Transition Your Practice on Your Terms with Cary Fry 0120

Navigating the intricate journey of dental practice transition requires thoughtful planning and expert insight. In this compelling episode of The Dental Wealth Nation Show, host Tim McNeely welcomes Cary Fry, a seasoned transition planning strategist from Callamath Consulting Group, to delve into the crucial steps of transitioning your dental practice on your own terms.

Cary Fry brings his extensive experience to the table, discussing the emotional, financial, and strategic facets of creating a successful exit plan. He highlights the significance of aligning personal goals, such as family time, with your practice exit strategy, rather than being swayed solely by unpredictable market conditions.

Throughout the episode, Cary emphasizes the value of having a cohesive, elite team of professionals to streamline the business transition process. He shares his unique 7-step framework, tailored specifically for dental professionals looking to retire or transition their practice to new ownership, whether it's to family members, internal buyers, or through an Employee Stock Ownership Plan (ESOP).

Listeners will gain insight into how market trends, economic fluctuations, and dental industry specific factors can influence their transition strategies. Cary and Tim touch on the importance of understanding your practice's valuation, reinforcing its attractiveness through value drivers such as motivated leadership, and building effective incentive structures for key employees.

Moreover, Cary Fry addresses the hesitations and common challenges faced by dental practice owners, providing actionable advice on how to approach transition planning holistically. Discover why time is your ally in planning a successful exit and learn about the resources available to help you prepare for the future of your dental practice.

 

Discussion Questions:

1. How can a dentist emotionally and mentally prepare for the significant change that comes with exiting their practice?
2. In what ways do personal goals factor into the timing and methodology of transitioning out of a dental practice?
3. Cary Fry highlights the importance of a coordinated team of professionals in the transition process. What are the key roles in such a team, and how do they collaborate effectively?
4. Based on Cary Fry's 7-step framework for business transition, what are the initial steps a dentist should take when considering selling their practice?
5. What challenges might a dental practice owner face when transitioning their business to insiders, such as family members or key employees, versus an outside buyer?
6. Cary Fry talks about building incentive structures for key employees. What types of incentives should dental practice owners consider to enhance the value and attractiveness of their practice for a successful transition?
7. Considering that many dentists lack a transition plan, what barriers might be preventing them from engaging in this critical planning? How can they be encouraged to take action?
8. Given that economic conditions and market trends can impact a practice's transition strategy, how can a dentist stay informed and adapt their plans accordingly?
9. What are some strategies for ensuring the continuity and stability of a dental practice post-sale, to protect the legacy and maintain the culture of the practice?
10. How can a dental practice owner determine the right timing and approach for conducting a business valuation, and what steps should they take to close any identified value gaps?

 

Don't miss this insightful conversation if you're a dental professional aiming to maximize your practice's net worth, understand the intricate details of practice transition, or simply seeking guidance on how to begin the succession planning process. Tune in to transition on your terms and secure your Dental Wealth Nation legacy.

Episode Transcript

(00:03):
As a driven dentist, you see the world differently where some
see scarcity. You see abundance. When others wanna give
up, you keep going. You're building an amazing life
of significance. That means you can't rely on ordinary
Advice from ordinary advisers to get to your goals. You want
advice that's going to help maximize your net worth so you can take

(00:25):
even better care of the people you love, the causes you care
about, and make your dent in the universe.
But the fact is this advice remains hidden because
relatively few professionals are well versed in them, and the extremely
affluent don't care to let you know about them. Join
us as we pull back the curtain to reveal Build the often hidden

(00:47):
advice and strategies used by today's most successful
individuals and families. Welcome to Dental
Wealth Asian, here's your host, Tim McNealy.
Hey. Welcome everyone to another edition of Dental Wealth
Nation, and I am so excited about today. I don't know

(01:09):
about you, but oftentimes, I feel like I don't have enough
time to get everything done in the day, and and chances are
you may feel that way too. And and time goes so
quick, and we're gonna all find ourselves at the end of our career ready to
exit our business faster and sooner than we've ever
imagined. And that's why today is so important. And by the time we

(01:32):
finish today, you're gonna know why time is your friend
when you're looking to to exit your business. You're gonna walk away. You're
gonna have insights into the exit planning process and an
awareness of of things that you can do to get ready for your
exit Even if it's a decade or more off, but most importantly of
all, you're gonna feel excited about the potential of your business

(01:54):
and motivated to take Nation so you can maximize your
exit. And when it comes to helping dentists do the the planning and getting
ready for that that preparation, one of my favorite guys out there is
Carrie Fry. Carrie is a member of my virtual family office, and he's
a n c double a college coach. And and we're gonna
talk about that. You're here to find out how that actually plays into, business

(02:16):
planning. Super excited to to build that tie in. But what I love about
Kerry is He understands that every single exit is different.
Sure. There's similarities. Sure. There are things in common, but each one of
you, you're an owner. You have your own unique goals and
objectives, and they're all special. And that's what I love about
Kerry. He wants to ensure and Wealth you make sure that your

(02:38):
lifetime of hard work pays off. Kerry, welcome to the show.
Tim, great to be here. Thank you so very much. I do have one correction.
I'm an NCAA Football official, not a coach. Okay.
I'm the one that, people in the stands aren't happy about most of the time,
but, you have a good time doing it. Alright. Well well, we're gonna dive
into that because it actually does play a role in exit planning, and and and

(03:00):
your minds are gonna be blown when you when you hear this. But, give me
a little bit of background. How did you start Getting involved in in
transition planning. Yeah. You know, I have been around the financial
services industry as an advisor, as an
distribution leader with various companies and, began to work with
a lot of affluent high net worth individuals, which happen to be mostly

(03:23):
business owners. And what I found is that, you know, there was
no other group of professionals that had a
passion for what they did. They they built they all
seem to build something special because they put their passion into it every day. The
blood, sweat, tears, they build something special. And,
unfortunately, wealth does not

(03:46):
pass to subsequent generations very effectively, very
efficiently. A lot of wealth is gone as time goes by. A
lot of business owners build businesses that, they
don't leave in the hands of the people,
in the best condition or the best way or that's gonna perpetuate in the way
that they like to create a a a legacy.

(04:08):
Owners wanna be able to monetize the value of what they've created
and and live their best life as a result. Oftentimes, that that
that's a a clear objective. And a lot of these owners
just didn't have the the guidance or the direction or or know where
to go to to get this information. They were going To maybe
their accountants or their attorneys. Not nothing wrong with those folks, but

(04:30):
they weren't those professionals really weren't equipped
To create a road map and a strategy that was individualized
for each business owner, based on their objectives
To to live their best life as a as a result of the business that
they created. So as a result, began to shift my my
work into this area. I'm part of Firm, a local Nation firm

(04:52):
located in Denver, Colorado. We do nothing but
business transition planning, business consulting,
business growth, that's all. That's all we do. You know,
we're not we're not involved in Product
solutions or, the the, the selling of the business,
the brokering of the business, our only objective is to work for

(05:15):
the business owner in creating an individualized plan. And we've been doing this
for 23 years, Samad, and,
been involved in thousands of plans. And and while everybody
has some similarities, you know, they're all maybe trying to do some
Similar things you've gotta work within, you know, tax laws and and gifting
laws and federal estate tax and and just stuff that you have to

(05:38):
to be concerned with. Every plan is unique. Everybody's objectives
are unique. Everybody's situation is unique, and that's the fun part, being
able to tap into that and build in a plan that's that's right for them.
Well, right, you you talk about having a plan for the the
exit, and I know, you know, oftentimes, we may just be thinking,
well, my plan is to Exit the business and, like, fix your

(06:00):
face. Right? Like like, I wanna get out, and I don't wanna pay a lot
of tax. Like like, what should I be even
Considering when I thinking about exiting, especially if it's a
decade or more off. So so what does that plan actually look like?
Well, a couple of things. So first of all, I know we
all know that every business is gonna transition someday,

(06:22):
willingly or not. I also know statistically
from research that our firm has done that 81% of
business owners wanna quit working in their business in the next 10
years. So the the,
desire to figure out how I'm going to do that is there for nearly
every business owner. I I further believe that

(06:45):
businesses are built with the end in mind, that owners look at that and say,
okay. I'm gonna create something special. I'm gonna put my
my blood, sweat, tears. I'm gonna put, you know, my financial risk and all
the other things that go along with building a business, so
that I have something special at the end that I can either pass on, create
a legacy, monetize in some way. I don't think business owners start

(07:07):
out, with the The goal of working their butts off
to just make a living. There's easier easier ways to make a living than
that. So I think that When you look at that as a
backdrop and think about, okay,
that's where we're at. So what is our plan?
Oftentimes, when I talk to business owners, I may say, I'm gonna sell to a

(07:29):
third party in the dental space, maybe going to a DSO or or another
practice, one, some kind of an aggregation. Okay. Great. What's your
plan? That's an objective. That's not a plan. Okay?
I I work a lot with, family businesses or businesses
that are being transferred to partners or legacy junior junior people coming
up. I'm I'm gonna transfer this business to my daughter. Great.

(07:52):
What's your plan? And that's really where time can
come in. The the longer that we have as a road map,
to create, to orient ourselves towards a a strategy, the
better off we're going to be. One, secret
I can just share with you for For any insider, I'm talking insiders,
key employees who could be Nation over, junior partners, family

(08:14):
members, and and so forth with the business, They have one
thing in common. They never have money. Okay? So,
it it it's often very attractive when you have that outside buyer or that corporate
entity coming in who who And maybe pay top dollar, but
a lot of business owners, a lot of dentists, a lot of, medical practitioners that
I work with, you know, they're not as comfortable with that in some Nation

(08:37):
because they they have something unique about their practice or their people, and they say,
you know, the culture would change, something would just not be right. That that's just
not the route I wanna go. For others, That's absolutely the right route.
So the more time that we have to be in front of that, to prepare
for that, to actually do a plan, the better off that we're going to be.
Many owners, when they're thinking about building a, or or

(09:00):
selling to a third third party of any kind in any any any entity,
they're usually looking at how do they obtain the maximum dollars.
And one of the things that they can, really
do with that is to be in front working with a firm like
ours and identifying what we refer to as value drivers.
Now the value of anything Is what anybody's willing to pay

(09:23):
for it, just plain and simple. It's it's not a
simple function of our EBITDA is this, Our,
multiple should be this based on our industry. It's certainly
a fallacy in the dental space. It's a fallacy in any business.
We often get trapped as business owners because we begin to look
at our our buddies, maybe at the club or other friends or other professionals, and

(09:46):
they say, Well, they got this for their practice. My practice is better or, you
know, bigger or whatever, so I should be getting that. The value is any
what anybody's willing to pay, And the there are several
factors that make a business more
effective from perspective, and that's That's what I'm referring
to as value drivers. The presence or absence of those

(10:08):
can significantly increase the value of the business or or decrease the
value. Coincidentally, these are the same elements
that should be there, even if the business is gonna
be passed internally, to a child or another insider or,
you know, a junior partner, it's the same elements because
they, help to increase the perpetuity

(10:30):
of the business, that healthiness of the business. So,
it it could be something as simple as looking at those elements, Putting the
pieces in place with the ultimate plan being down the road so when
that time comes, they're ready. Too many business owners We'll
get to a point where they say, okay. Hey. I'm thinking I need to slow
down. I wanna work differently. I I

(10:53):
wanna sell. What are the market conditions right now for that to occur?
Is it is it the best time? Have they done the things,
In terms of, like, implementation of value drivers that
are, positioning the business in the best way,
taking actions to address those things
before that's time to sell. That's creating a plan. That's creating a

(11:16):
strategy. And, again, if we're trying to go to an insider, remember, they have no
money. So if we need to monetize the value of the business, how do we
use strategies like deferred compensation or Or any number
of other ways that we can begin to accumulate some assets
so those are going to be there when we're ready to exit so that we
can monetize in some way. Wow. Well, in in some of

(11:38):
these strategies can be really simple. Right? You talk about just the the
business continuing on after the sale. Mhmm. It can be as simple as
Making sure you've got a lease agreement in place so that the new landlord can't
kick you out. Yeah. That's true. And and so so these can be
very simple things or like other things you mentioned, You know, ways to
to start building incentive structures so that your most important and key

(12:00):
employees stay on because that Increases
the value if you're keeping the weight steady. When we talk about these value
drivers and the and the way that, the business is going to be more attractive
from an outside buyer perspective or healthier from an inside transfer.
You know, there's about 17 that we we typically look at, but the number
one factor It's a stable, motivated leadership

(12:23):
team that's going to be there post transition.
And, You know, in in the dental space, that could be office managers,
GM, CFO. Any number of folks could be,
junior, associates that are not partners. I
I was recently working with a veterinary practice, a very
large, with, I think 8 or

(12:45):
9 different, veterinarians,
and Only one of them had any
desire to have ownership. I'm a little surprised by
that, but but that was reality. And so what we were able to
do is make sure that we have those other other veterinarians
who are going to be there, who are gonna be generating the revenue, And we

(13:08):
have them locked up and committed to the practice through incentive
planning so that, when the new ownership comes
in, they're going to stay. That's that's critical, critical
factor. So, you know, there's a lot of different ways to
potentially do that. Some of them could involve some equity planning.
I I prefer to use nonequity options, at least

(13:30):
at first, strategies, maybe like phantom stocks, stock
appreciation rights, Deferred compensation, so that
people can maybe, prove a track and and earn
equity, if they, If that's in
the cards, in some places, equity, having other
minority owners is just not in the cards. But if it is, Maybe a

(13:51):
path to get to equity, so they're not giving away equity too quickly and
having to buy back those minority interests from tax reasons. We do we don't have
time to get in that today. You'd be paying a dollar for every dollar share
that you try to repurchase in minority, stocks. Sure. You you may
wanna stay away from that. So A lot of owners, though, they they
believe in order to attract and retain people and to get them excited and

(14:13):
motivated is to give them ownership. That's probably not the best way
to align with their own transition objectives. Yeah. So, I
mean, why do you think a lot of owners really don't
engage in this kind of planning because I know what I typically see, and I
get a lot of phone calls is, hey. I just entered into, you know,
a transaction to sell my business, I'm ready to start doing some tax

(14:35):
planning. And it's at that point, it's a little too late. It's like
asking Santa what you want for Christmas on December 26.
Yeah. Our kids Tim still do that. Right? So Yeah.
You know, I it's a great question, Tim. I I I believe personally
that, owners don't realize that this kind of a
resource is available to them or available to them in In a,

(14:59):
a pretty cost efficient manner, and we talk about that a little later on as
well. But, you know, they they Just don't know where to go for
a bias. I I've seen various statistics that, less than
19% of business owners actually have a plan,
a, a transition plan. And I even think
a lot of those are transition objectives, as I touched on earlier, not really

(15:21):
plans that are behind that. And the result of that is that
the business is not going to, be as successful in that
transition or the the dollars aren't going to be realized as as much as they
could. So I I think they don't know where to turn. They're they're not sure
where to go. They're they're afraid of maybe what the cost could be in,
you know, trying to get this kind of advice. Again, I think a lot of

(15:41):
them go to the attorneys and the who who may do elements or or
or reactionary planning, but they're not strategists to be
doing the whole thing. When we work with a a client,
we kinda serve as the, hate to use the football analogy, kind of a quarterback
of that transition plan. Other advisers are definitely in
play. There's the tax attorney, the, corporate attorney, the tax

(16:04):
advisers, the the financial advisers, the wealth managers, the insurance
advisers, Other people who all fit into the plan, what
we're gonna do is we're gonna coordinate, build a plan, and engage them so
that they can do what they do. Too often, if they're the only
advisers who are trying to give advice to the business owner, they're just doing a
little bit of an element, and it it's just not sinking. It just doesn't go

(16:26):
very well. Yeah. Right. And there's a big difference
between making a referral versus having a coordinated team of
elite professionals, and And this is one thing I've learned by studying the
super rich in family offices. The the super rich, they
establish family offices, which are Tim of the best of the best individuals
Serving that family, and one of the reasons the super rich do that is

(16:49):
they want a coordinated team, not just referrals back and
forth, because What you do in one part of your plan impacts another
part, and you gotta have those professionals who are actually collaborating
on these things. Yeah. And I'm I'm glad you brought that up because I was
actually reminded about that, this morning. When you're working with
professionals Who also work together, who understands each

(17:11):
other's role, who understands each other's business. It even goes that much better. The
synchronicity is just is is that much better. If you're,
making a referral saying, hey. We need a, corporate attorney to
draft up something. Do you have a corporate attorney, mister mister and missus business
owner? Well, no, I don't. Well, let's go find 1. Okay?
Versus, you know, if we if you have 1 and you're comfortable working with

(17:34):
them, we want them to be part of the team because They know you. They
know that your business. They they fit in. We want to, bring
them in and integrate them to our team. But if that person doesn't exist
or doesn't have the right sets or, for whatever reason we
need to bring in, let's bring our person to the table
that we all know how to work with, and we'll just be that much more

(17:55):
efficient and and and less clunky along the way. Yeah.
No. So so true. And, you know, a couple Tim, you've you've mentioned
this idea of, You know, really, the the difference between
a plan versus just kind of having some tactics
or a strategy, can can we dive a little bit deeper into that?
Yeah. Well, certainly. And and what I would share for you is that when we

(18:17):
work with any business owner, we create a written plan. And and the
written plan, Every adviser has access to
everybody sees. We then focus once we create the plan.
These plans can be 40, 60, the 80 pages long. I mean, I don't wanna
just say they're fluff because they're not. But, I mean, depending on the complexity and
situation, we're gonna map out all the things that need to take place and and

(18:38):
what we're doing and so forth. So every adviser, every person involved,
they they they're they're singing from the same hymnal. They're they're they're
playing from the same playbook. From there, we focus
on implementation once we create the plan. And we typically take, by the way,
60, 90 days to create a plan. We, then
Focus on the implementation of the plan, you know, putting the elements in place. Even

(19:01):
if you're looking to transition 5, 10 years from now, maybe we identify the
objective that we need to, create a deferred compensation plan
for the the key employee or or, an incentive
design plan for, a new physician who we wanna bring
into the business to be a junior partner and and ultimately

(19:21):
partner and a potential successor. Whatever that is, that may be a
a years down the road, execution of that, but
we're gonna put the plan in place and and implement that and be ready for
that. Then we focus on implementation from there. So that's
what we do in the creation. Now, and then, again, coordinate
the advisers and their various functions. There's a lot that goes into that. What I

(19:42):
will tell you that there's a framework that we follow, and I think it's very
important to share that because, we
we We can look at elements as they may apply to to
certain situations and and go deeper in some than than others
depending on, on an environment. But But we generally are gonna follow
these these 7 steps in our framework. The first step is all about

(20:03):
the creation and the clarity of, the business
owner's exit objectives or their transition objectives. And that might
seem very simple because, well, of course, you gotta start with what are we trying
to do. But really diving into what is the Tim?
What is the cadence when the individual wants to begin to
maybe work differently and begin to turn over the operation of the

(20:26):
business in some way, maybe ease out of that, or or are they just gonna
stop and or just gonna stop that one day? What are
their needs post ownership? What are their financial needs,
for retirement or the life that they wanna create? You know, it's
interesting. I know about what do you need from a minimum. Okay? That's that's kind
of the start point. You need this to to live the lifestyle that you want.

(20:49):
But if that's, you know, whatever, if $2,000,000
is going to satisfy that need, but you built a business that's worth $20,000,000,
Well, once you have a better life, if you realize the value of that that
other 20,000,000. Right? So how do we how do we figure that out? So it's
it's what are your needs And and, really, what do you want from
that, and and how are we tracking there? How do we create that? Then we

(21:11):
focus on the desired route that they may have for
their succession or transition. And oftentimes, it's a, well, I'd
like to do this, but I just don't know how that's gonna happen. Again, we
don't worry about it. We're not we're not about to hang out. What do you
want to have? What what is ideal for you? And and I'm and I'm gonna
almost pause there a little on the the what do you want to happen because,

(21:31):
right, I spent a lot of time in discovery And getting to know
my clients and what's important to them. And I find that sometimes
my role has to actually be helping them figure out what they want.
It is. Do you find that too? There sometimes there's a lot of
uncertainty over what you actually want to have happen.
Well, all the Tim, and and that usually comes from,

(21:54):
I have an idea, but As
soon as I I take a step to how do I make that happen,
I get stuck. I don't know where to go, and I just it it it
it I I just get stuck Right there, and I can't go any further.
Although not a medical practice or a dental practice, I recently were
I have been working with Tim ongoing. I'm meeting with them actually tomorrow morning,

(22:16):
A client that has a concrete company, and,
they had the idea for a lot of years that they were gonna sell that
to a third party, and Nation a friendly
competitor. When the time came, they said, hey. You know, I think I wanna slow
down the way I'm working. The offers were about half of
what the business was really valued. Mhmm. And so then that made the owner

(22:38):
pivot to go, okay. I need to think about something else. I can pull that
money out in a number of years and still have all the assets, so why
would I do that? So then be shifted to more family transition.
Well, family's not ready. Who? What about the other family
members? This is a 2nd generation business now going to the 3rd. What about the
minority shareholders? Every time this owner started going

(23:00):
down, Wealth, what about this? He got stuck, and all it did was
keep him up at night. And and so when we came in and began to
talk to him, he's like, gosh. This is great. This is all the stuff I
need Wealth in figuring out. Okay. We're not gonna decide that for him.
We're just gonna help him take down the path and then help him understand if
we take this path, what that implication is or how we might be able to

(23:21):
do that. Okay. Kids aren't ready. Great. We'll create a path for them to get
ready if that's what we're gonna do. Okay. Next, let's go on to this next
phase. Right? So, yeah, that that Peace. I
mean, it it it almost seems, so
easy to to go in the framework, but it really is where the rubber meets
the road and where we spend a lot of time and energy.

(23:42):
So the 2nd step in the process is very critical in what
I find to be extremely, extremely valuable for owners,
And it's, the completion of a business valuation. We do
business valuations. We do, independent valuations. We
have a CPA on our team who Who who who does
these, or we do, in a different methodology. We we've got

(24:05):
a couple of different ways to approach it. But the idea is that you know
what your business is valued at From an outside perspective, it
takes that, affinity for my
business because it's a great business. It's gotta be worth this Kinda out and
looks at that independent those independent variables. And and oftentimes, that's our
benchmark. We're oftentimes at a place that the business is

(24:26):
valued at one level, But the owner needs it to
be, at the next level or or to another place.
So that gets into, okay, how do we close that gap? How do we grow
the value of the business? I touched on that earlier. It's the it's the
implementation of value drivers and the look at, the presence or
absence of these value Thrive, which can significantly affect the

(24:47):
value of a of the the purchase price of the business. Remember, value is
what anybody's willing to pay for it. So And once again, the these value
drivers aren't necessarily just Top line revenue items either. It's on
not just okay. Right. Because I I I think there may be some
confusion around that when we talk about drivers of value. We need to
grow the enterprise value, and I need more EBITDA, and I need more this, but

(25:10):
but there's really other ways to increase the value.
Yeah. Absolutely. And I mentioned the first one being that,
the presence of stable motivated retained leadership team That's going to
be their post management. I could say something as simple
as, you know, if if an owner is doing a lot of EBITDA,
and a lot of revenue, but they are the business. And

(25:34):
when they walk away, there's not much there. There's no value. Okay?
And I see sometimes see that with medical practices.
I I I recently was working with a client who, happened to be a
builder. They they were doing $30,000,000
of revenue and had something like a 30% margin. They were making
really good money. He had 4

(25:57):
staff. K? He would be basically did architecture and
design and built very custom homes, very high end homes.
Killing it. Doing very well. I asked him, okay.
Well, who who's who's doing the business
besides you? There's nobody. Okay? And, you know, he was
doing some pieces, but everything else was subcontractors. You know, you got something

(26:18):
that's, you know, maybe bringing in $10,000,000 a year
of you know, of of of revenue, of money, of take
home, and he is he's got nothing. It's
not worth anything. Nobody's going to buy that. His only
solution really was to bring along somebody who could come
up and be him in the future so that it he

(26:40):
duplicates that, And then he has something. K? But he he
he's not gonna be able to do that very quickly, so maybe if his timeline's
a year or 2, Probably not gonna happen. So we gotta be
careful about that. So and that's just one of the simple elements here. What
is the business, and what's the driving of the business, And and how
how is that business gonna continue? Now beyond the incentive planning that we

(27:02):
touched on, earlier in in in that critical Factor
to retain the key employees. We also think about,
several other key factors that you should be aware of. A big one
is that you have operating systems that are in place
that improve cash flow, improve sustainability.

(27:22):
Oftentimes, we we see the need to bring in a,
a fractional COO or some kind of a
leadership, education training for people who may be there so they have
true operating systems. That ties very
closely into another one, Which is,
proper financial controls, financial foresight and controls. You know,

(27:45):
you want to be If you're running things through the business,
club memberships, boats, planes, cars,
Family benefits, other things like that, which a lot of business owners do,
you gotta get those out, for it to be attractive, and then those really should
be out for 2 years, before it could come back and bite you.

(28:05):
Otherwise, you have to get a little creative sometimes. Creative does not mean we're
gonna sign step laws or Or anything like that. We just have more challenges that
we may have to face, and and some of the potential solutions may not be
ideal, in those. So so, really, once again, time is
your friend when you're when you're looking at exiting. And the the the
more time you can spend up front, You actually can reap some significant

(28:28):
rewards when it comes time to go to market. Yeah. Well
stated with that. And I I I think that when, You
know, a lot of people when they think of even business owners
or other advisers who might be might be listening to this podcast We'll be
thinking about, well, are my are my owners or am I as an owner
or as a a dental practitioner ready to to exit my

(28:50):
business? Well, maybe not. I'm not this year, so out of
sight, out of mind. That's not the way to be looking. The way to be
looking is someday, it's going to to transition. So how do I get
control? How do I build a plan on that Nation and really take
control, transition on your terms instead of someone else's?
And god forbid, things do happen. You know,

(29:11):
dentists have have to be good with their hands, have to be
good physically, all the other things that go in with that. You know, I live
in Colorado. The the the mountains are are really packed with snow
right now. People are skiing all the time. What happens if if somebody
gets hurt skiing or Or, you know, has other
physical things that they're not expecting. I can give you dozens and dozens

(29:32):
of examples of those that have really side railed,
businesses because they didn't take that into consideration because in their
mind, they weren't ready to take that on. Well, knowing that it's gonna happen at
someday, Let's start now. Let's let's take a look and let's build a
plan. And if it's 10 years, great. Then we have more time
to make sure that we Implement and and build what

(29:55):
we wanna build. Yeah. I know. It's so true. Right? Everything is
okay until it's not until it's not. That's right. Yeah.
I do see that that time and time again. So so right when you're
helping the the these businesses really put together those exit plans,
right, not just a transaction, but a a real plan. Mhmm.
Right? You're staying in your lane and doing some very specific

(30:17):
stuff. You're not an m and a firm. You're I'm not a business broker.
Why do you think that's important in in when it comes to the
planning? Yeah. Well and even continuing talking about the
framework that fits in very well to our next Our our next areas are
all looking at, insider transition considerations and
plans as well as external. You know, the third party, the strategic buyers,

(30:39):
the The aggregators, the DSOs, the private equity, those
kinds of folks that are out there. And when we're working
in that Space. The fact that we don't have a a
dog in the race, we we don't have, any other motivation
except to Do what's right for the business
owner based on their objectives. That's what we're being paid to do. We get

(31:02):
paid to build a plan and to implement the plan. We do that on a
project basis. Okay. That's it. We don't have any other
motivations. We occasionally work in the ESOP
realm. We actually probably unwind more ESOPs that we actually
implement, by the way, but and I I think that's probably the
case that ESOPs were put in place where they shouldn't have been.

(31:24):
ESOP folks, I hope that none of them are listening because I love you guys,
and you're very important if you're out there in the right situation.
But a lot of the ESOP people are like hammers. Everything looks like a
nail. Everything's an ESOP. Let's put it in that box. We don't care. If
you wanna transfer to family member, Key men, key
employees, junior practitioners. I I know in the dental space,

(31:46):
into the medical space, each state's a little bit different of who can have ownership
if they have to be a licensed Practitioner and how much in percentages. So just
kinda taking that to the side. You know, be it the
insiders, family members, the, the the key employees, the junior
Partners or the partners, the ESOPs, or outside
strategic buyers, competitors, DSOs, private equity,

(32:08):
other m and a firms, business brokers that might be out there, whatever the right
path is that's going to be the best situation for you, we're gonna facilitate. We
don't care where it goes. Yeah. No. I I think that
that's so important. And the other thing I think that you bring that's really
important is, Right. As much as I love dental and I
think there's a a role for dental specific people,

(32:31):
I think there's also Dentist when we can bring in people who work in
industries other than dental. Yeah. And so drawing on your experience
with working with other owners, How can that help a dentist with their exit
planning? Yeah. I mean, at the end of the day,
any, you know, a dental practice, Any medical
practice, it is a business. And, if you're

(32:53):
looking at from a business transition, you're selling it, you're transitioning the
business, It is a business, and it's gotta be looked at as such. Now,
I'm not please don't misunderstand. I'm not minimizing The
kind of care and and the the physical aspect that goes
into any kind of a medical practice, that that's so important.

(33:13):
But I think too many, medical professionals,
they they look at their operation, their their practice,
more in that vein and not as a business. It's another
reason that they need to have or should have a a good CFO, good
good COO or people who are performing those functions so that
they can, do what they do best, which is take care

(33:36):
of patients, bring the value and the care and the passion that they
have for that, but there's other people who are helping to steer it from a
business perspective. And other advisers Like myself, who are Wealth saying,
okay. At some point, this business is gonna be worth something. How do I
get there? Let me let me work with the advisers To do that and
and focus on what I do and and not get caught up that this is

(33:58):
just a a a medical practice because it is a business.
And and, yeah, more directly answering that question, that's what I learned from other places.
It doesn't matter In the big scope of things,
it doesn't matter what kind of an industry or what size
the business is. Okay? The,

(34:20):
challenges that have to be overcome or addressed, the questions that need to
be asked, and and the the paths that need to be created are
very similar depending on what transition path you're going to. If
you're transferring to an insider, you've got the same challenges to to
address Regardless of the type of the industry or the size that you're in,
if you're trying to position it for a third party sale, you've got the same

(34:42):
issues and challenges that you need to begin to address. Of course, there's
different subtleties and and intricacies to the businesses,
but, we're businesses are not as unique in
that aspect That, they may believe that they are. Okay.
No. Interesting. And Nation thank you for for sharing that. The the other thing
I'm curious about is talk to me a little bit about market Trends because I

(35:05):
I know so often as business owners, we may think, you know, I just need
to wait until the economy recovers. You know what? The
economy is really hot right now, so I'm gonna Keep growing the thing and it's
worth more or it's too slow. Like like, how much do current market
trends and economic conditions actually influence the
practice transition strategies, and should they be influencing

(35:27):
when we choose to execute? Great question.
I I'm gonna give my opinion, and people may feel differently than
this. The number 1 is, what's your objective? What's your Tim line? What's
important to you? And if it's you know, I need to
be out in 5 years because I'm gonna build a quality life with my family
and that's what I want, then that's what we need to do. 5 years could

(35:49):
be ideal, could be not so ideal. So I
wanna say that that's gonna be the number Nation factor. And with that being said,
there should be awareness of the market
conditions. There should be awareness of industry trends.
I'll say something as simple as in the last couple of
years, there's been a pretty significant shift in the m and a

(36:12):
marketplace, and that's really been interest rate driven. As
interest rates go up, the cost of capital is more.
So the companies that may be,
a little bit more loose in terms of what they would spend or what
price that they would pay. Maybe they're willing to pay a premium. They are
willing to pay a premium because cost of capital was cheap. So

(36:36):
if if if cost of McNeely is so cheap because interest rates are
low, Yeah. I'll overpay you if I can, you know, fit into my model with
that. That's changed. Cost of capital is
more expensive. There's still and and through
that time, through COVID and and post COVID,
there's a lot of money on the sidelines waiting to be deployed. K. That was

(36:58):
a huge factor that was also helping to drive some of the prices in the
m a in the m and a space.
Now there there's less on the sideline, but there is still capital on the
sidelines. So so it's still not bad on that front even though
interest rates are higher. But what that's done is that,
the m and a marketplace has become more industry specific

(37:20):
or more even within the industry Specific type of
practice focus or, specific niches that may
complement other things that they're doing. So, it's a little
bit more discretionary. They're still paying good
premiums. I don't know how much longer that's gonna last. But if you were
to look back and go 2 years ago, Gosh.

(37:42):
Interest rates are low. This is you know, they're staying. We're not going anywhere with
that before COVID, let's just say. You may have totally, you know, thought, okay. I'm
gonna hang on for, a better market condition. Maybe let let let's just
go back to post COVID. Interest rates were low. The the inflation was
high. Market condition didn't feel probably very good for people, but That
was actually a good time to potentially sell. So, you

(38:04):
know, there's a lot of factors that are gonna go in with that. But just
in in general market conditions, I think there should be an awareness,
Particularly, if you have a flexible timeline. Someone's looking and saying,
hey. I'm looking at 3 to 5 years. Let's
put put ourselves in the best position of whatever objective is in 3
years. If it feels good, if it feels right, and I as

(38:25):
a practitioner, As a business owner and ready to step away,
then it's a good time. One factor that's often not thought about, Tim,
is what are What are owners going to be doing post ownership?
How do they feel? You know, I I used to play competitive golf. I played
on some mini tours and And PGA sectionals and stuff like
that in my younger days. But, I'm excited

(38:47):
about playing golf maybe when I, when I retired, playing more of it. I
can't I don't know that I wanna golf every day. You you know, I might
get a little old. Right? Going to, you know, the
club or, playing pickleball or whatever you you're ready
to do, that might get old for people very quickly and
particularly business owners because they are used to,

(39:09):
building. They're used to putting passion towards things. They
they often find that they don't feel that they have purpose. They don't feel
like, they're contributing the way they want to. So part
of even creating the exit plan is what does life
look after After ownership for you, and how do you get there?
How do you how do you make that emotional adjustment or mental adjustment? And and

(39:31):
and maybe you're doing other things. Maybe you're starting staying on as an adviser. Maybe
you're Consulting. Maybe you're doing volunteer work. What
whatever that might be, you you gotta factor that in. And so if somebody
is looking and saying, I'm ready to sell in 3 years because are great. Are
they ready on all the other fronts? If they're not, not gonna be the ideal
outcome for them. Oh, and I'm so grateful you brought that up. We were

(39:53):
just talking about that yesterday on the show is is so often, right, us
as business owners, we have a lot of our identity wrapped up in the business.
Right. And we're not quite sure how to reinvent ourselves. And
And and I love the way you answer that question. Right? How much do market
conditions play into this? And they should play a role. We should be aware of
them. We should look at them. But, really, what you wanna pay attention to are

(40:16):
what are your goals? Because if your goal is to spend more time with
your family, why Why don't you start doing that today? Right? This whole idea of
kicking everything down the road and saying, I'll get to that important stuff
someday, And that to me doesn't make a lot of sense because we're not guaranteed
tomorrow. And so so I think letting your personal goals drive the
exit is really what has to be there more than any

(40:38):
market conditions. Yeah. And and and and Wealth, very well said. I I
would Go one step further in thinking about that is is if, you know, your
your your value, your your objective, what you wanna do is spend more time
with your family, Then, you know, don't wait for the time to
feel like you can do that. Figure out now, okay, how am I going to
do that? Well, maybe I need I either need to see fewer Nation.

(41:01):
That may not be the right Nation. Or I need to attract and bring somebody
into the organization. How do I do that? You know,
depending on your geography where you're located, some places are very easy to
recruit professionals to, others are not. I was working with a,
pediatric medical practice in Southeastern New
Mexico. I grew up there. Rural,

(41:23):
not a lot of good stuff out there. Not a not a real attractive
place. Unless you're from there or you have roots, You
generally don't wanna go there. That's very different to recruit
there than it is in a place like Denver, Colorado. Yeah.
So, you know, but but if we the sooner we address that, even
if you don't know how, let let's help you figure that out. Now is the

(41:44):
time to begin to do that. That's why time is your friend. You can do
the transition then on your terms rather than whatever the,
environment's gonna dictate for you. Yeah. 100%.
And, You know, when we when we kicked off the show, we talked about you
being an n c, double a, college football official. Mhmm.
Nation and there's actually a into some some exit planning, isn't there?

(42:06):
And some of those skills actually come over and actually help you
be an even better exit planner, don't they? You know, it's it's
funny from a skill standpoint. I I get reminded of this all
the time. In fact, I was at a men's group this morning That it came
up again, and and it was all about, how do you how do
you maintain, emotional,

(42:29):
congruency. You know, level level Nation. Mhmm. Not getting
angry. And and, you know, my comment was, you know, when people are are
frustrated, when they're not sure,
you know, where they're going, what's happening, it's not going their way,
k. That often gets, manifested by,

(42:49):
you know, frustration, anger. And on the
football field, What that means is that players start,
doing cheap shots, doing pushing and shoving after the play is
over, Start talking at each other. And and
that is a big part of of my job as an official, I'm
in the middle of the field, is the game management, and,

(43:12):
we get graded as as college football officials on every play, by the way.
So when you're when you're looking and going, gosh, Guys, what's what's going
crazy with that? Understand we get graded on every play if we're
in the correct position. If we're, if we throw a flag,
was considered a correct call if we or an incorrect call,
which is really bad, by the way. Better to not have a call and

(43:34):
miss a call from a grading standpoint than to have an incorrect We graded on
every single play. We don't care what the score of the game is.
We don't care who's winning. We don't care if we miss something and try to
make it up somewhere else Because that's gonna get us downgraded, which is
going to keep us from getting post, season
assignments, bowl games, or, keep us in the

(43:57):
conference or allow us to graduate to to bigger
conferences or or wherever that may go. So it it it's
really interesting from you when you look at that, but I'll tell you from the
the game management standpoint. When when players
become frustrated, When there is, anger, when
they they're frustrated. K? And I would say this could be for a

(44:18):
business owner. They, don't know where where to go. They're
they're they're insecure about where the future may be,
and and and they're frustrated about what might be happening because they're They're not sure
where to where to turn. From the game management standpoint, the game
turns into a crap show, and nobody wants to
see that. Nobody wants to watch a game that just deteriorates.

(44:41):
Nobody wants to do that. They they don't wanna see a lot of flags. They
don't wanna see, You know, just they wanna see good play and excitement.
So, you know, we spend a lot of time trying to keep people in an
even keel, starting from from beginning to
end, my my mother-in-law, you know, bless her heart,
she she watches football, doesn't totally understand. You know, 1st

(45:03):
couple of plays, if something big hap oh, this game's gonna be a runaway, isn't
it? Runaway, isn't it? Especially in college, you know, you can be
50 points ahead at halftime And still lose the game. So you've
gotta be consistent throughout. You've gotta keep that steady, and you
gotta execute from a a a a player standpoint, a team
standpoint. Gotta execute a plan. You come up with a game plan about

(45:25):
how you're going to defeat this other team.
So then it's about we're implementing, we're executing what we're doing,
and then we should have a good result. And I think From a from a,
business planning consulting standpoint, from a transition planning, it's
about having the end in mind that when, having a plan

(45:48):
and then and then executing that plan. And along the way, keeping a
cool head, ebb and flowing as you need to, But
managing that situation so you don't get sidetracked. Yeah. Oh, such
such powerful thoughts. And and I know I'm certainly walking away with, once again,
just a much better understanding of why time is your friend when you're
looking to exit. Right? The the more time you have to do the planning

(46:11):
to to get ready to put those puzzle pieces in place,
Actually, the more you're gonna enjoy it too because you've been planning, you've been getting
ready for this, and I certainly have more insights into the planning
process and And an awareness of some of the things to be looking
at, and I certainly feel excited about the future for everyone's
business And really helping them maximize their value so that

(46:33):
your lifetime of hard work can pay off. Kerry, thank you for
sharing so generously with us. Any Yeah. Any closing thoughts
before we sign off here? You know, it's just a, kind of a
sign off. If if what we do is something that, you know, could be a
benefit, you You know, reach out to us, reach out through Tim. We
we work as an extension of what the the work that Tim is doing,

(46:55):
to talk with us, to to see if it could be a good fit. There's
no charge for that. We get to know you. We get to scope out a
Dental project. And if it makes sense, we make a proposal to work together. If
not, we're gonna offer to be friends and and be a resource for you in
the future. But, you know, more than anything, I just wanna leave
Everyone with the the idea that, you know, you need to be thinking about where

(47:16):
you're headed here. You don't have to do it alone. You've got some trusted people
who can help you to do that. Let's just reach out and start having a
conversation. Well, hey. Thank you, Carey, and I've put your contact
information below. But where can we find you? Where can we get a hold of
you? Yeah. So my direct email is
[e-mail].

(47:38):
I would certainly encourage you to check out our website, Callamath Consulting
Group. We're the only one that's close to that, and,
there's a lot there's there's few good resources, some case studies, some, you know,
thinking about, you know, your transition, but,
you know, reach out through there. I think that'd be a great place. Based from
there, we have an opportunity to share some more for the content, white

(48:01):
papers we've authored, newsletters, so forth that could be appropriate to your
situation. Excellent. Well, hey. Thank you again for sharing, and thank all of you
for tuning in. Hope you found this helpful, and and really start that
planning. Reach out. Having the Nation, you right? Even if you
don't move forward with any of it, you're gonna walk away with a much clear
understanding. And the more clarity you can gain in life, the

(48:23):
better off you're gonna be. That that that that's always a win in my opinion.
Yeah. Thank you for having me, Tim. You're welcome, and we'll see you here soon
on the Dental Wealth Nation show. You've
been listening to Dental Wealth Nation. We hope you've gotten some
useful and practical information from the show. Join us next
time as we pull back the curtain to reveal the often

(48:46):
hidden advice, and strategies used by today's most
successful individuals and families and help maximize your
net worth so you can take even better Care of the people you
love. Till next time. Make sure to hit the website at
Nation