Episode 125- Ideal Practice’s Stephen Trutter on the  “Do’s and Don’ts” of Dental Start-Ups

This week, the Dental Amigos welcome returning guest Stephen Trutter, the CEO of Ideal Practices, a leading consulting firm for dental start-ups. Ideal Practices follows a proven process to guide dentists through every step of opening their start-up. Stephen Trutter has helped launch nearly 1,000 dental start-ups in his 20-year career.

Stephen discusses how to position yourself  for a smooth transition into practice ownership starting as early as when you are an associate. He emphasizes the importance of understanding and negotiating the restrictions contained in your associate agreement that could impact and limit your future career. Then, he offers his insight into the “acquisition vs. start-up” debate. Finally, Stephen highlights the importance of proper real estate negotiation.

Listeners who are pursuing ownership through a start-up can visit IdealPractices.com to explore their consulting services, learn from Stephen’s book, “The Startup Dentist: From Idea to Opening Day”, or register for Ideal Practices’ two-day Startup Practice Blueprint Seminar. Also be sure to check out Stephen’s podcast, The Startup Dentist Podcast.

Listeners who want to reach out to Paul can do so at Paul@DentalNachos.com and those who want to reach out to Rob can do so at Rob@RMontgomery-Law.com. To hear more from Stephen and the Amigos, listen to our first podcast with Stephen by clicking here.

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Full Episode Transcipt

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Bumper: 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: Hello, everyone. I'm Rob Montgomery, and I'm joined, as always, by the Head Nacho himself, Dr, Paul Goodman.

Dr. Paul Goodman: Great to be here with you, Rob.

Rob Montgomery: Welcome to another episode of the Dental Amigos podcast, Paul. Today we're talking about startups. Great topic. Are you ready?

Dr. Paul Goodman: I am ready. It is a spicy and fun topic in my community, and excited to dig into it.

Rob Montgomery: I'm really excited too about our guest today, a good amigo, old friend, and, shall we say, the Nacho Supreme of the dental startup world, Mr. Stephen Trutter. And I've had the pleasure of knowing and working with Stephen and his Ideal Practices clients for longer than I can easily remember or care to admit at this point, Paul, and for anyone who's heard me speak, or has been a client of mine, or has consulted with me, they know how I feel about the importance of working with a consultant in the startup world.  Working with a good consultant can mean the difference between, I like to say, “opening a practice” and “launching a practice.”  Paul, it goes back to your your talking points and your presentations, nobody does something to “not fail”, right? We joke like, come home at the end of the day, “How was your day?”, “I didn't go out business.”  “How's your marriage? “Not divorced!”

Dr. Paul Goodman:  Yeah, that's not the definition of success.

Rob Montgomery: I mean, in the dental world, there needs to be a much higher bar. And really what we're talking about, the people that do these things right, are the people that thrive. And we talk about the difference between thriving and not thriving, not what the lenders like to talk about, which is defaulting and not defaulting. I mean, you really got to do something pretty crazy to default on a dental practice loan. So with nearly 20 years and nearly 1,000 startup practices under his guidance, it's safe to say that Stephen has a passion for startups, Paul. And he loves to understand what moves a client at their core, to help to build a custom strategy with the entire Ideal Practices team to implement that strategy. In addition to his passion for client care, his other passion is the entire Ideal Practices team, Stephen constantly wants to provide the best leadership so that each member can level up and continue to deliver a true, elite, and trusted experience to their clients and really be proud of what they've accomplished in their own lives. And, I think Ideal Practices really does that better than anybody in terms of what is the vision and what is the impact that the practice can make on a community, Paul. Prior to Ideal Practices, Stephen was one of the top representatives at one of the largest dental-specific lending companies in the industry, a self-proclaimed “girl dad” as a father to three daughters, along with being a husband to his wife, Megan. And now, without further delay, here's Stephen Trutter. Welcome amigo, and thanks for being on the show.

Stephen Trutter: Hey Rob. Hey Paul. It is great to be here. Great to hear your voices. Like this is the three amigos. So we get to do that little dance that those guys like Steve Martin and all those guys did back in the 80s. It's great to be here. Great to be connected with your audience here, and super excited to get a passionate topic of mine that I am honored to be able to discuss with two experts and two really good friends here with you guys. So, I appreciate it.

Rob Montgomery: Yeah, we love it. This is gonna be a good one. And this is for our listeners, Stephen's second appearance, I think on the on the podcast, we had him on way back in the early days. Yeah, the early number six that like the 80s, like the 1980s, feels like it, anything that happened pre-COVID. PC, Pre-Covid. I’m pretty sure there were cavemen back then, and I'm not even sure if there was an Internet back then, when we first had you on. Stephen, you've been with us in Philadelphia. We've hung out with you. But if we were in where you live, tell us where that is, where would you pick to go get nachos, and what is your favorite topping?

Stephen Trutter: What’s my favorite topping on nachos? Okay, so I like nachos that are covered with everything, like the kitchen sink, but I want like brisket, something like that, on top of mine, like heavy meat ones. And I live in Tampa, so I don't know a favorite place here, but my favorite places are actually out west, Apres Ski. So after skiing, I'd like to have a nice cold beer. And sometimes I want a gigantic plate of nachos, maybe they're not the best nachos, but man, they taste damn good after a long day of skiing. Nachos covered with meat and all the toppings, they got to have some jalapenos on there.

Rob Montgomery: I can get behind that. That's great. That's a very context-driven answer. I like it.

Stephen Trutter: making myself hungry.

Rob Montgomery: Same here. So we're gonna cover some things today, that I think our listeners need to think about if they're considering a startup. And we're gonna kick off with employment agreements: the “do's” and the “don'ts” of employment agreements. If you're listening now, you're thinking, Wait a second, we're supposed to be talking about startup dental practices. Why would we be talking about employment agreements? And there's a good reason. Stephen's gonna tell us. So Stephen, give us some do's and don'ts when it comes to associate agreements and how they could negatively impact somebody's startup.

Stephen Trutter: Well, if we're laying the foundation, I think when we're laying the foundation, I think when most people think about startups, they jump right into a startup, going, okay, cool. I need to go find space. I need to g, buy some chairs and open up a practice. And it's like, yes. You need those things, the physical elements, so there's some pre-planning elements and, and I'll tell you, over the years, we have helped clients negotiate and run a lot of that. You've helped clients of ours too, to really look at their employment agreement. So, I think as you're listening as an associate or even as a dental student, going to get an associate position, I'd say here are some do's and don'ts of employment agreements. Number one is, do find an area that is going to be outside of where you want to own a practice, whether you're going to buy a practice or start-up, you need to understand that you want to be away from there because there are things called non-competes, which we'll talk about that. So, I think it's important to look beyond. So if you say, Hey, I don't want to be in this town, maybe look a town or two over to give yourself that flexibility so you can open up. So, if there's an area you do love, great, I think you live there. I think you'd be there. But do look outside of those areas to give yourself that flexibility.

Dr. Paul Goodman: I just want to ask, because you do this all the time. And this might seem like a simplistic question, but good for our listeners, most of your clients are coming to you currently with an associate job, right? They're not coming before and saying, Hey, Stephen, we're going to start our practice. Most of them are current associates when they are coming to you. And then how often, whether it was just missed in their reviewing, where they’re not hiring someone like Rob. Does that present a problem for you, their restrictive covenant? How often is that presenting a challenge for their location?

Stephen Trutter: Awesome, awesome question. I think it's probably somewhere between 10 and maybe 15 to 20% of the time where we're looking at an employment agreement that says you can't go here, or we need to engage in conversations with an employer to now go back and hopefully possibly renegotiate an agreement. I would say conservatively, 10 to 20% of our clients have employment agreements that they're not fully aware of what's in there.

Rob Montgomery: But, I imagine, though, Stephen, on top of that, 10 to 20% of the time you're working with somebody you're starting with, where can you go and where can’t you go? Right?

Stephen Trutter: I think there's probably somewhere between 10-20% that actually have a problem. But nearly every single one has an employment agreement that something needs to be reviewed, that we need to abide by. And the things I see through the Dental Nachos Facebook group, Paul is there's a lot of people asking questions about employment agreements. So it's really important to understand what is in it.  I think the big thing to take away is to stay away from where you think you want to own a practice, whether you're buying a practice or starting. I think the biggest thing is, to understand what in the heck is in your employment agreement before you start to venture into practice ownership. Really understand what's there so then you don't get multiple steps down and go, Oh, wait a minute. I actually can't do this in this area, or I have restricted things out even beyond the non-compete and other elements of the employment agreement that could restrict them in the future.

Rob Montgomery: Yeah, totally. What I like to talk about is contractual awareness. So it's the legal equivalent of situational awareness, knowing what you've got in there. And covenants not to compete, that's one type of restrictive covenant, but the other one that goes along with that is non-solicitation. So like, you may have a five-mile non-compete and you think, Well, I can go 5.1 miles away, but if you have horrible language in there that doesn't allow you to treat former patients or market within that area, the fact that you're outside the non-compete doesn't really matter, because now you've stymied your ability to do what you need to do as far as marketing to allow your practice to launch.

Stephen Trutter:  Also it's important that they’re reviewed. I think so many whether associates or new dentists coming out of dental school, think I have an employment agreement, it can't be negotiated. Things can't be changed. So they blindly sign it, going, well, this is what it is. They look at the pay, and go, Okay, that makes sense. Well, all right. They told me to sign this as an as a quote, unquote employment agreement, without understanding what is in there and not thinking that they can negotiate it because I've seen these clients where they're blocked out of three whole counties, yeah, and these aren't like counties, we're talking hundreds of miles they're blocked out of. And the thought is, oh, was I able to negotiate? Well, you don't know if you can if you don't try to negotiate, you don't know if you can negotiate certain terms of your employment agreement. So I think it's important to have counsel to review these and give it a thumbs up or thumbs down. And the great attorney that I know, Rob Montgomery, says that you could pay some today in attorney fees today, or pay a lot more and a lot of challenges and or lawsuits tomorrow. What's your choice?

Dr. Paul Goodman: I want to add Rob has given me license to use all of his jokes. I was at the Ohio Dental Association talking about this topic, and I talked about dual rep brokers, and I said that would be like someone saying my favorite team is Ohio State, and also my other favorite team is Michigan, and they love that. The other thing is, when people start off unreasonable, they don't usually get more reasonable. So, I tell these associates, the people you're working with should be reasonable, and if you come to them, with the help of someone like Rob, you have a reason to negotiate, meet that, or, if not, maybe it's unreasonable. You have to learn that, right? Like we started off saying, maybe you don't want to work in the town where you want to open up your practice for the next 30 years, don't make a three-year decision to ruin the next 30 and maybe you just have to say, I'm going to move well, and yeah, and you need to understand that. And I think where people fall into the trap guys, is where somebody says, This isn't negotiable, so therefore I don't need to hire a lawyer. A lawyer's job is not necessarily to negotiate a contract. That's one of the things that a lawyer does. The other thing the lawyer does is to advise a client as to what they are agreeing to. So, if a contract's not negotiable, okay, maybe it isn't. Some DSOs will say that especially but you need to know what's in there, and maybe you can't take that job, right? Just because you can't change, it doesn't mean that you shouldn't have somebody explain what the ramifications are. And as Stephen said, you have the contractual awareness as to what you sign up for, because the worst time to try to renegotiate this stuff is when you're getting ready to leave the practice to do your startup. That's when you don't have a whole lot of leverage.

Stephen Trutter: I think we'll talk about non-competes. Full disclosure, I'm not a legal advisor, but, look at hundreds of employment agreements a year, and understand, that today's environment has shifted a lot. So here we are, 2024, non-competes. There's a lot of like current in the United States right now on Okay, are non-competes going to be banned? Well, in certain states they're not enforceable. Okay, so let's apply this to the other basically, 48 or 49 states where they are enforceable. Associates, don't think non-competes won't be enforced. Do you want to try? Especially if you're talking about working with the DSO, they've got probably much deeper pockets than you as an associate. So if you want to find out if a non-compete is enforceable, go against it and see if it's enforced. I think everyone thinks, hey, they're not going to be enforced. Hey, they're going to be banned. Well, they're not yet. Obviously states like California, where they're not enforceable anyhow, but for the most part, they're enforceable, or you can see if they're enforceable, that's your try. And how much could that cost you? Too much. It could cost you tens of thousands of dollars.

Dr. Paul Goodman: You may have lost the thing in finding this out, right? The practice could be gone. The real estate could be gone. Your advisor might not work with you. So it's just another point where people think they're going to have, like, A Few Good Men courtroom battles over their non-compete being reasonable or not, and maybe, like, what Rob has said, you win, but did you really win? And you definitely didn't win, as the broker, if you win, you're losing still.

Stephen Trutter: Yeah, how much time or opportunities in order to go after that? So I think take the path of least resistance and avoid the non-compete situation altogether, if you can. That's why I say, understand what's in there and then go to an area that's far enough away.

Rob Montgomery: You were talking earlier about abiding by what's in the agreement. I think that's an important thing. We hear, and see so many people on Facebook groups and blogs that chime in about that, don't worry, that's not enforceable. And again, as you just said, the cost to find out whether something is enforceable is oftentimes prohibitive. Whether you're talking about non competes, or not giving sufficient notice before you terminate an agreement, it’s a cost that you just don't want to spend.

Stephen Trutter: If you're a dentist wanting to be a practice owner, don't spend your time in litigation now to try to find out and get to the end and go, Wow, I kind of won, but, boy, I feel like I just got mauled by an animal to go through it. I got put through the wringer, and you came out the other end with like I won. Well, it doesn't feel like I won, because I've lost so much time and momentum on my life, right?

Rob Montgomery:  And even in the opportunity, like, Hey, I found this great space. It's an end-cap in the shopping center with perfect demographics. You don't tell the landlord I'll be back in a year when I'm done litigating with my employer. Just keep that thing for me. Like, yeah, right, doc. All right, any other do's or don'ts on employment agreements?

Stephen Trutter: I think that's a really good start.

Rob Montgomery: Okay, so here we are, we got some acquisition guys, we got a startup guy. The age-old question, startup or acquisition, what should I do? So let's talk about common misconceptions that you see when people are evaluating whether to do a startup or an acquisition.

Stephen Trutter: I think there's a lot of people that have a lot of great ideas. I always question in different groups, like anybody that has a keyboard has an opinion, that opinion might be, might be great, but it might be misguided, or it might not be applicable. So I think when it comes to the acquisition, startup world, I think with acquisitions, a lot of people think, “I'm buying cash flow. This will be easier than a startup, or if I buy a small practice, it's less expensive and less risky than a startup, and I think that's really hard”. And I think from Paul's perspective of owning multiple practices, I think when you buy a practice, the lines are blurred when it comes to startups and acquisitions. I think that's the big thing. I think everyone thinks there's this black-and-white decision, but I think there are a lot of elements on both that you need to approach them very similarly in that things like demographics, understanding if you're going to buy a practice in this town or this area, or even buy that practice, does that practice have your kinds of patients you would want to serve? Does the town have the kinds of elements or the patients that you want to serve? So I think you need to approach the demographics, the real estate, one of the biggest we've seen this like, I think even with acquisitions one of the biggest, biggest hurdles of an acquisition is the actual lease itself. Everyone can agree to the purchase price of the practice. Life is good. And then all of a sudden it's like, ooh, we have this lease. So, when we're looking at the lens of a startup, we're always thinking about, Okay, this the startup lease of someone's leasing space. Are all the deal points looking good? And to Paul, to echo what you just said, we're not making the decision for the next three to four months, we might be making a two-to-three-decade decision, right? So understand, like when you're buying a practice, you also need to look at, is this lease good for me? Is a transferable? Am I able to negotiate with the landlord? Can I actually get this practice? Or are there other restrictions? I think approaching both startups and acquisitions very similarly, in terms of the analysis of the marketplace, understanding what you're buying, who you're buying, what team that you're getting, you really need to understand all those nuances, so you just don't buy what you think you're buying, this cash flow, and really understand, like, what else is there?

Rob Montgomery: I think that's a great point. Lots of great points there, Stephen, a bunch of things to unpack. And I think to me, when you're evaluating that decision, the conversation I like to have with dentists is, look, let's just talk about the fact that you want to be a practice owner, and then let's talk about what the path is to ownership for you. And again, just because there's cash flow doesn't mean that the acquisition is necessarily better than a startup. And the example you gave is buying a small practice. Say I'm going to buy a small practice and borrow less, it's less risky. I feel like small practices, it's the exact opposite.  A small practice, with less cash flow, less profit, you're that much closer to failing, and so if you lose a significant number of patients now, all of a sudden, you're below that break-even line, instead of having the cushion between being wildly successful and just kind of successful, if that's the delta between what you're going to lose after you buy that's maybe not the end of the world. And I think really approaching an acquisition like a startup, is really important too. And don't just say, like, Hey, I'm just gonna do it. I'm gonna buy instead of startup because I think it's gonna be quote-unquote easier. And I hate to say, the L word, but I think that's kind of being lazy in doing that and you're kind of kidding yourself to think that. And I'm going to turn this over to Paul right after I'm finished because I know how he feels about this. But to think that just because you bought a practice, it's going to be so much easier the day after closing than if you've done a startup. And a lot of times, I find myself having these conversations with clients to say, look, if you want what is better start-up or acquisition? Well, maybe the perfect acquisition might always be better than a really good startup. But what is that perfect, perfect acquisition where you've got a good team, low overhead, good demographics, an office that's the right size, everything's firing, good fee schedules, whatever it may be, and the further you chip away at that “perfect acquisition,” then all of a sudden, a “good startup” starts to look better, a startup done right, not just, hey, guess what? I cheaped out and bought the used equipment and didn't hire anybody, and didn't do any demographics, and I signed a lease. But  Paul, from your perspective as a practice owner, talk about the misconception.

Dr. Paul Goodman: What people fail to realize, the challenge of buying somebody else's thing? I mean, a lot of it is that you can't put your vision into an acquisition, because you're carrying on someone else's vision. And as someone who's done multiple acquisitions, I’ve had dentists consistently saying, Paul, I've been waiting to buy a practice where I live for the past three, four, or five years. I can't find one to buy. That's because you're dealing with someone else's timeline. You're dealing with the timeline of the current practice owner. Where, with a startup, you can take more control of your destiny while you have your good associate job, right? There's a lot of benefits to your planning, both personal and professional, where you can earn $200,000 to $300,000 a year as an associate dentist while you plan your startup. And really, as someone who's the only dentist on this podcast, if I'm giving career treatment plan advice, like I give patients treatment plan advice, they really need to be open to understanding how both work and not being so closed-minded. Because I have a feeling, Stephen, you have people who come to you saying, I never thought I'd ever do a startup, and I'm here. And then I bet you also have people who might say, hey, Stephen, I did three startups with you, and now I'm looking to acquire a good practice near me as I build my own model. But when you inherit the team in an acquisition, you have to deal with the challenges of that existing team and when you do a startup, you can build your dream team. And I think those are some things that most dentists just don't realize until sometimes they're too far along in the process.

Stephen Trutter: Yeah, and I was at one of our summits, literally just this past weekend in Chicago for one of our programs, and it's an accelerated growth program. We have a mastermind group of clients, and it's great because we have clients that are in there that have had their doors open for five years. Their clients have been there for four or five months, or even four or five weeks. And the one thing I hear from our clients, even the newer ones, some of them who achieved great success. I mean, I have a client, they've had the first $10,000 production day in the first 30 days of opening, the first 100 patients in their first month. So they leave it cheaper things, but they also say, Wow, this was hard. Because a startup is hard. I'm not going to mince words and say it's easier. And I think not looking at that lens going into a startup is going to be hard. You're going to pour your heart and soul into it and to understand that a cheap startup is just a cheap startup if you don't prioritize those things, or if you think, hey, if I do it myself, this DIY like, and I just pull a crowd of people to give me some advice on some of these areas, without really understanding then,  , just like any other professional sports person that's out there, they all have coaches. They all have people who are mentors and people who guide them through their lives.  Tom Brady has all kinds of trainers and people that they still today pay to be in tip-top shape, or he probably had trainers. He's not a great announcer yet, but you'll probably be a good announcer. It’s probably because his coaches are helping him feel out football right now. Guess what? If he went cheap, he would fumble through it, no pun intended, and he would not be good at what he's doing. So same thing with the startup, like you can fumble through it and come out to the end. And I think this rite of passage, of struggling through your startup for three years, and feeling better because you did it yourself. There's no there's no reward for struggling. The reward is you struggled and you financially struggled. So I think from a startup perspective, I think one of the misconceptions is that if you go cheaper, you lessen the risk. No, I think if you go there are areas where you can save a lot of funds. There's a lot of things you can save on, but trying to build a cheap startup using a beam that you're recognized as a chief dentist, and you haven't prioritized things like marketing and those elements, thinking, wow, marketing seems expensive. Well, you have two choices. You can either spend less or earn less. Pick one. Who wants to earn less?

Dr. Paul Goodman: I want to interject, I know our dentist people. We're spectacularly cheap. We spend more money on our golf swings than our practices, and we still stink at golf. These dentists, and they're my people, so I can talk about them, but one of the things that  comes to mind is there's just also no time in your daily day to do all of the things that you need to do to get a practice going and also do your dentistry. So these dentists who kind of say, Oh, I'm just going to do this myself. I can figure it out myself. I say you're going to contact a real estate broker while you're sealing your class two composite? Are you going to meet the person for cabinets while you're checking hygiene? And I just think that aspect of it as well, Stephen, just to highlight what you do, not only do you coach them, you're also participating in the game with them. Is that a good way to put it?

Stephen Trutter: Yes, but I'll also say that they also need to be involved. I'm very clear that a coin doesn't go in the slot of Ideal Practices and out pops a practice in 12 months. Like, this is their practice as well. So I think it's also important to understand, if you're going to open up a practice or acquire a practice, I think it's carve out time. Maybe you need to adjust your associate employment agreement or your time. Maybe you need to find a new job. That sometimes happens. I think you need to dedicate time. Because if you're wanting to be a practice owner, you need to understand a lot of people again, think, oh my gosh, I'm going to lose income at my associate position to start my practice. Yeah, you're starting a practice. Your future is your practice. Your future is not your associate position. So get comfortable knowing you're going to lose some of the income, but you're you're investing time for the next couple of decades, as opposed to maybe losing a little bit of income over the next 12 months, but it's investing that time and that income you lost into a future that is bigger and brighter for yourself.

Rob Montgomery: I love when you say, Stephen, a cheap startup is a cheap startup. And, and  you talked about your mastermind group and all the great things that they did and succeeded. And that's really how, if you truly want to make this a competition, all those metrics that you laid out, that's what people look at to see whether they're successful. Yeah. There's no award for the cheapest startup. Nobody says I saved the most money. I spent as little as possible. I'm still working three associateships, and I drive an Uber on the weekend I had the cheapest time. Congratulations. That's what I want to do I kept the doors open. Yeah, I didn't fail. I kept my doors open. Yeah, I didn't default on my loan. I still pay the rent. Wow, you're knocking it out of the park, but it's really about spending money wisely. And we say this all the time, Paul, it's the return on investment.

Dr. Paul Goodman: You want to be able to talk to people who do this every day to know if the thing that you're trying to do for the rest of your life is going well, right? Whether it's an attorney a consultant a dentist. Dentists Stephen, just tried to launch an entire company to do ortho at home by yourself, and that company's now out of business because all of us Dentists knew you could not predictably do your own ortho at home. You were going to mess it up. And people extracted their own teeth by doing at home. It’s actually easier to replace a tooth than a whole practice. So why not just have someone on your side who you can ask questions to. Is this going normal for the biggest decision of your career, becoming a practice owner? Because I'm going to venture to say, no. We both know Dr. Andrew Vallo, a big fan of yours who has multiple practices, but most dentists are going to own and operate one practice in their career, and you better make it one that you enjoy, is profitable, has people in it that you like. And, it's wild to me how dentists try to be cheap on what I've said is their one decision. So I'm with you.

Rob Montgomery: So when we talked about real estate, obviously a very important component of the startup, Stephen, let's, let's talk about blunders and top real estate blunders in the real estate aspect of the project.

Stephen Trutter: The real estate is probably the biggest decision they’ll make as a practice owner. If they lease space, it’s probably the longest document they’ll ever sign. Yeah. So it really needs to be properly negotiated. I think one of the biggest blunders is they go on their own and start calling the number on the sign. They start looking at real estate, and if you're not trained properly, if you haven't done this, I'll just say this, you need to hire somebody. You need to have proper representation. Don't go at it alone, folks, you're not going to get a better deal. You're going to get a different deal, and a different deal is going to be worse because you haven't successfully negotiated hundreds of commercial real estate opportunities. So I think it's important to understand that you have the proper representation, the right agent that understands it, not your cousin to help you buy a house, but somebody else that has transacted hundreds of times that is representing you in that and also that you have the legal again to support this, like Rob, like you need to have also the legal review of that agreement properly, and not just, like, go into it saying, Hey, I just want this space. If you fall in love with it, everyone's going to know it. Really have the proper representation, and don't go out alone.

Dr. Paul Goodman: I want to add in, since it's we're recording this not too far away from Halloween in person. So scary stories either for both of you guys, because Rob, one time, we had this whole episode on leases. I thought I was going to sleep through it, but it was actually a lot more exciting than I thought. So what are some of the things that have happened where, like how you have met with dentists who couldn't open up where they wanted to open up because they didn't take that one ounce of prevention and have their employment agreement look right? Their life was different because they did not spend the time, money and energy and effort. What are some scary stories of leases? I mean, I'm sure Rob has plenty. It might not just be money, it could be, hey, you might not be able to sell your practice if you do this, or we can move your practice. What are some things that these blunders have led to for either of you guys?

Rob Montgomery:  Don't call the name on the sign. Can we just circle back to that? Because that's probably the most catastrophic thing. And there are people who work with Ideal Practices and are guided by Ideal Practices who don't do that. Occasionally you probably have a client that's already done it before they come to you. But we see a little bit more of the Wild West. Thankfully, you're able to kind of capture them at an earlier stage. But, when we're talking about, “don't call the name on the sign”, where it's a Friday afternoon, dentist is thinking about doing a startup, they're not seeing patients that day, they drive by what they think is the absolute perfect space, and there's a sign out front that says, “space available call agent”, blah, blah, blah, and here's the phone number. And they think, well, let's just see what that's all about. Let's see what the rent is. Let me see what I can do, what the opportunity is. And when you do that, as Stephen said, you get a different deal. So when you go to a commercial landlord and you approach their agent without your own agent, you have no idea that there are sharks in the water. They’re going to give you the this person doesn't know any better. We’re not going to give them any tenant improvement allowance. We're going to charge them full asking rent. They're not going to get all the other concessions that they would have, and it's very difficult to put the toothpaste back in the tube after you've gone and started that process when, as Stephen said, you have no clue, because you've not surrounded yourself with a commercial realtor that represents you, and even more so, one that is familiar with the dental industry and those deals and that marketplace as well.

Stephen Trutter: In that marketplace, I think it's important to understand the marketplace. So I think there's a lot of bad things that can go in leases, and some of them we don't see obviously, because we're looking at those, but there's a lot of things that can go in there to alter your situation. One thing is looking through the lens of, what happens if I need to sell my practice? And what are things that are in here that can prevent that from happening, right? So it's in the fine print. A lot of people can understand some of the financial elements of a lease, like the lease rates, okay, and things like that. But what else is included for the  future like, do you have renewals? If you don't have a renewal, then you're going to find yourself without a home. Can they move your practice? Well,  it's a lot easier to move Rob's office than your practice Paul. Rob's office can be moved in probably a weekend.

Rob Montgomery:  For the right price, I will move my office tomorrow.

Dr. Paul Goodman: This is Rob's best joke, Stephen: If you have a dental practice without the practice, you just got dental and that’s nothing right? I remember one of my residents, his dad worked in New York City, and he had to move his whole practice because, like, AT&T bought the floor. And I'm, I'm not even saying he did anything wrong with his decision making, but dentists who are listening to this should just be properly scared and aware and reach out to a responsible team so they know that their dream is not going to turn into wanting to make them scream. Because I, I totally could see what you said there, Stephen, moving your dental practice. We're moving Nacho Headquarters two blocks away here in Philadelphia, coming up, and it's a lot easier than moving my dental practice.

Rob Montgomery:  Oh, yeah. Well, I mean people, and it's not intuitive either. You assume that if I sign a lease for space 101, that means that's my space forever. But out of the box without the right letter of intent, setting the table right or without the right representation to help you review and understand the lease. You could likely come away with a lease that allows the landlord to move you someplace else in the shopping center, in the office building or whatever. And even if they're willing in some cases to reimburse you for those moving costs, there's all sorts of other soft costs that go with that. And as far as the timing of that and what that means from a disruption standpoint for your practice that you can't even calculate, these are the things that are buried in the lease. And as Stephen said,  you can read the lease and see that the rent is right and understand that. And frankly, that's that's kind of like, that's the JV aspect of the whole thing, that's just the beginning. All the stuff and all the real pain is everything else that's in there, for sure.

Stephen Trutter: That's right. That's right. I think the other big aspect of real estate is, I always say, Don't chase real estate. And whether that's chasing the pretty building, or chasing somebody else's idea or dream. What I mean by that is, I think a lot of people go for like, Okay, everyone says visibility. Okay, great, we can talk about visibility. You could pay 20 or 30% or 40% more for real estate that's on the street corner, as opposed to something that's a block away. And I think this, this fixation on, like, I need visibility. I just had client, we had a vision call about a week or so ago. We were talking about his real estate, like, preferences and things like that. He says I don't actually want to be in, like, the, quote, the typical retail strip center. He goes, I don't like that look. And I think a lot of people think, oh, yeah, I need to be there. Because when people are going to drive by. They're going to come in. People don't consume dentistry through a drive-through. They don't. So will you have some emergency cases that can come through because they saw you and they have a toothache? Yeah. So I think, but chasing like, just simply, like, traffic counts, big signs, the pretty building is right in the same vein. I don't think this undercurrent of like, just go rural and go out in the middle of the country, because, well, I'll just say this, there isn't space available unless you're going to build so there isn't the right answer. I think you're finding the right real estate in the marketplace. And I think when you need to be chasing more of the opportunity and seeing what is available in terms of real estate. What I mean by that is I think demographics give really good direction of where people are. But demographics isn't necessarily the study of where to place a physical practice real estate needs to be situated to attract the people from that area of the demographics. So I think it's also understanding the dynamic, the dynamic between the two. And sometimes we've had, over the years, like we've had a few clients that have come on board, maybe they were looking with real estate agents, and then the real estate agent says, I've been working with this doctor for a year or so. We can't narrow down where they want to be. Well, what they're doing is they're chasing the real estate and not chasing the opportunity that is actually the right area and market for their practice, and then seeing what is available in terms of real estate. So when you just chase real estate, you're not really chasing the opportunity for the practice. You're just chasing a building at that point. And that's not the right approach when it comes to a startup.

Rob Montgomery: Yeah, that's powerful,  . And on top of that too, is,  , there's the the time and the cost of waiting an additional year trying to find that,  , and that and time is money,  , the longer it takes you to open, it's the longer before you start making money,  . And there's, there's, there's a price and $1 associated.

Dr. Paul Goodman:  You always say, Rob, time kills all deals. The more time goes by, your momentum gets lost.

Stephen Trutter: Paul, yeah, I love that. When it comes to startups, I'm very clear with our clients that there is one part of this process that will have the most influence on your time, and it will be the real estate part of this process. So I think if you're looking for the perfect thing, the perfect space there isn't “perfect space” there is finding what is the best available at that time. Because the goal is getting open. The quicker you get open, the quicker you're going to begin to set yourself on a path to freedom from working for somebody else. That's why you wanted to become a practice owner. To have freedom to be able to treat patients the way that you want. So real estate, there are things that are in our control. We can't make a building up here, out of thin air. But I think chasing the perfect real estate does divert the focus, and it also it does temper the momentum when it's like, I'm looking for this perfect space that this all of a sudden get there and the shines behind it and the lights light up. It's not going to happen that way, folks. It doesn't present itself that way.

Rob Montgomery: Yeah, yeah. No, it's so true and like, and I don't want to necessarily go too far down the rabbit hole of purchasing versus leasing, Stephen, but yeah, to me that that sort of wild goose chase of trying to find the right building to purchase is the best example of that.  When we talk about startups versus acquisitions, it's sort of like lease or purchase and for every concession that you have to make, because you're purchasing instead of leasing, whether it's size, demographics, layout, time, of the opportunity, all that stuff, these are, these are things that start to weigh towards leasing and trying to find the perfect building to buy. We’ve talked to clients that literally have been looking for years for that, and they haven't been able to open. And time is money, and if you spend the next two years trying to find a perfect building to purchase, because in your particular market, most of the property that's desirable is something you have to lease, literally, you could spend years and what amounts to hundreds and hundreds of thousands of dollars of lost revenue. I don't know how you could ever make that back, simply because you quote, unquote, own the real estate. And it is, it is the biggest sort of wild goose chase, I think that people lead themselves on. And I feel like, yeah, if you've got this particular, tremendous opportunity to purchase, and it checks all the boxes, it's available today and the timing and everything, yeah, that could work. But, man, that’s just that's a unicorn.

Stephen Trutter: I always say, don't prioritize the purchase over the over the opportunity for your practice. Very simply, don't prioritize that. Prioritize what is the best available property today, what is known factors today? Because no one can predict that that that purchase will will gain. Listen, there's a lot of there's a lot of real estate you can own, and it doesn't have to house your practice. Yeah, you can be an owner of real estate. I'm not a financial advisor, but I'm sure you talk a lot of financial advisors and say, Hey, real estate should be a part of your financial portfolio. Cool, doesn't mean it has to be your practice. Yep, own other real estate. You can apartment buildings, rent those out. Life is good.

Rob Montgomery: Good stuff, amigo. So tell us, Stephen, where can people learn more about Ideal Practices, and upcoming events. And I also want to chat briefly about your new podcast.

Stephen Trutter: Yeah, absolutely. So you can find us at IdealPractices.com, you can pick up a copy of my book, The Startup Dentist. Our next event- I feel like this is like Bill Maher, when he says where he's going to be- so, hey, where I'm going to be next will actually at our next Startup Practice Blueprint. This is a two-day immersive course, where we basically unfold the entire startup process that we guide our clients through over two days. Then next we have those in the fall as well and in the spring. You can go to StartupPracticeBlueprint.com to register for that next upcoming event. And it is just an awesome event. And Rob, you've been a part of many of those.

Rob Montgomery: Yeah, yeah. It's great. You bring in all kinds of industry experts. It's really, from my perspective, speaking and being in the room with the people that are really focused on doing startups and doing it right, to surround yourself as a dentist, with a peer group of what I would consider to be the gunners, and just the vibe and the energy and the questions in that room are just so beneficial and impactful for everybody there. And tell us about the podcast.

Stephen Trutter: Man, the podcast, The Startup Dentist Podcast, we're rolling out new episodes basically every week. So check out some new episodes that are going to be dropping here soon where I jump into all kinds of topics, not just startups, but even talking about practice ownership, getting yourself ready for that. And so check that out where you get your podcasts, The Startup Dentist Podcast.

Dr. Paul Goodman: Awesome, Stephen. You're always great talking to you. Yeah, thanks for thanks for taking the time.

Rob Montgomery: Stephen, it's always a pleasure. Amigos, keep up the good work and doing all the good stuff that you do for startup dentists.

Stephen Trutter: I appreciate it, guys, thanks.

Rob Montgomery:  Stephen does such a great job. All the people at Ideal Practices, Paul, I mean, we've worked with people that don't work with consultants. We've worked with people who work with bad consultants. There's no doubt in my mind that when you're working with a great consultant, it's the difference between floundering and thriving.

Dr. Paul Goodman: I mean, as someone who's gone to dental offices for a long-time, walk-in like, I'm going to walk in tomorrow, you want to make sure that your business home is the one you want. And it's not the time to be cheap about a place where you're gonna spend the next three decades. Changing people's lives, but also running a dental practice, which is incredibly complex, and getting yourself started on the right foot.

Rob Montgomery:  And as you steal my jokes, Paul, I'm allowed to steal yours too, and this isn't a joke. And it's like, these are, as you say, one transactions. Now for most people, once decisions, you don't get mulligans with this. It’s just it's exceedingly complex to run a dental practice and just make sure it's the right one for you.

Dr. Paul Goodman: It is not the time to try to get a deal like you are on lidocaine and work with people who do things every day. You’ve taught me that Rob and they don't teach you that in dental school. They think you can do it yourself, and, as you could learn how to bond a tooth, Rob, and I'm sure you could read the instructions, but I don't think your results are going to come out like a dentist’s. And same thing here, let's we're not going to find out.

Rob Montgomery: Yeah, thanks everybody for listening, Paul, it's always a pleasure. Thanks, Rob.

Bumper: 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 drpaulgoodman.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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