July 7, 2025 • 49 mins
This episode of "Dentist to DeNovo" features host Jonathan Miller has an in studio discussion with Stephen Au, a seasoned expert from McLaren & Associates, a leading dental transition group. With nearly 20 years in the dental industry, including clinical and practice brokerage roles, Stephen shares insights on navigating dental practice transactions. The conversation debunks the myth of an adversarial relationship between buyers' and sellers' brokers, emphasizing aligned interests when brokers prioritize success for all parties. They explore challenges in un-brokered deals, the importance of realistic expectations, and the critical role of thorough financials and team dynamics in acquisitions. Key topics include the pitfalls of desperation buys, the value of investing in staff, and the emotional versus logical aspects of purchasing a practice. The episode also touches on market trends, such as tight dental talent and the impact of leases, offering practical advice for buyers and sellers alike.
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Episode Transcript
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SPEAKER_00 (00:00):
Welcome to the podcast from Dentist to DeNovo.
This week, we are in studio.
It might look a little differentthan what you've seen in the
past, and I have the pleasure ofhaving Mr.
Stephen Au with me.
Now, before we get to Stephen, Iwill tell you a bit about him.
I've known him for years.
He's actually been in thebusiness now for almost two
decades, and I don't want to agehim, but I'm aging him.
Almost 20 years now, he's beenon the clinical side.
(00:23):
He worked with one of thelargest accounting firms, top
20, if I'm not mistaken, and nowhe's on the practice broker side
one of the largestdental-specific transition
groups in the country.
You guys do more than dental?
We only
SPEAKER_02 (00:36):
do dental and mainly work with private equity, but we
also do premier privatepractices as well.
SPEAKER_00 (00:40):
And that group is McLaren& Associates, right?
Yes.
I've gotten to know those guyswell.
I knew them before you got inthe game.
And honestly, man, the biggestreason why I wanted you here is
because so often when I workwith doctors as a buyer
advocate, they assume that it'sgoing to be an adversarial
relationship with the seller'sbroker.
And so I thought, what a greatopportunity.
(01:00):
I've known you.
I trust you.
And I thought, oh, great.
Excited to have you here so wecan have a chat about why it
shouldn't be adversarial.
SPEAKER_02 (01:08):
You know, I think the...
If they're a good broker, Igenuinely think that the
interests are in line with thebuyer's representative, buyer's
consultants.
And it's simply because, look,at the end of the day, you want
people to succeed.
(01:28):
And you have to do that bysurrounding the buyer with a
good group.
And to be clear, we representsellers.
And so we try to surround buyerswith their own team.
that are just not us becausethere's obviously a conflict of
interest there.
And so it makes sense for aconsultant like you to step in
and help them because a lot ofthese people have to be guided.
(01:51):
A lot of them need the help andthe hard part is they don't know
what they don't know.
SPEAKER_00 (01:57):
Right, yeah.
So it's funny because I findthat the toughest part we'll
call them deals or transactionsor acquisitions, are when there
is no broker on the other end.
And a lot of doctors will lookat me and go, well, why would
you say that?
Wouldn't it be easy for me andyou to, you can help me and we
go to a doctor, no broker, andkind of get whatever we want?
(02:17):
And I laugh and go, well, thebiggest challenge is we don't
have anybody corralling theseller.
We don't have anybody kind ofgiving the seller, hey, this is
what is expected.
This is what's required.
Banks are going to ask forfinancials.
CPAs are going to ask forfinancials.
Buyers are going to askquestions.
And it also allows us when Itypically say, well, doctor,
when there's nobody helping theselling doctor, when there's no
(02:40):
broker involved, the seller getsto make up the rules.
Right.
If they say, hey, you know what?
The sky's green today.
And you go, well, it looks blueto me.
They go, no, it's green becauseI
SPEAKER_02 (02:48):
said so.
I have that going on right now.
And a lot of times there arecases where as someone who sells
practices, I will be very honestwith doctors and just let them
know, hey, you don't need abroker because it's your
associate of 20 years orwhatever.
At that point, get someattorneys, go to town, it's
fine.
(03:09):
Even with that, I've had doctorscome to me specifically wanting
to preserve the goodwill just incase the transaction doesn't go
through.
And so I think that To yourpoint, I have this now where a
friend is buying from theirowner and they've been an
associate there for five years.
(03:29):
And every other day, the pricechanges.
You know, the doctor wants moreand then the rent's going to
double.
And you're like, look, there arerules of engagement.
There's things that arecustomary.
And just because you wantsomething or you feel like your
practice is all of a sudden onthe uptrend for the last two
months, doesn't mean you get todemand more money.
(03:49):
And I think...
part of my job as someone thatsells offices is to really set
realistic expectations, right?
And we also want to give theseller the feedback that, look,
maybe this person isn't theright buyer, right?
Because that does happensometimes.
There's a lot of people outthere who, you know, like the
(04:12):
idea of ownership, but don'twant to fully dive in.
You know what I mean?
They're kind of one foot in.
They want to dip their toe in.
And our job is to kind of ferretthat out a little bit and be
like, look, maybe like i knowthat they're here and they're
available um it's like datingyou you don't you don't marry
the first person you see all thetime right maybe you get lucky
right maybe i know lindsey's theonly person you ever dated right
(04:35):
yeah yeah yeah but but maybe youget lucky and that happens but
sometimes you just have to youknow pull them in a little bit
reign them in and and setexpectations and i think the
other part of it to your pointi've seen a lot of doctor doctor
transactions and It's verytumultuous.
They don't have P&Ls.
They don't have balance sheets.
And you get to this point whereevery single part is a stumbling
(04:56):
block.
Probably the best way for you tolose interest from a buyer.
SPEAKER_00 (05:00):
Totally agree.
And you had said, being honestwith them, I tell most buyers,
hey, I'm here to tell you whatyou need to know, even if it's
not what you want to hear.
You might need to know thatit's...
X, Y, Z on how they make moneyor what their profitability is
or what have you.
And you may have thought, oh,well, they're doing a million
five.
Why aren't they making a halfmillion?
They're only making 350 or four.
Well, that's what you need toknow.
(05:20):
It may not be what you want tohear.
And on top of that, I wish morebuyers that were working in
their associate offices.
They don't have to use someonelike me, but I kind of wish they
would use someone like me or aCPA or someone to vet that out.
Because, again, you haveowner-doctor, and I find this a
lot, soapbox, if you will, oldermale doctor, young female
(05:43):
associate.
There's going to be amansplained situation.
I mean, so that's
SPEAKER_02 (05:47):
actually what's going on right now in that
transaction.
It's literally what's happening.
UNKNOWN (05:51):
Right.
SPEAKER_02 (05:52):
And they're trying to justify what they're doing.
You're like, you can't justchange the price.
You can't just change the rent.
Your profitability is predicatedon your existing lease
situation, on your existing rentsituation, your existing
numbers.
But I'm right there with you.
And people ask me oftentimes, isa CPA enough?
That's probably a good questionto get asked.
(06:14):
And I tell them, listen, thenumbers tell you one part of the
story.
The other part of the story iswhat's not represented, possibly
in the numbers, right?
It could show you profitabilityof 30, 40%.
The other side of that is, well,how about the practice
management reports?
Most brokers, ourselvesincluded, will provide you
practice reports, but you haveto understand them and those are
(06:37):
way less straightforward.
And so it's about understandingare you a good fit for the
practice, right?
I've had people who buypractices that don't do ortho
and then they're like, oh, Ididn't know the practice was 50%
ortho.
And you're like, yeah.
And that's a silly probablyexample because that's so easy
to ferret out, but they justmiss that point.
(06:58):
And that's why it's important tohave advocates and someone to
kind of guide you along the waysimply because you could be
making a million dollar mistake.
SPEAKER_00 (07:05):
Right.
It happens.
I think there's something I wishmore buyers knew, which is CPAs
are great, but the numbers tell,I say, about a third of the
story.
I say the other two-thirds comesfrom practice management
reports, and then inside therealso what's going on with the
team dynamic.
So you know how you guys givethat, like, hey, here's who's
there, so many dentalassistants, hygienists, et
(07:27):
cetera.
I look at that as well as, okay,well, how long have they been
there?
Is anybody going to retire whenSeller retires?
They've been there 25, 30 yearsas well.
We might lose those folks.
So that tells us a bit about thestory.
And then we have, obviously, thepractice management reports that
tell us about the patients andhow did those numbers end up on
the tax return.
Now, that's something I wishmore buyers knew.
To put you on the spot for asecond, what do you think...
(07:47):
something you wish more sellersknew?
Because I'm going to tell youthat I bet you most sellers
think, well, Steven, you justtell me whatever we can sell it
for, and then we'll just make upthe price.
Come on,
SPEAKER_02 (07:57):
man.
I wish they knew that, one,there's always a cap.
I just got off the phone withone guy, and he's like, how
about 110%?
I'm like, listen, banks don'tloan to that.
I wish they knew that leading upuntil they retire it's okay to
(08:17):
take deductions but withinreason right because we see it
all the time where they'retrying to justify the fact that
they wrote off their yacht orwhatever it is or they bought
you know a lambo and they wantto write it off or i mean those
are extreme examples but i'vehad people write off planes i've
had people and you just you'relike listen trying to explain
that to a bank to say well thisis his the reason is he's paying
(08:40):
for a hangar in jet fuel like Sodifficult to explain.
So I think leading up into that,it's really it's important to
have a good CPA, goodfinancials.
I'll tell you, my struggle hasbeen probably the hardest
struggles have been with CPAsthat are non-responsive, that
don't get financials in time,that you're going to sell.
(09:02):
and they still need to do threeyears of tax returns.
And it's super common,unfortunately.
You'd be shocked at how manypeople don't even follow a tax
return for three years.
And you're like, how does thatwork?
SPEAKER_00 (09:14):
I would be shocked because I think there's also
it's funny when I know whenthey're kind of disorganized on
their side when you know we getto this point now we're shooting
this episode it's June halfwaythrough the year pretty soon a
lot of banks are going to startsaying let me see a six month
P&L and when they're like why doyou need to see that you're
right oh yeah your CPA is nottoo organized
SPEAKER_02 (09:34):
yeah and you know the hard part about this is it
all falls back on us meaning wetry to set the expectations and
I've told people like you needto make sure as you're going
through this that you're you'reup to date on your books all the
time.
Because at any point, they couldask you to pull a report.
And if you don't have that andyou don't produce it for 30
days, it holds up thetransaction for 30 days.
(09:54):
And again, as we say, time killsall deals.
People lose interest.
And it also says something aboutyour practice if you are highly
disorganized.
SPEAKER_00 (10:06):
Very true.
It gives a buyer cold feet.
Makes the buyer look around.
Right.
And sees something
SPEAKER_02 (10:10):
else.
Something else might come onmarket.
They might get pregnant andmove.
SPEAKER_00 (10:15):
Who knows?
Who knows?
SPEAKER_02 (10:16):
Who
SPEAKER_00 (10:16):
knows?
Who knows?
I would say something else Ithink I wish more buyers knew as
well.
And that is when a buyer gets aCPA, I'm not anti-CPAs on the
buyer side, but I will tell youthat if your CPA loves the deal,
but the bank doesn't, then it'snot going to happen.
So your CPA as a buyer could godo all the numbers and say, this
(10:36):
is a Killer deal, great deal.
Bank says, eh, we don't like it.
Not going to approve it.
Doesn't mean you can't go toanother bank.
Plenty of banks out there.
But if the bank doesn't love it,it's not going to happen.
And on the flip side, if thebank loves it and your CPA is
going, eh, I don't really loveit, there's some things that
more often than not, I seebuyers do the deal anyway.
SPEAKER_02 (10:52):
Yeah, yeah.
And there's so many people thatdon't necessarily understand
dental, and you know what Imean, and they don't understand
certain equipment, ad backs, andthings like that, where you have
a doctor that's investing intheir business over time.
And ultimately, it's a goodthing because it means whoever
steps into it should have sometechnology or some kind of
continuity with the investmentpiece of the practice.
(11:15):
But the CPAs say, oh, they spendway too much.
It's not a good practice.
They're over leveraged orwhatever the fact might be.
To me, you have to get someonethat's dental specific, that
understands when a seller isinvesting in their business.
And to me, that's a good sign.
What you don't want to see issomeone who never invests in
their business, right?
Because that's what you'rebuying.
Right.
Totally true.
SPEAKER_00 (11:36):
Totally true.
I also will see, so if the CPAson the buyer side can be a
little bit what have you, as faras maybe they're a little strict
or they're a little loose or allthat, I find that in the lending
side, the banks vary so muchlately.
Somebody loves it, somebodyhates it, and that really throws
(11:56):
the buyers off.
SPEAKER_02 (11:58):
It does.
I mean, there's been quite a fewdeals where one bank will
approve it, one bank's kind ofon the fence, and one bank will
decline it, and it gives someonecold feet.
Probably a good example of thisis I was doing a deal up north
and the issue was Delta Premier.
And two banks approved it, onedeclined it.
Ultimately, the doctor got coldfeet, walked from the deal,
(12:19):
eventually came back because itwas a universal problem, meaning
everyone in that area was DeltaPremier.
So if you're going to buy apractice, this is going to be a
universal problem.
It's not specific to thepractice I was selling.
They ultimately bought thepractice.
And I talked to the underwritersof these banks.
I won't name who they were.
And one of them said, we don'tlike it because here's what we
(12:40):
see in our portfolio where thesedoctors might underperform.
Then I talked to another bankwho was like, well, from what
we've seen on our data pointswith 1,000 offices, they just
replaced the income with someother stream of another clinical
aspect, a different modality.
They place implants.
They'll do more Invisalign tomake up for the kind of delta
(13:02):
shortfall, right?
SPEAKER_00 (13:04):
So you find them replacing it, and then you're
basically getting thisconflicting bank thing.
Did that buyer come back?
He did, and he ultimatelytransacted,
SPEAKER_02 (13:10):
and it's crushing it, right?
Probably crushed it, right.
Crushing it.
And ultimately, listen, I mean,let's just call it what it is.
I think...
doing well, and we've discussedthis a lot in the past, it's a
mental framework.
If you want to do well in lifeas a doctor or any business, you
have to mentally be prepared forit.
And that's it.
And my favorite quote is, if youwant to be a successful business
(13:32):
owner, you only have to workhalf a day.
You just have to pick the 12hours you want to work every
day.
And that's what you have to bein it for, because this stuff
does not exist in a vacuum.
You're not going to you know putsomething an x from your house
and then all of a sudden you'rejust going to get a line out the
door yeah um you know and wealways say listen the numbers
(13:55):
are logical but the buy isalways emotional right really
it's like what's the draw areyou drawn because of the
location is it because of thepatient pool i think number one
the numbers have to make sensejust as a starting point right
that's just a very basic levelstarting point second part is
Does your treatment modalityline up with the seller?
(14:18):
Very good point.
If they're aggressive andeverything's a crown, as the
saying goes, if you're a hammer,everything's a nail.
And if that's not you, youprobably shouldn't buy that
practice.
Or you take issue with that.
You probably shouldn't buy thatpractice.
To your third point, you have toknow the staff.
(14:39):
What's that look like?
How do they treat their staff?
How do they run the office?
There's got to be a kind ofcontinuity of personality there,
too.
And so, yeah, you're probablyright.
It's probably a third numbersand probably 70% other, right?
And the hard part about what youdo is that that other, it varies
(15:00):
so widely.
It depends who you're talkingto.
Some people are like, I canmanage people no problem.
Some people are really, probablyovertly interested in the
clinical aspect, right?
When the reality is patientsdon't know any better.
Right?
So it depends.
But yeah, the buy is veryemotional.
The numbers are logical.
SPEAKER_00 (15:21):
You've probably seen both though, you know, a doctor
transitions, And the patientsgo, I didn't even know, oh, Dr.
So-and-so left.
Because they're so in line withthe team and with the office and
what's going on.
And then other scenarios, it'slike, oh, Dr.
So-and-so left.
And then I will tell you, thebiggest thing for me with
(15:41):
helping a buyer is thetransition of the team.
If the team doesn't want to goin the direction you want to go,
then you're not going.
And on top of that, you findthat With that team dynamic, I
tell doctors, get the team'strust first, then the patients
will follow.
If you do not get the team'strust first, and I've seen it
(16:01):
where, let's face it, You're adoc.
You're selling.
It's a four-day-a-week practice.
Maybe it's a three-day-a-weekpractice.
Sounds great.
Buyer says, I can have a fourthday, a fifth day.
This thing's going to crush.
And then you tell the team thisgreat idea you have.
And they're like, we kind oflike this three-day-a-week game.
For the last
SPEAKER_02 (16:18):
30 years of their life, yeah.
Well, we like thisfour-day-a-week game.
100%.
You know, it's funny, right?
Because one of the things that Ialways recommend to buyers, I'm
like, look, you're going to gointo this.
You don't know these people.
But just start by giving themsomething, whatever that looks
like.
Great plan.
Love that.
Yeah.
I'm like, go give everyone a$2an hour raise.
Yes, it's not probably the bestway to spend your money, but
(16:40):
invest in your people, invest intheir continuity, show them you
care, start from a good foot.
The amount of people that I'veseen walk into office, start
cutting hours, they start nickeland diming their staff members,
and then they're like, well,they left, and you're like, You
wonder why?
Who wants to work for that?
I mean, they can go get nickeland a dime somewhere else and
(17:00):
probably get a$5 raise down thestreet.
That's just a fact.
This market's tight.
The talent is tough in a dentalpractice.
And you and I know the numberone phone call we get from
everyone and anyone who arefriends is, do you have a
treatment coordinator?
Do you have a hygienist?
Do you have an assistant?
Do you have an RDA?
Market's tight.
SPEAKER_00 (17:20):
Take care of people.
Always true.
I will tell you that I usually,when I'm talking to buyers and
we always get to a point wherelike, all right, well, is it a
good deal or not?
You know, I tell most doctors,anytime I see somebody slightly,
we'll call it overpay with airquotes, they end up in a better
position.
Anybody that took some deal,some I'm just giving it away, or
(17:42):
I ground somebody down onpurchase price to get whatever
deal was in my mind, usuallythey struggle.
SPEAKER_02 (17:48):
You know, it's funny.
I...
It's one of those things whereit's hard to convey because
we've been in the industry solong and we see it, meaning I
tell all buyers, I'm like, look,one, your mindset has to be in
the right place.
As a baseline, if you're abuyer, let's start with your
clinical.
You have to be good.
(18:09):
It can't be you're sort of good,right?
It's like being a pilot.
You can't land the planesometimes.
You have to land the plane allthe time, right?
And that's number one.
And I've had people who justThey thought they were great
clinically, and they step in,and it's not a practice builder.
In fact, patients start leavingbecause everyone has post-op
sensitivity.
Not a good position to be in.
(18:31):
The second part is just themental framework behind being a
business owner.
I'm a big believer that if youcan take$1 and make$1.20, it's a
great skill, impressive.
If you can take a dollar andsave 80 cents, that's not a
skill.
Listen, the abacus is the oldestinvention ever.
(18:51):
It predates us by hundreds ofthousands of years.
Saving money is not a skill.
And I wish more...
business owners understood that,just in general.
Because you can never cut yourway to prosperity.
It just doesn't work that way.
SPEAKER_00 (19:07):
I will tell you the challenge that I hear about from
young doctors or young andcareer doctors is that I think
there's still folks out therekind of getting this advice on I
know what my father gave to me,right?
As a military guy, Midwest guy,he said, hey, you know, take
$10,000 and put it in a savingsaccount with a high interest
rate and it'll be a milliondollars when you're 55 or 60.
And today that's not true.
(19:29):
And you cannot save your way towealth.
You absolutely have to find waysto invest your way to wealth.
And I also think that buyersshould appreciate that with what
they're buying.
We're buying somebody'spractice.
We're making an investment intoour future, but this is also
somebody else's version of, hey,this is my investment into my
retirement, my wealth, mystrategy.
100%.
SPEAKER_02 (19:48):
And so I've said this a lot, and this is not tax
advice.
Consult your CPA.
It's not wealth advice.
Consult your CFP.
Disclaimer alert.
The reality is making$150,000 asa business owner is probably
better than making$250,000 as aW-2.
Just hands down, right?
Just the ability to write thingsoff.
And for those of you watching,again, I'll give you a very easy
(20:11):
example.
If you were to buy a$50,000 caras a W-2, California yeah you
have to make a hundred grand youhave to pay your taxes you have
to pay sales tax you buy the carafter you make the hundred grand
if you're a business owner youjust got to produce 50 grand you
buy the freaking car yeah rightat the end of the day and that's
your entire life meaning yeahagain not CPA advice your Costco
(20:35):
runs your meals out your yourcontinuing education your travel
all of that right and so you'reusing cash flow to live your
life meanwhile you have this theability to tax shelter that's
huge i mean that that's that'sreally what is like 57 of all
(20:56):
the revenue united states comesfrom small businesses yep right
like that's why you want to be abusiness owner because It is
really difficult to get ahead ifyou are a W-2 employee.
Let's just put it out there.
It is what it is.
SPEAKER_00 (21:09):
Agreed.
I find that whenever I'm talkingto buyers about these deals,
good, bad, invest a little more,et cetera, some of the stuff
I've mentioned, I also say,look, there's really kind of
three versions of buying apractice.
There may be three reasons.
There's one of them you neverwant to be in, and then there's
the other two that areacceptable.
The two that are acceptable, youwant to buy one for opportunity.
(21:30):
I can see the future on thisthing.
Maybe, doctor, to your point, alittle conservative.
Yeah.
A little bit.
Not everything's a crown.
And maybe I don't have thetechnology.
And I can add to this practicepretty quickly.
Opportunity.
The other one is, I say, justkind of tried and true.
Historically, while we know ifwe were financial advisors,
historical performance is noindication of future success.
Right.
However, we can see that, hey,this thing is continuously done
(21:50):
X.
Right.
And the team has helped it getthere.
And the team's going to staywith you and be strong.
And those are all very goodindicators.
Right.
The third one that you neverwant to be is desperation.
Yes.
I just...
gotta buy something, man.
I'm sick of being an associateand there's nothing around and
this guy's down the street frommy house, I'll figure it
SPEAKER_02 (22:04):
out.
I mean, you know, dating isprobably the easiest kind of
comparison.
Like, you just don't want to bedesperate when you're dating.
Marry the wrong person, date thewrong person, you know?
It's, you know, you kidswatching, do not swipe right on
everything.
Yes, please.
Yeah.
It goes with the practices aswell.
Yes, yes.
I'm there, you know, the amountof friends that I've advised, I
(22:24):
mean, I get calls becauseeveryone knows I sell practices
and so they'll call me for mytwo cents.
And if it's not a greatpractice, I tell them, look, I'm
not trying to step on the otherbroker's toes, but this is not a
great practice.
But if you were to buy this,here's what you would have to do
to either grow it or turn itaround.
Are you comfortable with that?
It's much like fixing up ahouse.
(22:47):
Sometimes you do want theugliest house on the block.
And I'll give you a goodexample.
You find a practice in Venice,California.
You should buy it.
I don't care what the condition,because you cannot build.
And if you want to be in thatmarket, Even if it's garbage,
you've got to find a way to makeit work because you want to be
in that city.
Again, I'm not telling you tooverpay.
I'm not telling you to bedesperate.
But what I'm telling you isthat's your only way into that
(23:08):
market.
Very true.
Very true.
SPEAKER_00 (23:10):
Good point.
And there's definitely a lot ofpockets in the U.S.
SPEAKER_02 (23:13):
Yeah, I mean, the Palisades, unfortunately, was
one of them, right?
Yes, very true.
It was one that if you...
They didn't allow permitting formedical buildings.
And so you couldn't build adental practice.
La Cunada Flint Ridge isprobably another area.
You cannot really build a dentalpractice in La Cunada.
It's near impossible at thispoint.
And
SPEAKER_00 (23:30):
I mention this to docs because I get some doctors
Almost all my business comes viaword of mouth, doctor to doctor,
as you know.
And so one doctor will do astartup and say, well, I have a
buddy that wants to buy.
They think I'm crazy for doing astartup, but can you help them?
So years ago I got into thatversion because I'm like, yeah,
I can help, and here's a processand a path.
And so then I'll get doctorsthat kind of are looking at both
because I do both.
(23:51):
So they'll say, well, can Imaybe look at the startup, but I
have a few practices I'minterested
SPEAKER_02 (23:56):
in.
SPEAKER_00 (23:56):
And in some cases I'm like, look, there's no
inventory to do a startup.
These practices that you'reinterested in might be all
that's here.
Correct.
And this is it.
Yeah.
We've got to figure one of theseout or we can sit around and
wait.
100%.
SPEAKER_02 (24:06):
Opportunity cost that comes with that.
You know, it's funny becausethat's probably the million
dollar question we get askedevery day, right?
Like, should I do a startup orshould I buy?
And it's funny because I sellpractices, but I'm also, I think
there's not a lot of inventoryin general out there, right?
Very true.
The number one thing that Numberone thing doctors are always
(24:27):
worried about, right?
It's what if I fail?
And you and I are the opposite.
We're like, what if you're amassive freaking success?
There's that, right?
Like you could be a massivesuccess.
And I remind everyone, I'm like,listen, 100% of practices that
exist today were once a scratchpractice.
Like this is irrefutable.
You cannot argue this.
(24:47):
And so what's the upside of,let's say, starting up?
The upside of starting up isexactly where you want to be.
It's new.
It's the location you want to bein.
It's in the building you want tobe in.
It's a culture you want topresent.
There's upsides to all that.
And financially, it's structuredvery differently than an
acquisition loan.
(25:08):
And so it gives you a little bitmore runway.
You can maintain associateship.
You can start.
I say that because we've talkedto enough doctors that have been
on the fence for five years.
And at a certain point, time ismoney.
You just got to make a decision.
And the reality is you'reprobably not going to go wrong
going either direction.
The trouble I see is a lot oftimes there's too many opinions
(25:34):
from too many people.
And I'm not saying that's a badthing.
I'm saying you should listen topeople's opinions, but you
should take it with a grain ofsalt.
Everyone has rose coloredglasses for what they did.
If you talk to a guy thatstarted up, he's gonna tell you
should only start.
You talk to a guy who boughtfive offices, he's gonna tell
you should only buy offices,right?
You and I know people who arevery successful in both arenas.
SPEAKER_00 (25:55):
Yep, yep.
And I know people that aresuccessful at their HMO Medicaid
practices.
I know folks that arefee-for-service folks.
And the fee-for-service guyswould say, oh, those guys are
nuts.
And the Medicaid HMO guys aregoing, I have zero cash flow
issues whatsoever.
I've got two houses.
I think if you want to be afee-for-service guy, go for
SPEAKER_02 (26:14):
it.
You know, I have a friend who,they're brothers.
Let's hope they don't watch thispodcast.
But one jokes with me, the thepremier cosmetic dentist in a
city that will remain nameless,tells me that their brother is
exactly an HMO and just crusheshim in volume.
(26:36):
At the end of the day, Abusiness is what you make it.
It's predicated on theindividual.
It's predicated on the personthat's in the driver's seat.
It's not about the existingbusiness itself.
It's not about the elections.
It's not about what's happeningin the economy.
It's not about war.
And you and I have been in thislong enough.
(26:58):
When I lecture, I'll go and Iremember, I'll ask people, how
many people here went through9-11?
Most of the hands go up.
How many people went through theGreat Recession of hands go up.
How many people went throughCOVID,
SPEAKER_00 (27:12):
right?
SPEAKER_02 (27:12):
Look, they're still here and they're still thriving.
That's the message at the end ofthe day.
It's what you make it.
And the reality is fortunes aremade during a recession.
So stop being scared of it.
It's probably your time toacquire, to expand, to buy a
building, right?
But everyone just wants to holdtight and pull back.
(27:33):
And I get that.
Like, dentists by nature areconservative.
They're taught to beconservative, right?
You ever read the book, TheHappiness Advantage?
Who's that?
Sean Acor.
Maybe.
It's a great book.
And so the notion of the book isit posits positive psychology.
Not like frou-frou positivepsychology.
(27:54):
It's very interesting.
It basically says that If youare neutral, you get almost the
same outcome as being negativein your mental thought process.
And so one of the studies inthis book is very interesting.
They took two groups of doctorsand they replicated the study
over and over again.
And they gave two groups ofdoctors the same pathology.
(28:15):
They gave one group a cookie.
They called that psychologicalpriming.
They were not allowed to eat thecookie for sugar control.
The group of doctors that gotthe cookie arrived at the
pathology, the right diagnosis,much faster than the other group
and were 20% more accurate.
And there was less of aphenomenon called anchoring.
(28:35):
Anchoring is when you're anendocrinologist, you think it's
a gland issue.
You're an oncologist, you thinkit's cancer.
You're a cardiac doctor, youthink it's a heart issue.
There was less of that in thegroup that got the cookie.
And so the premise was, if youare happier and you move in a
direction where you're morepositive, it helps you in your
career.
And consequently, one of thestudies they did was they did a
(28:58):
study on auditors who work forKPMG, which is one of the
largest accounting groups in theworld, right?
And they found that these peoplein their private lives, all they
could see were flaws and issuesbecause their job was to look
for errors in books.
And I feel like dentistry is thesame way.
Listen, you're taught to seekdisease.
(29:19):
You're taught to look for flaws.
And so when you buy a practice,The number one thing people
always say, which baffles mymind, is what if I fail?
How many times have you heardthat in your career?
Plenty.
And you're like, doctors don'tfail.
It's not a thing.
SPEAKER_00 (29:35):
So I'll say this, and then I'll ask you something.
So the only other thing that Ireally wish more buyers knew was
that, well, I think it's maybe1A, 1B, or two parts.
You had said there are a lot ofpeople out there that are giving
advice, giving counsel, givingguidance, what have you.
Take it with a grain of salt.
So I wish more folks actuallysought out information over
(29:57):
affirmation.
It's very, very easy to go downthe path of like I'm right and
I'm going to go down this pathof telling me I'm right.
And I think that comes a littlebit from what team is around
you.
Having some people on the teamthat may not say every idea you
have is a good idea.
And then on the flip side,though, I will tell you there
are some folks out there that– Itry my darndest to stay in my
(30:18):
lane.
Sure.
That's what I do.
That's what I tell doctors.
I'm not giving you legal advice.
I'm not giving you CPA advice.
Here's where I focus on andhere's where I can help you.
And if that's not good, then goseek out one of those folks that
does that.
If you're looking to save acouple of bucks and you don't
want to hire an attorney, Godbless you.
Probably don't want to work withyou anyway because you're going
to make mistakes and you'reprobably going to blame me.
SPEAKER_02 (30:34):
Yeah.
I'm a big believer that you haveto surround yourself with a
group of people, no matter whatthe cost, because the opposite
of making a mistake is way morecostly.
It's like skipping a homeinspection to save two grand.
I get it.
It's not cheap.
But at the same time, if itprevents you from making a
multi-million dollar mistake,there's something to be said
(30:56):
about that.
SPEAKER_00 (30:57):
Car insurance is expensive, but...
One of you didn't have it.
100%.
Heaven forbid something reallyserious happens, you have zero
insurance whatsoever.
Right, right.
And I think there's some folksout there that don't do a very
good job of staying in theirlane.
So as buyers, the only otherchallenge I see out there in the
marketplace is they've got atougher job figuring out, well,
who's doing what and do I needthem on the team?
(31:19):
You know, a CPA that says, Ialso do consulting or attorneys
that also venture into the CPAworld.
Or I think for someone like you,you know, grinds my gears when I
have somebody who, I don't wantto say parades, but I'm going to
say parades as a CPA and thensays, oh, but I really make my
money selling practices.
SPEAKER_02 (31:38):
That's cool, dude.
100%.
I'll tell you, we had one wherethe quote unquote CPA, and
again, I love CPAs.
There's not a knock on CPAs tobe absolutely clear.
But one, they were out of state.
They didn't know the market.
They valued the practice at130%, which any buyer listening
(31:59):
is going to be like, roll theireyes immediately, right?
SPEAKER_00 (32:02):
Sellers, though, might go, this is my guy.
Yeah, yeah.
So the seller was like, thissounds great until it sat
SPEAKER_02 (32:05):
in the market for two years, right?
UNKNOWN (32:07):
Right.
SPEAKER_02 (32:08):
I got on a contract in two weeks.
But again, I had that come toJesus moment with the doctor
where I was like, listen,there's no shot of you even
getting remotely close to thisnumber.
Let's be realistic here.
And if you don't want to berealistic, I'm not your guy.
Go sell with someone else orlist it yourself.
It's just not happening.
But yeah, I think that One,there's a conflict of interest
(32:32):
when you try to do too much.
And to be clear, I've had peoplecome to me and ask consult.
I'm like, it's not what I do.
I don't want to mislead you.
I know a lot.
It's not what I do.
SPEAKER_00 (32:41):
I will say how I found McLaren, I found them
years ago because they do greatreporting.
And I was impressed when I had adoc bring me a McLaren report.
He was the associate in theoffice and he said, hey, these
guys have someone thatrepresents them, et cetera.
And I said, cool.
And he's like, they got areport.
They have this whole thing.
Sent it to me and I was like,it's actually really good.
And I'm like, this is actuallyvery well thought out.
(33:01):
They've got you know, kind ofplenty of reports, data, stuff
to back up where their numbersare at.
And I said, look, I can try andpoke holes in it if you want to,
but this is a really goodreport.
They've taken in a lot ofconsiderations in the report.
So outside of verifying saiddata, because obviously they
just had the report, we can gothrough and verify the data and
look at the numbers and stuff.
And having like maybe a secondset of eyes or a second opinion.
UNKNOWN (33:24):
Yep.
SPEAKER_00 (33:24):
This is a really good report.
And then I actually went back tothem a couple other times when I
would have a doctor who wantedto sell to their associate.
And they were like, but I need anumber.
And I was like, well, I'm notgoing to give you a number.
We need somebody to help youwith this.
Let's reach out to these guys.
And then the reports they givewith the numbers they provide,
I'm still impressed today.
And there are other companiesthat have come along and they
bring these reports and things.
(33:45):
Half the time, they'rethird-party vendors that they've
just pulled in, slapped theirletterhead on and said, here's
our report.
And I'm like, but I could– Icould technically go get the
same information on the internetfrom the same companies that you
put on this report.
SPEAKER_02 (33:55):
Right.
And it's funny you say thatbecause, again, a lot of my
friends will ask me to look atthings.
I'm like, how did you evenarrive at this number?
Yeah, yeah.
And it was like, you just threwsomething at the wall to see if
it's going to stick.
And I've had plenty where it'sover 100% or right at 100%.
And you're like, look, no one'sgoing to loan to this.
It's not even remotelyreasonable.
(34:17):
And this happens quitefrequently on really small
practices for whatever reason,sub 500s.
So many of these guys just valuestuff at 100%, 110%.
The most difficult to do.
The most difficult to do.
Sub 500, yep.
Sub 500, most difficult to do.
And really, just unreasonably.
reasonable as a number, right?
There's not enough cash flow toeven support the debt at that
point, typically.
Yes.
Typically, right?
(34:38):
But yeah, I'm right there withyou.
I see a lot of that.
And I'll tell you, as someonewho's worked on these
valuations, it takes us a longtime.
I did one last week.
It probably took me a solid 10hours to work through the
numbers.
But the point of that is to ownthe information and to really
get a deep, thoroughunderstanding of the practice.
(34:59):
And you should see some of thequestions we ask the sellers.
I mean, sometimes it overwhelmsthem, but it's all in the, we do
it for the sake of being asthorough as possible and making
the transition as smooth aspossible on the backend.
So if we're thorough upfront,then the backend's way easier.
SPEAKER_00 (35:20):
There was something you said in there on the numbers
and the data.
and some of these third-partyevaluations to see what sticks.
And I find that there are– so–Let me take a step back.
Those sub-500s, for anybodylistening or watching, what
we're talking about, and you cancorrect me if I'm wrong, what
we're talking about is apractice that's in a revenue
(35:41):
stage of less than half amillion dollars, trying to sell
for a half million, or even 450or 400, pretty high up there.
Those are the toughest to do fora lot of reasons.
But realistically, for anyonelistening or watching, it comes
down to the bank lending themoney.
And they look at it and go,well, gosh.
I tell a lot of doctors, thebiggest challenge with those
offices is, the bank's startupprojection is usually more often
(36:03):
than not higher than the revenuethat this office is doing.
So then the bank isautomatically going, well, I'm
going to lend you money.
You say, this guy's been herefor 20 years.
He's got a great reputation.
It's doing less than a startupis or what we projected to do.
So that's kind of like saying,hey, that person who just got
their driver's license is asgood of a driver as you've been
for the last 20 years on theseSouthern California roads.
(36:23):
Shouldn't be that case.
And then in addition to, youknow, a lot of times the cash
flow doesn't support.
You're making less money doingthat than as an associate.
And while better, to your point,being in that version than being
a W-2 associate, when it comesto the bank, it's like, well, in
the end, you're not going tomake enough.
SPEAKER_02 (36:40):
Yeah, I mean, let's just put numbers to this.
I mean, if you ever practice astudent half a mil, usually the
overhead, especially in SouthernCalifornia, overhead's going to
be insanely high.
So you might be walking with 25%of that.
So you're talking about$125,000before debt service.
And then...
You know, the broader issue nowis student loans as well, right?
So there's student, the studentloan component personally for
(37:03):
the buyers.
If they want a house, if theyhave cars, if they have their
own personal debt, that practiceneeds to support that personal
lifestyle.
And more often than not, a lotof these practices don't.
That's not to say, I've soldsome 500s to be clear.
That's not to say they're notworthwhile, but it needs to make
(37:23):
sense.
And It's
SPEAKER_00 (37:25):
got to be the right buyer.
SPEAKER_02 (37:26):
It's got to be the right buyer.
It needs to be open the rightnumber of days.
What you can't have is apractice open six days doing
$400,000 a year.
You're never going to survive,right?
And you can't cut days becausenow the patients are so used to
it.
Again, all practices sell at acertain point.
It's doable, but it's probablynot ideal.
SPEAKER_00 (37:46):
I think you have to have the right buyer and you
also have to have the sellerwho's in the right mindset.
If they're trying to sell half amillion dollar practice to say,
well, I have to sell for half amillion, maybe I have debt on it
or this is my retirement plan orwhatever, you're really at a
kind of a lose-lose.
SPEAKER_02 (37:57):
Yeah, yeah.
Especially, I mean, it's funny,the amount of EIDL loans that
exist today.
Like if you guys are listeningand you're a seller, please deal
with your EIDL loan.
Yes, yes.
Good point.
It needs to go away.
It doesn't magically disappear.
True story.
I got up right until the daybefore close once.
Yeah.
And I asked the seller, been inpractice for 50 years, no reason
(38:18):
for me to think the guy had anydebt.
Paid off practice.
And then the bank runs a liensearch like, hey, did you know
he has an EIDL loan?
And the doctor comes back to meand goes, I thought it was a
personal loan.
Like the Small BusinessAdministration does
SPEAKER_00 (38:34):
not do personal loans.
You have to pay this off.
And there's a group of folksthat think they just go away.
There's a group of folks thatjust thinks, oh, well, no one
said or done anything, and theyjust vanish.
SPEAKER_02 (38:44):
If you are listening, and you do want to
sell in the next five years,please address that.
Good point.
It is an issue.
Good point.
If you are an owner and you'reselling to your associate,
please address that.
You have to subordinate it.
or do something with it becauseit's a non-serve
SPEAKER_00 (38:59):
for most banks.
So let's rapid fire here becausewe're coming to the end.
And so rapid fire, what thingsmake a great buyer?
SPEAKER_02 (39:08):
Right mindset, clinically competent, not just
confident, but clinicallycompetent, right mindset, growth
mentality.
I mean, it's everything youwould think of when you think
about what a good businessowner, and just not scared to
fail, like failures andillusion.
Everyone does well.
You just have to put in theeffort to figure it out.
Okay.
What makes a great seller?
(39:29):
Someone who genuinely wants thebest for the patients and their
staff.
What I've learned is thatbestsellers, Continuity of care
is number one.
Okay.
Continuity of staff is numbertwo.
Okay.
And money is third.
Okay.
And it's usually always in thatorder.
And even the ones who tell methat money is number one and
they're a good seller, it alwaysflips to the other side.
I've seen it enough times wherethey tell me they care about
(39:50):
money because it's their baby.
And then when it comes down tobrass tacks, they find someone
that they know is going to takecare of the patients and staff.
They don't care about the
SPEAKER_00 (39:58):
money.
Okay.
Anything you hear in themarketplace that you're like,
oh, that's nonsense.
That doesn't really matter thatmuch.
SPEAKER_02 (40:04):
You know...
Getting more on the privateequity side, I will say that
there's this illusion that DSOsare evil.
And I think that that's not truebecause it's compromise of the
doctor's peers, right?
The doctors still run these.
They're still doctors.
And the reality is some of thesepractices are so large that no
(40:25):
bank will loan to a privatebuyer.
If you have a$7 millionoffice...
one which private buyer wants tobuy that or is not scared to
take that debt on right even ifit's two or three doctors the
banks can have a very hard timelending and so i've learned over
the years that there's a lot ofgood people who work for these
dsos and The reality is, again,I'm not necessarily advocating
(40:48):
for this, but they serve apopulation based on 99% of
doctors just will never see inprivate practice, don't want to
see, right?
It's kind of like the HMOdoctors.
They serve a patient base thatno one else wants to touch.
Fair.
SPEAKER_00 (41:01):
Do you guys lean one way more towards EBITDA, seller
discretionary earnings?
Obviously, some folks say, well,I should sell for 95% of my
previous year's collection.
It's
SPEAKER_02 (41:11):
typically EBITDA on the private equity side, I would
say.
On the On the private practiceside, it's purely cash flow,
right?
Yeah.
Buyer's discretionary cash flow,
SPEAKER_00 (41:22):
customary cash flow.
Okay.
Okay.
Good.
I always like to talk to them interms of seller discretionary
earnings or, to your point,buyer's discretionary, what they
expect to take home.
Right.
And I think that when folksstart comparing EBITDA,
especially in buyers, and thisis As somebody who's on a
podcast now talking, there aretoo many folks out there on
podcasts talking in terms thatdon't apply to the single doctor
(41:45):
buyer, the private buyer, if youwill, not the private equity
folks.
And understanding that EBITDAconversation and the multiple
love and blah, blah, blah.
Look, at the end of the day, thedentistry that we're talking
about is still an owner-occupierbusiness.
Correct.
It only is as good as yourhands.
SPEAKER_02 (42:01):
100%.
Tony Robbins said if...
If you have to be present tomake money, you're a sole
proprietor.
If you can create value in yourabsence, you have a good
business.
And I think that's really thedifference between someone
talking EBITDA and someonetalking cash flow.
Usually someone who can createvalue in their absence, they
(42:22):
usually have a very healthybusiness.
I will say the thing, EBITDAis...
slightly overused at this point.
Everyone talks about it.
Thank you.
I mean, if you're on theclinical side, it's like when
people talk about the 3, 4, 5Y's zirconia, it's like no one
cares.
It's all the same.
It's all the same stuff at thispoint.
You know, it's overused.
(42:42):
And the only thing that mattersis how much you're going to take
home as a private buyer.
That's the only number thatmatters.
The one thing that just poppedin my head that does bother me
that I hear a lot is thesepodcasts that tell people you
have to have six, seven, eight,nine, 10 ops.
It's like you can make a greatliving on four, three, four,
(43:04):
five.
I've seen it.
I have people crushing in three,four, five ops.
Me too.
You don't need 20
SPEAKER_00 (43:09):
ops.
My personal dentist, I happenedto help him years ago close to
my house.
Four ops.
I honestly was in disbelief.
Doing two million bucks.
out of four ops and I was like,there's no, what?
He told me this and I'm like,here, I'm full of it.
I got a chance to peek behindthe curtain a bit before he was
my personal dentist.
He runs three hygienists mostdays a week.
He works out of his op.
Every once in a while he worksout of two ops so he doesn't run
(43:30):
three hygienists every day.
But he runs three hygienistsfour days a week.
12 days of hygiene.
Crushing.
Crushing.
Modern day practice, so he's gotCAD CAM unit in there, he's got
cone beam in there, but he's notslapping implants on everybody.
He's got a well-built,well-oiled, I should say,
hygiene department going, andhe's just seeing his patients at
his op doing his thing.
He's got an easy name to findonline.
He's in a medical officebuilding, so he doesn't have
(43:51):
some grandiose thing.
You don't have to pay to park,but you do gotta take an
elevator, go up a couple floors.
SPEAKER_02 (43:56):
People are trained.
They're used to that.
SPEAKER_00 (43:58):
It's easy.
It's simple.
It's streamlined.
SPEAKER_02 (44:00):
That's probably the other thing you probably heard
as much as I have is like, youdon't have to be in retail
space.
It's not a thing.
Like if Starbucks is willing topay$12 a square foot, like why
would they charge you three tobe a dental practice?
Like it makes no sense for theowners.
But yeah, the amount of peoplecrushing the two, three, four.
I mean, we have a friend who'scrushing in two ops.
(44:21):
And you're like, you cannot makethis stuff up.
And you're like doing more than99% of dentists in
SPEAKER_00 (44:26):
the country.
in two ops.
Yeah.
And all the money that goes intotheir pocket.
Because the person that I'mtalking about, 50%,
Profitability.
Yeah.
Because it's a smallerfootprint.
Yeah.
Not nearly the same rent.
Right.
Plus his rent's not as high asretail, et cetera.
Staff's smaller.
I mean, he's got, everything isjust kind of the perfect size,
if you will.
It's efficient.
Yep, for efficiencies.
(44:46):
Yeah, it's efficient.
And so I think that thatmatters.
The only other thing I would saythat I want more buyers to pay
attention to that I think evensome sellers don't appreciate.
I know you guys are good atcovering this.
Not all brokers are.
In fact, I think that just getsmissed is the lease.
Understanding that assetpurchase agreement is a very big
part of it.
But the next most importantdocument you're going to sign is
a lease.
And most folks come to thatill-prepared.
(45:09):
They may not want to bring anattorney on board.
They may not want to bring acommercial real estate person in
the fray to understand what kindof what those economics are.
And then on the flip side,you've got another party to deal
with.
You know, as a buyer, you've gotnow landlord who might just go,
oh, well, you know what?
Here's a new rental rate.
SPEAKER_02 (45:24):
Right.
I mean, post-COVID, I mean, it'sbeen so much more difficult to
deal with these landlords.
The amount of Doctors I know whoneeded a personal guarantor,
needed their parents to co-sign.
And a lot of landlords don'tnecessarily understand the debt
and the half a million dollarsthat these guys are in debt.
(45:45):
And that's usually a point ofcontention.
And so to your point, I think,one, it would help to have an
advocate help negotiate thelease.
And you don't know, be itsomeone like you, a real estate
broker, an attorney, someoneneeds to be in your corner and
tell you kind of what'scustomary Because how would you
know?
(46:05):
You have to pull comps.
You have to know what'scustomary.
And quite frankly, you shouldread the lease of the previous
seller to see if it'sassignable.
Because if it is, it would justsave you a lot of headache.
The downside sometimes ofassignability is that it makes
(46:25):
the previous owner stay on as aguarantor for a long period.
So that part is...
can be an issue at
SPEAKER_00 (46:31):
times.
Sure.
And any other maybe things theysigned up for years ago, you're
kind of now on the hook for,whether they be good or bad.
But, no, I agree with you forsure.
Final thoughts?
SPEAKER_02 (46:45):
Read.
Read often.
Yeah.
Yeah.
Be careful who you listen to,though.
You know, there's just so much.
We live in an information age.
You just got to take it in.
Yeah.
Overload, I think one, you haveto have the right mindset.
That's my starting point.
Look, it's normal to be scared.
It's normal to be nervous.
That's how you know you'repursuing something worthwhile.
(47:07):
It's like parenthood, right?
It's like pop out a kid, likeyou're nervous.
Everyone is.
And I think you just...
You have to have the rightmentality.
The people with the rightmindset are the ones that crush
it.
That's what I see day to day.
SPEAKER_00 (47:20):
You made some dating analogies, but I find so much of
practice ownership and headingdown the path of startup or
acquisition there's a lot ofparent analogies that I end up
using.
So for those folks that I talkto when they're parents, they
get them right away.
And anybody I talk to, I make ahaving a child analogy, and
they're like, no, I don't havekids.
I'm like, well, this is going togo over your head then.
SPEAKER_02 (47:36):
Shoot.
You know, that's the hard part.
You know, I tell people, like,you have to have the right
disposition.
And if you have a pleasantdisposition, it usually works in
your favor.
There are so many people thatare kind of always skeptical,
slightly negative.
Like, it doesn't bode in yourfavor, and your team feeds off
that energy.
It's not good.
Yeah.
SPEAKER_00 (47:57):
Where can social handles, all that stuff, where
can people find you?
Social handles?
Well, McLaren
SPEAKER_02 (48:03):
and Associates.
McLaren and Associates.
SPEAKER_00 (48:05):
What, just website, your
SPEAKER_02 (48:05):
profiles on there?
Yeah, and Instagram, yeah.
Okay.
For me, I'm mainly on Instagramand LinkedIn.
It's just my name, Stephen Au,so S-T-E-V-E-N-A-U underscore.
SPEAKER_00 (48:17):
Yep.
SPEAKER_02 (48:17):
And then McLaren and Associates, I believe, is our
handle on Instagram.
Easy enough.
Same on my LinkedIn.
SPEAKER_00 (48:23):
You're all entire West Coast?
Entire West
SPEAKER_02 (48:25):
Coast.
Our West Coast.
But I have friends over here.
McLaren goes all over, too.
McLaren's all over the US.
We have people all over theUnited States, East Coast,
Midwest.
SPEAKER_00 (48:35):
My final thought is, to buyers or to sellers, make
sure you're working withsomebody that's not doing dual
representation.
We could do a whole episode onthat, but it just shouldn't be a
thing.
I almost wish it was illegal.
SPEAKER_02 (48:47):
It shouldn't be a thing.
And realistically, that's whenpeople feel like they get
burned.
Again, not calling anyone out,but it's just if you are
listening and you are buying apractice yes have a good
relationship with the brokerthat matters have a good
relationship with the sellerthat matters right you want you
want a good transition but youhave to surround yourself with a
(49:10):
good team period like it's justto your point you start off the
conversation about you know doesit have to be adversarial no i
think that you and i have alwayswanted the same thing for the
same people exactly there's nolook, if they're not a good fit
and they fall out as buyer,cool.
That's probably what should havehappened to begin with.
That's the best thing that couldhave happened.
(49:32):
What would be worse if someonebought a practice and they
weren't it?
They weren't the person.
That would be way worse.
UNKNOWN (49:39):
Totally true.
SPEAKER_00 (49:40):
Well, thank you, man.
I appreciate you being here.
Thank you.
Good seeing you.
Awesome.
Thanks.
Welcome to the podcast from Dentist to DeNovo.
This week, we are in studio.
It might look a little differentthan what you've seen in the
past, and I have the pleasure ofhaving Mr.
Stephen Au with me.
Now, before we get to Stephen, Iwill tell you a bit about him.
I've known him for years.
He's actually been in thebusiness now for almost two
decades, and I don't want to agehim, but I'm aging him.
Almost 20 years now, he's beenon the clinical side.
(00:23):
He worked with one of thelargest accounting firms, top
20, if I'm not mistaken, and nowhe's on the practice broker side
one of the largestdental-specific transition
groups in the country.
You guys do more than dental?
We only
SPEAKER_02 (00:36):
do dental and mainly work with private equity, but we
also do premier privatepractices as well.
SPEAKER_00 (00:40):
And that group is McLaren& Associates, right?
Yes.
I've gotten to know those guyswell.
I knew them before you got inthe game.
And honestly, man, the biggestreason why I wanted you here is
because so often when I workwith doctors as a buyer
advocate, they assume that it'sgoing to be an adversarial
relationship with the seller'sbroker.
And so I thought, what a greatopportunity.
(01:00):
I've known you.
I trust you.
And I thought, oh, great.
Excited to have you here so wecan have a chat about why it
shouldn't be adversarial.
SPEAKER_02 (01:08):
You know, I think the...
If they're a good broker, Igenuinely think that the
interests are in line with thebuyer's representative, buyer's
consultants.
And it's simply because, look,at the end of the day, you want
people to succeed.
(01:28):
And you have to do that bysurrounding the buyer with a
good group.
And to be clear, we representsellers.
And so we try to surround buyerswith their own team.
that are just not us becausethere's obviously a conflict of
interest there.
And so it makes sense for aconsultant like you to step in
and help them because a lot ofthese people have to be guided.
(01:51):
A lot of them need the help andthe hard part is they don't know
what they don't know.
SPEAKER_00 (01:57):
Right, yeah.
So it's funny because I findthat the toughest part we'll
call them deals or transactionsor acquisitions, are when there
is no broker on the other end.
And a lot of doctors will lookat me and go, well, why would
you say that?
Wouldn't it be easy for me andyou to, you can help me and we
go to a doctor, no broker, andkind of get whatever we want?
(02:17):
And I laugh and go, well, thebiggest challenge is we don't
have anybody corralling theseller.
We don't have anybody kind ofgiving the seller, hey, this is
what is expected.
This is what's required.
Banks are going to ask forfinancials.
CPAs are going to ask forfinancials.
Buyers are going to askquestions.
And it also allows us when Itypically say, well, doctor,
when there's nobody helping theselling doctor, when there's no
(02:40):
broker involved, the seller getsto make up the rules.
Right.
If they say, hey, you know what?
The sky's green today.
And you go, well, it looks blueto me.
They go, no, it's green becauseI
SPEAKER_02 (02:48):
said so.
I have that going on right now.
And a lot of times there arecases where as someone who sells
practices, I will be very honestwith doctors and just let them
know, hey, you don't need abroker because it's your
associate of 20 years orwhatever.
At that point, get someattorneys, go to town, it's
fine.
(03:09):
Even with that, I've had doctorscome to me specifically wanting
to preserve the goodwill just incase the transaction doesn't go
through.
And so I think that To yourpoint, I have this now where a
friend is buying from theirowner and they've been an
associate there for five years.
(03:29):
And every other day, the pricechanges.
You know, the doctor wants moreand then the rent's going to
double.
And you're like, look, there arerules of engagement.
There's things that arecustomary.
And just because you wantsomething or you feel like your
practice is all of a sudden onthe uptrend for the last two
months, doesn't mean you get todemand more money.
(03:49):
And I think...
part of my job as someone thatsells offices is to really set
realistic expectations, right?
And we also want to give theseller the feedback that, look,
maybe this person isn't theright buyer, right?
Because that does happensometimes.
There's a lot of people outthere who, you know, like the
(04:12):
idea of ownership, but don'twant to fully dive in.
You know what I mean?
They're kind of one foot in.
They want to dip their toe in.
And our job is to kind of ferretthat out a little bit and be
like, look, maybe like i knowthat they're here and they're
available um it's like datingyou you don't you don't marry
the first person you see all thetime right maybe you get lucky
right maybe i know lindsey's theonly person you ever dated right
(04:35):
yeah yeah yeah but but maybe youget lucky and that happens but
sometimes you just have to youknow pull them in a little bit
reign them in and and setexpectations and i think the
other part of it to your pointi've seen a lot of doctor doctor
transactions and It's verytumultuous.
They don't have P&Ls.
They don't have balance sheets.
And you get to this point whereevery single part is a stumbling
(04:56):
block.
Probably the best way for you tolose interest from a buyer.
SPEAKER_00 (05:00):
Totally agree.
And you had said, being honestwith them, I tell most buyers,
hey, I'm here to tell you whatyou need to know, even if it's
not what you want to hear.
You might need to know thatit's...
X, Y, Z on how they make moneyor what their profitability is
or what have you.
And you may have thought, oh,well, they're doing a million
five.
Why aren't they making a halfmillion?
They're only making 350 or four.
Well, that's what you need toknow.
(05:20):
It may not be what you want tohear.
And on top of that, I wish morebuyers that were working in
their associate offices.
They don't have to use someonelike me, but I kind of wish they
would use someone like me or aCPA or someone to vet that out.
Because, again, you haveowner-doctor, and I find this a
lot, soapbox, if you will, oldermale doctor, young female
(05:43):
associate.
There's going to be amansplained situation.
I mean, so that's
SPEAKER_02 (05:47):
actually what's going on right now in that
transaction.
It's literally what's happening.
UNKNOWN (05:51):
Right.
SPEAKER_02 (05:52):
And they're trying to justify what they're doing.
You're like, you can't justchange the price.
You can't just change the rent.
Your profitability is predicatedon your existing lease
situation, on your existing rentsituation, your existing
numbers.
But I'm right there with you.
And people ask me oftentimes, isa CPA enough?
That's probably a good questionto get asked.
(06:14):
And I tell them, listen, thenumbers tell you one part of the
story.
The other part of the story iswhat's not represented, possibly
in the numbers, right?
It could show you profitabilityof 30, 40%.
The other side of that is, well,how about the practice
management reports?
Most brokers, ourselvesincluded, will provide you
practice reports, but you haveto understand them and those are
(06:37):
way less straightforward.
And so it's about understandingare you a good fit for the
practice, right?
I've had people who buypractices that don't do ortho
and then they're like, oh, Ididn't know the practice was 50%
ortho.
And you're like, yeah.
And that's a silly probablyexample because that's so easy
to ferret out, but they justmiss that point.
(06:58):
And that's why it's important tohave advocates and someone to
kind of guide you along the waysimply because you could be
making a million dollar mistake.
SPEAKER_00 (07:05):
Right.
It happens.
I think there's something I wishmore buyers knew, which is CPAs
are great, but the numbers tell,I say, about a third of the
story.
I say the other two-thirds comesfrom practice management
reports, and then inside therealso what's going on with the
team dynamic.
So you know how you guys givethat, like, hey, here's who's
there, so many dentalassistants, hygienists, et
(07:27):
cetera.
I look at that as well as, okay,well, how long have they been
there?
Is anybody going to retire whenSeller retires?
They've been there 25, 30 yearsas well.
We might lose those folks.
So that tells us a bit about thestory.
And then we have, obviously, thepractice management reports that
tell us about the patients andhow did those numbers end up on
the tax return.
Now, that's something I wishmore buyers knew.
To put you on the spot for asecond, what do you think...
(07:47):
something you wish more sellersknew?
Because I'm going to tell youthat I bet you most sellers
think, well, Steven, you justtell me whatever we can sell it
for, and then we'll just make upthe price.
Come on,
SPEAKER_02 (07:57):
man.
I wish they knew that, one,there's always a cap.
I just got off the phone withone guy, and he's like, how
about 110%?
I'm like, listen, banks don'tloan to that.
I wish they knew that leading upuntil they retire it's okay to
(08:17):
take deductions but withinreason right because we see it
all the time where they'retrying to justify the fact that
they wrote off their yacht orwhatever it is or they bought
you know a lambo and they wantto write it off or i mean those
are extreme examples but i'vehad people write off planes i've
had people and you just you'relike listen trying to explain
that to a bank to say well thisis his the reason is he's paying
(08:40):
for a hangar in jet fuel like Sodifficult to explain.
So I think leading up into that,it's really it's important to
have a good CPA, goodfinancials.
I'll tell you, my struggle hasbeen probably the hardest
struggles have been with CPAsthat are non-responsive, that
don't get financials in time,that you're going to sell.
(09:02):
and they still need to do threeyears of tax returns.
And it's super common,unfortunately.
You'd be shocked at how manypeople don't even follow a tax
return for three years.
And you're like, how does thatwork?
SPEAKER_00 (09:14):
I would be shocked because I think there's also
it's funny when I know whenthey're kind of disorganized on
their side when you know we getto this point now we're shooting
this episode it's June halfwaythrough the year pretty soon a
lot of banks are going to startsaying let me see a six month
P&L and when they're like why doyou need to see that you're
right oh yeah your CPA is nottoo organized
SPEAKER_02 (09:34):
yeah and you know the hard part about this is it
all falls back on us meaning wetry to set the expectations and
I've told people like you needto make sure as you're going
through this that you're you'reup to date on your books all the
time.
Because at any point, they couldask you to pull a report.
And if you don't have that andyou don't produce it for 30
days, it holds up thetransaction for 30 days.
(09:54):
And again, as we say, time killsall deals.
People lose interest.
And it also says something aboutyour practice if you are highly
disorganized.
SPEAKER_00 (10:06):
Very true.
It gives a buyer cold feet.
Makes the buyer look around.
Right.
And sees something
SPEAKER_02 (10:10):
else.
Something else might come onmarket.
They might get pregnant andmove.
SPEAKER_00 (10:15):
Who knows?
Who knows?
SPEAKER_02 (10:16):
Who
SPEAKER_00 (10:16):
knows?
Who knows?
I would say something else Ithink I wish more buyers knew as
well.
And that is when a buyer gets aCPA, I'm not anti-CPAs on the
buyer side, but I will tell youthat if your CPA loves the deal,
but the bank doesn't, then it'snot going to happen.
So your CPA as a buyer could godo all the numbers and say, this
(10:36):
is a Killer deal, great deal.
Bank says, eh, we don't like it.
Not going to approve it.
Doesn't mean you can't go toanother bank.
Plenty of banks out there.
But if the bank doesn't love it,it's not going to happen.
And on the flip side, if thebank loves it and your CPA is
going, eh, I don't really loveit, there's some things that
more often than not, I seebuyers do the deal anyway.
SPEAKER_02 (10:52):
Yeah, yeah.
And there's so many people thatdon't necessarily understand
dental, and you know what Imean, and they don't understand
certain equipment, ad backs, andthings like that, where you have
a doctor that's investing intheir business over time.
And ultimately, it's a goodthing because it means whoever
steps into it should have sometechnology or some kind of
continuity with the investmentpiece of the practice.
(11:15):
But the CPAs say, oh, they spendway too much.
It's not a good practice.
They're over leveraged orwhatever the fact might be.
To me, you have to get someonethat's dental specific, that
understands when a seller isinvesting in their business.
And to me, that's a good sign.
What you don't want to see issomeone who never invests in
their business, right?
Because that's what you'rebuying.
Right.
Totally true.
SPEAKER_00 (11:36):
Totally true.
I also will see, so if the CPAson the buyer side can be a
little bit what have you, as faras maybe they're a little strict
or they're a little loose or allthat, I find that in the lending
side, the banks vary so muchlately.
Somebody loves it, somebodyhates it, and that really throws
(11:56):
the buyers off.
SPEAKER_02 (11:58):
It does.
I mean, there's been quite a fewdeals where one bank will
approve it, one bank's kind ofon the fence, and one bank will
decline it, and it gives someonecold feet.
Probably a good example of thisis I was doing a deal up north
and the issue was Delta Premier.
And two banks approved it, onedeclined it.
Ultimately, the doctor got coldfeet, walked from the deal,
(12:19):
eventually came back because itwas a universal problem, meaning
everyone in that area was DeltaPremier.
So if you're going to buy apractice, this is going to be a
universal problem.
It's not specific to thepractice I was selling.
They ultimately bought thepractice.
And I talked to the underwritersof these banks.
I won't name who they were.
And one of them said, we don'tlike it because here's what we
(12:40):
see in our portfolio where thesedoctors might underperform.
Then I talked to another bankwho was like, well, from what
we've seen on our data pointswith 1,000 offices, they just
replaced the income with someother stream of another clinical
aspect, a different modality.
They place implants.
They'll do more Invisalign tomake up for the kind of delta
(13:02):
shortfall, right?
SPEAKER_00 (13:04):
So you find them replacing it, and then you're
basically getting thisconflicting bank thing.
Did that buyer come back?
He did, and he ultimatelytransacted,
SPEAKER_02 (13:10):
and it's crushing it, right?
Probably crushed it, right.
Crushing it.
And ultimately, listen, I mean,let's just call it what it is.
I think...
doing well, and we've discussedthis a lot in the past, it's a
mental framework.
If you want to do well in lifeas a doctor or any business, you
have to mentally be prepared forit.
And that's it.
And my favorite quote is, if youwant to be a successful business
(13:32):
owner, you only have to workhalf a day.
You just have to pick the 12hours you want to work every
day.
And that's what you have to bein it for, because this stuff
does not exist in a vacuum.
You're not going to you know putsomething an x from your house
and then all of a sudden you'rejust going to get a line out the
door yeah um you know and wealways say listen the numbers
(13:55):
are logical but the buy isalways emotional right really
it's like what's the draw areyou drawn because of the
location is it because of thepatient pool i think number one
the numbers have to make sensejust as a starting point right
that's just a very basic levelstarting point second part is
Does your treatment modalityline up with the seller?
(14:18):
Very good point.
If they're aggressive andeverything's a crown, as the
saying goes, if you're a hammer,everything's a nail.
And if that's not you, youprobably shouldn't buy that
practice.
Or you take issue with that.
You probably shouldn't buy thatpractice.
To your third point, you have toknow the staff.
(14:39):
What's that look like?
How do they treat their staff?
How do they run the office?
There's got to be a kind ofcontinuity of personality there,
too.
And so, yeah, you're probablyright.
It's probably a third numbersand probably 70% other, right?
And the hard part about what youdo is that that other, it varies
(15:00):
so widely.
It depends who you're talkingto.
Some people are like, I canmanage people no problem.
Some people are really, probablyovertly interested in the
clinical aspect, right?
When the reality is patientsdon't know any better.
Right?
So it depends.
But yeah, the buy is veryemotional.
The numbers are logical.
SPEAKER_00 (15:21):
You've probably seen both though, you know, a doctor
transitions, And the patientsgo, I didn't even know, oh, Dr.
So-and-so left.
Because they're so in line withthe team and with the office and
what's going on.
And then other scenarios, it'slike, oh, Dr.
So-and-so left.
And then I will tell you, thebiggest thing for me with
(15:41):
helping a buyer is thetransition of the team.
If the team doesn't want to goin the direction you want to go,
then you're not going.
And on top of that, you findthat With that team dynamic, I
tell doctors, get the team'strust first, then the patients
will follow.
If you do not get the team'strust first, and I've seen it
(16:01):
where, let's face it, You're adoc.
You're selling.
It's a four-day-a-week practice.
Maybe it's a three-day-a-weekpractice.
Sounds great.
Buyer says, I can have a fourthday, a fifth day.
This thing's going to crush.
And then you tell the team thisgreat idea you have.
And they're like, we kind oflike this three-day-a-week game.
For the last
SPEAKER_02 (16:18):
30 years of their life, yeah.
Well, we like thisfour-day-a-week game.
100%.
You know, it's funny, right?
Because one of the things that Ialways recommend to buyers, I'm
like, look, you're going to gointo this.
You don't know these people.
But just start by giving themsomething, whatever that looks
like.
Great plan.
Love that.
Yeah.
I'm like, go give everyone a$2an hour raise.
Yes, it's not probably the bestway to spend your money, but
(16:40):
invest in your people, invest intheir continuity, show them you
care, start from a good foot.
The amount of people that I'veseen walk into office, start
cutting hours, they start nickeland diming their staff members,
and then they're like, well,they left, and you're like, You
wonder why?
Who wants to work for that?
I mean, they can go get nickeland a dime somewhere else and
(17:00):
probably get a$5 raise down thestreet.
That's just a fact.
This market's tight.
The talent is tough in a dentalpractice.
And you and I know the numberone phone call we get from
everyone and anyone who arefriends is, do you have a
treatment coordinator?
Do you have a hygienist?
Do you have an assistant?
Do you have an RDA?
Market's tight.
SPEAKER_00 (17:20):
Take care of people.
Always true.
I will tell you that I usually,when I'm talking to buyers and
we always get to a point wherelike, all right, well, is it a
good deal or not?
You know, I tell most doctors,anytime I see somebody slightly,
we'll call it overpay with airquotes, they end up in a better
position.
Anybody that took some deal,some I'm just giving it away, or
(17:42):
I ground somebody down onpurchase price to get whatever
deal was in my mind, usuallythey struggle.
SPEAKER_02 (17:48):
You know, it's funny.
I...
It's one of those things whereit's hard to convey because
we've been in the industry solong and we see it, meaning I
tell all buyers, I'm like, look,one, your mindset has to be in
the right place.
As a baseline, if you're abuyer, let's start with your
clinical.
You have to be good.
(18:09):
It can't be you're sort of good,right?
It's like being a pilot.
You can't land the planesometimes.
You have to land the plane allthe time, right?
And that's number one.
And I've had people who justThey thought they were great
clinically, and they step in,and it's not a practice builder.
In fact, patients start leavingbecause everyone has post-op
sensitivity.
Not a good position to be in.
(18:31):
The second part is just themental framework behind being a
business owner.
I'm a big believer that if youcan take$1 and make$1.20, it's a
great skill, impressive.
If you can take a dollar andsave 80 cents, that's not a
skill.
Listen, the abacus is the oldestinvention ever.
(18:51):
It predates us by hundreds ofthousands of years.
Saving money is not a skill.
And I wish more...
business owners understood that,just in general.
Because you can never cut yourway to prosperity.
It just doesn't work that way.
SPEAKER_00 (19:07):
I will tell you the challenge that I hear about from
young doctors or young andcareer doctors is that I think
there's still folks out therekind of getting this advice on I
know what my father gave to me,right?
As a military guy, Midwest guy,he said, hey, you know, take
$10,000 and put it in a savingsaccount with a high interest
rate and it'll be a milliondollars when you're 55 or 60.
And today that's not true.
(19:29):
And you cannot save your way towealth.
You absolutely have to find waysto invest your way to wealth.
And I also think that buyersshould appreciate that with what
they're buying.
We're buying somebody'spractice.
We're making an investment intoour future, but this is also
somebody else's version of, hey,this is my investment into my
retirement, my wealth, mystrategy.
100%.
SPEAKER_02 (19:48):
And so I've said this a lot, and this is not tax
advice.
Consult your CPA.
It's not wealth advice.
Consult your CFP.
Disclaimer alert.
The reality is making$150,000 asa business owner is probably
better than making$250,000 as aW-2.
Just hands down, right?
Just the ability to write thingsoff.
And for those of you watching,again, I'll give you a very easy
(20:11):
example.
If you were to buy a$50,000 caras a W-2, California yeah you
have to make a hundred grand youhave to pay your taxes you have
to pay sales tax you buy the carafter you make the hundred grand
if you're a business owner youjust got to produce 50 grand you
buy the freaking car yeah rightat the end of the day and that's
your entire life meaning yeahagain not CPA advice your Costco
(20:35):
runs your meals out your yourcontinuing education your travel
all of that right and so you'reusing cash flow to live your
life meanwhile you have this theability to tax shelter that's
huge i mean that that's that'sreally what is like 57 of all
(20:56):
the revenue united states comesfrom small businesses yep right
like that's why you want to be abusiness owner because It is
really difficult to get ahead ifyou are a W-2 employee.
Let's just put it out there.
It is what it is.
SPEAKER_00 (21:09):
Agreed.
I find that whenever I'm talkingto buyers about these deals,
good, bad, invest a little more,et cetera, some of the stuff
I've mentioned, I also say,look, there's really kind of
three versions of buying apractice.
There may be three reasons.
There's one of them you neverwant to be in, and then there's
the other two that areacceptable.
The two that are acceptable, youwant to buy one for opportunity.
(21:30):
I can see the future on thisthing.
Maybe, doctor, to your point, alittle conservative.
Yeah.
A little bit.
Not everything's a crown.
And maybe I don't have thetechnology.
And I can add to this practicepretty quickly.
Opportunity.
The other one is, I say, justkind of tried and true.
Historically, while we know ifwe were financial advisors,
historical performance is noindication of future success.
Right.
However, we can see that, hey,this thing is continuously done
(21:50):
X.
Right.
And the team has helped it getthere.
And the team's going to staywith you and be strong.
And those are all very goodindicators.
Right.
The third one that you neverwant to be is desperation.
Yes.
I just...
gotta buy something, man.
I'm sick of being an associateand there's nothing around and
this guy's down the street frommy house, I'll figure it
SPEAKER_02 (22:04):
out.
I mean, you know, dating isprobably the easiest kind of
comparison.
Like, you just don't want to bedesperate when you're dating.
Marry the wrong person, date thewrong person, you know?
It's, you know, you kidswatching, do not swipe right on
everything.
Yes, please.
Yeah.
It goes with the practices aswell.
Yes, yes.
I'm there, you know, the amountof friends that I've advised, I
(22:24):
mean, I get calls becauseeveryone knows I sell practices
and so they'll call me for mytwo cents.
And if it's not a greatpractice, I tell them, look, I'm
not trying to step on the otherbroker's toes, but this is not a
great practice.
But if you were to buy this,here's what you would have to do
to either grow it or turn itaround.
Are you comfortable with that?
It's much like fixing up ahouse.
(22:47):
Sometimes you do want theugliest house on the block.
And I'll give you a goodexample.
You find a practice in Venice,California.
You should buy it.
I don't care what the condition,because you cannot build.
And if you want to be in thatmarket, Even if it's garbage,
you've got to find a way to makeit work because you want to be
in that city.
Again, I'm not telling you tooverpay.
I'm not telling you to bedesperate.
But what I'm telling you isthat's your only way into that
(23:08):
market.
Very true.
Very true.
SPEAKER_00 (23:10):
Good point.
And there's definitely a lot ofpockets in the U.S.
SPEAKER_02 (23:13):
Yeah, I mean, the Palisades, unfortunately, was
one of them, right?
Yes, very true.
It was one that if you...
They didn't allow permitting formedical buildings.
And so you couldn't build adental practice.
La Cunada Flint Ridge isprobably another area.
You cannot really build a dentalpractice in La Cunada.
It's near impossible at thispoint.
And
SPEAKER_00 (23:30):
I mention this to docs because I get some doctors
Almost all my business comes viaword of mouth, doctor to doctor,
as you know.
And so one doctor will do astartup and say, well, I have a
buddy that wants to buy.
They think I'm crazy for doing astartup, but can you help them?
So years ago I got into thatversion because I'm like, yeah,
I can help, and here's a processand a path.
And so then I'll get doctorsthat kind of are looking at both
because I do both.
(23:51):
So they'll say, well, can Imaybe look at the startup, but I
have a few practices I'minterested
SPEAKER_02 (23:56):
in.
SPEAKER_00 (23:56):
And in some cases I'm like, look, there's no
inventory to do a startup.
These practices that you'reinterested in might be all
that's here.
Correct.
And this is it.
Yeah.
We've got to figure one of theseout or we can sit around and
wait.
100%.
SPEAKER_02 (24:06):
Opportunity cost that comes with that.
You know, it's funny becausethat's probably the million
dollar question we get askedevery day, right?
Like, should I do a startup orshould I buy?
And it's funny because I sellpractices, but I'm also, I think
there's not a lot of inventoryin general out there, right?
Very true.
The number one thing that Numberone thing doctors are always
(24:27):
worried about, right?
It's what if I fail?
And you and I are the opposite.
We're like, what if you're amassive freaking success?
There's that, right?
Like you could be a massivesuccess.
And I remind everyone, I'm like,listen, 100% of practices that
exist today were once a scratchpractice.
Like this is irrefutable.
You cannot argue this.
(24:47):
And so what's the upside of,let's say, starting up?
The upside of starting up isexactly where you want to be.
It's new.
It's the location you want to bein.
It's in the building you want tobe in.
It's a culture you want topresent.
There's upsides to all that.
And financially, it's structuredvery differently than an
acquisition loan.
(25:08):
And so it gives you a little bitmore runway.
You can maintain associateship.
You can start.
I say that because we've talkedto enough doctors that have been
on the fence for five years.
And at a certain point, time ismoney.
You just got to make a decision.
And the reality is you'reprobably not going to go wrong
going either direction.
The trouble I see is a lot oftimes there's too many opinions
(25:34):
from too many people.
And I'm not saying that's a badthing.
I'm saying you should listen topeople's opinions, but you
should take it with a grain ofsalt.
Everyone has rose coloredglasses for what they did.
If you talk to a guy thatstarted up, he's gonna tell you
should only start.
You talk to a guy who boughtfive offices, he's gonna tell
you should only buy offices,right?
You and I know people who arevery successful in both arenas.
SPEAKER_00 (25:55):
Yep, yep.
And I know people that aresuccessful at their HMO Medicaid
practices.
I know folks that arefee-for-service folks.
And the fee-for-service guyswould say, oh, those guys are
nuts.
And the Medicaid HMO guys aregoing, I have zero cash flow
issues whatsoever.
I've got two houses.
I think if you want to be afee-for-service guy, go for
SPEAKER_02 (26:14):
it.
You know, I have a friend who,they're brothers.
Let's hope they don't watch thispodcast.
But one jokes with me, the thepremier cosmetic dentist in a
city that will remain nameless,tells me that their brother is
exactly an HMO and just crusheshim in volume.
(26:36):
At the end of the day, Abusiness is what you make it.
It's predicated on theindividual.
It's predicated on the personthat's in the driver's seat.
It's not about the existingbusiness itself.
It's not about the elections.
It's not about what's happeningin the economy.
It's not about war.
And you and I have been in thislong enough.
(26:58):
When I lecture, I'll go and Iremember, I'll ask people, how
many people here went through9-11?
Most of the hands go up.
How many people went through theGreat Recession of hands go up.
How many people went throughCOVID,
SPEAKER_00 (27:12):
right?
SPEAKER_02 (27:12):
Look, they're still here and they're still thriving.
That's the message at the end ofthe day.
It's what you make it.
And the reality is fortunes aremade during a recession.
So stop being scared of it.
It's probably your time toacquire, to expand, to buy a
building, right?
But everyone just wants to holdtight and pull back.
(27:33):
And I get that.
Like, dentists by nature areconservative.
They're taught to beconservative, right?
You ever read the book, TheHappiness Advantage?
Who's that?
Sean Acor.
Maybe.
It's a great book.
And so the notion of the book isit posits positive psychology.
Not like frou-frou positivepsychology.
(27:54):
It's very interesting.
It basically says that If youare neutral, you get almost the
same outcome as being negativein your mental thought process.
And so one of the studies inthis book is very interesting.
They took two groups of doctorsand they replicated the study
over and over again.
And they gave two groups ofdoctors the same pathology.
(28:15):
They gave one group a cookie.
They called that psychologicalpriming.
They were not allowed to eat thecookie for sugar control.
The group of doctors that gotthe cookie arrived at the
pathology, the right diagnosis,much faster than the other group
and were 20% more accurate.
And there was less of aphenomenon called anchoring.
(28:35):
Anchoring is when you're anendocrinologist, you think it's
a gland issue.
You're an oncologist, you thinkit's cancer.
You're a cardiac doctor, youthink it's a heart issue.
There was less of that in thegroup that got the cookie.
And so the premise was, if youare happier and you move in a
direction where you're morepositive, it helps you in your
career.
And consequently, one of thestudies they did was they did a
(28:58):
study on auditors who work forKPMG, which is one of the
largest accounting groups in theworld, right?
And they found that these peoplein their private lives, all they
could see were flaws and issuesbecause their job was to look
for errors in books.
And I feel like dentistry is thesame way.
Listen, you're taught to seekdisease.
(29:19):
You're taught to look for flaws.
And so when you buy a practice,The number one thing people
always say, which baffles mymind, is what if I fail?
How many times have you heardthat in your career?
Plenty.
And you're like, doctors don'tfail.
It's not a thing.
SPEAKER_00 (29:35):
So I'll say this, and then I'll ask you something.
So the only other thing that Ireally wish more buyers knew was
that, well, I think it's maybe1A, 1B, or two parts.
You had said there are a lot ofpeople out there that are giving
advice, giving counsel, givingguidance, what have you.
Take it with a grain of salt.
So I wish more folks actuallysought out information over
(29:57):
affirmation.
It's very, very easy to go downthe path of like I'm right and
I'm going to go down this pathof telling me I'm right.
And I think that comes a littlebit from what team is around
you.
Having some people on the teamthat may not say every idea you
have is a good idea.
And then on the flip side,though, I will tell you there
are some folks out there that– Itry my darndest to stay in my
(30:18):
lane.
Sure.
That's what I do.
That's what I tell doctors.
I'm not giving you legal advice.
I'm not giving you CPA advice.
Here's where I focus on andhere's where I can help you.
And if that's not good, then goseek out one of those folks that
does that.
If you're looking to save acouple of bucks and you don't
want to hire an attorney, Godbless you.
Probably don't want to work withyou anyway because you're going
to make mistakes and you'reprobably going to blame me.
SPEAKER_02 (30:34):
Yeah.
I'm a big believer that you haveto surround yourself with a
group of people, no matter whatthe cost, because the opposite
of making a mistake is way morecostly.
It's like skipping a homeinspection to save two grand.
I get it.
It's not cheap.
But at the same time, if itprevents you from making a
multi-million dollar mistake,there's something to be said
(30:56):
about that.
SPEAKER_00 (30:57):
Car insurance is expensive, but...
One of you didn't have it.
100%.
Heaven forbid something reallyserious happens, you have zero
insurance whatsoever.
Right, right.
And I think there's some folksout there that don't do a very
good job of staying in theirlane.
So as buyers, the only otherchallenge I see out there in the
marketplace is they've got atougher job figuring out, well,
who's doing what and do I needthem on the team?
(31:19):
You know, a CPA that says, Ialso do consulting or attorneys
that also venture into the CPAworld.
Or I think for someone like you,you know, grinds my gears when I
have somebody who, I don't wantto say parades, but I'm going to
say parades as a CPA and thensays, oh, but I really make my
money selling practices.
SPEAKER_02 (31:38):
That's cool, dude.
100%.
I'll tell you, we had one wherethe quote unquote CPA, and
again, I love CPAs.
There's not a knock on CPAs tobe absolutely clear.
But one, they were out of state.
They didn't know the market.
They valued the practice at130%, which any buyer listening
(31:59):
is going to be like, roll theireyes immediately, right?
SPEAKER_00 (32:02):
Sellers, though, might go, this is my guy.
Yeah, yeah.
So the seller was like, thissounds great until it sat
SPEAKER_02 (32:05):
in the market for two years, right?
UNKNOWN (32:07):
Right.
SPEAKER_02 (32:08):
I got on a contract in two weeks.
But again, I had that come toJesus moment with the doctor
where I was like, listen,there's no shot of you even
getting remotely close to thisnumber.
Let's be realistic here.
And if you don't want to berealistic, I'm not your guy.
Go sell with someone else orlist it yourself.
It's just not happening.
But yeah, I think that One,there's a conflict of interest
(32:32):
when you try to do too much.
And to be clear, I've had peoplecome to me and ask consult.
I'm like, it's not what I do.
I don't want to mislead you.
I know a lot.
It's not what I do.
SPEAKER_00 (32:41):
I will say how I found McLaren, I found them
years ago because they do greatreporting.
And I was impressed when I had adoc bring me a McLaren report.
He was the associate in theoffice and he said, hey, these
guys have someone thatrepresents them, et cetera.
And I said, cool.
And he's like, they got areport.
They have this whole thing.
Sent it to me and I was like,it's actually really good.
And I'm like, this is actuallyvery well thought out.
(33:01):
They've got you know, kind ofplenty of reports, data, stuff
to back up where their numbersare at.
And I said, look, I can try andpoke holes in it if you want to,
but this is a really goodreport.
They've taken in a lot ofconsiderations in the report.
So outside of verifying saiddata, because obviously they
just had the report, we can gothrough and verify the data and
look at the numbers and stuff.
And having like maybe a secondset of eyes or a second opinion.
UNKNOWN (33:24):
Yep.
SPEAKER_00 (33:24):
This is a really good report.
And then I actually went back tothem a couple other times when I
would have a doctor who wantedto sell to their associate.
And they were like, but I need anumber.
And I was like, well, I'm notgoing to give you a number.
We need somebody to help youwith this.
Let's reach out to these guys.
And then the reports they givewith the numbers they provide,
I'm still impressed today.
And there are other companiesthat have come along and they
bring these reports and things.
(33:45):
Half the time, they'rethird-party vendors that they've
just pulled in, slapped theirletterhead on and said, here's
our report.
And I'm like, but I could– Icould technically go get the
same information on the internetfrom the same companies that you
put on this report.
SPEAKER_02 (33:55):
Right.
And it's funny you say thatbecause, again, a lot of my
friends will ask me to look atthings.
I'm like, how did you evenarrive at this number?
Yeah, yeah.
And it was like, you just threwsomething at the wall to see if
it's going to stick.
And I've had plenty where it'sover 100% or right at 100%.
And you're like, look, no one'sgoing to loan to this.
It's not even remotelyreasonable.
(34:17):
And this happens quitefrequently on really small
practices for whatever reason,sub 500s.
So many of these guys just valuestuff at 100%, 110%.
The most difficult to do.
The most difficult to do.
Sub 500, yep.
Sub 500, most difficult to do.
And really, just unreasonably.
reasonable as a number, right?
There's not enough cash flow toeven support the debt at that
point, typically.
Yes.
Typically, right?
(34:38):
But yeah, I'm right there withyou.
I see a lot of that.
And I'll tell you, as someonewho's worked on these
valuations, it takes us a longtime.
I did one last week.
It probably took me a solid 10hours to work through the
numbers.
But the point of that is to ownthe information and to really
get a deep, thoroughunderstanding of the practice.
(34:59):
And you should see some of thequestions we ask the sellers.
I mean, sometimes it overwhelmsthem, but it's all in the, we do
it for the sake of being asthorough as possible and making
the transition as smooth aspossible on the backend.
So if we're thorough upfront,then the backend's way easier.
SPEAKER_00 (35:20):
There was something you said in there on the numbers
and the data.
and some of these third-partyevaluations to see what sticks.
And I find that there are– so–Let me take a step back.
Those sub-500s, for anybodylistening or watching, what
we're talking about, and you cancorrect me if I'm wrong, what
we're talking about is apractice that's in a revenue
(35:41):
stage of less than half amillion dollars, trying to sell
for a half million, or even 450or 400, pretty high up there.
Those are the toughest to do fora lot of reasons.
But realistically, for anyonelistening or watching, it comes
down to the bank lending themoney.
And they look at it and go,well, gosh.
I tell a lot of doctors, thebiggest challenge with those
offices is, the bank's startupprojection is usually more often
(36:03):
than not higher than the revenuethat this office is doing.
So then the bank isautomatically going, well, I'm
going to lend you money.
You say, this guy's been herefor 20 years.
He's got a great reputation.
It's doing less than a startupis or what we projected to do.
So that's kind of like saying,hey, that person who just got
their driver's license is asgood of a driver as you've been
for the last 20 years on theseSouthern California roads.
(36:23):
Shouldn't be that case.
And then in addition to, youknow, a lot of times the cash
flow doesn't support.
You're making less money doingthat than as an associate.
And while better, to your point,being in that version than being
a W-2 associate, when it comesto the bank, it's like, well, in
the end, you're not going tomake enough.
SPEAKER_02 (36:40):
Yeah, I mean, let's just put numbers to this.
I mean, if you ever practice astudent half a mil, usually the
overhead, especially in SouthernCalifornia, overhead's going to
be insanely high.
So you might be walking with 25%of that.
So you're talking about$125,000before debt service.
And then...
You know, the broader issue nowis student loans as well, right?
So there's student, the studentloan component personally for
(37:03):
the buyers.
If they want a house, if theyhave cars, if they have their
own personal debt, that practiceneeds to support that personal
lifestyle.
And more often than not, a lotof these practices don't.
That's not to say, I've soldsome 500s to be clear.
That's not to say they're notworthwhile, but it needs to make
(37:23):
sense.
And It's
SPEAKER_00 (37:25):
got to be the right buyer.
SPEAKER_02 (37:26):
It's got to be the right buyer.
It needs to be open the rightnumber of days.
What you can't have is apractice open six days doing
$400,000 a year.
You're never going to survive,right?
And you can't cut days becausenow the patients are so used to
it.
Again, all practices sell at acertain point.
It's doable, but it's probablynot ideal.
SPEAKER_00 (37:46):
I think you have to have the right buyer and you
also have to have the sellerwho's in the right mindset.
If they're trying to sell half amillion dollar practice to say,
well, I have to sell for half amillion, maybe I have debt on it
or this is my retirement plan orwhatever, you're really at a
kind of a lose-lose.
SPEAKER_02 (37:57):
Yeah, yeah.
Especially, I mean, it's funny,the amount of EIDL loans that
exist today.
Like if you guys are listeningand you're a seller, please deal
with your EIDL loan.
Yes, yes.
Good point.
It needs to go away.
It doesn't magically disappear.
True story.
I got up right until the daybefore close once.
Yeah.
And I asked the seller, been inpractice for 50 years, no reason
(38:18):
for me to think the guy had anydebt.
Paid off practice.
And then the bank runs a liensearch like, hey, did you know
he has an EIDL loan?
And the doctor comes back to meand goes, I thought it was a
personal loan.
Like the Small BusinessAdministration does
SPEAKER_00 (38:34):
not do personal loans.
You have to pay this off.
And there's a group of folksthat think they just go away.
There's a group of folks thatjust thinks, oh, well, no one
said or done anything, and theyjust vanish.
SPEAKER_02 (38:44):
If you are listening, and you do want to
sell in the next five years,please address that.
Good point.
It is an issue.
Good point.
If you are an owner and you'reselling to your associate,
please address that.
You have to subordinate it.
or do something with it becauseit's a non-serve
SPEAKER_00 (38:59):
for most banks.
So let's rapid fire here becausewe're coming to the end.
And so rapid fire, what thingsmake a great buyer?
SPEAKER_02 (39:08):
Right mindset, clinically competent, not just
confident, but clinicallycompetent, right mindset, growth
mentality.
I mean, it's everything youwould think of when you think
about what a good businessowner, and just not scared to
fail, like failures andillusion.
Everyone does well.
You just have to put in theeffort to figure it out.
Okay.
What makes a great seller?
(39:29):
Someone who genuinely wants thebest for the patients and their
staff.
What I've learned is thatbestsellers, Continuity of care
is number one.
Okay.
Continuity of staff is numbertwo.
Okay.
And money is third.
Okay.
And it's usually always in thatorder.
And even the ones who tell methat money is number one and
they're a good seller, it alwaysflips to the other side.
I've seen it enough times wherethey tell me they care about
(39:50):
money because it's their baby.
And then when it comes down tobrass tacks, they find someone
that they know is going to takecare of the patients and staff.
They don't care about the
SPEAKER_00 (39:58):
money.
Okay.
Anything you hear in themarketplace that you're like,
oh, that's nonsense.
That doesn't really matter thatmuch.
SPEAKER_02 (40:04):
You know...
Getting more on the privateequity side, I will say that
there's this illusion that DSOsare evil.
And I think that that's not truebecause it's compromise of the
doctor's peers, right?
The doctors still run these.
They're still doctors.
And the reality is some of thesepractices are so large that no
(40:25):
bank will loan to a privatebuyer.
If you have a$7 millionoffice...
one which private buyer wants tobuy that or is not scared to
take that debt on right even ifit's two or three doctors the
banks can have a very hard timelending and so i've learned over
the years that there's a lot ofgood people who work for these
dsos and The reality is, again,I'm not necessarily advocating
(40:48):
for this, but they serve apopulation based on 99% of
doctors just will never see inprivate practice, don't want to
see, right?
It's kind of like the HMOdoctors.
They serve a patient base thatno one else wants to touch.
Fair.
SPEAKER_00 (41:01):
Do you guys lean one way more towards EBITDA, seller
discretionary earnings?
Obviously, some folks say, well,I should sell for 95% of my
previous year's collection.
It's
SPEAKER_02 (41:11):
typically EBITDA on the private equity side, I would
say.
On the On the private practiceside, it's purely cash flow,
right?
Yeah.
Buyer's discretionary cash flow,
SPEAKER_00 (41:22):
customary cash flow.
Okay.
Okay.
Good.
I always like to talk to them interms of seller discretionary
earnings or, to your point,buyer's discretionary, what they
expect to take home.
Right.
And I think that when folksstart comparing EBITDA,
especially in buyers, and thisis As somebody who's on a
podcast now talking, there aretoo many folks out there on
podcasts talking in terms thatdon't apply to the single doctor
(41:45):
buyer, the private buyer, if youwill, not the private equity
folks.
And understanding that EBITDAconversation and the multiple
love and blah, blah, blah.
Look, at the end of the day, thedentistry that we're talking
about is still an owner-occupierbusiness.
Correct.
It only is as good as yourhands.
SPEAKER_02 (42:01):
100%.
Tony Robbins said if...
If you have to be present tomake money, you're a sole
proprietor.
If you can create value in yourabsence, you have a good
business.
And I think that's really thedifference between someone
talking EBITDA and someonetalking cash flow.
Usually someone who can createvalue in their absence, they
(42:22):
usually have a very healthybusiness.
I will say the thing, EBITDAis...
slightly overused at this point.
Everyone talks about it.
Thank you.
I mean, if you're on theclinical side, it's like when
people talk about the 3, 4, 5Y's zirconia, it's like no one
cares.
It's all the same.
It's all the same stuff at thispoint.
You know, it's overused.
(42:42):
And the only thing that mattersis how much you're going to take
home as a private buyer.
That's the only number thatmatters.
The one thing that just poppedin my head that does bother me
that I hear a lot is thesepodcasts that tell people you
have to have six, seven, eight,nine, 10 ops.
It's like you can make a greatliving on four, three, four,
(43:04):
five.
I've seen it.
I have people crushing in three,four, five ops.
Me too.
You don't need 20
SPEAKER_00 (43:09):
ops.
My personal dentist, I happenedto help him years ago close to
my house.
Four ops.
I honestly was in disbelief.
Doing two million bucks.
out of four ops and I was like,there's no, what?
He told me this and I'm like,here, I'm full of it.
I got a chance to peek behindthe curtain a bit before he was
my personal dentist.
He runs three hygienists mostdays a week.
He works out of his op.
Every once in a while he worksout of two ops so he doesn't run
(43:30):
three hygienists every day.
But he runs three hygienistsfour days a week.
12 days of hygiene.
Crushing.
Crushing.
Modern day practice, so he's gotCAD CAM unit in there, he's got
cone beam in there, but he's notslapping implants on everybody.
He's got a well-built,well-oiled, I should say,
hygiene department going, andhe's just seeing his patients at
his op doing his thing.
He's got an easy name to findonline.
He's in a medical officebuilding, so he doesn't have
(43:51):
some grandiose thing.
You don't have to pay to park,but you do gotta take an
elevator, go up a couple floors.
SPEAKER_02 (43:56):
People are trained.
They're used to that.
SPEAKER_00 (43:58):
It's easy.
It's simple.
It's streamlined.
SPEAKER_02 (44:00):
That's probably the other thing you probably heard
as much as I have is like, youdon't have to be in retail
space.
It's not a thing.
Like if Starbucks is willing topay$12 a square foot, like why
would they charge you three tobe a dental practice?
Like it makes no sense for theowners.
But yeah, the amount of peoplecrushing the two, three, four.
I mean, we have a friend who'scrushing in two ops.
(44:21):
And you're like, you cannot makethis stuff up.
And you're like doing more than99% of dentists in
SPEAKER_00 (44:26):
the country.
in two ops.
Yeah.
And all the money that goes intotheir pocket.
Because the person that I'mtalking about, 50%,
Profitability.
Yeah.
Because it's a smallerfootprint.
Yeah.
Not nearly the same rent.
Right.
Plus his rent's not as high asretail, et cetera.
Staff's smaller.
I mean, he's got, everything isjust kind of the perfect size,
if you will.
It's efficient.
Yep, for efficiencies.
(44:46):
Yeah, it's efficient.
And so I think that thatmatters.
The only other thing I would saythat I want more buyers to pay
attention to that I think evensome sellers don't appreciate.
I know you guys are good atcovering this.
Not all brokers are.
In fact, I think that just getsmissed is the lease.
Understanding that assetpurchase agreement is a very big
part of it.
But the next most importantdocument you're going to sign is
a lease.
And most folks come to thatill-prepared.
(45:09):
They may not want to bring anattorney on board.
They may not want to bring acommercial real estate person in
the fray to understand what kindof what those economics are.
And then on the flip side,you've got another party to deal
with.
You know, as a buyer, you've gotnow landlord who might just go,
oh, well, you know what?
Here's a new rental rate.
SPEAKER_02 (45:24):
Right.
I mean, post-COVID, I mean, it'sbeen so much more difficult to
deal with these landlords.
The amount of Doctors I know whoneeded a personal guarantor,
needed their parents to co-sign.
And a lot of landlords don'tnecessarily understand the debt
and the half a million dollarsthat these guys are in debt.
(45:45):
And that's usually a point ofcontention.
And so to your point, I think,one, it would help to have an
advocate help negotiate thelease.
And you don't know, be itsomeone like you, a real estate
broker, an attorney, someoneneeds to be in your corner and
tell you kind of what'scustomary Because how would you
know?
(46:05):
You have to pull comps.
You have to know what'scustomary.
And quite frankly, you shouldread the lease of the previous
seller to see if it'sassignable.
Because if it is, it would justsave you a lot of headache.
The downside sometimes ofassignability is that it makes
(46:25):
the previous owner stay on as aguarantor for a long period.
So that part is...
can be an issue at
SPEAKER_00 (46:31):
times.
Sure.
And any other maybe things theysigned up for years ago, you're
kind of now on the hook for,whether they be good or bad.
But, no, I agree with you forsure.
Final thoughts?
SPEAKER_02 (46:45):
Read.
Read often.
Yeah.
Yeah.
Be careful who you listen to,though.
You know, there's just so much.
We live in an information age.
You just got to take it in.
Yeah.
Overload, I think one, you haveto have the right mindset.
That's my starting point.
Look, it's normal to be scared.
It's normal to be nervous.
That's how you know you'repursuing something worthwhile.
(47:07):
It's like parenthood, right?
It's like pop out a kid, likeyou're nervous.
Everyone is.
And I think you just...
You have to have the rightmentality.
The people with the rightmindset are the ones that crush
it.
That's what I see day to day.
SPEAKER_00 (47:20):
You made some dating analogies, but I find so much of
practice ownership and headingdown the path of startup or
acquisition there's a lot ofparent analogies that I end up
using.
So for those folks that I talkto when they're parents, they
get them right away.
And anybody I talk to, I make ahaving a child analogy, and
they're like, no, I don't havekids.
I'm like, well, this is going togo over your head then.
SPEAKER_02 (47:36):
Shoot.
You know, that's the hard part.
You know, I tell people, like,you have to have the right
disposition.
And if you have a pleasantdisposition, it usually works in
your favor.
There are so many people thatare kind of always skeptical,
slightly negative.
Like, it doesn't bode in yourfavor, and your team feeds off
that energy.
It's not good.
Yeah.
SPEAKER_00 (47:57):
Where can social handles, all that stuff, where
can people find you?
Social handles?
Well, McLaren
SPEAKER_02 (48:03):
and Associates.
McLaren and Associates.
SPEAKER_00 (48:05):
What, just website, your
SPEAKER_02 (48:05):
profiles on there?
Yeah, and Instagram, yeah.
Okay.
For me, I'm mainly on Instagramand LinkedIn.
It's just my name, Stephen Au,so S-T-E-V-E-N-A-U underscore.
SPEAKER_00 (48:17):
Yep.
SPEAKER_02 (48:17):
And then McLaren and Associates, I believe, is our
handle on Instagram.
Easy enough.
Same on my LinkedIn.
SPEAKER_00 (48:23):
You're all entire West Coast?
Entire West
SPEAKER_02 (48:25):
Coast.
Our West Coast.
But I have friends over here.
McLaren goes all over, too.
McLaren's all over the US.
We have people all over theUnited States, East Coast,
Midwest.
SPEAKER_00 (48:35):
My final thought is, to buyers or to sellers, make
sure you're working withsomebody that's not doing dual
representation.
We could do a whole episode onthat, but it just shouldn't be a
thing.
I almost wish it was illegal.
SPEAKER_02 (48:47):
It shouldn't be a thing.
And realistically, that's whenpeople feel like they get
burned.
Again, not calling anyone out,but it's just if you are
listening and you are buying apractice yes have a good
relationship with the brokerthat matters have a good
relationship with the sellerthat matters right you want you
want a good transition but youhave to surround yourself with a
(49:10):
good team period like it's justto your point you start off the
conversation about you know doesit have to be adversarial no i
think that you and i have alwayswanted the same thing for the
same people exactly there's nolook, if they're not a good fit
and they fall out as buyer,cool.
That's probably what should havehappened to begin with.
That's the best thing that couldhave happened.
(49:32):
What would be worse if someonebought a practice and they
weren't it?
They weren't the person.
That would be way worse.
UNKNOWN (49:39):
Totally true.
SPEAKER_00 (49:40):
Well, thank you, man.
I appreciate you being here.
Thank you.
Good seeing you.
Awesome.
Thanks.
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