July 26, 2023 • 19 mins
Casey and Jarrod explore the hidden costs contributing to high overhead in your dental practice. From inefficient processes to underutilized resources, they shed light on the often overlooked culprits behind this financial burden and offer practical solutions to address them.
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Interested in more info on how to: Earn More, Save More, and Retire Early
Upcoming Tour Dates: Go to our EVENTS page for info
Facebook: Four Quadrants Advisory
Instagram: @fourquadrantsadvisory
LinkedIn: Four Quadrants Advisory
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:03):
Hello, everyone, Welcome to theMillionaire Dentist Podcast, brought to you by
four Quadrants Advisory. On this podcast, we break down the world of dentistry,
finances, and business practices to helpyou become the millionaire dentist you deserve
to be. Please be advised wedo speak with an honest tongue and may
not be safe for work. Helloand welcome. This is Casey Hires back
(00:27):
at the Millionaire Dnist Podcast in studiowith co host Jared Bridgeman. Casey,
Bud, how are you doing well? I love that shirt? Man?
What is that a two can?What kind of bird is that? Yeah?
I think it's a two cam?Gorgeous, Yeah, nice and blue.
It's we had a situation where wehad you had taken um, maybe
not you, but we had takensome clients golfing and they want to be
to go out and do some photos. And I have no golfing clothes because
(00:50):
I don't golf, and so Iwent and bought the shirt and I was
like, that's actually not half bad. You look like like a scratch golfer
almost all right. Yeah, I'lltake it. It makes me want to
kind of learn enough to just youknow, out there if you want to
be frustrated. Yeah, it's likeeating um the Saint almost shrimp cocktail.
It makes you cry and you comeback for more. Yea for those out
(01:12):
of state right set, almost shrimpcocktail has so much horse radish in it
that your sinuses magically open up andyou ry. But it's tasty. That's
how golf is. Yeah, Ican see that makes you cry and you
come back for more. Um.Casey. When you are you know,
speaking with these practice owners and thesepeople sometimes you know before sometimes after these
(01:33):
people dentists and specialists, practice owners. Yeah, I didn't want to you
know those people. Yes, whenyou're speaking with dentist and practice owners and
specialists, um, and they hearyou speak what is one of the big
things that they end up coming andtalking to you about and asking you about
what's what's a big for them thatthey can see it is like a big,
a big factor they can try andtake care of. Now. Yeah,
(01:57):
those typically launch into people going,hey, really enjoyed the content,
thank you for that. It soundslike you work for a firm that might
master this. Yes, that's correct, and they want to engage later that
month and maybe have a one offconversation or you know, private conversation on
the sense sensitive topic. And ultimatelywhen we get into them understanding the full
bandwidth of kind of what we doand and what all we do to help
(02:22):
practice owners, they want to knowthe how, and typically it gets to
overhead. Right, I've got overhead. I've got high overhead for the ones
I know it. Yeah, sosomething I don't know what I'm overhead is,
but I feel that it's high.Like, how do you lower overhead?
That's the That's what I'll hear alot if you just what fire people
and quit buying nice things. Yeah, that's what they's that's the first place
(02:44):
you go and ultimately stop buying avocadotoast, stop going to Starbucks, right
the Yeah, you don't want yourown barista in your practice. I mean
people would love it, but no, high overhead it's hard. And going
back to golf, it's We've saidthis before, it's like a high handicap.
If your handicap's a twenty five ingolf, that means you're not very
(03:05):
good. Well, if you takesome lessons and go to the driving range
and work at it for a season, you'll get that twenty five handicap down
to like a fifteen or a sixteen, and it's not too terribly hard.
But go to a fifteen or sixteento like an eight, it gets way
harder handicaps, I'm sorry. Overheadis similar. Some people have seventy eighty
percent overhead, but there are somethings you can do to get that down.
(03:27):
But then once you get it downmaybe sixty sixty five percent, it
can be more challenging. But yeah, how do you do it? There's
only three ways to effect overhead.We've said this before on this podcast.
You can increase revenues, you candecrease expenses, or a combination of both.
What a lot of people don't realizeis learning a new procedure, dropping
(03:49):
an insurance. You're not working moreto increase your revenues, but you're increasing
your revenues, right, And soinstantly people go to I got to work
more in fire people that it's nota formula for a world class firm like
ours to help our clients, northe best way to lower overhead. Now,
let's say you, you know,have fifty employees and two chairs.
(04:11):
Maybe you have too many employees,but that's not the thing. You run
first two right, no, no, And actually today we've got eight yeah,
eight areas that you know, ifyou have a high overhead in the
dental office, here's some things tobe aware of. And one of them
I just mentioned overstaffing. Yep.And that's that's a tough one. That's
(04:31):
an emotional one, yeah, becauseI mean a lot of times, you
know, you may have been working, you know, having these people work
for you for for years potentially,or they've been they've been the front the
front desk lady for two decades,you know, the overstaffing. There's a
lot of variables that goes into this. But number one, what is the
benchmark for you and your practice orthat you should have, um, what
(04:54):
are your employee wages percentage versus revenues? Right? And some people don't know.
Some people it's twenty eight percent,some people it's forty five percent.
Some people it's fifty five percent.They typically all say the same thing,
we're like family. And I cannever imagine reducing anybody or you know all
that stuff. I'm gonna tell youthis right now. Any company that tells
(05:15):
you we're like family here, itdon't work there. That's a big red
flag that once you drink some koolaid. Yeah, Now I don't know
that that's a big red flag.That's a cute goal to have in a
catchphrase. But but from overstaffing,it just comes down to what is the
benchmark and where are you at?Now? Could overstaffing That doesn't just mean
(05:38):
having too many people. If youhave a bunch of people that are producing
a lot for you, then thatthen that could work, but also can
also be right like like you know, you're one person who's getting let's say
overpaid, would that fall into overstaffingas well? Like maybe that? So
I for me, that's more gettinginto the weeds, right, That's where
a lot of people take their mindsto. But the biggest picture is are
(05:59):
my employee wages percent of revenues aroundtwenty percent? You know, having a
benchmark? What is the bench what'sthe goal? And where are you?
Most people don't know those two piecesof data. That's the first thing with
overstaffing. It's not getting emotional aboutsomebody who's been there or couldn't imagine that
is what is good? And whereare you? Then you look to see,
(06:21):
okay, what decisions could be made. I've told this story before,
but working with somebody at the beginning, and they said, we're like family,
My people are I think underpaid.We live in an expensive area.
That's off the table, and it'slike, that's great. The benchmark should
be twenty percent. I know inthis day and everything's eb and flow.
(06:41):
But right now that's a little higherbecause people are having trouble finding good people,
right, but yours is forty fivepercent. Well, he didn't know
what the benchmark was and also didn'tknow what there's were correct. Those are
the first two steps, so theyalready hadn't reached a conclusion without the two
pieces of data the most important.Yeah, right, and so people go
(07:02):
to the emotional I don't want tofire anybody, right, So just to
repeat it for the fifth time,know what the benchmark is right here,
it's twenty percent. Generally speaking,there's always a lot more data that goes
into it. Generally speaking, twentypercent is what employee wage used to be
as a percentage of revenues. Andwhat are what is your percentage? Right?
(07:23):
That's the first one. So that'swhat the overstaffing one is. Gotcha?
Gotcha? All right? That thatcovered it pretty well? Casey um.
Next up, I would say let'sdig into um. It can kind
of tie in in some ways,but like overspending, right, so this
would dive more into um. Youknow, any cost that could be associated
(07:44):
with like borrowing money to buy thingsthat you may need or you know you
thought you needed for tax purposes,but like equipment and new technology and things
like that. I feel like you'reyou're just throwing the softballs here. I
am over overspending, right, Sothis comes onto a couple of things.
Number one, having a custom dentalchart of accounts that your external team has
(08:05):
created for you that shows you andtells you things like are you losing money
on a procedure? Are you usingsix different points of advertising but yet you
dump in an advertising versus have sixline items? In that way you can
tell if there's two losers there,right, So the overspending comes from knowing
(08:26):
those pieces of data you mentioned equipmentSection one seventy nine. Please don't let
your equipment reps come in at theend of the year until you do you
want to pay taxes or do youwant to shine a new piece of equipment?
They if you actually need it,that's a different conversation, correct,
And if they have an intimate viewof your personal financial situation, your profit
and law statement, your balance sheet, your tax situation, then they might
be able to help you with thatdecision. News flash, those people don't
(08:48):
have access to that stuff, norhave any lens to be able to analyze.
No, they're trying to make moneya lot of times. Ye,
So a second section one seventy ninethat can lead to overspending going into debt
is a terrible tax strategy, right. And then it's just the again the
shiny thing mentality yep, yep.And then supplies everybody thinks they're getting a
(09:09):
great deal. Not everybody's getting agreat deal, right. I mean,
you rep will tell you that becauseagain sales well and the and the person
who does the buying is going totell the practice owner, I'm getting the
best deal possible. Right. Okay, say now that when we're vetting out
potential new clients, one of thethings we really can dig into is their
fees and how much they charge fortheir fees. Sometimes there are situations where
(09:33):
they are not that's too low,right, Like maybe they haven't updated it
in a decade in inflation, thisit this is low hanging fruit. Yet
so many practices miss on this.Do you think they're afraid if they raise
their fees people will stop coming becausethey're that kind of fear of well that
you hit on it again. Thatis the first emotional thought that comes.
(09:54):
So a couple of things. NumberOne, we use the Wasserman feet study,
but there's different feasts studies out there. You should know where you are
to be in the eightieth percentile withinyour zip code using a whole bunch of
variables. It's adjusted for all sortsof things, cost of living, this,
that, and the other. Butthat will tell you we were just
going through our process. We dothat for people. Some people are three
(10:16):
percent low, others are right ontarget. Other people are twenty thirty and
forty percent fees low, to whichthey say, what, well, I
could never raise my fees. Listen, there's a strategy. It's three percent,
it's five percent. You know annually, you've got to do those things
well. And that's what what kindof practice do you want? Some of
our best clients they know we're notcheap and they go well, as a
practice owner, I'm not cheap either. I'm providing excellent service and I charge
(10:39):
for it. And by doing that, I also keep sorry to say it
undesirables out of my practice, I'vehad people say, well, what happens,
They're not going to be able toafford dental service. There's two hundred
thousand dentists in the country. Yes, you're not the only game in town.
For the most part, they're goingto get their dental done. So
don't don't use sentimental emotion as anexcuse. If you are if you have
(11:01):
passion, if you have a passionfor any amount of charity work, there's
always options for that too, underyour own terms. Suit, Yeah,
do it on your own terms.But all the excuses I hear are just
that they're they're unfortunate. But yeah, know where your fees should be,
and unapologetically you should think you arean eightieth percentile good or best performing dentist
(11:26):
charge accordingly, Casey. Sometimes oneof the things that can be an issue
that's I think a harder subject totackle or correct would be location and capacity
issues, possibly due to just thebuilding you've rented is only X big.
Are you trying to tie together thefact that location and building in capacity issues
(11:48):
can screw up overhead? Thanks?Oh yeah, yeah, this is interesting
right. Um, A lot ofvariables. If you're in New York City,
it's going to be a little differentthan you're in Omaha, Nebraska.
Right. But unfortunately, what wehave seen sometimes are dentists will want the
(12:09):
practice of their dreams, not usingmuch data. Get that taj Mahal practice
you talk about sometimes, Yeah,not using data to drive that decision,
but instead of motion, you know, buying a big space, blowing it
out, decking it out, andyou know it's just beautiful. So potentially
it could be it's you know,it's a situation where you've made you've made
it too big, like you don'tthere's not enough patience or you know,
(12:31):
people around to actually fill the spaceyou need in you're paying for. Yeah,
it comes back to data. Youknow, how far are you booked
out? What's your capacity? What'syour vision? Do you want and associate
down the road? Do you needspace for them? Are you referring out
a bunch of stuff or are youlearning new procedures to do it yourself?
How far you booked out, howfar hygiene booked out? If you're a
GP, there's so much data withthat. But but unfortunately, too many
(12:54):
people think if they get this big, sexy office on the you know,
the best corner in town and itjust looks good. You know they're going
to come and feel to dreams asyou know, if you build it right
outdated, but you know, youbuild it and a lot of times the
only team that comes as high overhead, you know. So again you've got
to have good data, um,and ultimately a good team to help you
guide that. Unfortunately, we've seenway too many people that just go ahead
(13:16):
and make that jump or maybe it'sa second location. Their overhead is going
to be high and um, youknow they they've used two pieces of data
instead of sixteen pieces. That's areally hard one to bounce back from.
Yeah, it's such five to eightyears for sure. Right. Obviously we
talk about this, you know often, and it's a thing we really focus
(13:37):
on here at four quadrants. Butpoor insurance adjustments to reimbursements. That's one
I hear you know as a patient. Yeah, insurance seems like something you'd
want from from the owner dock side. Sometimes these insurances, uh aren't the
greatest. Well this is probably aone on one level bullet point. But
(14:00):
if you take a lot of insurancesand you're and you're producing two million you're
staffed up for two million, youhave a building that's the sized up for
two million, you've got supplies fortwo million of production. But let's say
you are collecting I don't know,one point three million, your your insurance
adjustments are seven hundred thousand dollars.That f's overhead. Obviously that would be
(14:28):
a thirty five percent insurance adjustment rightthere. Number guy, I take no.
Uh, I don't know if you'reright or wrong on that, but
I'm I'm gonna say I am.Um. It's just like it's like my
every argument I have as my wife, Like remember that time I was right?
That's what I say. But you'reright, insurance adjustments and insurances when
(14:48):
you talk about you know, increasingrevenues, decreasing expenses. If you're if
you're an insurance shop, um,you know the productions high, the collections
are low, and your revenues andprofitabilities not great. Right, So I
mean that's an entire podcast or more. Oh that's big, that's probably a
ninety minute presentation. But yeah,insurance, you know what is your insurance
(15:09):
situation? Um, that that's goingto affect overhead greatly. You know,
unfortunately you'll have big offices with bigstaffs and many associates, and you know,
again a lot of production, nota bunch of collections, a lot
of insurance right offs, and massivelyhigh overhead. And that's a poor combination.
Have you when you when you weretalking to some some of the dentists
and specialists out there, you knowa lot of them will say that,
(15:31):
yeah, my insurance, the insurancesucks, and this kind of thing.
But have you seen any legit horrorstories involving insurance reimbracements? Yeah, I
mean that, Yeah, there's Iwas at a state meeting recently and talked
to, you know, some peopleand that's what they said. They they
said, I've I've looked. Youknow, I started in dentistry and I
loved it, and I got intoit for these reasons. And you know,
(15:52):
I started with insurances just to getthe patients up with the intention of
backing off. And I look upsix years later and I'm in the same
spot or worse, and it's justit can be really hard and challenging.
And again that's why for our clients, they have a full team to help
them navigate these stormy waters of insurances, because they're a necessary evil that being
(16:14):
said, they will control you unlessyou control them. And we've worked with
people who used to get smoked withinsurances and now they're making two hundred thousand
dollars more in income than they werealready making before and they're not and tend
to be working less. Yeah.Yeah, another I would say, I
mean this seems really obvious. Thisone ties a bow on it. It
(16:36):
ties the bow on everything. Um, Bad decisions, bad decisions all around.
What are some specific bad decisions you'veyou've you've seen or heard of or
come across that have led to highoverhead Well practice owners aren't potentially going into
something like man, I'm gonna screwthis up, make a bad decision,
but unfortunately what they settle for,and we've said this before, their taxes
(16:57):
have been extended or late, they'redelayed, or quick books or months and
months and months behind. Their profitand loss statement and balance sheets are months
behind, and so they're making decisionswith incomplete or incorrect data. And so
they're not intentionally making a bad decision, they just don't have all the information
and then then go ahead and makea decision that the bad decision is making
(17:21):
a decision if kind of a mindpretzel, right, Like, they're not
trying to make a bad decision.No, but there's a crossroads. But
they shouldn't be making that decision,so it could be bad or ignorant decisions,
just uninformed, right, Like youwalk into a dark room with a
dart and you throw it and you'relike, well, why wasn't that a
bull's eye? Well, because becauseit was dark and you couldn't see.
If you don't have your data andyour information and really some people to help
(17:47):
walk through, here's what I'm thinking, tell me the good and the bad.
I need to tell me what Ineed to hear, not what I
want to hear. Because a lotof these bad decisions, you know,
staffing and spending and fees and location. You've got a lot of cheerleaders trying
to, you know, almost helpyou along, right because they assume you
was the brilliant practice owner has alreadylooked at all the data and has a
(18:08):
good decision. They don't know you'redirty little secret that you're kind of going
on a motion Casey, thank youso much for stopping by today and helping
me work out some of these reasonsfor high overhead and practices UM and I
know you're heading back out soon.You're always on the road. Uh,
you see me just just like youknow, two days, one night.
Yeah, and you send me somepictures and I'm like, dang, oh,
(18:29):
it's nice. I like that hotelright there. Um, don't forget,
folks that we were going to bein Saint Louis um in the beginning
of April apri I'm sorry, inthe beginning of August. Um. We
still have a just a handful ofspots available for our avoid cash flow traps
in your dental practice. It's atop golf in the Saint Louis area.
After that we will be tasting thenight before is overbooked. Yeah, we've
(18:52):
got a clear spots for the topfor the top Golf UM. And then
if you're in the Minnesota Minneapolis area, we'll be having a tasting event and
a top golf event there as well. That will be in the August seventeenth
and eighteenth. So visit our siteat four Quadrants Advisory dot com slash events
and if you're in that area,sign up. It's it's free and there's
a lot of great education. Youget to chat with Casey and there's also
(19:15):
things to do with it some funthings, So thank you Casey. Excellent.
That's all the time we have today. Thank you to our guests for
their insight and for sharing some reallygreat information, and thank you to you
the listener for tuning in. TheMillionaire Dentist podcast is brought to you by
Four Quadrants Advisory to see if theymight be a good fit for you and
your practice. Going over to fourQuadrants Advisory dot com and see why year
(19:37):
after year they retain over ninety fivepercent of their clients. Thank you again
for joining us and we'll see younext time.
Hello, everyone, Welcome to theMillionaire Dentist Podcast, brought to you by
four Quadrants Advisory. On this podcast, we break down the world of dentistry,
finances, and business practices to helpyou become the millionaire dentist you deserve
to be. Please be advised wedo speak with an honest tongue and may
not be safe for work. Helloand welcome. This is Casey Hires back
(00:27):
at the Millionaire Dnist Podcast in studiowith co host Jared Bridgeman. Casey,
Bud, how are you doing well? I love that shirt? Man?
What is that a two can?What kind of bird is that? Yeah?
I think it's a two cam?Gorgeous, Yeah, nice and blue.
It's we had a situation where wehad you had taken um, maybe
not you, but we had takensome clients golfing and they want to be
to go out and do some photos. And I have no golfing clothes because
(00:50):
I don't golf, and so Iwent and bought the shirt and I was
like, that's actually not half bad. You look like like a scratch golfer
almost all right. Yeah, I'lltake it. It makes me want to
kind of learn enough to just youknow, out there if you want to
be frustrated. Yeah, it's likeeating um the Saint almost shrimp cocktail.
It makes you cry and you comeback for more. Yea for those out
(01:12):
of state right set, almost shrimpcocktail has so much horse radish in it
that your sinuses magically open up andyou ry. But it's tasty. That's
how golf is. Yeah, Ican see that makes you cry and you
come back for more. Um.Casey. When you are you know,
speaking with these practice owners and thesepeople sometimes you know before sometimes after these
(01:33):
people dentists and specialists, practice owners. Yeah, I didn't want to you
know those people. Yes, whenyou're speaking with dentist and practice owners and
specialists, um, and they hearyou speak what is one of the big
things that they end up coming andtalking to you about and asking you about
what's what's a big for them thatthey can see it is like a big,
a big factor they can try andtake care of. Now. Yeah,
(01:57):
those typically launch into people going,hey, really enjoyed the content,
thank you for that. It soundslike you work for a firm that might
master this. Yes, that's correct, and they want to engage later that
month and maybe have a one offconversation or you know, private conversation on
the sense sensitive topic. And ultimatelywhen we get into them understanding the full
bandwidth of kind of what we doand and what all we do to help
(02:22):
practice owners, they want to knowthe how, and typically it gets to
overhead. Right, I've got overhead. I've got high overhead for the ones
I know it. Yeah, sosomething I don't know what I'm overhead is,
but I feel that it's high.Like, how do you lower overhead?
That's the That's what I'll hear alot if you just what fire people
and quit buying nice things. Yeah, that's what they's that's the first place
(02:44):
you go and ultimately stop buying avocadotoast, stop going to Starbucks, right
the Yeah, you don't want yourown barista in your practice. I mean
people would love it, but no, high overhead it's hard. And going
back to golf, it's We've saidthis before, it's like a high handicap.
If your handicap's a twenty five ingolf, that means you're not very
(03:05):
good. Well, if you takesome lessons and go to the driving range
and work at it for a season, you'll get that twenty five handicap down
to like a fifteen or a sixteen, and it's not too terribly hard.
But go to a fifteen or sixteento like an eight, it gets way
harder handicaps, I'm sorry. Overheadis similar. Some people have seventy eighty
percent overhead, but there are somethings you can do to get that down.
(03:27):
But then once you get it downmaybe sixty sixty five percent, it
can be more challenging. But yeah, how do you do it? There's
only three ways to effect overhead.We've said this before on this podcast.
You can increase revenues, you candecrease expenses, or a combination of both.
What a lot of people don't realizeis learning a new procedure, dropping
(03:49):
an insurance. You're not working moreto increase your revenues, but you're increasing
your revenues, right, And soinstantly people go to I got to work
more in fire people that it's nota formula for a world class firm like
ours to help our clients, northe best way to lower overhead. Now,
let's say you, you know,have fifty employees and two chairs.
(04:11):
Maybe you have too many employees,but that's not the thing. You run
first two right, no, no, And actually today we've got eight yeah,
eight areas that you know, ifyou have a high overhead in the
dental office, here's some things tobe aware of. And one of them
I just mentioned overstaffing. Yep.And that's that's a tough one. That's
(04:31):
an emotional one, yeah, becauseI mean a lot of times, you
know, you may have been working, you know, having these people work
for you for for years potentially,or they've been they've been the front the
front desk lady for two decades,you know, the overstaffing. There's a
lot of variables that goes into this. But number one, what is the
benchmark for you and your practice orthat you should have, um, what
(04:54):
are your employee wages percentage versus revenues? Right? And some people don't know.
Some people it's twenty eight percent,some people it's forty five percent.
Some people it's fifty five percent.They typically all say the same thing,
we're like family. And I cannever imagine reducing anybody or you know all
that stuff. I'm gonna tell youthis right now. Any company that tells
(05:15):
you we're like family here, itdon't work there. That's a big red
flag that once you drink some koolaid. Yeah, Now I don't know
that that's a big red flag.That's a cute goal to have in a
catchphrase. But but from overstaffing,it just comes down to what is the
benchmark and where are you at?Now? Could overstaffing That doesn't just mean
(05:38):
having too many people. If youhave a bunch of people that are producing
a lot for you, then thatthen that could work, but also can
also be right like like you know, you're one person who's getting let's say
overpaid, would that fall into overstaffingas well? Like maybe that? So
I for me, that's more gettinginto the weeds, right, That's where
a lot of people take their mindsto. But the biggest picture is are
(05:59):
my employee wages percent of revenues aroundtwenty percent? You know, having a
benchmark? What is the bench what'sthe goal? And where are you?
Most people don't know those two piecesof data. That's the first thing with
overstaffing. It's not getting emotional aboutsomebody who's been there or couldn't imagine that
is what is good? And whereare you? Then you look to see,
(06:21):
okay, what decisions could be made. I've told this story before,
but working with somebody at the beginning, and they said, we're like family,
My people are I think underpaid.We live in an expensive area.
That's off the table, and it'slike, that's great. The benchmark should
be twenty percent. I know inthis day and everything's eb and flow.
(06:41):
But right now that's a little higherbecause people are having trouble finding good people,
right, but yours is forty fivepercent. Well, he didn't know
what the benchmark was and also didn'tknow what there's were correct. Those are
the first two steps, so theyalready hadn't reached a conclusion without the two
pieces of data the most important.Yeah, right, and so people go
(07:02):
to the emotional I don't want tofire anybody, right, So just to
repeat it for the fifth time,know what the benchmark is right here,
it's twenty percent. Generally speaking,there's always a lot more data that goes
into it. Generally speaking, twentypercent is what employee wage used to be
as a percentage of revenues. Andwhat are what is your percentage? Right?
(07:23):
That's the first one. So that'swhat the overstaffing one is. Gotcha?
Gotcha? All right? That thatcovered it pretty well? Casey um.
Next up, I would say let'sdig into um. It can kind
of tie in in some ways,but like overspending, right, so this
would dive more into um. Youknow, any cost that could be associated
(07:44):
with like borrowing money to buy thingsthat you may need or you know you
thought you needed for tax purposes,but like equipment and new technology and things
like that. I feel like you'reyou're just throwing the softballs here. I
am over overspending, right, Sothis comes onto a couple of things.
Number one, having a custom dentalchart of accounts that your external team has
(08:05):
created for you that shows you andtells you things like are you losing money
on a procedure? Are you usingsix different points of advertising but yet you
dump in an advertising versus have sixline items? In that way you can
tell if there's two losers there,right, So the overspending comes from knowing
(08:26):
those pieces of data you mentioned equipmentSection one seventy nine. Please don't let
your equipment reps come in at theend of the year until you do you
want to pay taxes or do youwant to shine a new piece of equipment?
They if you actually need it,that's a different conversation, correct,
And if they have an intimate viewof your personal financial situation, your profit
and law statement, your balance sheet, your tax situation, then they might
be able to help you with thatdecision. News flash, those people don't
(08:48):
have access to that stuff, norhave any lens to be able to analyze.
No, they're trying to make moneya lot of times. Ye,
So a second section one seventy ninethat can lead to overspending going into debt
is a terrible tax strategy, right. And then it's just the again the
shiny thing mentality yep, yep.And then supplies everybody thinks they're getting a
(09:09):
great deal. Not everybody's getting agreat deal, right. I mean,
you rep will tell you that becauseagain sales well and the and the person
who does the buying is going totell the practice owner, I'm getting the
best deal possible. Right. Okay, say now that when we're vetting out
potential new clients, one of thethings we really can dig into is their
fees and how much they charge fortheir fees. Sometimes there are situations where
(09:33):
they are not that's too low,right, Like maybe they haven't updated it
in a decade in inflation, thisit this is low hanging fruit. Yet
so many practices miss on this.Do you think they're afraid if they raise
their fees people will stop coming becausethey're that kind of fear of well that
you hit on it again. Thatis the first emotional thought that comes.
(09:54):
So a couple of things. NumberOne, we use the Wasserman feet study,
but there's different feasts studies out there. You should know where you are
to be in the eightieth percentile withinyour zip code using a whole bunch of
variables. It's adjusted for all sortsof things, cost of living, this,
that, and the other. Butthat will tell you we were just
going through our process. We dothat for people. Some people are three
(10:16):
percent low, others are right ontarget. Other people are twenty thirty and
forty percent fees low, to whichthey say, what, well, I
could never raise my fees. Listen, there's a strategy. It's three percent,
it's five percent. You know annually, you've got to do those things
well. And that's what what kindof practice do you want? Some of
our best clients they know we're notcheap and they go well, as a
practice owner, I'm not cheap either. I'm providing excellent service and I charge
(10:39):
for it. And by doing that, I also keep sorry to say it
undesirables out of my practice, I'vehad people say, well, what happens,
They're not going to be able toafford dental service. There's two hundred
thousand dentists in the country. Yes, you're not the only game in town.
For the most part, they're goingto get their dental done. So
don't don't use sentimental emotion as anexcuse. If you are if you have
(11:01):
passion, if you have a passionfor any amount of charity work, there's
always options for that too, underyour own terms. Suit, Yeah,
do it on your own terms.But all the excuses I hear are just
that they're they're unfortunate. But yeah, know where your fees should be,
and unapologetically you should think you arean eightieth percentile good or best performing dentist
(11:26):
charge accordingly, Casey. Sometimes oneof the things that can be an issue
that's I think a harder subject totackle or correct would be location and capacity
issues, possibly due to just thebuilding you've rented is only X big.
Are you trying to tie together thefact that location and building in capacity issues
(11:48):
can screw up overhead? Thanks?Oh yeah, yeah, this is interesting
right. Um, A lot ofvariables. If you're in New York City,
it's going to be a little differentthan you're in Omaha, Nebraska.
Right. But unfortunately, what wehave seen sometimes are dentists will want the
(12:09):
practice of their dreams, not usingmuch data. Get that taj Mahal practice
you talk about sometimes, Yeah,not using data to drive that decision,
but instead of motion, you know, buying a big space, blowing it
out, decking it out, andyou know it's just beautiful. So potentially
it could be it's you know,it's a situation where you've made you've made
it too big, like you don'tthere's not enough patience or you know,
(12:31):
people around to actually fill the spaceyou need in you're paying for. Yeah,
it comes back to data. Youknow, how far are you booked
out? What's your capacity? What'syour vision? Do you want and associate
down the road? Do you needspace for them? Are you referring out
a bunch of stuff or are youlearning new procedures to do it yourself?
How far you booked out, howfar hygiene booked out? If you're a
GP, there's so much data withthat. But but unfortunately, too many
(12:54):
people think if they get this big, sexy office on the you know,
the best corner in town and itjust looks good. You know they're going
to come and feel to dreams asyou know, if you build it right
outdated, but you know, youbuild it and a lot of times the
only team that comes as high overhead, you know. So again you've got
to have good data, um,and ultimately a good team to help you
guide that. Unfortunately, we've seenway too many people that just go ahead
(13:16):
and make that jump or maybe it'sa second location. Their overhead is going
to be high and um, youknow they they've used two pieces of data
instead of sixteen pieces. That's areally hard one to bounce back from.
Yeah, it's such five to eightyears for sure. Right. Obviously we
talk about this, you know often, and it's a thing we really focus
(13:37):
on here at four quadrants. Butpoor insurance adjustments to reimbursements. That's one
I hear you know as a patient. Yeah, insurance seems like something you'd
want from from the owner dock side. Sometimes these insurances, uh aren't the
greatest. Well this is probably aone on one level bullet point. But
(14:00):
if you take a lot of insurancesand you're and you're producing two million you're
staffed up for two million, youhave a building that's the sized up for
two million, you've got supplies fortwo million of production. But let's say
you are collecting I don't know,one point three million, your your insurance
adjustments are seven hundred thousand dollars.That f's overhead. Obviously that would be
(14:28):
a thirty five percent insurance adjustment rightthere. Number guy, I take no.
Uh, I don't know if you'reright or wrong on that, but
I'm I'm gonna say I am.Um. It's just like it's like my
every argument I have as my wife, Like remember that time I was right?
That's what I say. But you'reright, insurance adjustments and insurances when
(14:48):
you talk about you know, increasingrevenues, decreasing expenses. If you're if
you're an insurance shop, um,you know the productions high, the collections
are low, and your revenues andprofitabilities not great. Right, So I
mean that's an entire podcast or more. Oh that's big, that's probably a
ninety minute presentation. But yeah,insurance, you know what is your insurance
(15:09):
situation? Um, that that's goingto affect overhead greatly. You know,
unfortunately you'll have big offices with bigstaffs and many associates, and you know,
again a lot of production, nota bunch of collections, a lot
of insurance right offs, and massivelyhigh overhead. And that's a poor combination.
Have you when you when you weretalking to some some of the dentists
and specialists out there, you knowa lot of them will say that,
(15:31):
yeah, my insurance, the insurancesucks, and this kind of thing.
But have you seen any legit horrorstories involving insurance reimbracements? Yeah, I
mean that, Yeah, there's Iwas at a state meeting recently and talked
to, you know, some peopleand that's what they said. They they
said, I've I've looked. Youknow, I started in dentistry and I
loved it, and I got intoit for these reasons. And you know,
(15:52):
I started with insurances just to getthe patients up with the intention of
backing off. And I look upsix years later and I'm in the same
spot or worse, and it's justit can be really hard and challenging.
And again that's why for our clients, they have a full team to help
them navigate these stormy waters of insurances, because they're a necessary evil that being
(16:14):
said, they will control you unlessyou control them. And we've worked with
people who used to get smoked withinsurances and now they're making two hundred thousand
dollars more in income than they werealready making before and they're not and tend
to be working less. Yeah.Yeah, another I would say, I
mean this seems really obvious. Thisone ties a bow on it. It
(16:36):
ties the bow on everything. Um, Bad decisions, bad decisions all around.
What are some specific bad decisions you'veyou've you've seen or heard of or
come across that have led to highoverhead Well practice owners aren't potentially going into
something like man, I'm gonna screwthis up, make a bad decision,
but unfortunately what they settle for,and we've said this before, their taxes
(16:57):
have been extended or late, they'redelayed, or quick books or months and
months and months behind. Their profitand loss statement and balance sheets are months
behind, and so they're making decisionswith incomplete or incorrect data. And so
they're not intentionally making a bad decision, they just don't have all the information
and then then go ahead and makea decision that the bad decision is making
(17:21):
a decision if kind of a mindpretzel, right, Like, they're not
trying to make a bad decision.No, but there's a crossroads. But
they shouldn't be making that decision,so it could be bad or ignorant decisions,
just uninformed, right, Like youwalk into a dark room with a
dart and you throw it and you'relike, well, why wasn't that a
bull's eye? Well, because becauseit was dark and you couldn't see.
If you don't have your data andyour information and really some people to help
(17:47):
walk through, here's what I'm thinking, tell me the good and the bad.
I need to tell me what Ineed to hear, not what I
want to hear. Because a lotof these bad decisions, you know,
staffing and spending and fees and location. You've got a lot of cheerleaders trying
to, you know, almost helpyou along, right because they assume you
was the brilliant practice owner has alreadylooked at all the data and has a
(18:08):
good decision. They don't know you'redirty little secret that you're kind of going
on a motion Casey, thank youso much for stopping by today and helping
me work out some of these reasonsfor high overhead and practices UM and I
know you're heading back out soon.You're always on the road. Uh,
you see me just just like youknow, two days, one night.
Yeah, and you send me somepictures and I'm like, dang, oh,
(18:29):
it's nice. I like that hotelright there. Um, don't forget,
folks that we were going to bein Saint Louis um in the beginning
of April apri I'm sorry, inthe beginning of August. Um. We
still have a just a handful ofspots available for our avoid cash flow traps
in your dental practice. It's atop golf in the Saint Louis area.
After that we will be tasting thenight before is overbooked. Yeah, we've
(18:52):
got a clear spots for the topfor the top Golf UM. And then
if you're in the Minnesota Minneapolis area, we'll be having a tasting event and
a top golf event there as well. That will be in the August seventeenth
and eighteenth. So visit our siteat four Quadrants Advisory dot com slash events
and if you're in that area,sign up. It's it's free and there's
a lot of great education. Youget to chat with Casey and there's also
(19:15):
things to do with it some funthings, So thank you Casey. Excellent.
That's all the time we have today. Thank you to our guests for
their insight and for sharing some reallygreat information, and thank you to you
the listener for tuning in. TheMillionaire Dentist podcast is brought to you by
Four Quadrants Advisory to see if theymight be a good fit for you and
your practice. Going over to fourQuadrants Advisory dot com and see why year
(19:37):
after year they retain over ninety fivepercent of their clients. Thank you again
for joining us and we'll see younext time.
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