May 3, 2023 • 18 mins
Back from traveling across the country to multiple dental shows, 4Q's Chad Tothero talks to Casey and Jarrod about how DSOs try to pull out all the stops for their booths.
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Facebook: Four Quadrants Advisory
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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 help youbecome the millionaire dentist you deserve to
be. Please be advised we dospeak with an honest tongue and may not
be safe for work. Hello andwelcome. This is Casey Hires back at
(00:26):
the Millionaire Dentist Podcast in studio withco host Jay Rod. Hey, Casey
h Chad's here where us. Hehelps us in a variety of ways here
at the firm, but one ofthe things he's been doing is representing us
at some educational opportunities at different dentalshows, recently at an Orthodonic orthodontia show
(00:46):
and also at a regional show.But there's a variety of things for us
and got some insights that we thoughtwould be pertinent to talk about today.
Chad, let me ask you,when you were at the Orthodontia meeting,
what's really stuck out to you assomething that you weren't expect you to be
there? What was something that kindof got your your blood boiling. A
(01:07):
lot of the largest flashiest booths atthe expo. I've realized I've been these
orthodonic service organizations zsos DSOs. Obviouslya lot of money being thrown around.
It's very uh they were they therebasically just you know, doing a little
razzle dazzle, trying to get peopleto lots of razzle dazzle, lots of
(01:29):
free drinks, lots of flashing lightsand uh so, from what I understand,
you came back and told me alittle bit of a story from that
from that show you are booth.Was you're right next to a DSO,
weren't you? Kind of yes,it was a legal firm that does a
lot of the brokering for the dealsfor DSOs, and had a very interesting
chat with an attorney. We gotinto a chat at the expo about DSOs
(01:55):
and the advantages and he asked whatwe know about DSOs, and admittedly I
know a decent amount, but wasreally interested to hear his perspective on it.
And he was explaining to me allthe benefits of DSOs, the upfront
cash payouts, being able to nothave to worry about the business side of
the practice, and the HR andall the purchasing and everything that goes into
(02:17):
the non clinical aspects of running apractice and then being able to count on
a reliable salary for the next threeto five years or however that partnership is
stipulated and made a lot of interestingpoints. And so after this you were
a dead set you were going tosell out to a DSO. Yeah,
I was actually considering enrolling in dentalschool, going through the whole process,
(02:38):
and then working for a DSO rightof Wales. So it sounds like he
was pretty proud of himself as hewas presenting to you. It sounds like
he was doing a practice run forwhat he tells a lot of the orthananis
out there. Yeah, it soundedlike the greatest thing since sliced bread.
There was no way you couldn't becomerich and everyone should do it well.
And as we get into this,listen, this is not a direct indictment
(03:00):
on DSOs. It's indirect. It'snot direct. Right, we call ourselves
the DSO kryptonite, And what thatmeans is for some people, in some
situations, selling out to corporate dentistryor a dental service organization perhaps makes sense
for them in their unique personal andpractice situation. What makes us the kryptonite
though, so when this gets broughtup in education events around the country,
(03:24):
ultimately you always have or most oftenhave the option to sell out to corporate
dentistry or a dso that is afairly common option. Us being that kryptonite
means will get a practice owner whocollects million dollars, two million dollars one
point five million dollars in dentistry,and we can get their practices using systems
(03:49):
and processes and our whole comprehensive teammastering everything incomes doubling on track for eight,
ten, fifteen, eighteen million dollars. We can get them insulated into
a place in their practice that itis a absolute cash cow. They are
their own boss. They haven't hadto sell out. They're still making a
lot of money. They're doing ittheir way. They don't have to sell
(04:11):
out nor be scared if one movesin across the street. That's right.
And so you're insulated because your financialsshow massive success, and you can sell
to a young dentist anytime you want, because the young dnist is going to
look at your financials and oh mygosh, you have a beautiful practice.
You're close to a fee for servicepractice, you're making seven hundred thousand dollars.
In general dentistry, you're saving twohundred thousand. I mean, just
(04:34):
on and on, and so that'swhy we're the kryptonite. So when we
hear this pitch from the DSOs,we know who they are targeting sometimes,
which is that practice owner who hastried to do it themselves. There may
be in their late fifties or sixtiesor god forbid, seventies, and their
options are limited, and so thatcan potentially be the route they take.
(04:57):
But you hearing their pitch, ifyou will, was fascinating because once you
started to ask some questions, someof which you kind of knew the answer,
others in which you genuinely wanted tolearn. Let's get into that a
little bit. Yeah, I askedseveral questions of a pretty inquisitive guy,
and his attorney was sharp. Hehad great answers to most of my questions.
(05:18):
When finally I got to the pointwhere I just came out and point
blank asked him, So, ifyou are a successful practice owner running a
profitable practice, and you don't wantto immediately retire, what is the advantage
of selling to a DSO versus workingwith a company such as ours that will
still allow you to retain full ownershipand make your own decisions in the practice.
(05:41):
And after that it was complete silence. Crickets. Huh wasn't a good
answer, And I didn't think whatI was asking was that poignant. But
to me, that really signified thatthere wasn't a good answer. Did his
tone or body language change, yeah, shoulders slumped, slight frown and you
can see the wheels turning. Butit just wasn't a good comeback to that
(06:03):
question. So, I mean,unless you want to get out of dentistry
permanently or you just can't handle beinga practice owner, he didn't make very
many good points as to why youshould sell to a Dso what were some
of the basic questions you asked him? We asked a lot of questions such
as, you know, what arethe benefits, what's the what's the benefit?
(06:26):
And for him it was love thatone. Yeah, yeah, yeah,
you yeah, you just rattled thoseright. Yeah. Sure, when
you get that big, big check, right when you sell the practice to
him, But then you're also lockedinto a contract for several years, working
for a salary or a percent ofproduction. But He really really highlighted the
fact that you're gonna get you know, several million dollars check up front.
(06:46):
We're gonna buy your practice for onehundred percent of revenue, which is what
you normally get seller privately, youknow, seventy five or eighty percent.
That was a big point. Andthen you get stock. There's stock,
and when we recapitalized and selled aprivate equity groups, you're gonna get a
hand in all those profits and andthose shares. But you don't really you
didn't say how many shares you own. He didn't really get into how many
(07:09):
shares are outstanding. But that kindof cocktail party talk really tickles the fancy
of the practice owner who was undersafe for retirement. So then they hear
that and they're like, oh man, they get they get lost in the
bright lights of EBB and then stocksand because they'm undersaved, no start imagining
that big old check like publishers clearinghousetype thing right now, grass, But
(07:31):
then you know, as you asyou've pointed out, you know privately uh
off off offline, Um, youget that big check, but you don't
actually get all that money, right, what happens of that there's taxes,
talk about taxes check. I mean, but it's true, like it's easy
(07:54):
to just say off a million dollarsonce you pay your taxes, and once
you knock out your sharehol or loanthat your CPA didn't tell you about,
God forbid, you still have anydebt when you do this. But I
mean that million dollars turns into fourhundred real quick. And if you've got
some significant debt, it's even less. I mean, what we find is
typically one to four years worth ofcash flow and retirement. Is what that's
(08:18):
worth to you. That doesn't getit done, doesn't get it done at
all. And I know you hadafter having a conversation it kind of pique
your interest to do even more ofa deeper dive. What are the some
of the things after fascinating that didn'thave an answer to, Well, what
if you have a successful practice,do you even get into with him the
(08:39):
control that the seller gives up orkind of get into some of the strings
attached. Yeah, yeah, soand getting into you know, losing control.
You flip that as well. Youdon't have to worry about any of
the business or non clinical aspects ofyour practice. We do all of your
practasing. We provide you with software, we provide you with associate dentist and
recruiting services. Is whether you wanthim or not exactly do you have no
(09:03):
aut time or authority to choose whichsoftware you want to use or which technology
you want to implement within your practice. So it was spun is not having
to worry about all that stuff.But he never really honed in to the
point that once you sell to adso, you are relinquishing all control of
every major financial decision to your practice. I've shared this before, but recently
talking to a crowd and getting intothat conversation of which what's easier selling to
(09:26):
corporate dentistry or selling your own practice, And we're touching on a lot of
the pros and cons of it.But a practice owner raised his hand and
said, I can share with youa personal experience. I just sold to
corporate dentistry. My gut told menot to do it, but for a
variety of reasons, I did it. And I was supposed to stay.
I can't remember if it was threeyears or five years, but that's associated
(09:48):
with how much you get. Longstory short, he said he couldn't last
six months he couldn't handle it,and he was done. He lost a
lot of money, and he regretteddoing it, but his personality, he
could not watch his baby get wreckedin the manner in which they were maybe
changing it right, they were changingit in the manner in which he did
not like it. He didn't feellike it was in the best interest of
(10:09):
his staff, of his patience,of himself. He was just a number,
and he screams from a mountaintop toanybody who will listen, don't do
it, or at least try tofind another option. Obviously on this podcast,
the other option is have an externalteam that masters this stuff. So
you can collect a million, youcan make four hundred, you can save
one hundred, you can be ontrack for twelve million, and you don't
(10:30):
have to worry about the business andfinancial side of this. In the beginning,
to us, that's just that's aship shot. But for the purpose
of that conversation, it's it's incrediblethe things that were left out. It
was just it's an autopilot and youget a bunch of money. What are
some other things you saw that youknow you might corporate corporate seller beware,
(10:52):
I mean in talking about the expoitself. I mean, the biggest,
flashiest, best looking boosts were theseDSOs or osos, and me being the
Devil's advocate, getting into thinking,I mean, where's all this cash coming
from? Why are they spending somuch on these shows to attract young dentists
or young orthodonist And it really gotme to thinking just our economic climate that
we're currently in. I mean,the past several years, the government has
(11:15):
been printing money, the stimulus checksfrom COVID, all of that. There's
a lot more money looking for goodinvestments, and there are good investments to
be found. And when thinking aboutit, I mean, a great investment
is a profitable dental practice. Butwhen they have derived their marketing pitch these
dentists, it's all about that catch. It's the upfront payment. But what
(11:35):
we all forget is it's not acash that's valuable now, it's owning a
productive business, which is the valuableasset. They're willing to pay so much
for it, and by selling that, you lose that and they're going to
capitalize on your fears. You know, the economy is going to be taking
a turn. Practices are going togo down in valuation, But if that
is the case, then why arethey so desperate to buy? Why are
(11:56):
they trying so hard to buy asmoney practices as they possibly can. Well,
it's sad because there's so many practicesthat underachieve for decades and when they
do that, you know they canswoop in and they know they can make
them more profitable. But practice ownersnot going to get that profit. Jared,
where's your where's your head in?Where's your head at? With all
(12:18):
this DSO corporate dentistry talk sucks soprofound? Thank you. You know,
we've done several podcasts and I've evenwe've even done some with our CEO and
president and founder Jason Smith about youknow, you don't need to sell to
a DSO, you need to workon yourself and work on your own practice.
(12:39):
And it makes sense that Chad,when you were talking to the advocates,
they were only selling you on thebenefits of it. And of course,
yeah, they're not going to wantto mention any of the negatives because
that's you know, that makes thema terrible salesperson. But I like your
point about if if you know they'rethey're they're trying to spend as like we're
(13:00):
doing you a favor, Let metake your practice off your hands. It's
not doing that well, You're notdoing that great. We can do better,
And I feel like most people knowthat's not true, and they don't
like people messing with their babies.So, yeah, what did you when
you were doing your research? Didyou come up with anything or were you
able to find anything that you know, here's a reason or here's a couple
(13:20):
of reasons as to why you shouldn'tsell your practice to Dso I found many
reasons. I didn't find any onthe actual DSOs websites themselves there or no
cons on those those websites. Yeah, I found a handful. And what
you mentioned earlier too, just aboutI forget exactly what you said. It
was a perfect segue into what itall comes down to, and it's greed.
(13:41):
They don't want to help you asthe practice owner or the dentist.
They want to profit from you orthe patient, right exactly. You don't
get to pick your supplies exactly,So they are making all their money off
the labor of all the practicing dentistsout there as private equity partners that aren't
(14:01):
producing. And the thing is,I just thought about this too is you
know, the patient who may havebeen coming to see you for the last
ten, fifteen, twenty years doesn'tknow all the history going into Now you're
working for somebody else and your suppliesare different, maybe you have some different
staff going on, and they justsee it as, oh, I don't
like going to doctor Chad's as muchanymore. I might go to somewhere else.
(14:22):
Yep. I was talking to ayounger dentist earlier this month than after
about three years of ownership. Theysaid I was going to give it at
two more years and then look tosell to dso because I just felt so
overwhelmed with the business and financial sideof it. I felt like I just
my head was in the sand withcash flow and taxes and it was just
(14:43):
such an uphill battle. And soit can be overwhelming. I understand why
people would consider it. It's goodto educate yourself. But that's what part
of today is educating people on thebroader picture of the pros and the cons.
I mean for our clients, Iguess the the rub is you have
to be coachable like the so youdon't have control, you have no autonomy.
(15:05):
You have to do for our clients. You have to be coachable,
which goes to the point of ifyou're not gonna take most of our advice
and you shouldn't pay us. Otherthan that, there is no rub We're
the real deal. You can haveit all. You can have a killer
practice that is yours that you enjoythat as Hey, if you want to
(15:26):
take a day off, take aday off, you don't have to get
you know, can micro managed bythe people that just gave you this big
check. But no kidding, butyeah, I found it fascinating. No,
an attorney who does a lot ofthese deals. You kind of heard
his best step forward of kind ofwhat the pitch was and just being sort
of astute, you ask some questions, propose something that he couldn't get out
(15:50):
of, and it's not like you'resome twenty year veteran of studying DSOs.
I am certainly not. I thinkit was interesting because I don't think he
really knew what we four quadrants to. Clearly, I think it was trying
to, yeah, sell us onsomething, and when it just came down
to the point where all the positivesthat you're pitching, we can do the
(16:11):
same thing for practice owners without havingthem except the practice owner gets to enjoy
the profits of their hard work.It's it's uh, it's incredible. Is
there a chair you want to puton top of this one? Pal?
There is? I would like tosay if you want to hear more about
us just going off about DSOs,but really learning about getting some real dental
(16:32):
financial advice from us. We aregoing to be in El Sagundo, California
on May twelve at Top Golf ElSegundo. Would be pretty exciting, right,
I know that place? Have youbeen there? I used to live
about two miles from this. Yeah, Hermosa Beach, Manhattan Beach, Santa
Monica. There's there's a lot ofareas that that tie into this new Top
(16:52):
Golf right by on Spolvada or PacificCoast Highway. Some call it used to
be a little executive nine whole course. I used to go play out.
There's probably some lost golf balls ofmine. But it's a beautiful location.
It actually serves a lot of differentareas and regions in that geography. Hopefully
we get to pull a lot ofpeople in there. These have been really
really good. The folks that attend, they learn much more than anticipated and
(17:17):
then they enjoy getting a little biteto eat and going and smashing the golf
ball. And it's right. We'realso going to be in our own backyard
and June we'll be at Fishers IndianapolisTop Golf as well. I know we
got some other shows that we're exhibitingat coming up. Guys. Don't forget,
guys and gals, we are offeringa free tax assessment right now.
If you received a really large billor maybe a really large refund and maybe
(17:41):
this isn't even the first year andyou're getting fed up with what's going on
with that, or even if you'renot and you want to hope that we
maybe we can find something your currentCPA is not. Go to four Quadrants
Advisory dot Com slash taxes for that. Fill out the form and one of
our experts will be in touch withyou. Chad, thanks for bringing back
that vibe valuable information from that thatexpo in Chicago. As I say,
(18:06):
Chick fil A, it was mypleasure. Guys. Thank you. That's
all the time we have today.Thank you to our guests for their insight
and for sharing some really great information. And thank you to you the listener
for tuning in The Millionaire Dentist Podcastis brought to you by four Quadrants Advisory
to see if they might be agood fit for you and your practice.
(18:26):
Going over to four Quadrants Advisory dotcom and see why year after year they
retain over ninety five percent of theirclients. Thank you again for joining us,
and we'll see you next 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 help youbecome the millionaire dentist you deserve to
be. Please be advised we dospeak with an honest tongue and may not
be safe for work. Hello andwelcome. This is Casey Hires back at
(00:26):
the Millionaire Dentist Podcast in studio withco host Jay Rod. Hey, Casey
h Chad's here where us. Hehelps us in a variety of ways here
at the firm, but one ofthe things he's been doing is representing us
at some educational opportunities at different dentalshows, recently at an Orthodonic orthodontia show
(00:46):
and also at a regional show.But there's a variety of things for us
and got some insights that we thoughtwould be pertinent to talk about today.
Chad, let me ask you,when you were at the Orthodontia meeting,
what's really stuck out to you assomething that you weren't expect you to be
there? What was something that kindof got your your blood boiling. A
(01:07):
lot of the largest flashiest booths atthe expo. I've realized I've been these
orthodonic service organizations zsos DSOs. Obviouslya lot of money being thrown around.
It's very uh they were they therebasically just you know, doing a little
razzle dazzle, trying to get peopleto lots of razzle dazzle, lots of
(01:29):
free drinks, lots of flashing lightsand uh so, from what I understand,
you came back and told me alittle bit of a story from that
from that show you are booth.Was you're right next to a DSO,
weren't you? Kind of yes,it was a legal firm that does a
lot of the brokering for the dealsfor DSOs, and had a very interesting
chat with an attorney. We gotinto a chat at the expo about DSOs
(01:55):
and the advantages and he asked whatwe know about DSOs, and admittedly I
know a decent amount, but wasreally interested to hear his perspective on it.
And he was explaining to me allthe benefits of DSOs, the upfront
cash payouts, being able to nothave to worry about the business side of
the practice, and the HR andall the purchasing and everything that goes into
(02:17):
the non clinical aspects of running apractice and then being able to count on
a reliable salary for the next threeto five years or however that partnership is
stipulated and made a lot of interestingpoints. And so after this you were
a dead set you were going tosell out to a DSO. Yeah,
I was actually considering enrolling in dentalschool, going through the whole process,
(02:38):
and then working for a DSO rightof Wales. So it sounds like he
was pretty proud of himself as hewas presenting to you. It sounds like
he was doing a practice run forwhat he tells a lot of the orthananis
out there. Yeah, it soundedlike the greatest thing since sliced bread.
There was no way you couldn't becomerich and everyone should do it well.
And as we get into this,listen, this is not a direct indictment
(03:00):
on DSOs. It's indirect. It'snot direct. Right, we call ourselves
the DSO kryptonite, And what thatmeans is for some people, in some
situations, selling out to corporate dentistryor a dental service organization perhaps makes sense
for them in their unique personal andpractice situation. What makes us the kryptonite
though, so when this gets broughtup in education events around the country,
(03:24):
ultimately you always have or most oftenhave the option to sell out to corporate
dentistry or a dso that is afairly common option. Us being that kryptonite
means will get a practice owner whocollects million dollars, two million dollars one
point five million dollars in dentistry,and we can get their practices using systems
(03:49):
and processes and our whole comprehensive teammastering everything incomes doubling on track for eight,
ten, fifteen, eighteen million dollars. We can get them insulated into
a place in their practice that itis a absolute cash cow. They are
their own boss. They haven't hadto sell out. They're still making a
lot of money. They're doing ittheir way. They don't have to sell
(04:11):
out nor be scared if one movesin across the street. That's right.
And so you're insulated because your financialsshow massive success, and you can sell
to a young dentist anytime you want, because the young dnist is going to
look at your financials and oh mygosh, you have a beautiful practice.
You're close to a fee for servicepractice, you're making seven hundred thousand dollars.
In general dentistry, you're saving twohundred thousand. I mean, just
(04:34):
on and on, and so that'swhy we're the kryptonite. So when we
hear this pitch from the DSOs,we know who they are targeting sometimes,
which is that practice owner who hastried to do it themselves. There may
be in their late fifties or sixtiesor god forbid, seventies, and their
options are limited, and so thatcan potentially be the route they take.
(04:57):
But you hearing their pitch, ifyou will, was fascinating because once you
started to ask some questions, someof which you kind of knew the answer,
others in which you genuinely wanted tolearn. Let's get into that a
little bit. Yeah, I askedseveral questions of a pretty inquisitive guy,
and his attorney was sharp. Hehad great answers to most of my questions.
(05:18):
When finally I got to the pointwhere I just came out and point
blank asked him, So, ifyou are a successful practice owner running a
profitable practice, and you don't wantto immediately retire, what is the advantage
of selling to a DSO versus workingwith a company such as ours that will
still allow you to retain full ownershipand make your own decisions in the practice.
(05:41):
And after that it was complete silence. Crickets. Huh wasn't a good
answer, And I didn't think whatI was asking was that poignant. But
to me, that really signified thatthere wasn't a good answer. Did his
tone or body language change, yeah, shoulders slumped, slight frown and you
can see the wheels turning. Butit just wasn't a good comeback to that
(06:03):
question. So, I mean,unless you want to get out of dentistry
permanently or you just can't handle beinga practice owner, he didn't make very
many good points as to why youshould sell to a Dso what were some
of the basic questions you asked him? We asked a lot of questions such
as, you know, what arethe benefits, what's the what's the benefit?
(06:26):
And for him it was love thatone. Yeah, yeah, yeah,
you yeah, you just rattled thoseright. Yeah. Sure, when
you get that big, big check, right when you sell the practice to
him, But then you're also lockedinto a contract for several years, working
for a salary or a percent ofproduction. But He really really highlighted the
fact that you're gonna get you know, several million dollars check up front.
(06:46):
We're gonna buy your practice for onehundred percent of revenue, which is what
you normally get seller privately, youknow, seventy five or eighty percent.
That was a big point. Andthen you get stock. There's stock,
and when we recapitalized and selled aprivate equity groups, you're gonna get a
hand in all those profits and andthose shares. But you don't really you
didn't say how many shares you own. He didn't really get into how many
(07:09):
shares are outstanding. But that kindof cocktail party talk really tickles the fancy
of the practice owner who was undersafe for retirement. So then they hear
that and they're like, oh man, they get they get lost in the
bright lights of EBB and then stocksand because they'm undersaved, no start imagining
that big old check like publishers clearinghousetype thing right now, grass, But
(07:31):
then you know, as you asyou've pointed out, you know privately uh
off off offline, Um, youget that big check, but you don't
actually get all that money, right, what happens of that there's taxes,
talk about taxes check. I mean, but it's true, like it's easy
(07:54):
to just say off a million dollarsonce you pay your taxes, and once
you knock out your sharehol or loanthat your CPA didn't tell you about,
God forbid, you still have anydebt when you do this. But I
mean that million dollars turns into fourhundred real quick. And if you've got
some significant debt, it's even less. I mean, what we find is
typically one to four years worth ofcash flow and retirement. Is what that's
(08:18):
worth to you. That doesn't getit done, doesn't get it done at
all. And I know you hadafter having a conversation it kind of pique
your interest to do even more ofa deeper dive. What are the some
of the things after fascinating that didn'thave an answer to, Well, what
if you have a successful practice,do you even get into with him the
(08:39):
control that the seller gives up orkind of get into some of the strings
attached. Yeah, yeah, soand getting into you know, losing control.
You flip that as well. Youdon't have to worry about any of
the business or non clinical aspects ofyour practice. We do all of your
practasing. We provide you with software, we provide you with associate dentist and
recruiting services. Is whether you wanthim or not exactly do you have no
(09:03):
aut time or authority to choose whichsoftware you want to use or which technology
you want to implement within your practice. So it was spun is not having
to worry about all that stuff.But he never really honed in to the
point that once you sell to adso, you are relinquishing all control of
every major financial decision to your practice. I've shared this before, but recently
talking to a crowd and getting intothat conversation of which what's easier selling to
(09:26):
corporate dentistry or selling your own practice, And we're touching on a lot of
the pros and cons of it.But a practice owner raised his hand and
said, I can share with youa personal experience. I just sold to
corporate dentistry. My gut told menot to do it, but for a
variety of reasons, I did it. And I was supposed to stay.
I can't remember if it was threeyears or five years, but that's associated
(09:48):
with how much you get. Longstory short, he said he couldn't last
six months he couldn't handle it,and he was done. He lost a
lot of money, and he regretteddoing it, but his personality, he
could not watch his baby get wreckedin the manner in which they were maybe
changing it right, they were changingit in the manner in which he did
not like it. He didn't feellike it was in the best interest of
(10:09):
his staff, of his patience,of himself. He was just a number,
and he screams from a mountaintop toanybody who will listen, don't do
it, or at least try tofind another option. Obviously on this podcast,
the other option is have an externalteam that masters this stuff. So
you can collect a million, youcan make four hundred, you can save
one hundred, you can be ontrack for twelve million, and you don't
(10:30):
have to worry about the business andfinancial side of this. In the beginning,
to us, that's just that's aship shot. But for the purpose
of that conversation, it's it's incrediblethe things that were left out. It
was just it's an autopilot and youget a bunch of money. What are
some other things you saw that youknow you might corporate corporate seller beware,
(10:52):
I mean in talking about the expoitself. I mean, the biggest,
flashiest, best looking boosts were theseDSOs or osos, and me being the
Devil's advocate, getting into thinking,I mean, where's all this cash coming
from? Why are they spending somuch on these shows to attract young dentists
or young orthodonist And it really gotme to thinking just our economic climate that
we're currently in. I mean,the past several years, the government has
(11:15):
been printing money, the stimulus checksfrom COVID, all of that. There's
a lot more money looking for goodinvestments, and there are good investments to
be found. And when thinking aboutit, I mean, a great investment
is a profitable dental practice. Butwhen they have derived their marketing pitch these
dentists, it's all about that catch. It's the upfront payment. But what
(11:35):
we all forget is it's not acash that's valuable now, it's owning a
productive business, which is the valuableasset. They're willing to pay so much
for it, and by selling that, you lose that and they're going to
capitalize on your fears. You know, the economy is going to be taking
a turn. Practices are going togo down in valuation, But if that
is the case, then why arethey so desperate to buy? Why are
(11:56):
they trying so hard to buy asmoney practices as they possibly can. Well,
it's sad because there's so many practicesthat underachieve for decades and when they
do that, you know they canswoop in and they know they can make
them more profitable. But practice ownersnot going to get that profit. Jared,
where's your where's your head in?Where's your head at? With all
(12:18):
this DSO corporate dentistry talk sucks soprofound? Thank you. You know,
we've done several podcasts and I've evenwe've even done some with our CEO and
president and founder Jason Smith about youknow, you don't need to sell to
a DSO, you need to workon yourself and work on your own practice.
(12:39):
And it makes sense that Chad,when you were talking to the advocates,
they were only selling you on thebenefits of it. And of course,
yeah, they're not going to wantto mention any of the negatives because
that's you know, that makes thema terrible salesperson. But I like your
point about if if you know they'rethey're they're trying to spend as like we're
(13:00):
doing you a favor, Let metake your practice off your hands. It's
not doing that well, You're notdoing that great. We can do better,
And I feel like most people knowthat's not true, and they don't
like people messing with their babies.So, yeah, what did you when
you were doing your research? Didyou come up with anything or were you
able to find anything that you know, here's a reason or here's a couple
(13:20):
of reasons as to why you shouldn'tsell your practice to Dso I found many
reasons. I didn't find any onthe actual DSOs websites themselves there or no
cons on those those websites. Yeah, I found a handful. And what
you mentioned earlier too, just aboutI forget exactly what you said. It
was a perfect segue into what itall comes down to, and it's greed.
(13:41):
They don't want to help you asthe practice owner or the dentist.
They want to profit from you orthe patient, right exactly. You don't
get to pick your supplies exactly,So they are making all their money off
the labor of all the practicing dentistsout there as private equity partners that aren't
(14:01):
producing. And the thing is,I just thought about this too is you
know, the patient who may havebeen coming to see you for the last
ten, fifteen, twenty years doesn'tknow all the history going into Now you're
working for somebody else and your suppliesare different, maybe you have some different
staff going on, and they justsee it as, oh, I don't
like going to doctor Chad's as muchanymore. I might go to somewhere else.
(14:22):
Yep. I was talking to ayounger dentist earlier this month than after
about three years of ownership. Theysaid I was going to give it at
two more years and then look tosell to dso because I just felt so
overwhelmed with the business and financial sideof it. I felt like I just
my head was in the sand withcash flow and taxes and it was just
(14:43):
such an uphill battle. And soit can be overwhelming. I understand why
people would consider it. It's goodto educate yourself. But that's what part
of today is educating people on thebroader picture of the pros and the cons.
I mean for our clients, Iguess the the rub is you have
to be coachable like the so youdon't have control, you have no autonomy.
(15:05):
You have to do for our clients. You have to be coachable,
which goes to the point of ifyou're not gonna take most of our advice
and you shouldn't pay us. Otherthan that, there is no rub We're
the real deal. You can haveit all. You can have a killer
practice that is yours that you enjoythat as Hey, if you want to
(15:26):
take a day off, take aday off, you don't have to get
you know, can micro managed bythe people that just gave you this big
check. But no kidding, butyeah, I found it fascinating. No,
an attorney who does a lot ofthese deals. You kind of heard
his best step forward of kind ofwhat the pitch was and just being sort
of astute, you ask some questions, propose something that he couldn't get out
(15:50):
of, and it's not like you'resome twenty year veteran of studying DSOs.
I am certainly not. I thinkit was interesting because I don't think he
really knew what we four quadrants to. Clearly, I think it was trying
to, yeah, sell us onsomething, and when it just came down
to the point where all the positivesthat you're pitching, we can do the
(16:11):
same thing for practice owners without havingthem except the practice owner gets to enjoy
the profits of their hard work.It's it's uh, it's incredible. Is
there a chair you want to puton top of this one? Pal?
There is? I would like tosay if you want to hear more about
us just going off about DSOs,but really learning about getting some real dental
(16:32):
financial advice from us. We aregoing to be in El Sagundo, California
on May twelve at Top Golf ElSegundo. Would be pretty exciting, right,
I know that place? Have youbeen there? I used to live
about two miles from this. Yeah, Hermosa Beach, Manhattan Beach, Santa
Monica. There's there's a lot ofareas that that tie into this new Top
(16:52):
Golf right by on Spolvada or PacificCoast Highway. Some call it used to
be a little executive nine whole course. I used to go play out.
There's probably some lost golf balls ofmine. But it's a beautiful location.
It actually serves a lot of differentareas and regions in that geography. Hopefully
we get to pull a lot ofpeople in there. These have been really
really good. The folks that attend, they learn much more than anticipated and
(17:17):
then they enjoy getting a little biteto eat and going and smashing the golf
ball. And it's right. We'realso going to be in our own backyard
and June we'll be at Fishers IndianapolisTop Golf as well. I know we
got some other shows that we're exhibitingat coming up. Guys. Don't forget,
guys and gals, we are offeringa free tax assessment right now.
If you received a really large billor maybe a really large refund and maybe
(17:41):
this isn't even the first year andyou're getting fed up with what's going on
with that, or even if you'renot and you want to hope that we
maybe we can find something your currentCPA is not. Go to four Quadrants
Advisory dot Com slash taxes for that. Fill out the form and one of
our experts will be in touch withyou. Chad, thanks for bringing back
that vibe valuable information from that thatexpo in Chicago. As I say,
(18:06):
Chick fil A, it was mypleasure. Guys. Thank you. That's
all the time we have today.Thank you to our guests for their insight
and for sharing some really great information. And thank you to you the listener
for tuning in The Millionaire Dentist Podcastis brought to you by four Quadrants Advisory
to see if they might be agood fit for you and your practice.
(18:26):
Going over to four Quadrants Advisory dotcom and see why year after year they
retain over ninety five percent of theirclients. Thank you again for joining us,
and we'll see you next time.
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