The Dental Amigos are back for Season 4, where they’ll dig into important aspects of buying a practice, plus they’ll be tipping off listeners to some common mistakes that they’ve seen time and time again in their many collective years of assisting buyers with dental practice acquisitions.

With Rob’s experience as a dental-focused attorney and Paul’s experience as a dentist and dental broker, they’ll be providing listeners with holistic advice on how to select the best practice to purchase. In this first episode of the season, Rob and Paul dive right into what to look for and what to avoid when buying a dental practice. They caution listeners on potential red flags to spot early on in a deal, discuss space concerns, review ideal price ranges and offer their own anecdotal advice on finding the right fit when choosing a practice. See below for a full transcription of the episode.

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Bumper  0:00  

Welcome to The Dental Amigos podcast with Dr. Paul Goodman and attorney Rob Montgomery, taking you behind the scenes of the dental business world. All the things you didn't learn in dental school, but wish you had. Rob is not a dentist and Paul is not a lawyer. But since Rob is a lawyer, we need to tell you that this podcast is for informational purposes only and shouldn't be considered legal advice. Listening to this podcast does not and will not create an attorney client relationship. As is always the case, you should formally consult with legal counsel before proceeding with any legal matter. Learn more about the dental amigos at www.thedentalamigos.com. And now here are The Dental Amigos:

Rob Montgomery  0:39  

I'm Rob Montgomery and welcome to another episode of The Dental Amigos podcast where I'm joined as always by the head nacho himself, Dr. Paul Goodman.

Paul Goodman  0:47  

Great to be talking Rob.

Rob Montgomery  0:48  

It's good to see you, Paul is always here in the studio. And we have an exciting show. Today we are into our season four. Yeah. The first episode of season four. So it's like the fall, everybody has been waiting all summer for it to come back out. I remember those days.

Paul Goodman  1:05  

Exactly. You can just binge watch 20 episodes in 21 hours.

Rob Montgomery  1:10  

Alright, you know, and it's like the weather was still warm. It was still kind of light out. Wait, you know, and yeah, look, looking forward to your favorite show coming back on? Yeah, exactly. It's like I feel like a dinosaur. Right. It was different -- a throwback. Throwback, right. Both of those things are cooler, I think. Or at least we'll tell each other that. Yeah. So in this, in this season, we are going to talk about buying a practice the biggest decision of your dental career, yeah, it will be and possibly your life. Paul: I agree. Rob: And so today's episode, the first episode of the season, we're going to kind of explore a somewhat broad topic of what to look for, and what to avoid. And so try to help people -- give them some ideas as to what, what types of things are important, what may not be important. And I suspect that over the course of this discussion, we're also going to end up talking about the importance of not doing things that other people think is the right way to do it. Right. So be your own dental practice purchaser, for sure. And just basically share our experience with the audience of types of things that we see people do right and wrong and ways to try to make the process maybe a little less stressful,

Paul Goodman  2:31  

For sure. Yeah, I mean, you gotta treatment plan your own happiness, I always say , we talked about treatment plans in dentistry, but your own career happiness. And this is really the biggest part of your entire treatment plan. You're making a decision that you're going to be attached to --stuck with is a negative term, right. Attached to for decades, most of the time. Yeah. And I think it's really important to kind of start off with what are you looking for? What are you not looking for? I don't know if I mentioned this Robert, Patrick Winston "How to Speak" is just one of my favorite content pieces, he talks to MIT students about how to find a job has like 13 million YouTube views.

Rob Montgomery  3:08  

Yeah, actually you've you've turned me on.

Paul Goodman  3:09  

It's always telling people, you're building a fence around your idea. What is your idea? What is your idea not? And I think sometimes, since we don't get a lot of this talk in dental school, they don't even know what types of practices really out there.

Rob Montgomery  3:21  

Yeah, yeah. Oh, for sure. And I think then in as I said, at the outset, I think it's important to that's what type of practice are you looking for? Yeah, you know, and a lot of times people will ask us, just generally not just in this subject, but others, like, what's the right way to do this? It's like, Well, it all depends, you know, like, just because you like a house, Paul, right? Doesn't mean that Jeff is gonna like that same house, right. And nobody, everybody has different tastes, there's different things that are important, which is cool. And that's, that's why I think pretty much you could walk in just about any dental practice in the country, and no two are identical. Right? And I think although there might be some DSOs that are kind of rubber stamped, that kind of the same, right? But, you know, it's important for you to, I think, not fall into the sort of the trap of the perfect what is deemed to be perfection on social media or by your peers. And you know, sometimes there's more to it than revenue or production or EBITA

Paul Goodman  4:24  

or total size physically in the space and thereby I think it's, you know, kind of as we start to drill down into it pun intended, and someone who's, you know, join my father's dental practice, we purchased the second location, someone who helps people buy and sell practices, looks at practices. I think what dentists who are listening to this thinking, I'm gonna buy my first dental practice, you know, most dentists buy one dental practice, there are people on 567 double digit dental practices, but most time you're making a once decision in buying a practice. And I think one thing I'll share is somebody else is put yourself inside of other people's practices before you need to buy a practice. You know, you could walk around and look at homes and Philadelphia for fun and see this one is a four story walk up this one is in the suburbs. But I think what is maybe you don't realize, Rob, since law can be practiced now virtually dentistry cannot. Right? Most dentists are just not even in many different practices for context of what other practices are like.

Rob Montgomery  5:26  

Yeah, yeah, that's a that's a really great point. I've never thought about that. I mean, most people, I guess you save you kind of take dental school out in that clinical environment out. You had a dentist or two kind of growing up, possibly. And now you have your current dentists that you ago say.

Paul Goodman  5:42  

And I just want to interject that when you go to the dentist growing up, you only go to that one room, they never like hey, today's today, we're gonna tour you around and look at sterilization.

Rob Montgomery  5:51  

Right? So we want to see what's in the basement, it

Paul Goodman  5:53  

might not ordinary tip to start off is connect with dentists and ask if you can come hang out their practice, you will be amazed at how many people say yes, Jeff and I do that. But dentists said to me, Hey, I want to come to paint and Dental Associates in February for half a day and just see what you do and say great, let's set it up. Because it's like your practice is like a child, you're proud of it. And dentists are very unique people, I'm one of them, but they tend to do really well with I'd like to come and observe in your practice, I would recommend picking a place you want to be in and just kind of contacting dentists and say I'll bring some pizza, I'll bring cookies or bring coffee and Chi check it out. You'll learn so much. One of the things I talked about Rob, this kind of goes back to a previous season. But one of the reasons I tell job seekers to interview as many interviews as possible excuse you get to see inside so many different practices. Yeah. And you get to kind of learn. Yeah, so when it's what to look for, I think you need to create context with different opportunities to be inside of dental practices. Yeah,

Rob Montgomery  6:48  

I mean, how do you know what's, what the difference is? Between these two things? If you've only seen one, you know, it's like, I like this. But what's your basis? For comparison? It's a really, it's a great a great point. I've never personally thought about that, Paul. So yeah, get out there and, and look around, shop around, get yourself in, in the room. That's interesting. So and before we launch into some specific suggestions to in addition to that, I think, you know, the importance of these deals, as you said, these are once or one transactions for most people, but you know, it's difficult to would you say you give it back, I can't just say I changed my mind a year later. Or I don't want this anymore. At some point. I mean, you you've borrowed a lot of money to buy the practice from the bank, and you might be fortunate enough to be able to sell it for what you paid for it, maybe. But if things didn't go out

Paul Goodman  7:39  

there, because we talked about throughout the state dental offices, we talk about our people places, not pizza places. And there's always a red flag. If someone goes, I bought this practice two years ago, and I want to sell it and even if they got into a specialty program, or even if their spouse got a giant, awesome job across the country, it doesn't come with Oh, yay. Right? You know, most of these you and I are involved, these are purchasing an existing practice where the dentist has been there for over 20 years, right. Most of the time, you are looking at someone who said I've been in this place for 20 years, I know the ins and outs of this practice. I know the patients because that's really what you're buying. So I think that the very bad return policy on dental practices is important to think

Rob Montgomery  8:22  

about it's not it's not Zappos Yeah. Well, and yeah, and that's, that's absolutely true. I mean, I don't, if somebody said that this was a practice that was purchased by the by the seller 18 months before, I'd say that's a yellow flag, not the end of the world. But you know, we're gonna have some questions like, there's usually just a lot of

Paul Goodman  8:40  

urgency to that sale, for whatever reason, because it's not a normal circle of life thing. And whenever there's an urgency to a sale for any reason, you just have to have your eyes wide open as to why even if it's on its face a good reason. Yeah,

Rob Montgomery  8:53  

you you've truly spent too much time with lawyers and too much time doing dental practice transitions. Yeah, you have evolved,

Paul Goodman  9:02  

or you've been really good on a scar tissue. I see a doctor about that. I'm so proud of you.

Rob Montgomery  9:09  

You've come to the dark side. So, you know, when we talk about, you know, what to look for. I mean, there are different types of practices, right, you know, so sort of the

kind of look at a couple broad categories, you know, you've got what was referred to as like the well oiled machine and right practice that's firing on all cylinders. It's got a great team, generating a lot of revenue, it's run profitably. And then at the other end of the spectrum, you have hungry to say the dreaded right because I normally very suspicious and hesitant to get clients involved in the fixer upper right. All right, I think a lot of times people fall into the trap, I think with a fixer upper that it's just gonna be like on HGTV I buy this practice for cheap, I fix it up. And it's worth a lot more and look at all these patients by the end of the show like we went from like some dingy old. And one

Paul Goodman  10:07  

thing I want to point out when you practice you like some You've helped me, I'm a fixer upper A decade ago, which I was glad you did. Because I said, Rob, I want to do this thing and this exciting part of the city. You said you don't want to do this, but I do it and you were right. I was wrong, right? This fixer upper was a small practice revenue wise size rise, be honest, I one thing I think we should point out the well oiled machine versus the fixer upper. When most people fix up a house, they live somewhere else, while it's being. You have to fix up while you live inside the practice and make money. And it's a very difficult thing to do and fixer upper. For practice, listeners could be revenue, but a lot of times it's just physical space, right? Oh, sure. I mean, if you gotta like someone goes, you can, once they go, you can knock down a wall. I mean, you might be able to commission those two operatories for months, you know. So, you know, we fix up our own dental practice, and we only do it over these Christmas and holiday breaks because it can shut down a whole operation.

Rob Montgomery  10:58  

Yeah, well, you're talking about like physical fixer upper Tibbett, I'm gonna go, you know, to me, fixer upper means more than just having to knock down walls and put in new new equipment and change the look of the practice. I mean, the fixer upper is also this practice has horrendously high overhead or, you know, the payroll is too high, or there are different problems with it, which makes performing

Paul Goodman  11:24  

and really one of the things that I think I've had to learn as a buyer and broker is, someone says they work full time, like 200 days a year, and they only collect $300,000, they have this hobby practice. And they really can't possibly be working full time. They'd be be tinker around their practice, and we'd be sitting in the back. But I think that's a huge red flag when they go, I work four days a week, and I produce 310,000 hours. And I want to say, well, what are you doing during these days? Because $1,500 of revenue for a dental practice is in case we have dental students listening, I'm new, it is incredibly low for a day, right? Yeah. And some of them even say they have hygenist. And sometimes I have to hold myself back because I want to be I don't want to be insulting. But I want to say what are both of you doing all day here?

Rob Montgomery  12:09  

Yeah. All right. Well, I think you know, there's there's a few other contrasts too, I look at it and I when I think about the fixer upper, and again, this is not just physical fixer upper. This is, you know, really an underperforming practice, right? You know, you, if you look at the practice that's firing on all cylinders, that means there's more than likely, there's a lot of profit being thrown off of that. So buying a practice is different than buying a house that you're going to fix up. I mean, the only way you make money off of your house is if you buy it for x and sell it for y and then you get the Delta there. Yeah. But in the practice ownership world, if you're going to buy a practice and hold it for the next 1015 20 years, it almost doesn't matter how much more you sell it for than what you purchased for if you're making a million dollars a year, for example, right? So that that practice is throwing off income, you know, and so that, more often than not, I see that that is the the number that matters, as opposed to the resale value sure of your

Paul Goodman  13:09  

accent to say this and I say this with positivity, but more with positive and realism. If you take what a Dennis Dennis buys a practice, works there for 30 years and sells it. They make income for work in their practice, but like the amount they make more for selling it is really a poor hourly dollar per hour investment. Audible, right, because I just want to share dental hours, your dog your hours. So you know whether you work 200 days a year, eight hours a day, 1600 hours, you're putting in another 800 hours on other things, right? So you're you know, if you buy a practice, and bought it for 700,000 sell it for a million what you said exactly right, Rob, the real value is what it provides to you for income for all those years. Yes, it's nice to sell it at the end. But I think there's just a real misunderstanding of how good an investment a dental practice is the one you work in, yes. DSOs yes, there's good practices when you get into six, seven practices, but the one you're buying is really the dental house you're gonna show up at every day. And it's got to give you profit, it's got to you got to have the right people there. And one of the things I think as we talked about what to look for, since you have not gone to Dennis fantasy camp, Rob, I will share the work with my dad five operatories and we bought a practice three operatories. And our biggest challenge that causes cry inside is not enough operatories because you are limited in modern day dentistry, with all the things that you do. So more options, the better. So, I don't know if you kind of probably get this with your clients. It's like, I want to buy this three practice outside area like it's already it would be hard for me to tell someone for their first dental practice to say that that would make a lot of sense as a general dentist. Specialists might be different and endodontist might be different. But you need a lot of ops to do your thing as a general dentist

Rob Montgomery  14:59  

and that's that is a great lead into the next point with this, which is if you're buying a quote unquote fixer upper, is it something that can be fixed and there are certain things that can be fixed and improved on. If they're if the practice is as plumbed and has three, equipped operatories. And there's no room for any more, you can't make more space. So that is that's not a fixable problem.

Paul Goodman  15:23  

And in some of it, it just has, since I'm the only dentists at this table, some of the spaces for your morale because I have a very close friend who has an amazing practice in New York City. He does amazingly well, and his physical space. Now he's 47, it causes him a lot of morale problems, because he doesn't have any space to go right when there's downtime, right? He sometimes sits in his operatory for his patients. So even though he is earning incredible income, and even though he would say he's had a good dental career, and he does amazing dentistry, he's like, I wish I had a little space to myself.

Rob Montgomery  15:54  

That's kind of the nature of the beast for that Mark. Yeah,

Paul Goodman  15:56  

right. Right. But he you know, that's just what you want to look at to not just the operatories, what is the physical space for your team to be able to be there? Is there an area for people to sit? Is there a lunch room? So I think the physical space and then you know, that's a pay for physical space, and then the patients are what to look forward to? Right? Is it? Is it that patient base that you interact well, with? Right, y'all know this from? You know, I did, I'm a dentist. Now what Robin, I have my question for the students was, if you had to sell cars for the rest of your life, would you want to sell a Mercedes, a Lexus, a Volvo, a Honda, and it was no judgment on the money that you would make, it would just be people immediately know that clientele, right? I'm going to see fewer people that are more escalada questions, I'm going to see a lot of people who buy Honda's that is their first car, it's grandparents that see that. So I think dentists don't really get a lot of good insight in dental school as to how important the patient base is to your long term Saturday and success,

Rob Montgomery  16:55  

right? And if you're, you're you're buying the goodwill, the practice, essentially, you're buying these patient relationships. And if you're not, if that patient base isn't the patient base that you have in your vision, then you have to come in and say, I'm going to fix this, then well, you know, if you're going to scrap it all and just basically start from start fresh with a brand new type of patient, what what did you pay for sort of

Paul Goodman  17:16  

startup see or do practices, not just one as a resource and do that and build your vision that way? You have to you have got what I am. Share with people when a coach if this is if you can pay to fix it. It's not a problem, right? So I know you hate the carpets, I get it. But you can pay to fix that problem, right? If it's a patient thing, or a physical space size thing

Rob Montgomery  17:37  

or a demographic thing, right? Like if if somebody has been there for 30 years, and the practice is underperforming? Maybe it's because there are too many dentists in the neighborhood. Yeah. And you can come in with the most dazzling business plan and marketing plan. But like if there aren't people, available patients to put in the chair, then you're just spending money. That is there's no prospect of return.

Paul Goodman  18:01  

Yeah. And I always made me think of something I was telling you before was at a dog birthday party last night, which he thought was funny. And

Rob Montgomery  18:07  

I did tell me I think I think our listeners probably

Paul Goodman  18:11  

building in Philly and we get to know that we have a dog park there and we get to know the dog parents. And it was funny. So

Rob Montgomery  18:17  

before you go, do you How long did it take you to learn the names of the dog parents as opposed to the

Paul Goodman  18:22  

notes in my phone? I knew the dogs I call canes dad. Right? Yeah.

Rob Montgomery  18:27  

You know, we have similar peppers. Right? Exactly. Like what's that person's name? Right? My camera's like I have no yeah.

Paul Goodman  18:34  

So I got Daphne and drew eight and four. I got Tilly, me and Mary. They said come on up. I said we got nothing going on. We're coming up. So it was all the dogs run around the halls, great. They bought food. But we were the only people that came with kids. Right? Right. And the people were younger. So I say No, it'd be a good service guys. And they thought it was hilarious said instead of us getting babysitters, we will rent our children to you. So you can see what it's like to have children, right? You can have a whole weekend of the kids and they thought that was funny. But I say this with Now getting back to this practice ownership thing. In buying a practice, there are so many phenomenal associate positions out there where associates are earning between two and $400,000 a year that you want to make sure that when you buy a practice, it's one that you want to work in for all these years because there's opportunities to be successful without buying one. It's it is accurate that most practice owners have the opportunity to be more successful financially had more freedom, right? But that all comes with behind the right practice,

Rob Montgomery  19:31  

right and again in the fixer upper versus a firing all cylinders practice or the well oiled machine if you're going buying that underperforming practice, there needs to be a plan and a reasonable path to to grow it and I will say to that the other thing and then maybe we can move on to our next sort of subtopic with this but I think a lot of times people fall into the trap and I do believe it's a trap. That it's it's is less risky to buy a small underperforming practice? Because you only you know, I put all these these statements in quotes air quotes for, you only have to borrow $350,000 or $275,000 from the bank. I mean, to me I look at that and say, Well, geez, there's not a whole lot of room, you know, a cushion there between defaulting, you know, failing and making money in this practice, right? Because, you know, the line is tight,

Paul Goodman  20:29  

I would share it. If someone was asking me, because dentists love details, Rob, they love the exact answers to things between 900,001 point 2 million, I think is the best $300,000 range to look for. Because, well, beyond that, you just need to make sure you can do that type of dentistry doesn't mean it's impossible. So if you got a $1.7 million practice on the table, of course, look at it, that's better than $400,000. But you want to practice that? Yeah, you're exactly right, that is, is bringing enough revenue, where there's some wiggle room for changes, yeah, downturns, you know,

Rob Montgomery  21:02  

or to, or to, like, stay in the black. Right? Right. You know, like, if you're so close to that, you know, I'm in the black or in the black or red. You know, in a small practice, you lose a few patients, you're close to a few days, you have a few slow days, whatever the case may be, all of a sudden, now you're not making money, yeah, a bigger operation, you can take a little bit of a hit, and you're still making money, right. And so the smaller it is, the closer your margin for error shrinks to, and also,

Paul Goodman  21:28  

um, I have a feeling this, you know, a lot more about real estate than I do. But like, when people buy a home, they probably buy nicer stuff for the home than the people used to have, right? The people selling the home, like, that's my couch of 20 years. But as soon as you buy a home, you have this desire to make it a little better. With dentistry, you want to buy new equipment, sometimes you want to put in technology that previous seller didn't have. So if you're doing that with a $400,000 practice, it can become really tight, and anxiety producing for you as the owner where you have a million dollar practice, you just have a lot more

Rob Montgomery  22:04  

room to do that. Yeah, yeah. And then then you get into the sort of the patient perception with that, because that's a certain type of practice that, that you're trying to now change, which, you know, kind of gets into, you know, vision right now, and what what kind of practice do you want, right, and, and, and trying to buy a practice based on what the numbers are, what the potential loan is, or what somebody else thinks is a good idea, if that's not the practice that you want, and your plan is to buy this practice and make all sorts of changes, as you said a few minutes ago, at a certain point, like maybe you should have just done a start, right? Because if there's going to change this change that make these changes, and try to, to basically, you know, reconfigure what you got. I mean, like, we all know, like, you live in an old house, it's, it's a lot, like, anytime you do a home improvement project, it's like, oh, wow, well, we're gonna find behind that. Right, exactly. It's just, it's hard to change an existing thing. And, you know, a lot, a lot of times, it's just easier just start from the ground up, you know, and, and you don't have to worry what's behind behind that wall. So, and as we talked about that, you know, I think, let's talk about the size a little bit, Paul, you know, is bigger is better, right?

Paul Goodman  23:15  

Well, the size or is that, you know, the the apps, availability and the ability to do more, I think if you're if you're in a six to 10, operatory type of world, I think that's really great for up to date dentistry, and being able to have things in you know, usually with more ops also means more space, right, you can put into CBCT. Like, we have a practice where I like, I wish I we just can't put it in a CBCT, the 3d X ray machine, there's no special thing we can do. Right, but it's over, right? I don't know, if we put in the waiting room, I think that would not be good. We're just taking x rays when people are sitting waiting for their appointments. They'll probably also a violation of HIPAA, wherever you do violation of HIPAA. Right? Don't don't even speak on your potential violation. So, I think size that way is, you know, six to 10 operatories. You know, also, as we get through this season, we'll talk about these things, you know, we talk with, we talk with I talk with people daily as you do about groups looking to buy practices. So if you are thinking about one day selling your practice whenever it is, more apps is attractive to whoever's gonna buy that whether it's a private practice dentist or DSOs. So my vote Rob is the six to 10 op size.

Rob Montgomery  24:24  

But by the same token, you know, when we talk about what you want, what your vision is, if you have six to 10 Opps I'm thinking you probably need two dentists than their

Paul Goodman  24:31  

right six Ops is probably six Ops is a one dentists coming still. But yes, you're right, once you get to 1010 availability, I mean, I guess just as I've gone through this world for 20 years, I'm just always need more space, right? And I'm just like, even if I was a solo dentist, we wouldn't necessarily have to equip every op, right? And you know, you talked about the lease and things so you're right. They're paying for the six the six up minimum for Tow because Instagram hygenist working there, you know, that can take up to three ops. and Dentistry has changed dramatically from when my dad was young dentists, you know, working out of one room, doing your one little patient, you have people coming in for post op checks for surgery, these things here. So just like the ability to it's like tables at a restaurant, right? We're home to the BYOB, right. Sometimes you want to go to the BYOB, I can't do it right, you see immediately it's all taken off. But then you go to park and he say, there's a lot of tables here, I think I have a chance of getting a table. So I think you know, though I would say

Rob Montgomery  25:26  

too, though, you know, I mean, it's like what you're looking for, you know, if you're if you're up for a 10 chair, practice, if you're not up for a 10 chair practice and that's not sort of how you want to practice dentistry, you shouldn't do it, this your

Paul Goodman  25:39  

ops, the more fee for service you're going to be. So we'd like to fewer ops, right? If you have a four operatory practice where it's you and one hygienist it usually means you're delivering advanced care whether it's cosmetics and plants something else. Because you don't need as many of you even more insurance based office. You have to bring up it's not a secret, you got to bring more patients in to make same amount of money. Right? Right. Yeah,

Rob Montgomery  26:04  

yeah. Yeah. So they're important issues. And that leads us into, you know, the fee for service versus PPO to fairly different business models, right.

Paul Goodman  26:15  

I mean, I've changed my thoughts on this dramatically over the past few years. To me, taking over a fee for service practice comes with fewer headaches, with the addition of you have got to be the same type of clinical dentist as the person you're taking over for. But as we'll get to in later episodes, the credentialing with insurance, the spoiled Glock PPO, not allowing certain people to get the same fee schedule as the person selling, right, which is a big northeast prop challenge. Yeah, so I just need to start that awareness. I think there are fewer challenges to taking over a fee for service practice, provided you can deliver the same type of clinical dentistry because most of the time fee for service practices are delivering a special type of clinical dentistry doesn't mean it's better just means it's like that dentist is known for doing clear aligners, that dentist is known for doing cosmetic dentistry.

Rob Montgomery  27:12  

Right. But you know, and this is the caveat, they think that you know, that there, which is you need to be similar clinically. Yeah. So you can't just say, hey, the Holy Grail is the fee for service practice, I'm gonna buy this fee for service practice, just because it's a fee for service practice. And, you know, half of the clinical dentistry that's being done, there are things that you generally don't do are uncomfortable doing, you know, so then that's not necessarily a good thing I'll get into

Paul Goodman  27:38  

you have to you have to have a very the end you have to very patient personality for the patient demographic and fee for service practices. So you could be actually I should elaborate, elaborate that you could do the clinical dentistry, but there's there is a high maintenance effect to the patient base and fee for service practices, which I think is totally normal, because they're not utilizing insurance a lot. They're coming out of network. So you just have to be the patient, the dentist with patient communication skills and leadership skills want to deal with it. We just had two dentists in Philly Travis Campbell and Todd Fleischman. We're about as different as you can get and Travis goes. I don't want your patients Todd and Todd goes out your patients Travis. Travis goes I'd rather if you're gonna see 20 patients and Mrs. Smith and network and that's Travis's life and both of them are doing a wildly successful in their own lanes. But if they did the What was that like show with a freaky Friday swapper they would be very upset. Yeah, yeah. So I don't think Todd could work at the pace Travis does and runs around and I don't think Travis would like to answer 16 questions about this crown. Right. So I don't know if that helps you. Yeah, that part there?

Rob Montgomery  28:47  

No, I think it definitely does. I think it's great for our audience to hear that because I think a lot of times this again, keep keep coming back to this. It's It depends what you're looking for. And what's good for Travis isn't good for Todd and vice versa. And just because somebody says on, you know, a blog or social media posts a fee for services is the way to go. It's not if that's not the type of dentistry, providing

Paul Goodman  29:10  

that PPO purchase they had for a second. You have to be ready to see more patients. You definitely do good dental care, but it is no secret when you are very involved with dental insurances. It will affect the type of dentistry you're able to do. You have got to be able to manage that. We know the Tasmanian dentists Mati. Right, right. He's perfect with that it takes every insurance. He's not saying I'm so angry, I can't do this zirconia crown they want me to a PFM. He says no big deal. So that's the side to the PPO side, right, that it's not the right word isn't compromises. It's just an understanding that you have this other party called insurance. That is literally affecting your life every single day. Right. Right. He's have to be ready for that.

Rob Montgomery  29:55  

Yeah, that's a good point. Another thing to think about is just the culture of the practice, right? So the Jamie, as you know, the ideal practices founder is to say that, you know, a surfer, only a surfer dentist should buy a surfer dentists practice, right? So sort of in that goes from a patient base to the people that work there. And I think this gets back to, you know, buying something is consistent with your vision is what we're talking about, you know, and again, so this a little while ago that, you know, the the people that want to buy a practice and then make all these changes to its later like, by the time you've done that, why did you pay that, but it's also

Paul Goodman  30:33  

the biggest in a transition was talking about later. But when you say the culture, the team that's there, because the dentist is now on his or her way out, right? They may be there six months, they may be the year, but the team knows that that dentist is leaving, you really got to get that team on your side. And if it's a cultural misfit between you and the team, it's going to be a disaster. So you got to be very mentally flexible. Oh, I'm so glad Sally's been here for 15 years. I'll deal with her. I'm so glad this hygenist has been not glad. But yeah, that is where I really sometimes envy the startup. I've never done one. But you're just hiring all your own team. Right? Right. If you see this in NFL coaching, very frequently, this will happen soon. Right on that Monday after it's like a lot of coaches will be fired. And their whole teams. Yeah, it's rare to have the head coach fired and the whole team stay not impossible. But so what happens with dentistry is that the leader transitions, all the people working there stay, which can be great for patient care, they still see those faces, it's just that you want to make sure that culture is one that you can take over for yourself.

Rob Montgomery  31:39  

Yeah, yeah. That's a that's a good point. And I think, you know, again, when we're talking about either fixer uppers or you know, just culture, cultural similarities and your vision, it, I think people sometimes underestimate how difficult it is to manage or change the team right now, like you can't just come in, and sometimes we'll have these conversations with people who say, well, the payroll is like, way too high. So you know, but I can fix that. Really, how right, you know, you're just gonna cut everybody's pay, you're gonna cut their benefits, like, that's gonna go over really well. Or, you know, part of what you're buying is, again, the goodwill, the patient relationships, but the patient relationships are relationships, not just with the selling dentists there with the people that work in the office. So you're just gonna fire everybody and hire new people, like, you can do all these things. But, and by that, that's gonna really Bode really well for your transition plan,

Paul Goodman  32:35  

just so you don't feel it didn't show up. You're, you're counting on these team members to get you through your day. Right? You know, like, you can work in your own laptop, doing law, right? You can review documents, and you have a great team, but you don't need them in dentistry. If you do not have a dental assistant, you cannot produce the $6,000, you need to keep the office open. Right? So you got to you have to really look at yourself and see, am I the type of person who can take on an existing team, I've done it and I think it works itself out. Some people stay for six months, some people don't say I've had people stay for the entire time. Also, at the time of this recording, finding team members very difficult, right. So you may as well start with the ones that

Rob Montgomery  33:18  

are not changing anytime soon. From the looks of things, but you know, I but I think that's it, I think, you know, it's important to realize that if you're not happy with that team, right, how they're paid, or how they behave, how they perform, you know, like the you're, you're stalking them. Yeah. How could you

Paul Goodman  33:33  

go to say, Hey, everyone. special surprise, the dentist is now selling the practice, I'm going to pay you less just don't buy that practice.

Rob Montgomery  33:40  

Yeah, well, that's just it. I mean, especially if it's a practice that maybe it's not even the, the well oiled machine necessarily, or the fixer upper. It's something in between, yeah, you know, you use as you said, you need those people to be able to produce, it's a different thing. If you do a start up, and you don't have as many patients and then you don't need as many team members, you can hire those people incrementally, but you can't just have half of the team when you have a practice. That's that's that's grossing $750,000. If they walk out, you got a problem, right? And, you know, the you don't go back to, you know, provide and say, Well, you know, we borrowed that money. And overnight, I've kind of devalued my practice. And I don't

Paul Goodman  34:15  

know, I mean, there are dentists who can't find a hygienist, anywhere. And they don't know how to do it, deal with it, right. So if you're taking over a practice, and there's two hygienist to start working with them, and if you find something to be a deal breaker, you know, you could move on from them. But I just I think that's a key point that dentists don't pay enough attention to. And they think because they're in their little bubble, that they're gonna go in and do these things that just backfires on them.

Rob Montgomery  34:41  

Yeah, yeah. That's it may be more difficult than you think. Right. And so it was we talked about these. Look, if you're buying a practice, you can't expect everything to be perfect, right? So there are going to be compromises that need to be made, what things you compromise on and how many compromises you make. cuz that that becomes, you know, a good thing to be to be aware of, you know, because if you, again, if you if there's so many things that are changing or so many things that you're not happy about, at a certain point, you have to ask yourself, what is it that I'm buying and why?

Paul Goodman  35:15  

Right? I would say someone is compromised on stuff you can pay to fix. They don't have the CBCT you can buy one that's a it's an easy one, right? They don't have a scanner, and they take old school impressions, nope, easy compromise that they pay their office manager too much. That's harder, right? You know. So I think the compromises that you need to make are ones that still get you to a position where you can build what you want. Right now, you can't look for total perfection. But there should be you should know your own deal breakers.

Rob Montgomery  35:43  

Hey, look, don't buy a PPO practice, if you want to turn it into a fee for service.

Paul Goodman  35:48  

I know we don't learn any business in dental school, zero, okay, then you try to cobble together these business things. And now there's podcasts and more things. And Costas is there's a lot of information out there. But then it still say, I'm gonna buy PPO practice, and then drop all the insurances and turn it to fee for service. I don't really know if anyone's actually ever done that successfully. With the practice transition, right? I'm not saying someone who's 15 years into their career, and now the next 15 They want to do it different. That's a whole different story

Rob Montgomery  36:16  

different, right? Well, because the pay $850,000 at that 15 year mark to you know, to go to the next step. So

Paul Goodman  36:24  

I just think they just say things that are just delusional at times beyond optimistic because everybody talks about what happens when optimism and delusion, and sometimes, you know, oh, you're optimistic, I think you're more delusional, so, and delusional can destroy your investment. So I think that's a really important point, the compromises have to be they really can't be giant things. It's basically that that I mean, they can't be giant, big picture things into practice,

Rob Montgomery  36:50  

why liquid the way you put it, I mean, and there's exceptions to the rule, but like, if you can pay to change it, then that might be okay. Right. But compromises that don't involve, you know, a sort of a quantifiable number and a check, are certainly more problematic.

Paul Goodman  37:06  

And one thing I'll kind of add is we're gonna we're gonna wrap up soon, but even Steven Crowder said this on interviews with startups, if it's here, the location is key, because if you think, Oh, I'm going to commute to this practice 75 minutes away, because I love this practice. I'm single, you know, you may become married during that time, you may start to have children. And I just think it's like, location, you should be flexible with location. You know, it doesn't have to be between 15th and 18th. And St. and Philadelphia, it doesn't have to be Pennington, New Jersey, maybe it's Mercer County. But sometimes I think dentists are so desperate to buy a practice, that they make a location compromise that they regret later.

Rob Montgomery  37:42  

Yeah, no, that's a good point. You know, and I think, you know, and that's, that's a, that's a change, again, that you can't write a check to correct. But yeah, I think that kind of leads us into I think, is kind of my last topic on this is just generally, you're keeping an open mind now. And when I say keeping an open mind, but I think, you know, sort of the, sort of the, the sub heading to that, and you know, and be realistic, right? That don't just be set on one particular location, one particular practice, you know, because, look, let's face it, I mean, again, as of the time that this recording is being done, you know, we're still very much in a cellar market. So you know, if you are looking for just the unicorn in one particular part of the forest, you might be wandering around right now looking for that for waiting for a long time. Yeah,

Paul Goodman  38:32  

I always think, you know, my dad, you know, did the Air Force and was buried and they had me and then when they came back, their only criteria for practice was the entire state of New Jersey. That was their only criteria. That's pretty wide. Yeah, I get buyers who say, Hey, Paul, do you have something just in Lawrenceville and I say, hey, buyer, this isn't a candy store. So I say if you want just Lawrenceville or West Windsor, I know New Jersey. Well, it could be a long time and you may never get a practice. Yeah. If you tell me that you're willing to do anything in Mercer and Middlesex County? Well, now I can look for you. And I, I understand. They say yeah, my kids are in a school district. Right. You know, I mean, if you think back to my parents, they had an infant. So now sometimes, dentists are looking to buy a practice when they have two kids in the school district. So I totally get it. It's very difficult. But these are, these are things that don't turn over that frequently. And I just think, you know, like you said, Knowing your yourself before you start this process of okay,

Rob Montgomery  39:28  

yeah, no, absolutely. I think that's a good thing to wrap it up here today. Well, everybody, hopefully, you got some good, good ideas and some good insights into things that Paul and I see. You know, thanks for listening.

Paul Goodman  39:48  

As always, if you enjoy the podcast, please give us a good review. We don't get many answers on there. She said something nice about this one. Yeah, we're just trying to help you make the biggest decision of your life right. So.

Rob Montgomery  39:58  

Thanks for everybody for listening. And thanks, Paul. It's always a pleasure. Until the next time. Awesome Rob.

Bumper  40:02  

Thanks for listening to another great podcast with The Dental Amigos. And don't forget to tune in next time to have the dental business demystified. If you're looking for more information about today's podcast, you can find it on thedentalamigos.com. If you're looking for Paul, you can find Paul at Dr.Paulgoodman.com. And if you're looking for Rob, you can find him at yourdentallawyer.com This podcast has been sponsored by Orange Line Media Group, helping dentists and other professionals create content people love find out how we can help you take your business to the next level at www.orangelinemg.com. Till next time

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