you might need to upgrade your external team.

 

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EPISODE 103 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 back at The Millionaire Dentist Podcast, and studio co-host, Jarrod Bridgeman.

Jarrod Bridgeman:
Hey, good morning. How are you?

Casey Hiers:
What do you want to talk about today, pal?

Jarrod Bridgeman:
Listen, you and I were having a conversation not that long ago about how humor and things have changed over the years and some things were okay back then, may not be okay now, and we kind of stumbled upon the late '80s, early '90s, the zeitgeist of Jeff Foxworthy. And growing up in small-town Indiana like I did, some of these jokes really kind of hit home. And so...

Casey Hiers:
He did the redneck ones, right?

Jarrod Bridgeman:
Yes. If you've ever cut your grass and you found a car, you might be a redneck, and coming from a family where we have six to eight cars in our driveway, that kind of rung home. Another one I really liked is if you refer to the fifth grade as your senior year, you might be a redneck.

Casey Hiers:
You might be a redneck.

Jarrod Bridgeman:
Now those are some of the safer ones.

Casey Hiers:
I remember old Fox. You might be a redneck if... And I mean, he's probably got hundreds of those.

Jarrod Bridgeman:
Hundreds and then he had books and he did a sitcom and then went on to do, I think, If You're Smarter Than a 5th Grader.

Casey Hiers:
Oh, yeah. He did that show, but his catalyst was the You Might Be a Redneck, right?

Jarrod Bridgeman:
Yep, yep.

Casey Hiers:
And he had that goofy voice.

Jarrod Bridgeman:
And it kind of got the wheels spinning for us. What's a good way to kind of play off that. Here's a setup, here's the punchline. And so, what if we did something like, you might need to upgrade your external team if... What if we have that setup and then a punchline, but the punchline is something that's actually...

Casey Hiers:
I'm tracking with you. All right. So you might be a redneck if... instead, you might need, and we talk about this a lot, the external team being accountant, financial planner, business advisor, investment person, consultant, helping you with direction of the practice. That's the external team. You might need to upgrade your external team if... All right. Set me up. Let's roll.

Jarrod Bridgeman:
I was thinking right now, right out the gate, if your income is less than 300,000. Now, I want to say we do have a national perspective here at Four Quadrants. And so, we're talking practice owners that are collecting over 900,000. If you're making less than 300K, what's the deal there? Why aren't you? You should be...

Casey Hiers:
You might need to upgrade your external team if your income's less than $300,000.

Jarrod Bridgeman:
Exactly.

Casey Hiers:
No, and to your point, we see a lot of practices between, what, $900 and call it maybe one-three, and way too many practice owners out there are not making the income that they should.

Jarrod Bridgeman:
Well, and to us, that's kind of a basement number, because to be honest, we talk to people who... they're making five, six, $800,000 already, but they know that that's not good enough. If you are out there making over 900,000 and you're less than 300, but you know somebody else may be doing the same, you should be like, "Oh, I need to... I might have to change some things up here."

Casey Hiers:
Let me get into this. You might need to upgrade your external team if your tax management is subpar, standard of care is poor. What's that mean? We say here, your CPA should be making you money and we consistently see when we work with new folks, a lot of times there's $25,000, $30,000, $40,000 worth of basically getting taxes right for practice owners where that cash flow should be back in the practice owner's pocket. We look back two years to clean up taxes, but that's very, very common here.

Jarrod Bridgeman:
You'd say, and that's what we're usually calling a tax surprise, right?

Casey Hiers:
Yeah. You might need to upgrade your external team if you are the one that is always calling your accountant, you meet twice a year, and typically, there's a pretty significant refund or tax bill after you've already paid quarterlies that wasn't accounted for. That's kind of a long description, but if your tax management is subpar and the standard of care is pretty basic, and they're not "making you money," you might need an upgrade.

Jarrod Bridgeman:
That's right. What are you paying them?

Casey Hiers:
And a lot of times, the catalyst is what? Well, I'd call them and I owe money and I'm mad. But like I said, we get in there and structure things from a tax perspective that ultimately we quickly help find more money, find more cash flow.

Jarrod Bridgeman:
You might need to upgrade your external team if you don't know when you can retire. A lot of people, they say when we talk to them, when do you want to retire or do you know when you can retire? And they'll say they don't know. The truth of the matter is they kind of do know, which is they might be working right up to the nursing home, in their 70s, because they can't afford to retire earlier than that.

Casey Hiers:
One of the first things we like to know is when does somebody want to retire and then very soon with working with somebody, we lay that out. I mean, what's the strategy, what's the end game?

Jarrod Bridgeman:
How soon after we bring on a client do we have that game plan, a rough outline of 55, 60?

Casey Hiers:
I mean, that's a first meeting when they come here for the day, we're looking at everything and we've spent a lot of time on it, but we can show people what it looks like, different scenarios, help them to get there again proactively, but way too many folks don't know. "I don't know and I just love it and I don't know if I'll ever stop." And a small percentage, that is true. They truly love dentistry.

Jarrod Bridgeman:
Some people do.

Casey Hiers:
They may practice two days a week up until they're 75 years old.

Jarrod Bridgeman:
Some people just like to work.

Casey Hiers:
But I hear that all the time. Most folks, they can't retire. They spend too much, they haven't saved enough. They don't have a plan. They don't have a strategy. And so, they don't know, to your point, they do know, they're not able to fully retire.

Jarrod Bridgeman:
Unfortunately.

Casey Hiers:
Here's another one. We have a lot of fee for service folks. They're great. A lot of people take insurance. If your insurance situation is you're producing a whole bunch of dentistry and you're not collecting as much, we say if your insurance write-offs are over 15%, one-five annually, you're getting in the neighborhood of you might need some help. And we say, listen, if you produce a million and because of insurance, you are collecting, let's say 850, that's right there. That's 15%, but you start getting more than that...

Jarrod Bridgeman:
You're just taking money right out of your own pocket.

Casey Hiers:
It's a problem! What's the strategy? Who's helping you? Why are you working so much and not... It goes back to the income. A lot of times, people aren't making over 300 with a million dollar practice or an $800,000, $900,000 practice.

Jarrod Bridgeman:
And a lot of that has to do with insurance?

Casey Hiers:
Yeah. They're getting smoked. And their "write-offs" are 25, 30%. What do we say? It's great to give away free dentistry on your terms.

Jarrod Bridgeman:
Exactly. And I get it, there's a fear there of, oh, if I cut this, patients may no longer show up, but our experience has not shown that to be the case.

Casey Hiers:
I mean, that's just four, but taxes, income, insurance, and not knowing when you can retire.

Jarrod Bridgeman:
Wow!

Casey Hiers:
Spoiler alert, you might need to upgrade your external team, Jarrod, and those are just some basics. Let's drill down a little bit more with retirement. If you're not saving at least $100,000 for retirement or you don't have a plan to get there soon, you might need to upgrade your external team.

Jarrod Bridgeman:
And we're talking per year.

Casey Hiers:
Annually!

Jarrod Bridgeman:
Annually.

Casey Hiers:
Yeah, absolutely. All right. We have an orthodontist that saves over $800,000 just for retirement. I mean, that's... His goal was, I just don't want to be poor anymore. Well, couple years of working with the right people and having an upgraded team, all of a sudden, you're saving for retirement. Over 800.

Jarrod Bridgeman:
Make more, save more and all this can be done with an upgraded external team. I mean, at some point, someone has to make a decision. It's still up to you to make that decision to switch a team out.

Casey Hiers:
Well, we'll get into complacency and a little bit of that, but there's one word I hear a lot and it's proactive. Does that ring any bells for you?

Jarrod Bridgeman:
You know what? It does and I would say you might need to upgrade your external team if the team you currently have now is not being proactive. If you are the one that has to reach out every single time, contact your CPA, talk to your financial planner, and then you have all these people giving you their advice from their own little bubble, their own little silo, and then it's up to you to sift through that and try to make sense when nobody's working together.

Casey Hiers:
If you feel like the weight of the world's on your shoulders, you might need to upgrade your team. I mean, I hear that so often that the practice owner is the proactive one. They simply want somebody to give them some proactive advice. They want somebody to come to them for solutions. That's a big one.

Jarrod Bridgeman:
What would you say in your opinion is one of the biggest emotions that people can feel that could possibly alleviated fix...

Casey Hiers:
An indicator.

Jarrod Bridgeman:
Yes, that they need to upgrade.

Casey Hiers:
Well, the whole weight of the world on your shoulders, but ultimately, there's not enough time and I'm so stressed out. I was just talking to somebody recently and their third office has a leak. They have a kid home with COVID. I mean, she went through all the things that are going on in their life right now and it all points to that they need some help, but ultimately, dentistry isn't what you thought it was going to be and you're just stressed out, you're at capacity, you might need to upgrade your external team, somebody who can take things off your plate, somebody who can be proactive, somebody that can help free up your time. Here, we say, we want our clients practicing dentistry and enjoying their lives and hobbies.

Jarrod Bridgeman:
That's right. Have more time to do what you want to do working in the chair and have time for home, family, hobbies, whatever else you want to do.

Casey Hiers:
And these are just seven. This was kind of a fun exercise to go through it, but again, I hear this from practice owners all over the country that are frustrated of these seven. I don't know, let's say four or five. It's a sliding scale. Take your pick for what each person may resonate more, but these are common things that practice owners struggle with, but here's one. You might be in denial if you know you're leaving money on the table every year, but you're stuck on the hamster wheel and comparatively, you're doing better than most people you know so you rationalize mediocrity.

Jarrod Bridgeman:
You might be making double, triple your neighbors, but that doesn't mean you're doing well in your actual profession in terms of money.

Casey Hiers:
There's a quote, comparison is the thief of joy, but that being said, somebody has a couple Teslas and maybe they're making 280 and they're a dentist. They've got a nice house, but it can be a house of cards. They realize that they could be doing so much more. Change is hard so they don't, but there's a lot of... Being on the hamster wheel, being a little bit in denial and that is a real roadblock to, again, achieving more and mastering the business side of dentistry, maximizing your finances, but yeah...

Jarrod Bridgeman:
I feel like a lot of this ties back into complacency. That's a word, right?

Casey Hiers:
Sure. No, you're exactly right and let's end with an edgy Jeff Foxworthy one. You might be a redneck if you go to family reunions to find a date.

Jarrod Bridgeman:
I would not suggest that.

Casey Hiers:
I mean, 20 years ago, that was funny. Now, it might offend somebody, but I think it's still kind of funny, but anyway, I'm glad we went through this again. These are things practice owners need help with, and if we can help nudge them in the right direction, even better.

Jarrod Bridgeman:
That's right. Thanks, Casey.

Casey Hiers:
All righty.

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 90% of their clients. Thank you again for joining us and we'll see you next time.