The Dental Foundation: Building Your Practice from the Ground Up

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:
Casey, I was going to ask how you are, but I can kind of hear it in your voice a little bit, are you under the weather today?

Casey Hiers:
I don't feel 100%. I thought it was just allergies, it's a little more.

Jarrod Bridgeman:
Yeah, yeah.

Casey Hiers:
I got some sleep, overdosing on some supplements.

Jarrod Bridgeman:
Right, right.

Casey Hiers:
Fingers crossed. I hate being sick.

Jarrod Bridgeman:
It's the worst.

Casey Hiers:
It's a sign of weakness.

Jarrod Bridgeman:
It is a sign, your body is just pathetic.

Casey Hiers:
I limped in here weak today, my apologies.

Jarrod Bridgeman:
So you're saying it's up to me to carry the podcast?

Casey Hiers:
What's different?

Jarrod Bridgeman:
I was going to say, that was going to be a rough shot, but thank you for the compliment on that one. Casey, you and I were chatting this morning, trying to come up with what are we going to talk about today, what's something that an experienced dentist who's maybe buying a practice for somebody, or even a newer, younger dentist who's starting their own practice, it comes down to things like making sure you have a great foundation, and so that spun out into how we compare that to a house, a relationship-

Casey Hiers:
A podcast on construction?

Jarrod Bridgeman:
Yes.

Casey Hiers:
Let's talk about construction today.

Jarrod Bridgeman:
So this is going to be basically about basement finishings, siding, all that stuff.

Casey Hiers:
A lot of the things we talk about, as you know, it's conversations I have with practice owners, trends, patterns, things of that nature. Most of what we talk about is, to our listeners, what your peers share and deal with and things like that, and ultimately hear it from more than one, and there's different seasons of that. But just [inaudible 00:01:52] you've got to make sure the foundation's good, and we've all heard of that, the house built on the sand versus built on the rock, good foundation. You can build a McMansion, and if the foundation's no good-

Jarrod Bridgeman:
Right, it'll just topple down. The same-

Casey Hiers:
Maybe if it doesn't crumble, more realistically, the... Who's the person that comes and checks your house before you sell it?

Jarrod Bridgeman:
Yeah.

Casey Hiers:
What's that called?

Jarrod Bridgeman:
It's a home inspector.

Casey Hiers:
A home inspector.

Jarrod Bridgeman:
Early in my career, one of the jobs I had as a marketing creative director type of role was I worked with a company that dealt with dozens and dozens and dozens of home inspection companies around the country. So hearing some of the horror stories that come out of people either trying to sell the home or someone who may have bought a lemon and didn't get the home inspected at the front-end of the purchase, and later seeing, oh, the slab was cracked under here and now the basement's flooding or whatever the case may be.

Casey Hiers:
Regardless of how many stories, how high you build it, how big you build it, if the foundation is flawed, compromised, there's going to be problems, there's no way around it. You can't put lipstick on a house if the foundation is not solid.

Jarrod Bridgeman:
No, but I hear you can put one on a pig, and that's... No, and I 100% agree, because let's say you bought a house, it was a smaller home to begin with maybe, and then you start having some children and you're wanting to maybe have an addition or build a garage, whatever the case may be, if your foundation is not great, it's just going to cause even bigger significant issues, and you've already ponied up the money for that new part to begin with.

Casey Hiers:
Yeah. Before we jump in, I also thought about a relationship analogy, and I've known some of these people, the relationship may not have the best foundation, but they're like, "Here's a great idea, let's get a dog, let's get a dog together." That's more maybe pre-marriage when you're dating.

Jarrod Bridgeman:
Right. Or we knew somebody who used to work here who moved in with his girlfriend after three weeks of dating.

Casey Hiers:
Yeah. Let's move in, let's cohabitate, let's blend our finances, let's have a kid, a kid's going to fix it all or-

Jarrod Bridgeman:
That does fix it, yeah.

Casey Hiers:
... let's buy a lake house, beach house, let's do all these things, all these ideas, they can be good, but if the foundation is bad, you are causing a lot more heartache with making these decisions.
So let's parallel this with dentistry, the foundation, and these are large buckets that I'm going to share, practice cashflow, that's a big bucket, but if practice cashflow is a source of stress, that's a foundational problem. Overhead percentage, these are all tied together, that's a foundational situation. Insurance adjustments, if applicable, if you accept insurance and your insurance adjustments, you probably don't know what they are, but if you do and they're over 15%, God forbid, 20%s or 30%s, which is common, that's a foundational problem. Taxes, tax management, spending money to correct bad foundational tax management, your tax situation needs to be mastered. How about the personal financial plan? A lot of these things I mentioned were in the practice, but that needs to be blended with the personal financial plan. What's the debt strategy, what's the retirement strategy, are those foundational things in place and in your income? It makes me sad when I talk to people producing an incredible amount of dentistry and they're either not paying themselves or they're just taking a very little bit home.

Jarrod Bridgeman:
They're taking a fraction of what they should be doing.

Casey Hiers:
Those are just seven or eight foundational things in a practice that need to be at least planned for, strategized for, and hopefully you're succeeding, excelling, flourishing in those areas, always looking to improve, but at least you have a foundation to build upon.

Jarrod Bridgeman:
Because if you're already hurting on, say, the cashflow part of it in the practice, some docs might think, well, if I bring in an associate, if I hire someone to come in, I'll be able to maybe not double my output, but increase it, that means more money, right?

Casey Hiers:
Great segue. So let's say, a lot of times, it's, well, my income stinks, I don't like my personal finances, so I'm going to do some of these ideas. So if the foundation is good, the things I'm going to list out and talk about, those can be excellent strategies in a practice. What we see all too often is somebody's foundation isn't good, they start throwing stuff against the wall, hoping something sticks, they start doing these things, but with the wrong foundation, it's like adding multiple levels to your home, building up, and the foundation is bad.
And I know this analogy may be getting tiresome, but it's very important, because what are some good ideas if the foundation is good that a practice owner can do? Most of the time, it's things people do to try to put a Band-Aid on, well, the foundation stinks, so now I'm going to renovate my current practice, I'm going to make it look real pretty, it's going to be good for my feelings, for the team, people are going to want to come here. Listen, I went to a dentist in Southern California and I could see the Pacific Ocean from his waiting room. He wasn't a great dentist, I learned that years later. That was a bad foundation with a great view.

Jarrod Bridgeman:
If you're looking to bring in more patients and they're already not coming in, renovating is not going to... They're not going to magically see it.

Casey Hiers:
If you build it, they will come. That's kind of a joke, but too many people do that. They're just going to go a million dollars in debt to renovate, maybe that's high, but renovating, adding a second location, we've talked about that a lot, adding an associate, those come together.

Jarrod Bridgeman:
Well, and you said with adding a second location, that's almost comparable to buying that lake house or buying that beach house, where people are already frustrated, I know I am, with just my household chores and things I've got to take care of now, whether it's the yard, whether it's making sure my deck is weather-stained each year on time and things like that, then you're adding a second location, that you also, unless you've got someone who can take care of it for you.

Casey Hiers:
Well, our marriage is a little rocky, so I think this lake house is really going to bring us together. Like you just said, it's going to add a ton of more work-

Jarrod Bridgeman:
And stress.

Casey Hiers:
... and debt, stress, all those things. It's a Band-Aid. Now, again, if you're crushing it, foundation's good, that can be fun. How about purchasing a piece of equipment that's six digits?

Jarrod Bridgeman:
Yeah, but that's going to save on taxes, right?

Casey Hiers:
That goes back, spending money is typically a bad tax strategy. But again, when the foundation of your tax management situation or your CPA isn't great, they come up with some of these gimmicks.

Jarrod Bridgeman:
And also, if you're buying that equipment, you better make sure you are able to use it, you're trained on it.

Casey Hiers:
Are you trained on it? What's the timing of it? What's the planning of it?

Jarrod Bridgeman:
Or you actually make money with it.

Casey Hiers:
Yeah, because if your insurance adjustments are a mess and you're not getting the right patients per month, again, if foundationally there's structural issues, these things are going to set you back. We just mentioned it, spending money to reduce tax liability, those are five things that a lot of practice owners use as Band-Aids, they try use those to fix something that is foundationally flawed.

Jarrod Bridgeman:
And they might feel good in that first month of whatever it was.

Casey Hiers:
At least they're trying something. A lot of times, what people are trying ends up hurting them, but in their minds, hey, I'm trying something, there's some hope. We talk about hopium, that's a drug a lot of practice owners are taking.

Jarrod Bridgeman:
We talked about how bad it is, it's the worst drug of all.

Casey Hiers:
It's not good.

Jarrod Bridgeman:
It's not great,

Casey Hiers:
Not great.

Jarrod Bridgeman:
It feels good though.

Casey Hiers:
You have to prioritize things, and if you prioritize the foundation of your practice and be honest with yourself and get those things in a good spot, it doesn't have to be pristine or perfect, but get them in a good spot where there's a strategy behind all of them.

Jarrod Bridgeman:
Because they say the grass is always greener in the other yard, but work on making your grass green.

Casey Hiers:
Yeah, no, I've talked to people that, on the surface, everything looks great, and on the foundation, it's terrible. Multiple locations, multiple associates, I've got a boat, I've got three houses, they're movers and shakers.

Jarrod Bridgeman:
It feels so unwieldy.

Casey Hiers:
Again, if the foundation's good, these things are great. The idea here is that we help get practice owners' foundations rock solid, and then talk about all these other things that can be good. But my cautionary message today is make sure your foundation's good in your practice before trying all these other things. And so often, the source of the pain, the source of the problem, must be addressed before these other ideas are going to actually impact you in a positive way.

Jarrod Bridgeman:
Exactly. Casey, with all these things that we're talking about, which these are the things you do bring up and mention in a different way at our events that we host across the country, sometimes you're out there, sometimes one of your really amazing speakers of your team are out there working with everybody. So we've got events coming up, we're going to be in Savannah, Georgia, we're going to be in Athens, Georgia, we're going to be in Boca Raton. For these folks that maybe they think they've already got some of this tackled, what are some benefits that someone who's doing really well, but they've plateaued, what can they expect to see or hear at one of our events that's going to be... This isn't just a one-on-one level class.

Casey Hiers:
We cover a lot of ground. Some people maybe they are broken, they know they're broken, they're coming for quick fix. There's practice owners that come to our events who are in general dentistry, already making $400,000, $500,000, $600,000 in general dentistry, but they know that it should be better, they know there's challenges. For those that hear that and go, "Holy cow, I'm making half that or a third of that," well, it emphasizes the point even more, you need to get this right. But our subject matter touches a lot of different people in a lot of different situations, and that's why we always say we're not going to hand you a magic wand to fix everything on Monday, but we're going to cover a lot of ground where you're at least going to have the awareness. I was sitting in church Sunday and they were saying, "Love your enemy," and it's something that is not hard to understand, it's very hard to do.

Jarrod Bridgeman:
Yeah, correct.

Casey Hiers:
A lot of the things we talk about, it's not hard to understand, but how is change going to take place? What's that look like? What's the path? What are the options? We get into a little bit of that.

Jarrod Bridgeman:
Yeah, because lot of people, myself included, might be too timid or too afraid to even start the changing process, because I'm not quite sure what the outcome will be.

Casey Hiers:
Very well put. Change is hard, and then the what if game, and we've talked about this internally. But in our [inaudible 00:11:39] process, we bear out, here's what each strategy, here's how it's going to affect you, your practice, your cashflow, your overhead, your insurance, all those things. We're able to really forecast that out and show people, and they go, "Wow, we've never been shown anything like this before." That could be a 35-year-old, a 50-year-old, I've had a 65-year-old tell me that.

Jarrod Bridgeman:
And then, once that's all starting to happen, once it's all cooking and things are getting better in your practice, you're making more money at home, you've got better cash and all these things-

Casey Hiers:
Then let's look to the others.

Jarrod Bridgeman:
Yep. And then, you've got also all the indirect benefits of less stress at home, maybe more family time, maybe you and your wife can't take that vacation or whatever the case may be. It's not just about money in the bank, there's a lot of other fringe benefits that come with it.

Casey Hiers:
No doubt. You've got to make sure the bones are good. I think there's a song about it, if the bones are good, if the foundation's good, it can be a happy life. And unfortunately, if they're not, these challenges, they're not going to just magically go away, and putting a mandate on it's not going to solve it.

Jarrod Bridgeman:
That's right. But if you had a magic wand, that'd probably be a pretty penny, right? Casey, thank you so much for stopping by. Folks, please visit our website, fourquadrantsadvisory.com. We have an events tab. If you want to look at pictures of me and Casey, you can click on meet the team and you can see how handsome Casey is and how I am.

Casey Hiers:
You're sweet.

Jarrod Bridgeman:
Thank you so much, Casey.

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.