EP62: Success Strategies for Todays New Dentists

Podcast

Are you out of dental school and looking for highly profitable opportunities, or a good long term plan? Are you running at maximum capacity and ready to hire a young associate on board? In this episode, Wendy and Dr. John discuss common frustrations, opportunities and situations experienced by our young dentists today. Highlighting proven strategies they’ve seen in todays market that will allow for young dentists to hit the ground running. They will also speak to established practices and give strategies to seamlessly introduce a new associate model that will alleviate blockages and increase production with an additional provider. You wont want to miss it!

“EP62: Success Strategies for Todays New Dentists” Transcript:

00:00:00.470 [music]

00:00:01.940 Welcome to the Double Your Production podcast with the Team Training Institute, the one place designed for dentists and their staff who want to grow their practices by following in the footsteps of those that have done it, who are in the trenches, who know exactly what you’re going through. And now, your leaders, the stars of the podcast, Dr. John Meis and Wendy Briggs.

00:00:24.530 [music]

00:00:27.790 Hey, everybody. Welcome to this episode of the Double Your Dental Production podcast. I’m Dr. John Meis and with me is Wendy Briggs. Hey, Wendy.

00:00:36.270 Hey, Dr. John.

00:00:37.800 And we’re the Team Training Institute. And we thought it would be kind of fun to talk about the challenges that young dentists face that are so different and unique than when people were graduating from dental school 20 years ago. So the world has really changed and it’s tipped on its axis a little bit. And the set of problems that young dentists face are different, in some ways more complex than the problems that their predecessors had. So I thought we would just kind of walk through this list, Wendy, and talk about kind of some general recommendations that we have to help people as they wade through this. So the first one is high debt. So students coming out of school with much more debt than they used to have, which means their payments are higher and longer, right? And so one of the things that we think is super important for young dentists to realize is that they’re going to have to be more thoughtful about their productivity. They’re going to have to be more thoughtful about their clinical toolbelt, what procedures they do, what procedures they refer out so that they can expand their toolbelt, which allows them to be more productive, which allows them to have greater income, which allows them to have a great lifestyle while still being able to pay off these high debts.

00:02:11.830 Right. I saw a young dentist asking a Facebook group– which is probably another topic for another time. When you’re making such vitally important decisions, I would hope you have more to advise you than a Facebook group of random dentists who may or may not even be successful themselves, right?

00:02:31.160 Yes.

00:02:32.600 But he asked, “Is it unreasonable to expect after I buy this practice and paid the debt to still have $250,000 leftover first year?” And the responses were really stunning. You really expect to have 250,000 in cash the first year after you buy this practice and satisfy the debt? Some people were saying that’s a completely unreasonable expectation. And the other dentists were saying, “Well, then why did I go to dental school? I am being counted on to support my family in this way.” And so it’s really kind of an interesting dynamic, isn’t it, when you hear some of these conversations?

00:03:10.220 It sure is. And if you have an income expectation or an income need, particularly at that level, the practice that you buy, the support that you have around you is going to be extremely important because that’s a pretty tall order for year one of buying a practice. Not that there aren’t people who do it, there are. Or not that people do twice that, there are, but just not very many. And so that’s kind of a high order. So totally agree that that really is a challenge. When you’ve got a big expectation, you’re going to need big help to help you get there. Another problem that young dentists have is the relatively– and this varies from school to school, but many of the schools are really challenged in getting patient flow. And so people are graduating from dental school today with less reps in various procedures than they used to. And so now, we have a little less experience, which means we have a little more need for mentoring. We have more need for someone to be available if you get stuck in a procedure. If you get caught in some way, is there someone who can help you out in real time? And so this is a really important thing as young dentists are looking for opportunities, that they have the ability to have this real time mentorship. And certainly one of the questions as you’re looking at opportunities, do I have that with this opportunity? Because it certainly is valuable when you have that.

00:05:00.190 I thought it was interesting, Dr. John, there was a young dentist that actually posted on a doctor Facebook group saying, “I am seeking a practice where I can find a mentor.” So some young dentists really are sharp. And they know exactly what they want and they ask for it, you know?

00:05:17.300 Yep.

00:05:18.620 I’m impressed by that.

00:05:19.840 And I speak at a lot of dental schools and it is really one of the most common things that young dentists that are seeking employment. That’s one of the reasons why they’re seeking employment is they want to have that mentorship. They want to have that continuing education. They want to have a clear path on how they’re going to improve their skills over time. And so like you said, knowing that, wanting it, expressing it, and being patient and finding the opportunity that has that. Now, we advise young dentists that are looking for employment. We advise dentists that are looking employees, employee dentists. And we have a tool that we call the associate readiness checklist. So it is for dentists that are out, that are thinking they’re going to add an associate. And it asks them some questions to make sure that they’re ready from a financial standpoint and that they’re ready from an emotional standpoint. And one of the things is are you willing to mentor a young dentist? Are you willing to step in and help them with the procedure if they get stuck? And if they say no to that, they’re not ready. And so we help people understand that. And on the young dentist side, asking that question when you’re looking at opportunities, it’s important.

00:06:41.140 Absolutely. So many associateships fail because there’s a couple of things on that checklist that haven’t happened. One of the most common things that we see is we haven’t developed enough demand to feed two dentists. There’s so many little things and just one of those things being off can tank the entire opportunity.

00:06:59.620 Yep. For sure. The next I had on my list is employment issues. So now young dentists are coming out, they’re looking for jobs, and they’re trying to compare from one opportunity to another opportunity. And the vast majority of these people are being hired by group practices and DSOs. And they don’t make it easy to compare because they really want it to be a good relationship and so they’re trying to drive the relationship piece of it. But really being able to break down what the offer is and what are the things that you want and what the offer is. So one of the funny things that I’ve observed having seen a lot of employment agreements from a lot of different group practices is that if you do all the math in them and you figure out exactly, “Okay. What am I actually going to get paid?” there’s not that much different from one to the other. But when you read them on the surface, it may appear that one of them is a lot more than another one. But at the end of the day, after you have deducts and–

00:08:16.500 Your lab bill, you know?

00:08:17.990 Right. Yeah. Right. All the different things that are deducts, all the things that you have to pay for in one that are included in another, it turns out that they’re all pretty closely aligned, but it’s difficult. So making sure that you understand, first, what you’re looking for and then how the agreements compare to that is super important.

00:08:43.420 Right. I think what’s stunning too, when we look at the differences in what graduates today are looking for versus graduates years ago– and that’s been a significant shift, isn’t it? I thought I read somewhere or you shared a statistic that said now it’s less than half of dentists in dental school want to own their own practice.

00:09:00.090 Oh, yeah, way less than that. Yeah. Way less than that.

00:09:03.320 Back in the day, that was really the only pathway that many dentists chose.

00:09:09.810 Yep. When I graduated back in the Dark Ages, back when we had leeches and I also cut people’s hair and– no, I’m kidding. So when I graduated, some people bought a practice right out of school. Well, you could never do that today. First of all, you’d never find a bank that would loan you the money. When I got out of school and went to the bank and said I wanted to buy this practice, they said, “Okay. Great. We’ll loan you the money to buy the practice. Do you want to buy a house too? Okay. We’ll loan you the–” I mean, it was that simple. I just went in and literally, they were willing to give me pretty much whatever I asked for, but not today. They want to see a track record of success. They want to see you have some experience. And they want to see you have some money ahead of time before they’re going to loan you any money. So because the bank’s capital requirements are higher than they used to be, they really can’t loan you 100% of anything. And so that’s created a challenge for coming out and being able to buy a practice. So the career pathway has changed a lot from either getting out, buying your own practice, or associating with someone who’s near retirement that you’re going to take over for. That was what was most common when I graduated from school to today where there’s general practice residencies and then you’re employed by somebody for a period of time. And then maybe or maybe not, you buy your own practice at some point.

00:10:53.170 Right. Well, another thing that we see today is sadly, in our position as consultants, we end up having to help dentists clean up some messes, right? And I think the reason for that is sometimes they can buy a practice and they’re using historical data to try and determine a value. And maybe they have advisors helping them and maybe they don’t, but we often see young dentists saddled with a practice that they way overpaid for and then trying to right the ship, right? That’s a very common thing that we see. We also see practices that were successful on a model that was successful in the past, such as fee for service, that are having a much harder time– a much harder go of it now. And we still see, sadly, some consultants and experts guiding dentists to get rid of insurance and enter a fee for service model. So there’s so many things that have changed. It’s not just the graduates and their situation that’s changed. But in the marketplace of actually practicing dentistry, I’ve seen tremendous changes even over the last five years, even down to the minutia of what patients want. That can be really problematic and challenging for a new graduate to deal with.

00:12:08.550 I had dinner with a group of dentists last weekend at a meeting in Las Vegas. And one of the dentists there was sharing with me that his revenue was down by 30% and his new patient numbers are down significantly. And he was going for the fee for service practice without really capturing enough patient demand to do it. And so he was driving his practice really into the ground because he just did not build enough demand. So you have to be really good on the patient attraction and the patient retention side if you’re going to use that strategy. And there are people who do it extremely well. And there are people who are successful using it, there just aren’t many, right? And it’s becoming harder and harder as more of the population is covered, has dental benefits, and wants to use those dental benefits. It becomes more difficult. So that picture of ideal that we were all given in dental school, it’s really fascinating that when you get out into the real world you have to come up with a way of thinking of ideal that is more flexible. And I still hear dental school professors say, “Oh, just don’t get involved with insurance and blah, blah, blah, blah, blah.”

00:13:41.340 Selling yourself out. You’re selling the profession out.

00:13:43.680 Yeah. Right.

00:13:44.860 That whole thinking of if we all would just ban together and not allow the insurance companies– but that’s living in a hypothetical, perfect dream world. I don’t think that’s reality.

00:13:56.110 Well, and you’re taking financial advice from someone who may or may not be financially successful. And so that’s always a bad idea. So one is the practice structure ideal. The other one is treatment. What’s ideal treatment? Well, that varies a lot. And how do you match ideal treatment with the fact that patients’ philosophies and their values and their financial wherewithal can vary from person to person? And now you have one way that you’re going to treat everyone and that is the “ideal dental school ivory tower way”? And I’m not picking on dental schools because I think dental schools are amazing. I had a wonderful experience where I went to school, got a great education. Now, I’m not picking on dental schools because that’s their job is to teach us the clinical end of dentistry. But we want to make sure that when we are thinking about going into the real world, we’re taking that ideal and trying to help as many people get there as we can. Our job is to help people become more healthy, more stable, and more attractive. But that’s not always done in one step like we were led to believe maybe in dental school.

00:15:14.930 Right. Another thing that we see is– a huge challenge is the new doctor comes in. They’ve bought this practice and they’ve inherited a practice full of patients who maybe the previous doctor was somewhat retiring in practice. And so they are faced with an overwhelming patient base that has a whole host of restorative needs but they’re the new guy or the new gal. And they’re coming in and they’re trying to ramp revenue up considerably and they lose trust. And then pretty soon, the practice is dying because all the patients just have checked out and gone elsewhere. There’s so many pitfalls that can happen, right? The other thing that we see is when they buy a practice or even if they try and do a startup on their own, they don’t know what they don’t know yet. And so one key decision such as location can ruin everything for them. So these are also common challenges that sadly, I feel for the new doctors just graduating because how do they know who to listen to and how do they know where to find these answers? It’s not always as easy as it seems.

00:16:20.290 No. For sure not. And really, when you’re looking for guidance and looking for help, really it’s important for you to talk to people who understand the challenges that you face and have been through some of them, have solved some of them. And the challenges that new graduates have today compared to what I had, they’re different challenges. But because we work with so many, we understand where they are and we understand how to help. And so one of the ones that we frequently see is someone who pays way too much for a practice, not having any understanding of what drives the value of a practice, what drives the revenue and income from a practice, and therefore, paying too much. And then being really in a bind because now we’ve got to turn the practice around in order to just– we have to do much better just to pay for it, much less to get ahead ourselves. So those are all [inaudible].

00:17:17.840 Right. That [inaudible]. A great topic for an upcoming podcast would be maybe a few things that you’re looking for. A lot of our clients– well, let’s talk about Dr. McRae, for example. He had a flagship, really successful practice and his goal was to go to multiple locations. And he didn’t really quite know the best way to do that. But you’ve helped him tremendously there and now isn’t he up to four or five?

00:17:39.900 He’s three now.

00:17:41.060 Okay, yeah, Three now.

00:17:42.740 Yep. Yep. So he went from one to three kind of in one step. But all the things that you don’t really think about and you don’t really know about if you’ve just been in practice for a long time. And just you get real good at dentistry. You get real good at doing one, but you don’t understand lease negotiations. You don’t understand the demographic studies. You don’t understand all the ins and outs of construction and all the ins and outs of structuring a deal, all the ins and outs of due diligence on buying a practice, all the ins and outs of how you value a practice. Because I can tell you, the value that practices are listed at, the practices virtually never sell for that. It’s always an inflated price. And so really having someone help guide you through those things that has done it many times before is very, very helpful. One of our group we saved over $70,000 in the first term of a lease just by one simple principle. It’s very easy to understand, but because he didn’t understand it, he was almost ready to sign one that would’ve cost him an additional 70 grand. And so those kind of big mistakes, they’re hard to recover from.

00:19:04.530 Yeah. Maybe we do another podcast here in the next weeks about startups, maybe the pros and cons or the mistakes that we’ve seen people make. If they have their flagship practice and they want to do a startup for a second location, I know you have tremendous experience with that too. That might be a good topic for a podcast.

00:19:25.580 Yeah. Sure would.

00:19:26.040 Maybe practice acquisition would be an awesome topic.

00:19:29.840 Yep. Those would be good. All right. Good job, Wendy.

00:19:34.890 Yeah. Thanks for all of your insights. It’s always so interesting to dig into some of the challenges. And hopefully, yeah, some of our listeners have found some help with whatever their circumstances may be.

00:19:46.410 Well, that’s it for another Double Your Dental Production podcast. We hope to see you all at an upcoming event. And we’ll have information on the show notes for this podcast on what we’ve got coming up. And we hope to see you at one of those. And we’ll definitely see you on our next podcast. Thanks, everybody.

00:20:05.350 [music]

00:20:05.540 Thanks, everyone.

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