Dental Unscripted

Welcome to Dental Unscripted. Where Mike Dinsio and Paula Quinn break down the practice ownership journey, one episode at a time. Starting up, buying, and running a successful dental practice. what up what up guys welcome back to another episode of dental unscripted my name is michael Dinsio one of the co-hosts of the program I also have my my partner in crime co-host Paula Quinn What's up, guys? And then we have a special guest today, a friend of mine. Yes, an actual friend, not just an acquaintance or professional in the industry. But before we get into his background and all the goodies of this program, a little housekeeping. If you're listening to the episode on dental unscripted, acquisition unscripted, or startup unscripted, Please join us. We're consolidating both podcasts into one called Dental Unscripted. It's a new brand and it just, frankly, just makes it easier for us. Why have two podcasts when you can just make one? And then we're also going to be talking about practice management stuff. So historically it's all been how to buy, how to start, all the processes that go into that. But now those of you that have been watching and listening for the last five years, you guys own now. So I guess we should probably give you some tips on how to do that. And hence why we have Paula now on the show, a veteran in the industry for thirty five plus years and a crazy amount of experience to bring to the program. So, Paula, thanks for doing this with me. OK, so let's get it going. Dave Dollar from Menlo Transitions. Man, you and I go way back, brother. We ex-B of A guys and you did some other stuff in real estate, but you're now a practice transition broker, a transition specialist. And today we're talking about how to find a practice. But thanks so much, buddy, for being on the program. Oh, my gosh. Thank you. We've talked about doing it for a long time. It's good to finally make this a reality. It's good to see you guys. Did he give you like two hour notice, Dave, or did you at least get a day? Listen, it is unscripted. I can attest to the fact that this is very unscripted. Very, very. It was thirty six hours ish. Something like that. That's pretty good. Thirty six hours. That's plenty of time. The first thing Dave said is, is this how is this how Joe Rogan does it? I'm like, I don't know, but this is how we do it. just a quick text hey um let's do this okay yeah yeah let's do it let's do it so the topic today is how to find a dental practice I feel like I'm on the phone all day long so are you dave uh with buyers looking to buy practices and they don't know really where to start and of course the easy button whoop is call a broker and we've got a broker on the horn but as a xp of a guy and um guy that's been in the market for a bajillion years you know that's not the only way to do it Paula you bought a practice and it just kind of fell on your lap and you kind of used your networking and that what absolutely I know it was through Menlo, but she bought a practice. But I didn't call the broker. She just happened to be in front of me and we had a discussion. Yes. Yes. I just had to mute Paula because Koda in the background is going crazy on her. So I'm muting you, Paula, until you figure that out. But in the meantime, let's pivot. So Dave, In your mind, what is the best way to approach the market as a buyer? Let's just softball it up and I'll ask you the question. When a buyer calls you, man, and you don't have anything to sell them because you only have the listings that you have, what do you tell these guys? What do you tell them? Yeah, it's great. I think my background in banking sort of helped me to prepare for some of that. um it's the the sort of the b of a way as mike mentioned as you mentioned like we talked about like the getting our start in at the bank that part of it was network network network network network you're only all all day every day And so when you walk into any sort of opportunity with that type of mentality, you start to realize that, man, there are a lot of people to know in the dental space in Phoenix, Arizona, in Milwaukee, Wisconsin, where I am. And lots of different people have lots of different connections. And all of a sudden you become known as somebody who finances dental practices or who is looking for a dental practice to buy. So brokers are an obvious one, obviously, right? But then it's CPAs and there's attorneys and there are your territory reps at Henry Schein or Patterson or Benco or your commercial real estate brokers. All of those folks will know of... people opportunities um that may or may not ever hit the market it may never land in my lap as a practice broker um but those are those are really fantastic opportunities and to to start with networking is always I think a really good place to start it it spreads your tentacles out as much as as humanly possible quickly Yeah, no, I couldn't I couldn't agree. And Paula found her through through networking. But I know it was a broker, but I I just you're you're one hundred percent right. I think about the time that we all spend in our day. Right. So like we all have jobs, we all do do what we're going to do. But like when you focus on some kind of thing, whether it's looking for a practice or you know, spending time with your family or whatever, like whatever that is, you know, I, I think of things like in units and, and if you're approaching to find a practice, I'm kind of breaking it up as like, like, like, like, like, like, like, like, like, like, like, like, like, like, like, like, like, uh do they don't think of networking they don't think of having conversations and going to the dental societies and just frankly looking up to a dental office and saying hey can I buy you lunch and talk because you're you're a gray hair you own a practice are you thinking about selling paula didn't we just have a client that just did this I don't know but that's how I found my first practice was doing hygiene there I just was in oh you did tipping hygiene and What did that look like? Well, I mean, he just mentioned getting old and wanting to have an associate. And I was like, oh, I have one for you. My husband. Yes. He needs a job. He just graduated dental school. We need to get him in here. Yeah. That's how it started, that one. Yeah, no, I think, well, I'm thinking of a Dr. V here in Seattle. Dr. V, Dr. V in Seattle. He just bought a dream, his dream house. And he's like I own a practice this is a true story I he owns a practice now dave and um he he like his dream house and it's out of Seattle he owns a practice downtown Seattle and he's like I would really love to own a dental practice right down the street from my house and I'm like bro you you own a practice you know that right and he's like yeah yeah it'll be fine and I'm like okay well let's figure this out so so literally he goes from door to door he does a google search he finds all of the practices in the area and he literally just like walked in or found his way in to each one of these dentists whether it was writing them a letter or just going through dental societies and having conversations so um and he literally had like four people send him financials And they were all like, hey, I'm open to it. You know what I mean? It wasn't, you know. Yeah. You know, I think like the idea of cold calling walking into an office and meeting somebody is probably like super daunting for some people. Yeah, the people listening, the dentists. they don't do that yeah right yeah but but like you know what isn't that daunting like writing a letter um changing the name on the top of the letter putting in an envelope and sending it out to the entire rate right if there's thirty doctors in the radius that you want to be in the chances are that one says yeah they'll yes we'd love to sit down with you and talk about the opportunity and now it's just your opportunity to connect with the doc see if it makes sense get a better idea of timeline if there's some um If you if you have some things in common in terms of how you think about patient care and how you think about your staff and how you think about running a business and it fits in the radius and your and your price range and stuff like that, that's a really easy. I think that's a really easy path that a lot of folks don't do. That is a separator type of thing. Yeah, no, I couldn't agree more. I think it's surprising to doctors how small kind of the dental industry is. Like when you go to dental societies or even like bankers or CPAs, it's actually pretty interesting how when I was a banker, even now as a buyer rep, you as a broker, Um, Paula, even you networking in the, in the, in the Phoenix area, if a, if a dentist called you guys, either one of you and, um, asked, Hey, do you know of any practices for sale? Dave think about before you were a broker. How our tentacles are in the industry and how many conversations we have, how many people you could have called, Dave or Paula, you could have called and said, hey, is anybody looking to sell even our existing clients? It's kind of surprising how people don't ask us that more often when we are in those roles. The industry is super small and in a good way. Yeah, it's funny. In every market... it feels like a dozen people do all the business. Maybe it's a little bigger than that in some other markets. But I think of it from a banker's standpoint. And I say, first, let's make sure we get you prequalified to buy practice. That's the first thing I want to do as a banker so that we give you something to hunt for as you go out there to the street to look for something to buy. Um, on the flip side, as a broker, that's one of the first questions I asked somebody too, like, are you pre-qualified with the bank already? Once you are now, I know that I have a qualified buyer, um, you know, look, human nature is somewhat self-serving, right? I'm going to do, I'm going to, I have an opportunity to finance this practice purchase as a banker. So I'm going to do some work to try to find, I'm going to call my own network of people that I've spent my time and career cultivating to try to find you the right practice for you to buy. Because, you know, if I do, you're probably going to finance the practice with me. Right. This this industry had like the dental industry has like the banking world in as it relates to dental practices is fantastic. It's like built products that are specifically built for practice purchases and startups and real estate and stuff like that with very little out of pocket and long term fixed rates that are fantastic, et cetera, et cetera. There are almost no other industries that have that. And so there's a robust list of bankers in each market, two or three or four or five bankers that have networks that it's a super efficient way to get your name out very, very quickly is to talk to a banker or two and let them know that you're in the market to buy and they'll do some of the work for you too. Yeah. Yeah. Because they want to do it. So if let's say that a banker refers me into it, you know, like a dental practice, they're the matchmakers. Now I don't have a broker like breaking down the practice for me. I don't get that perspective. So what do I do then if I don't know what I'm doing? Yeah. I don't have your nice little package. Yeah. No, I think that's a great question because as you get into the world of non-brokering deals, it's a perfect question because when you go down this path of like calling up the CPA or the bankers and saying, what practices do you know that are for sale? And there's no brokers on them. Then all of a sudden now you're organically doing this deal without a broker, which is extremely challenging. Yeah. It is hard. It is hard. So what would be the first step in your guys' opinion? Dave, how would you approach that for a buyer? I have my answer, but I want to hear more from you. I mean, not only is the banking world a built out network, there's an entire ecosystem of dental folks, right? CPAs are a really good place to start to me in that scenario. What you don't want is your buddy who's a CPA. You can find out from your banker or from folks you know in the industry, from you guys or any of your friends, I need a dental specific CPA. So you have a dental specific CPA. Now you've got they know what practices should sell for. They know what ad backs to add back into the cash flow as they're looking to evaluate the opportunity. So there are a bunch of doctor to doctor transactions that happen without a broker all over America every day. And it's I've said forever, like if you just as a buyer or seller surround yourself with the right people, your chances of screwing it up are really, really small. Right. Like it's the reason banks love lending money to dentists is because like they do a really good job of paying it back. And they do a really good job of paying it back because they're overwhelmingly successful. So all of that is surrounding yourself with experts who sort of understand your business. And the biggest part of understanding your business is on the front end, on the way in, am I making a good sound decision on the practice that I'm looking to buy? It's a really good place to start, I think, at least from the numbers standpoint. So we're just looking at cash flow. We're just looking like, what's a P&L, right? That's what CPAs and bankers do. They can help you dive into that P&L. Or Mike D'Anzio. Or Mike D'Anzio. We can do a lot. We can do a lot. That's just the number side of it, right? But then you guys will do a more robust analysis of all the other non-number stuff. Right. Yeah. None, you know, tax return stuff. Right. Yeah. No, I think as we kind of like as we talk about this networking thing, I'm thinking about a couple of my docs right now, literally who have approached sellers. There's no brokers involved. The benefit of a broker. We're going to pivot here to how to approach a broker. um but the benefit of a broker is having a beautiful package like paula said like it's just nice and all the information's there it's professional they're they are in the industry whether you trust them or not they're in the industry they've done a ton of transactions um I know that they're not quote unquote on your side but they've gone through this enough times where they know what you're probably looking for and um it's interesting because yeah financials is kind of where it starts and that's where the valuation begins and I will say like as you do this networking you start talking to sellers without professionals I wouldn't suggest getting too far without professionals like dave just said but you know that a seller is for real if they're willing to share their financials If it's just a chitty chat chat conversation and you're like, hey, man, I'm really thinking about buying your practice. I don't know anything about it, but like, let's just start the conversation. Like, can I see your financials? That's a very personal thing, right? Here's my tax returns, right? So if they don't share their financials, you're not really dating. Right? You're not really dating. You gotta get to that place where you're dating. And I think that it's obviously super easy with a broker because we all know that the seller wants to buy, but there is a dance. And I think once you gain that trust and rapport with that seller, potential seller, I think there's a dance. I do wanna make a comment. A lot of sellers are thinking their exit strategy and maybe they're not ready to sell But maybe they're thinking partnership and be careful. I think we all know the dangers of partnership, Paula. Like we talk about it with a lot of our clients. And does it make sense to partner in a practice? And is it big enough? Right. Why are you making that face? What are your what are your thoughts? Like why? Why not consider partnership on a smaller practice? I mean, I would say, you know, in my over thirty five year career, I've probably not only been in a partnership in dentistry, but also have helped a few dissolve in which ours evolved as well. It's like you've got to really be three steps ahead. It's it's it's almost like having a prenup. when you get married. And most people don't think about that. You're excited. It's new. You're obviously going in. You want to be a hundred percent trusting and you jump into this, but you don't think about that exit strategy. And then one day the exit strategy comes and it's quite honestly as nasty as a divorce, if not nastier, because it's a lot more, well, not always a lot more money, but it's a business. It's your baby. And you've got to you've got to figure out how to depart in a in a way where it's fair. And so the partnerships that I've seen, they just don't think ahead and it never ends up it ends up bad. It's not even the ending, it's the journey in between of who gets to make the decision, it's even decisions on technology and team members and that vision of the practice. And if you've got two different visions, or let's say you're both strong in the same, which Let's face it, a lot of dentists are. You and I, Michael, work because we have two different backgrounds and bring a lot of different things where two dentists kind of bring the same thing, right? Their skills, their vision, you know, lack of management, lots of things. I mean, team management. Um, so sometimes the weaknesses are in the same spot and the strengths are in the same spot. And man, when it, when you don't agree on it, it's a lot more challenging than when you have two different skillsets and it's kind of like, Hey, you take care of that. I'll take care of this type thing. So it's the journey. And then which ultimately ends is what prompts the end. And then the end is not good. So, I mean, I, you know, I think if you're going to do a partnership, this is way off subject. You really need to solicit somebody who's experienced and can help you think about all aspects of that. Or, you know, it's, you got two chiefs in one, in one. Not in. piece of land or yeah tribe yeah yeah yeah it's it's tough to like you know it's funny you go to I I've spoken at dental schools for years you stand in front of the room and I always I always try to get a lay of the land of who's in the room what your path to ownership is how many people want to start up from scratch and legitimately it's like one person in the back Who doesn't raise it above their head, their shoulder? And like, who wants to own them? And it's an ortho. And it's an ortho. Yeah, that's right. Who wants to own the business outright? Who wants to buy a practice outright? And it's probably twenty percent of the room or twenty five percent of the room. The overwhelming majority of the room thinks that the easiest path into ownership is partnership because it's sort of Feels like it, right? The least risky on the way in. You just walk into a full schedule. You finance it, yes, but you're making money enough to cover it. You don't have to make all the decisions. It's sort of a nicer way to come in. But in that scenario, especially like, you know, a twenty eight year old kid buys into a practice of somebody who's fifty five or sixty and they're on their way out. Like you, you're you're in different phases of your life, right? Like, yeah. you it's very difficult to remain aligned on how you're gonna run the business or treat the staff or patient care or invest in the company and continue to grow like it's and so that makes it more difficult and more challenge along the way one side might feel they're being pulled too far or too fast and the other one is not being pulled fast enough. But then it goes to like, what do we, how do we, how do we fix it? How do we get in front of it? I do think it is a lot like a marriage with less, there's less love on the front end, right? The marriage, you at least want to stay together for the kids or for whatever. Whereas, unfortunately, it comes down to or fortunately or unfortunately, when in business, it comes down to money often. And and I do think it's more socially acceptable by an industry standard for when you walk into a partnership to have. laid out a partnership agreement for what happens if scenarios and because everybody's thinking clearly on the front end. Nobody's upset. No one's thinking about divorce when you're in love, right? That's right. We're just excited to work together. And yeah, we need to work through these scenarios because if they happen, of course, this isn't going to happen to us until it happens, right? I think it's but I think it's like one of those things that is maybe uncomfortable for a minute, but it is. But it gives you comfort for a lifetime, a career to have that stuff laid out on the front end. So everybody walks into it with eyes wide open. Yeah, I think that's I think that's really interesting because like most of the listeners here, they're they're they're imagining ownership to be maybe so hard, so complex. They want ownership. They want like that older doc mentor and that makes sense, right? But the more deals that I do, you guys do, you all know that after three months, it's The goodwill is almost already devalued. Even without partnership, Michael, we've dealt with it so much where the seller stays on as an associate and that doesn't even work. That works, like Michael said, for about three months. And then the buyer, the young guy is like, how do I get him out of here? It's like, why do I commit to this? So, yeah, it's just... it's so scary. And I think that's, you know, not to brag on next level, but I think it's where when we do buyer rep, it's so good when we stay with them after, because I think that first three to six months is really scary. But once you get through that, you feel so much more confident that it's not going to fall apart. So I think it's the same when a A seller associate or a partnership happens as you think you need this. And then you realize, like, wait, this is my vision. I've been waiting on this forever. Well, maybe a whole year to three, but forever in their eyes. And they're ready to now make it their own. And then you can't because you've got. you've got this conflicting, like you said, Dave vision, or, you know, it's one going out, one coming in. They, they want to spend how much on just technology alone. And, and, and that's right. And older guys like, wait a minute, we got bloody. I've been doing dentist paper for like, I've been dropping implants with panels, you know, I've been dropping implants with panos. We're fine. We don't need a CBCT. No, like I, I like, like, let's pull this back to like finding a practice, but I think this is super relevant. If you're thinking about buying a practice that Dave and I were just talking offline, like a lot of deals are happening outside brokers with partnerships. And it's just because doctors think that's the easiest way to find a practice of partnership. I'm actually glad we went here organically because this is such a relevant topic to a non broker deal. But let's bring it back to to brokering now. So so obviously, brokering is kind of the easy button. It's the it's the go to way. And Dave, you have been involved in this industry for so long. You're selling practices today. And my question is, is like, what is the best way to approach a broker? Like, you know, mentally, what kind of questions are they going to be asked? Should they talk to other brokers? Let's break it down like the brokering scene, the other fifty percent of the equation. Yeah, I would say details matter, right? Like you want to be succinct about, you want to have thought through some things before you get on the call, right? Before, reaching out to a broker is a very simple thing, right? interested in meeting new by every broker in America is interested in meeting new buyers. No question about it. Right. Because we either have listings in that area or we will market to that area because we have interested buyers. Right. It's all interconnected. But what you want to be is is Definitive about what you're looking for. Right. So where do I want to be? Oh, I want to be anywhere within an hour of Phoenix. That's tricky. Right. That's a lot of stuff. right like um so understanding your a your your skill set what type of practice you're looking for your production capability um your ability to get financed so one of the first questions a broker will ask is if you're working with a bank yet And if you are, are you pre-approved? And yes, should be the answer. Even if you don't have a banker yet and you want suggestions on who to work with in a particular market, a broker will be really good with that stuff, too, to make sure that you start working with the right two or three banks. Sometimes you find that you work with a bank who doesn't understand dental, you walk into your current local bank, right? They might tell you, they might not have a dental specific product. They might tell you that they'll put you in the SBA bucket or we'll do a conventional, but we need somebody to co-sign with you or we need you to come up with a down payment. All of that stuff shouldn't be part of the equation. Those are outlier scenarios. You should likely expect to have a hundred percent financing, expect to be able to buy ARs or get working capital on top of the hundred percent financing. That should be the expectation walking in. So but but but bankers will or brokers will want to know that you're a serious buyer. Right. And you're serious about wanting a particular area and that you're qualified or pre-qualified to buy a practice that might cost eight hundred thousand dollars. So you're not running down the path with somebody. Oh, my gosh, it didn't work. You didn't get financed. Oh, my gosh. We never we never cross that bridge. You want you know, you want to make sure if if a seller is excited, if you meet a seller, they're excited about working together, about transitioning this thing, that this business that they've built over the course of their entire career and handing over the keys. that it's somebody who can afford it and who can get financed and do it. And before they get all excited about it, you you want to make sure that you've checked off as many of those boxes as you can on the broker side to make sure that you're doing right by your client and giving that person maybe more attention than you would somebody else who hasn't gone through the paces of doing that stuff on the front end. I will say I will say that like I will say it's very rare that someone can't get financed, right? I mean, there's definitely some people that can't for sure. But if I lined up ten people, how many of those can't get financed? It's probably four, maybe three, you know? So it's pretty- Oh, I think it's lower than that. It's probably lower. And so I love what you said because banking is for sure, or lending is for sure something that makes sense that you would be interested in. I'm thinking about like, like the fit, right? Like to your point, Dave, like if they don't come prepared with what they want and what matters, then, Like, what are we doing here? Why are we even having a conversation? Right. So like like Paul and I are always talking to doctors just like just yesterday is like, OK, so what kind of dentist are you? Like, what don't you like doing? How much money do you need to make? The doctor talked about yesterday, Paula. I asked him how much money did they need to make? And she said two hundred fifty thousand had to. And I'm like, that's a lot of money. You need two fifty. Well, no, I actually don't need any. My husband makes plenty of money. We could be break even for two years. I'm like, well, you need two fifty or you need nothing. What's the answer here? Right. Because and so like to that point, like get your get your apples straight, because if I call a broker. And I tell Dave, hey, I need a hundred grand minimum. What do you got? Dave's like, well, I got ten practices. Or if someone calls you, Dave, and says, well, I need two hundred fifty. You'd be like, well, I have like one. Yeah. Yeah. Right. It's a perfect example. Yeah. I'll give you another example. Like I have a, I have a, um, a doc who called me and said, Hey, here's what we need. Like, um, I need, my husband's a dentist. I'm a dentist. We need the ability to grow in the same building. We want to work in the same building and we want to, we want to work at the same time. So I don't want like four operatories where I'm there Tuesdays and Thursdays and he's there Mondays and Wednesdays. And so like that, um, while that limits the, the pool of practices they're going to be able to look at. Yeah. So, so be it. Right. We're not wasting anyone's time. Right. That's right. Why go in? I mean, I know your mind can change obviously, but that's why I think there's a difference between need and want. And I, and I love that you said that because it's like, if you have to have this, there might be one practice. Let's not waste anyone's time. Let's wait until that practice is available. Yeah. If there's thirty, OK, we can go look at all thirty. But yeah, it's a I mean, it's not I mean, I know we're all used to I don't want to say wasting our time. We're all used to. Like. you know, going out and doing things and it doesn't come to a conclusion and that's okay. That's part of our business. But if, if we can limit that, not only just for us, but for them, I mean, like, why do that? Or for the seller who, who wants to sell their house, their, their baby. And you're just retiring out of there. And they're providing, like you said, Michael, their intimate tax returns and, and, We have to sneak in after hours. So the team doesn't. I mean, it's just it's a lot that goes into it. So let's be real. I got I had a client, one of our clients follow where we're on the front end. I hated the deal. The attorney hated the deal. The CPA hated the deal. I valued it. Wasn't even close to what they're asking for. There's no broker involved, of course. And so the price was like up here and it should have been down here. If a broker was involved, the price probably would have been down here closer to my number. And everybody was setting this really hard expectation with the buyer. Like, no one really likes this thing. Why are you want it? The buyer's like, I like it for this, this, this. All right, let's move forward. So we get into contract and we do the big due diligence and we practice analysis and all the things. And I still hate it. Everybody hates it. The attorney hates it. And then the buyer literally bounced for all the reasons we said in the very beginning. And it was a really big fun exercise for everyone. You know what I mean? And so there's gonna be things that break a deal up of deal breakers, things that you didn't know on the front end. But I think the goal is to what? Dave, isn't that the value of a broker is having all the right information in the freaking beginning. Yes. Yeah. Yeah. Yeah. Level like one of the one of the things that a broker will do is level set the expectation for the seller. Right. There are lots of sellers out there who believe that their practice is worth x that's building the same way right their blood sweat and tears went in it right yeah maybe you should see the upside of if I if I did this and I'm only here two days a week and if I was here five days a week we would we would well you weren't double it would double the revenue well maybe right like maybe we would maybe we can go back to what we did in if somebody did the blood sweat and tears to get it there but yeah should they pay you for it today probably not yeah so From that standpoint, I agree. I think it's level setting the expectation first for the seller. And then it's Part of anybody's job really, we mentioned it a couple of times, this industry is a really small one. Your reputation follows you wherever you go. If you do things the right way and you take care of people the right way, people will know that and they'll also know if you don't. So the job of the broker is also to ask the seller the tough questions about like, well, why was there this dip in your revenue and what'd you do to fix it? And why is your staff, why do you only have one person who's been working for you for more than six months? And and why is this person being paid this much money when they when the market says they should be making this much money? Right. And and some of that. And then what other and then what else we run into the books that might look different, that that might look different for a buyer post-sale, right? All of that stuff should be clearly illuminated on the in the marketing packet or the prospectus, wherever you want to call it, so that when and when a buyer looks at it, they can trust the information that they're seeing and be it makes for a more educated decision without having to do a whole bunch of digging and investigative work to figure it out. So I think that's a big part of it. I do want to circle back to a point you made a minute ago, Mike, though. With your client, it is about trusting your team of people that you work with, too. If you surround yourself with experts, that's one thing. If you listen to them, it's a whole other thing. If everybody's telling you that this is the wrong thing, and you're just going to go rogue and do it anyway... you're kind of asking for what happens there, right? Like, so it is like, it always comes down to sort of trust in the people that you work with and it's why you want to experience people. But that's only half of the equation. The other half of the equation is you need to really listen to them and take what, because everybody's looking out for your best interest, really. Like I said, it's hard to screw it up. yeah unless you sometimes try um to run through stop signs which is not a terrible it's not a great idea is it we like to take the hard the hard route all the time that's what we do It makes for an exciting life, but it's not the easiest way for sure. Um, that's right. I, uh, I think that's, I think that's perfect. Um, you know, um, we had a question actually come in and I think it's a good one, but it's, it's a bit loaded. Um, so what do dentists need to do in order to prepare their, their production or, or, or show their production, which is a great question and how to gauge the amount we can finance. So, um, It's actually, I'll take a little bit of this. You guys can narrow in on, Paula, once you take the production, how to get that. I'll take the, Dave and I can take the amount of finance, but I will say that what you produce is becoming more and more important to the lenders. David, do you remember when we were bankers? I mean, it was important, but it seems like it's way more important these days. I'm not a banker anymore, a lender. But today it's like it matters. Production really matters. And it can absolutely affect whether the underwriter is comfortable lending. And so, Paula, before we get to your how do you how do you get the production reports and all that stuff? David, do you do you agree with that is about how much they can get financed and all that? Yeah, I think it's important to explain the mechanics of how the banking side of it works as it relates to that stuff. Right. So if very simple example, if you have if you buy a million dollar practice and hygiene is it does a million dollars in revenue and hygiene is thirty percent of that, which is sort of industry standard right now, you have seven hundred thousand dollars of doctor production. If you produce seven hundred thousand dollars or more, you've hit the threshold for what a bank needs in order for you to buy that particular practice. If you produced in the last twelve months five hundred thousand, they need to account for the gap. And the gap in that is two hundred thousand dollars in production. And you have to. And in that scenario, you need to pay an associate on two hundred thousand dollars worth of production. And at thirty percent, that's sixty K. Right. Is that math right? Seems right. Yeah, that sounds right. So that needs to get so that gets added back to the cash flow as an expense for you to buy that practice. oftentimes that could be the difference between them saying yes to an approval and them saying no to an approval because it's an expense that wouldn't be there for somebody with higher production numbers right so that that part of it is really really important as you go um when you're buying a solo practice and and the margins are not generally enormous that it can absorb that type of payment to an associate doctor for a one doc practice which a million dollar practice is probably you know still a one doc practice it's probably not one and a half yet so yeah yeah I think it's I think it's really really important it's sometimes it's difficult and paula can get into some of the The details of that, but like, you know, if you've switched jobs and stuff like that, if you had a down year, if you were off for maternity leave during that, during the last twelve months, all of that is matters. All of that is taken into consideration. Even even fee schedules. David, I love that you're talking about the volume part. So like the dollars, the amount. And like this practice does this amount. And can the buyer do that amount? And what's the how are we making that shore up? How's that level? But then there's another factor to it. And it's like the actual clinical part of it. So like like we're talking, Dave, you and I are ex-bankers. We're talking about dollars. Right. You can do a million bucks. Oh, they do a million bucks. Cool. We're good. But then there's another factor to it, and it's probably where Paula's head's at with the production. What kind of production is it? Like, right, Paula? Like, are you picking up on putting down there? Like, as far as the, yeah. Yep. Well, if I was an associate at a position right now, I mean, number one, you should be paying attention to your production. It's pretty simple. You're getting paid on net production, most likely your collection. So you should already have some type of spreadsheet where you're tracking this stuff. But, you know, to Michael's point, I would probably also track production. your crowns, like you can run reports either in the software or you can start manually tracking these today. But it's really like, did I do, you know, twenty crowns per month? Did I did fifteen? Because if you're like a Medicaid office or or a DHMO where you're you're collecting, you know, very little to none on some of these procedures, you know, and you're going to pull your production report, it's not going to reflect that. So, you know, I would be I would be tracking, you know, if you're in, if you're doing clear aligners, if you're a doc that does Botox, if you're a doc that does you know, crown and bridge and all that stuff. I would be tracking my, my big, big rock procedures as well. I mean, you could track it all. They're easy to run reports on this. It's, you know, procedure by production. It shows the quantity, it shows the amount you made and then know, know the fee, the average fee schedule or the UCR, because if, you know, if you're a PPO office versus a fee for service office, you're going to have, you know, your production is going to look a lot greater. So I would probably know a little bit of that too. Like if, if this was not a Medicaid patient, this normally would have averaged out at about nine hundred dollars for these crowns. So you can show that and then just show the percent of the office was fifty percent Medicaid or DHMO, where obviously I didn't have the ability to produce five thousand a day. But had this been a normal ppo office this is you know my quantity so I don't know if that's what they were looking for but that's what I would be doing yeah and I'm also thinking about that doc we're talking to right now in phoenix where the production or the collections like one point four and like dave and I were saying just make sure you can do one point four but is it the kind of work you can do right We were doing more from the other aspect, but absolutely. It's one thing that we do for you is look at those codes and say, hey, this office was fifty percent clear aligners. Can you even do clear aligners nowadays? We can make that happen. You know, whatever on fours, whatever that might be. You know, you want to make sure that you align with the procedures in the office. There's so much that goes into it. But yeah, I know. I know. That's another thing on the broker side, too, that like helps to. we can you can get you'll have a better idea of what sort of procedures are being done on the way in like the top with yeah yeah yeah that's a you want to find that stuff out as quickly as you can if you if you're not if you can't do any ortho and they're doing some Invisalign that and they're doing and that makes up twenty five percent of the business that's Dave, we got solutions for all of that, though. I mean, listen, it's just more proof that they need you guys. That's it. Well, you said it, not me, but I couldn't agree more. No, no. I think the big picture is as we kind of close down on final thoughts here, there's just so much to going into buying a practice. You need a team. But being that the highlights that I took away and then I'll pass it to you guys to close it down is like, get creative, network, have conversations, shake hands, kiss babies, do all of this stuff. And you're gonna find yourself having better conversations with sellers that maybe have brokers or don't. And then if there is a broker practice, be prepared for specific questions. Those were my big takeaways. dave your thoughts and then we'll go to paula yeah I I think it's I I think you hit it right like finding yourself a team matters um I've said that a couple times now um once you're sure that this is the path you want right like how I want I'm ready to be an owner and a lot of times people ask you like when you know it's time, you'll just know. There's not a better answer to me. You just wake up and you're tired of working for somebody else or you're just ready for the new challenge or whatever it is. Once you decide in your head that you're ready, you got to go. Get yourself surrounded with people. Put your name out there. Confidentiality matters, right? And you want to make sure that folks know that. You certainly don't want, to it being blasted all over the place that your employer sees or whatever and now you find yourself needing to find something tomorrow as opposed to being able to take your time and and doing the transition the right way but um once you say that you want to do it just just don't look back go surround yourself with really good people and listen to what they have to say and you'll find something that makes sense and and it'll end the way it's supposed to end which is successful transition because they overwhelmingly are. Yeah. Yeah. Paula. I don't really have a takeaway. I mean, I have lots of takeaways from today, but what I would also say just being a practice owner myself is no practice is going to be perfect. The chairs aren't going to be perfect. The equipment's not going to be perfect. Maybe the paint on the walls. I think cashflow and procedure is the most important thing in location. So if it's in a location you like, it's putting off the cash you need and You can do majority of the dentistry within reason. Everything else can be, can be fixed. And by the way, Michael taught me this when I bought mine, patients are already coming in. So even if the chairs from the nineteen seventies, that eight hundred, nine hundred and twelve hundred patient base is visiting that office. So they already know that it looks like crap and they're OK with it like that. So you're not this isn't a you know, if you want to do a startup, if you want to build a house from scratch, then go that route. If you're buying existing, that kitchen may not be set up the exact way you want it. um but it's going to do fine and you can eventually change those things if it really matters but I think once you get in there you'll find like I don't really need to fix this it's not broke it's fine it works the team loves it or functions with it the patients function with it I just want to do that because that was a tip I had a hard time with I had nineteen seventy chairs and I was like oh no no new patients are going to want to come in this place and I, they came in just fine. Um, it didn't affect, it didn't affect that. So yeah, that's what I wanted to throw out there. I got, we covered so much partnership, how to find a practice, how to look at a practice, how to get lending. Like we literally covered episodes. So there you go, folks. Uh, listen, rewind, listen again, rewind, take what you want from it. But it was a pleasure, Dave. It's been too long. We got to catch up sometime. Great to meet you, Dave. You too, Paula. Thank you so much, guys. I sure appreciate the opportunity. All right, guys. Well, another episode of Dental Unscripted. Let's shut it down. Tune into our next episode, which is probably next week, and be looking for some more stuff on how to buy, start, and run a practice. Take care, guys. Bye. Let us know how you like the show. Rate us on Apple and Spotify. Subscribe and follow for more.