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In this episode of Dentist Money™ Reese interviews Dr. Chris Salierno, chief editor of Dental Economics magazine and international lecturer. You’ll hear why the days of passive practice ownership are over. You’ll also learn about resources that can help you think more strategically and improve your business model. Plus, Reese and Chris have fun covering a few typical dentist issues in a fast paced lightning round.
Reese Harper: Welcome to the Dentist Money™ Show, where we help dentists make smart financial decisions. I’m your host, Reese Harper, here with a special guest, who has recently finished a major conference, Dr. Chris Salierno. Welcome to the show, Chris! It is good to have you.
Dr. Chris Salierno: Thanks, Reese. Thanks for having me.
Reese Harper: Yeah, man! I have been wanting to do this for years. You are one of the people in my life where I’m like, “why have I never interviewed this guy?” And like a month a go, I told my podcast manager, “dude, we’ve gotta get Chris on the show.” I just feel like you have a ton of background as a GP practicing in New York; you have written a ton of content; you are the chief editor of Dental Economics; you also serve as the editorial director for Principles of Practice Management that DE puts out; you lecture all over the place. I just feel like you have a really cool perspective on what it is like to be a dentist, and what it is like to educate dentists and know the gaps that— I guess the gaps they have in their knowledge, and the gaps they have in their ability to dedicate time to learning (laughs).
Dr. Chris Salierno: Well by the way, I should say I am a fan of your podcast. I have been listening for a couple of years now, I guess it has been, since you have been doing it. I think we have helped we have shared, we have commingled on Dental Economics and DentistryIQ, your podcast, and you always— I love seeing you. I remember we first got to meet at the Yankee Conference when you are holding court and doing like a podcast fest all on your own. It looks awesome; it looks like a lot of fun.
Reese Harper: That’s cool. Well I think today, the thing that I am hoping to kind of focus on… I have a couple of topics, but give me some thoughts that you have about the business of dentistry and what it means to kind of be strategic.
Dr. Chris Salierno: Yeah, I think that the biggest problem I have when I am on a personal campaign to rally against is the passive business owner, right? And I think that too many dentists are passive business owners, and what I mean by that is, as you said, reactionary. They hang up the shingle, they are great tooth carpenters, they are doing the best clinical dentistry they can, and that is fantastic, but when it comes to attracting patients, when it comes to developing an account’s receivable system, when it comes to any kind of growth or success in their practice that is outside of the clinical realm, they just wait for it to happen to them. So if they saw more patients this year than they did last year that it may be more due to luck than because they strategically sat down and put some sort of plan together and paid attention to the results. And so, in the days— you know, I was here in the 70s, and the 80s, and the 90s, great time to be a dentist— we didn’t have to focus on many of those systems and success still came to many dentists. If you took great care of people, you were a good dentist, and your practice would grow and thrive and things were great! But obviously, there has been so many changes since then, from a rise in PPOs, increasing number of dentists, more competition from different business models, and we could go on and on, that now that dentists are less busy, the faults within their practice, their lack of strategic thinking is becoming very evident, and they have to start changing their thinking into being an active business owner rather than just a passive one.
Reese Harper: You know, it is interesting. We talk about this a lot, and from my perspective, one of the ways that people can manifest this conscious choice to be a business owner is where they put their money (laughs). And sometimes, it is uncomfortable for a dentist to put their money into, we will call it practice growth, or something strategic that feels like the results might be six to twelve months out before they get to see— it is not like how in the old days, you could pop down three grand on a mailer and buy yourself thirty new patients. There is a real tendency that I see of people wanting either maximized profitability and minimized expenses, which is just like, I want to cut everything I can possibly cut and avoid spending money on anything unnecessary, meaning almost anything that is not supply or back office related, right? And even they lean up the front. We have a skeleton front staff, and we put all our money only in essentials that are necessary for treatment, and other than that, I want to maximize all the profitability. And if I ever told someone like I did this week where this person’s savings rate actually was really high, and they were putting a lot away personally into retirement, and my recommendation was after seeing their practice sort of flatline and decline a little bit over the last couple years, the recommendation I made was, “we need to drop your personal after-tax savings.” Not their 401k, but their after-tax accounts. They needed to stop saving quite as much as they were and start to reinvest a little bit back into some core areas of the practice, which it is not my goal to identify those necessarily, but I gave them a handful of names to call. But it was like a really awkward thing for them to go through and like, “you’re my financial guy, but you’re telling me like, I’ve got a lot of money I’m saving, and I could—” I mean he was saving 39% of his gross income, by the way. Like, an extraordinarily high percentage of his income. This is unusual. But it was coming at the cost of the business sort of flatlining and declining, and I could see that, and so we just said, “look, let’s back this off to 18% or 19% savings of your gross income, and let’s reinvest seven grand a month or nine grand a month into initially some— let’s start with getting some ideas on where it should go by bringing in a few people who’ve got opinions on this and see what they say.”
Dr. Chris Salierno: Yeah, if you are taking a lot of money out of the business and investing it in retirement accounts and those sorts of things, well that is great! It is fantastic to invest in your future and to have you wealth grow intelligently. That is fantastic. But from the business’s perspective, if you are taking more money than you should out of the business, then it doesn’t matter if you are blowing it on a Lamborghini or if you are saving it for retirement, your business is being bled more than it should be. You are not reinvesting in the practice. I completely agree with you.
Reese Harper: Yeah, and I mean you always here like, “oh, dentists are spending too much money. They never save for retirement. They need to save more.” I mean, in some section of the dental population, that is true. But I, on a very regular basis, see dentists who are willing to put away $10,000, or $20,000, or whatever the number is every month towards their retirement, but they wouldn’t dream of spending $25,000 on some strategic consulting, or some practice management, or some marketing, or some systems, or a new front desk staff. They wouldn’t dream of that! But they would put it away, and I think it is important to just like acknowledge that that’s happening and kind of give people a license to say, “look. I need to be able to invest in my practice, because if I wanna compete with multi-million dollar corporations that are definitely investing in that kind of stuff and expanding their operations and building their front and their marketing and their positioning, and all of their operations are efficient.” I mean, you are going to have to spend some of your money to compete in today’s world.
Dr. Chris Salierno: Yes. So the dark side of that is when there are dentists who still remain passive business owners, they just end up throwing money at the problems, right? So, I agree that you, as a business owner, realize there are some challenges— accounts receivable, new patient numbers not being where you want them to be, whatever it is— that to invest money intelligently in the practice to fix those problems is a great idea. But, that person has to start thinking actively about what it is they are doing, and that these decisions fit in with the bigger business plan. Otherwise, they are just throwing money at problems and hoping that it will go away, and it may or may not.
Reese Harper: That is a huge issue. That happens all the time. So how do you narrow down what you are going to invest in strategically? Because there are like five business models I can pick from to start with, right? I mean, I’m going to be a ten location operation that sells out; I’m going to build my own DSO; I’m going to be a solo practice; I’m going to be a one associate; I’m going to be two locations; I’m going to be a specialty practice. Like, there are a lot of business models that everyone might choose to do given enough pressure one way or the other. How do you know what you are going to— do you start there, or do you start with something more fundamental, you know?
Dr. Chris Salierno: Yeah, so my favorite tool for creating a business model, whether you are just about to start a practice, start a second practice, or your fifth, each practice should have its own business model. You may have your own personal goals. “Hey, I wanna have ten offices and sell to a DSO” or whatever. But each individual location, each practice, should have its own business model. My favorite tool for that is a book by a guy named Osterwalder that came out in 2010 called Business Model Generation, and this is the book that introduced the concept of a business model canvas. Now we are doing a podcast, so we don’t have a visual here to show, but anyone who is at home can just google “business model canvas” and they will see examples of what this looks like. It looks like you are playing Tetris, like, there are these building blocks. And there is a flow… you know, this is just one of many different kinds of management models that someone could use, but this is a very visual one; I think it works great for small businesses, and it works for large businesses to. We don’t have time to go through the entire exercise, but the very first part of it is thinking about the target customer, or in our case, the target patient. So I ask every dentist when I lecture them this material, “who is it? Name one or two or three different types of patients you want to treat more of.” Now, maybe that is because it is the right personality for your practice. Maybe because it is charitable; you like treating more senior patients; it warms your heart, and that is wonderful. But maybe it is because that type of person, that target patient, has the kind of dental needs you love to fulfill: implants, or endo, or whatever it is. Identify those few different types. So for example, I will give one. In my case, my business partner and I, when we started in 2010, it was a little startup, we wanted to treat what I call “busy business people.” That was our target demographic. The busy business people, they have cosmetic needs; people want to replace missing teeth; they are senior vice presidents of whatever at their different corporations. And so we said, “that is one type of person we really like to treat in our practice.” So one, I think to really visualize that. Then, you start to go through the rest of the exercise and figure out what that person needs and how you can deliver it to them. So I just want to pause for a second and say, this is very different already from what most dentists do. Most dentists hang up their shingle and say, “well I’m a general dentist, so I’m here to just do general dentistry for people. Sure hope you show up!” And that is already in my opinion going off in the wrong direction; we shouldn’t try to be everything to everyone. I’m happy to treat whoever walks in the door, but I don’t treat kids, really, it is not my favorite thing to do. So when I look at my three targets— busy business people are one, people with sleep apnea, and seniors are my three— kids are not in there. So, I am already going to start to, as I move through the exercise, not create an infrastructure in my practice or systems or marketing materials or anything that would cater to them. We start to make these decisions very cleanly and very clearly.
Reese Harper: Okay, so I want to kind of question a few of these things. I think this is critical. I mean, in marketing and business, dude, this is like fun-da-men-tal 101, like if you are going to go raise capital for any small startup, if you haven’t identified your customer and clearly articulated who they are, you are not getting funding (laughs) and so—
Dr. Chris Salierno: Right, but what i so funny is—
Reese Harper: But that doesn’t happen in dentistry, right?
Dr. Chris Salierno: No! You’re like, “I’m gonna be a dentist,” and people are like, “well good! You’ll do well. Less than 1% of the loans fail.” And that is absolutely correct!
Reese Harper: I think there are several ways you could identify who your customer is. Because it could be a product, right? It could be—
Dr. Chris Salierno: I like placing implants or something. Right.
Reese Harper: Yeah. Or it could a person. Busy business people.
Dr. Chris Salierno: It is a fine point, and I am glad you raised it. So if someone were to say to me while I am doing this exercise, “well I want to do more implants,” I would say, “okay. That is a service. Give me your target customer. Give me your target patients. So who in particular who needs implants?” And you may identify— look. You can have seven different types of target patients that you want to identify, and you could say, “look. The busy business people need implants, the seniors with ill-fitting dentures need implants…” and that is all fine. But that is why it is just kind of an exercise; it just gets you thinking about the stuff in the right direction. But I agree. We want to start thinking in terms of people, not products just yet.
Reese Harper: Yeah, and the reason is why? Why would you say that is more important initially? Why is the persona more important that the product? What are you using these personas for?
Dr. Chris Salierno: Because we are in the service industry. I think that is the main thing. Because we are not just people who manufacture fillings and crowns, we are catering to people! We are healthcare providers. We are in the service industry. And so for those reasons, it is really important that we identify the type of person that we want to attract. I’ll give you an example. I worked in a practice years ago that was— and marketing comes into this exercise in just a little bit— I worked in a practice and their target probably, you know, they never really thought about it, but they wanted to be a dentist to everybody. They would complain time and time again how they kept getting these tire-kickers coming into the practice, people who would come in, and say, “how much for this, and how much for that,” and they just wanted the deal, and meanwhile, their marketing was in these little clipper coupon savers. Their own advertising had, you know, “20% off this!” and “$5.00 off that!” and “free this while this happens! Act now while supplies last!” It’s like, guys! You are the ones who are training people like this to come to your practice, and you are training them how to treat you. You can’t get angry when tire-kickers come to your practice if all of your marketing is directed to that particular demographic!
Reese Harper: Yeah, you are highlighting the point that I was asking earlier, which is why would you pick a person over a product? And it is because in my experience at least, you can market to people, you can’t—
Dr. Chris Salierno: And so many people market their products, right? It is implants this much off, or whatever. And not only are you just marketing the product, which by the way, is a commodity, right? A product is a commodity; an implant is a commodity. You say “implants only this much,” well then the person who is getting the attention of that add is easily going to look at another add that has a lower price. Commodities are price sensitive, and you are teaching people to treat it that way.
Reese Harper: Yeah, you are, and I think it is really difficult to develop a marketing strategy. I mean, dentists don’t market very effectively. Most don’t, and some do an excellent job of marketing. And there are the people who have figured out what you and I are talking about here, but I think if I am going to target— you said busy business people too, which is interesting. You have identified— I mean, you practice in Long Island, right?
Dr. Chris Salierno: So I practice in Melville, Long Island, and that happens to be one of the major corporate and industrial areas on the island. So Estée Lauder, Canon, Nikon, Bank of America, Henry Schein, as a matter of fact, they all have major one to two thousand person campuses within a five mile radius of where I practice.
Reese Harper: What I was going to say is this is not an obvious niche market that everyone should pick, okay? This is something you came around to organically through a lot of experience and research and thinking. I just think it is important for people to— in financial planning, everyone is always like, “oh Reese, but I can’t pick a niche like you. I mean… you did dentists, but what am I gonna do? Like, I’m a financial planner, and you know, people just want financial planning generally from a guy. Like, everyone does what I do.” (laughs) and I think everyone gives themselves that excuse, like, “I’m just a generic dentist. I’m a generic attorney. I’m a generic accountant.” But really, you just have to do… the pain of what Chris has gone here is, in his community, in his network, in the area where he lives, he has identified one of 50 possible niches. There are 50 possible niches that Chris could have picked in Long Island, and he picked this one. And you didn’t start probably by saying “busy business people,” you found out that they were busy, really busy, after you started experimenting with business people, and you were like, “this might be a good niche!” and “Holy cow! These guys are so busy. They’re so stressed about their time and their schedule. Getting them in here is hard…”
Dr. Chris Salierno: Well, and those are very astute observations, because the second part— and we are not going to go through the entire exercise, but the second part is a real critical one. It is, what is the unique selling proposition that that target demographic wants? And the answer isn’t, “oh, they want implants, or they want…” No no no. We still shouldn’t be talking about products here. What a busy business person wants is flexible business hours. They want to come on their lunch time, right? So I would be pretty stupid if I like to take my lunch at noon. I was like, “well I’m the dentist, and I’m the boss, and I just want to have lunch at noon, cuz meh!” It’s like, well then I’m an idiot, because that is when these people want to come to work, and they darn well better get out on time!
Reese Harper: It is either early, or late, or in the middle of the day. But it is going to be harder to pack in certain hours, and I just— that is why you have probably had multiple demographics, too, because you are like, “well if I only did this one niche and I went all the way in on it, then maybe I’d have some gaps in my schedule between 9 and 10 AM, or between 2 and 4 PM when they are all busy, and—” I don’t know. I’m just saying, you experimented with this, you found a niche, and the reason that I think it is so valuable is now you can finally market, because until you get to this point, you can’t market! Like, it is not possible.
Dr. Chris Salierno: Right. You are absolutely right. And that is the third step. What channels do you take your unique selling proposition, your non-commoditized unique selling proposition? Flexible hours, fun pleasant environment, whatever. And then communicate that to your target demographic. Where do they play? I will give you a good example. My office manager who is my de facto marketing manager, she came to me a bunch of months ago and said, “oh hey. I just saw in the Chamber of Commerce we can get a special deal where we can put a banner up that advertises our practice. It will be at a soccer game for kids. Won’t that be great? It’s only $100,” and my answer was, “no!” Because kids and soccer moms are not our target demographic. We are not going to waste— yeah, it’s only 100 bucks, but it is a waste of a hundred bucks. That is not our brand! That is not who we are trying to attract. Let a pediatric dentist or a family GP take care of doing something like that. That is a great opportunity for them! So once you put these building blocks in place, you can make these sorts of decisions I think a lot more quickly. You still have tough decisions to make, but it makes sense where you are going to spend money on things. When you then hire the services of someone doing direct mail, which still can work very well, you can then look with a keen eye at the copy they are going to be sending out on your behalf, and you can give them that feedback! “Hey listen. I know this works for all your other offices, but this is not my target demographic. I don’t want this, what else do you have?” So that is why I say, just giving your money to someone to spend for you on marketing or whatever… well that’s fine! That can work pretty well. You will be in a so much better position, though, if you are able to think critically and give them that feedback about which patients they are attracting to your office or what kind of systems they want you to implement.
Reese Harper: Like whatever service, delivery, experience you are going to create, it has to be based on the customer profile that you are picking. And in my business, it used to be that financial planning was delivered through phone calls, quarterly meetings, get-togethers over lunch, but we built a service delivery model that is almost entirely delivered through videos that are consumed at the dentist’s schedule, because we couldn’t get phone calls scheduled at the same time easily. We couldn’t get in the same place at the same time, because financial planning wasn’t quite as important as their kids’ baseball game, or whatever else they wanted to do. I mean, dentists make enough money to neglect financial planning for quite a while (laughs), and so we made it easier for them by just saying, “look. We’re gonna create this service delivery model, and we are going to deliver little pieces of it to you through recorded video from your advisor explaining what to do.” Not a generic video, but actual one-on-one, like… your financial planner to you… Chris, I am just going to record this five minute clip of what we need to do so you can watch it at your convenience. Well, I would have never even thought of doing that without having first picked my customer and then finding out that meetings were kind of inconvenient for them, and they didn’t really want to block out time for an hour to walk through this stuff, they just wanted to consume. And then we started doing video, and I was like “holy cow! This is taking off, and people love it, and it’s easier to consume, and we can get—” Anyway, my point is that your service delivery experience, or the product that you are going to deliver, or whatever it is, the type of dentistry that is needed, you will figure it out and start deepening your service experience once you target your customer! Figure out who that is first and all this other stuff starts to take shape organically. But like you said, what do people do? They pick a product first. They say, “I’m the implant guy,” and then it’s like, well, somehow, you are not reaching the customer! You are not really reaching them, you know? It’s just critical, man! Just critical.
Dr. Chris Salierno: They are trying to be everything to everybody. They may have their favorite procedures, and they may have their favorite types of patients, but they are not acting on it, and they are not thinking strategically about it.
Reese Harper: Yeah. Let’s talk about once you have that target. Talk to me a little bit about implementing systems in the practice that feel like the team is really behind you, as opposed to… doctor comes back with this great new vision, and we are going to change everything, and then it is like, you are dragging them along, you know?
Dr. Chris Salierno: Yeah. So, you have created your business model, and using, say, the Business Model Canvas as an exercise… okay. You have your vision for the practice, and your marketing, and all of that is in place. That is all great, but if you can’t deliver that same level of service, that same great experience consistently, you are going to hemorrhage money, have patients that maybe walk out with a mediocre or horrible experience… it is still not a successful business just because you have a clear vision for what it should be. So, every dentist is guilty of this: we go to a course— especially practice management courses, consultants, whatever it might be— and we get an idea. It is a new system for accounts receivable. I always joke, “do you go to see my buddy Josh Austin?” He is a fantastic lecturer on online reputation management among other things, and you see his reputation management course, and you come home to your office on a monday and you say, “great news everyone! We are going to start asking patients for google reviews.” And that is about as far as you have thought; you didn’t take good notes at Josh’s course. So, that is a very one-directional leadership strategy, right? You are telling people, “I know you didn’t used to do this thing, but now you have to do it.” Or you are telling people, “you used to do it a certain way, now change it and do it this new way,” right? So that is a particular type of improvement called innovation. A common type of innovation is when you just spend a bunch of money on a thing. You buy a fancy new piece of CAD/CAM, or equipment, or a 3D printer, or a brand new operatory. These are both great necessary things: to have bold new ideas that require almost overnight change, they are capital intensive… this is a great and necessary way to improve your practice. To treat people more efficiently, to provide new services for people, that is all great. The other phase of this that is critically important— I am using management terms, here— is then maintenance, right? So you buy something, you implement a new system… well, the maintenance phase is really critical. It is very obvious with equipment; make sure you take care of it correctly, and don’t— you know, the sterilisation equipment is not supposed to be run through and that kind of stuff. But maintenance also means getting the buy-in from your team to go ahead and start now actually using this equipment, or using this accounts receivable system, or whatever. And so many times when it is not really thought out and it is just one directionally imposed on people, that maintenance phase does not go well. You know, you come back and say, “guess what? We are going to start asking for google reviews!” And everyone under their breath is like, “uhh. Just don’t say anything. Just give it two weeks, and he will totally forget that he asked us to do this. We will go back to the way we always did it.” (laughs) because that is human nature, right? And sure enough, we tend to forget about it, and we move on, and that is it. So innovation, and maintenance. Bold new ideas; spending lots of money; improving the practice through those means, but then maintenance. Actually making sure you continue to implement and use these new systems. There is a third word here we should define, and this is a fascinating subject, and I am curious if you are familiar with this topic. It is called “kaizen,” and kaizen is a japanese term, and it is another type of improvement. This makes that maintenance phase; it is another type of innovation that does not require spending a lot of money. Here is what it is.
Reese Harper: I want to say my wife told me something about this. It is like, changing, or something about change. I just remember hearing it, and it had to do with holistic something, and I was like the old guy that didn’t know how to keep up with the young zen mentality, so you explain it to us.
Dr. Chris Salierno: It is, it is eastern philosophy.
Reese Harper: My wife is Japanese, by the way, so that is probably why (laughs).
Dr. Chris Salierno: Oh, fantastic! Then this is very much a part of her culture. So, history lesson in fifteen seconds: in post World War II Japan, the country was literally in ashes, and Americans came over, brought their manufacturing know-how, and taught Toyota and other groups how to start becoming an industrialized nation, and within a couple of decades, they were an economic world super power. It is not just because they learned really well how to do our manufacturing processes, our innovations. They did, but they brought to it this culture for their workers, and the philosophy that took American manufacturing and made it successful is what is called kaizin; it is continuous incremental improvement. Continuous, it is happening all the time. Incremental, these are not big bold overnight sexy changes that cost tens of thousands, they are just little improvements, continuous, incremental improvements. And it is done by everyone. It is done by the quote-on-quote lowly worker on the assembly line all the way up to the CEO of the company, right? So when it comes to innovation, when it comes to spending money on a thing, only I as the dentist CEO am spending it, right? My assistant is not spending $20,000 on a new system for the practice, right? She is not authorized to do that, I do that, right? Or if it is a new system for accounts receivable, usually that is coming from me or the office manager. So the team members, the front office staff, the hygienists, the assistants, they have no buy-in for this. They are being told to do something new. With kaizen, you are taking select members of your team, you are sitting them down on a regular basis and saying, “hey, I’ve noticed this problem. What do you think we should do about it?” And then you shut the heck up and listen to what they have to say. And that is so different from what we do in western thinking, right? So for example, and I will do a quick example, let’s say, “you know what, the patient accounts receivable is getting out of control. We send them the bills once a month, they’re angry about it, we can print up our report from Dentrix and we see that number is getting out of control. How do we change that?” Well, the western thinking, the innovative thinking would be, “well let me go hire a consultant,” and that is not necessarily a bad decision. Or you might say, “well, I’ll get a new billing system that will send out the accounts—” or whatever. You know, spend some money to solve the problem. And that is not necessarily a bad idea. But what a really interesting idea would be is to sit down in this case say your office manager and your finance coordinator and say, “I’ve noticed accounts receivable is getting a little out of control. Why do you think that is happening? What would you do?” And there are exercises in kaizen, from deming wheels, and there are other kinds of exercises you do to get to the root cause of the problem, and get feedback from your team members about what to do about it. And so two very interesting things happen. One, your team knows the problem better than we do; they are the ones in the front lines getting those angry phone calls from patients, you know what I mean? So they have better solutions than we do. I don’t know how to print half the reports in Dentrix and submit claims… I don’t know how to do that! My team knows how to do that. So let them come up with solutions. And the second interesting thing that happens is when they suggest a solution to a problem, don’t you think they have so much more buy-in to actually now implementing this as a new system? They are the ones that solve the problem. You are not telling them what to do differently, they are saying, “hey, if we do this, this would be better.” And now you have that buy-in innately. So that is kaizen in just a couple of minutes. It is obviously, way more detailed than that, but I recommend anyone—
Reese Harper: They 30,000-foot view.
Dr. Chris Salierno: Yeah, that is a real big bird’s-eye view, but anyone who is interested in that as a philosophy, I am telling you, I have implemented it in my practice and it has been wonderful to get that feedback. It brings our team together more, and we are solving problems we didn’t even realize we had. And sometimes those problems save a lot of money, but sometimes they just take those little bit of stress out of your day because we are continuously incrementally improving.
Reese Harper: The bad example that may have been me in years past would be, “our AR is out of control, why aren’t you x y z?
Dr. Chris Salierno: Right. “What are you doing wrong?”
Reese Harper: “Why aren’t you x y z doing this? You should know better…”
Dr. Chris Salierno: Don’t blame the person, blame the system or lack thereof.
Reese Harper: Yeah. And it is like, that type of culture bleeds over into everything, and if you want new ideas from your team and if you want to grow, you need them to feel like their input is safe and that they can give you that feedback and know that you are going to take it and listen to it and contemplate it and decide if maybe— you have to really believe that your ideas are not the best ideas. You have to really— it is vulnerable sometimes to be in that situation. Be like, “I’m the practice owner and my ideas may not be the right ideas at every turn, and I’m not right all the time, and I’m probably wrong,” and sometimes for me to really grow my practice exponentially, it took assuming that maybe my ideas were not the right ideas. Like, starting with the assumption that what I think might not be true, what I think might not be the way we should do things at every area in the practice, and just listening to the feedback that comes from your team and creating an environment where they can communicate with you. I just think it is so critical to business growth, and when practices don’t grow, a lot of times in my experience it is because that owner is not allowing that kind of environment to foster.
Dr. Chris Salierno: I agree. They are not allowing it to foster, or unfortunately they have lost that spark; they are a passive business owner and they are just waiting for success to happen to them. And with this business model canvas idea with the kaizen approach, being an active business owner doesn’t mean you have to just have all of the answers and magically know what to do in every situation. It doesn’t mean you have to have a huge bank account to throw money at problems. It just means listening to your team and help guiding them to find and problem solve with you. You don’t have to have the answers of activism, you just have to care, and make sure that you and your team feel safe, as you said. That is a great word for it. Feel safe and encouraged to help find these small problems as they arise and correct them as they go along.
Reese Harper: That is awesome. Alright dude, we are going to go into the lightning round. You have given us a wealth of information, and now it is time to go into the— you have 30 seconds to respond to each of these questions. You don’t know what they are; I have not prepped you in advance. I will start going down the list and get your opinion on this. You ready?
Dr. Chris Salierno: Okay, let’s do it. I’m ready.
Reese Harper: Question number one, what is your favorite thing to spend money on?
Dr. Chris Salierno: Books. So nerdy. Business books. Ugh… nerdy.
Reese Harper: (laughs) okay. Awesome! Number two, favorite place in the world that you have liked to travel. Your favorite place you have gone.
Dr. Chris Salierno: I am going to say Sydney, Australia.
Reese Harper: Nice! Okay, you have 20 seconds left to tell us why that was so cool. What did you like about it?
Dr. Chris Salierno: Oh, I have been twice, I got to lecture out there, it was fantastic. Australians are great; they love Americans. You know, you are around some parts of the world and they are like, “euh, Americans,” but they are just as weird and rude as we are, it is fantastic.
Reese Harper: (laughs) Ah, that is cool. Okay third item, do I own or lease my building?
Dr. Chris Salierno: I am renting in a business complex.
Reese Harper: Okay, so now we are going into financial opinions, advice that you are going to give to someone else. Do I own or lease my building, Chris?
Dr. Chris Salierno: Oh, what advice would I give to someone? If you can own, then that is fantastic. The financial implications of that are staggering; it is fantastic if you can own.
Reese Harper: Okay, well what is a good reason to not own? If I am going to lease, why would I want to lease, then?
Dr. Chris Salierno: If you are not 100% rooted down to where you are practicing and if you feel you may need the flexibility to grow out of that space or to move towns if you haven’t done your demographic search, then leasing would be a better option.
Reese Harper: Mmm. What is the best way to do a demographic search? You actually went into my next question; I was going to ask that.
Dr. Chris Salierno: There are some great groups out there. I am forgetting the name of his business, but Scott McDonald, really big guy, writes for Dental Economics sometimes… yeah. There are people who for not a whole heck of a lot of money will give you great research on the trends in your local area.
Reese Harper: Yeah. Okay, next question is, is whole life insurance a good investment? You don’t have to have an informed opinion about this, and I am not going to criticize you, I just want to know what your opinion is. Is whole life a good or bad investment?
Dr. Chris Salierno: Oh, you know what… (sighs) I am so bad with this, because I will do research on this— I know I am not giving you a lightning round answer— I will do research on this, I’ll make the decision, and then I forget about it and don’t look at it for years later.
Reese Harper: Okay! That’s a fine response.
Dr. Chris Salierno: I wish I was the person who knew every detail of every insurance or whatever I have, but I don’t. I do the research, I make the right decision, and then I walk away from it (laughs).
Reese Harper: Okay. Should I hire a financial advisor or do my own stuff? How do I know if I should hire someone or DIY this?
Dr. Chris Salierno: No, it is too complicated to do all this yourself. Don’t get stock tips from guys, I mean… you know. A financial advisor is one of the key members of the team.
Reese Harper: Okay. Who are your top three key team members to help you with your dental practice? Outside your own internal team, who do you rely on a lot?
Dr. Chris Salierno: CPA would probably have to be number one, especially if they are a dental specific CPA, which is great; the Academy of Dental CPAs has a list. Your attorney is a key member, but you don’t have to use them a whole lot, (laughs) hopefully not. And then the third one I would give a wild card too. If you are a practice that needs to spend a whole lot of money on marketing, then your marketing consultant is going to be a very key member. In my practice, it would be my financial advisor. But that is personal.
Reese Harper: Yeah. What about, should I hire a consultant or not? How do I know if I need to hire a consultant?
Dr. Chris Salierno: Consultants are wonderful. At the Principles of Practice Management Conference just the past week when you were alluding to– I had a gentleman who just didn’t know where to start. He was getting all these great ideas, and he was like “I don’t know where to start,” and I said, “you know what? You, I think, are a great fit for a consultant. They can just guide you through this process.” I think if things are moving along just fine and you have the patience and the interest and the leadership ability to walk your team through a lot of these steps, then you can certainly do it yourself. But if you really can’t, you don’t have the patience or the know-how are the passion, hire a consultant. Don’t just let success happen by accident.
Reese Harper: Okay, last two. CEREC or Lab?
Dr. Chris Salierno: I use Lab.
Reese Harper: Okay. Is there any advice you would give me?
Dr. Chris Salierno: I do digitally scan, and then I will have the laboratory make the restoration, I think the technology is getting there, but I personally don’t have the workflow in my practice nor do I want to have the workflow in my practice for us to manufacture restorations ourselves. If you are that type of dentist who is really into it or you love training your assistants to do it then by all means, go for it.
Reese Harper: Okay, this is a tough question, because you are not supposed to know the answer to this, but I want you to guess at what you think the average dentist makes across the country. What do you think an average income would look like for an average GP?
Dr. Chris Salierno: For an average GP, I am going to say it is around 150 or north of 150 I think?
Reese Harper: Okay. What about average collections? If you had to guess based just based on just anecdotally what you have seen and what you have experienced, or what you know.
Dr. Chris Salierno: For a one-doctor, five-day week practice? Well, that is going to be a pretty dramatic range these days unfortunately. There is going to be an average, and I will say it is… you know, it is say $700,000 or $800,000, somewhere in that neighborhood for a successful practice, but we know there are more senior docs who have really whittled their practice down to nothing, and then there are great practices that are hitting that 1.2 mark and are sailing.
Reese Harper: Awesome. Tell me about the average student loan balance coming out of school, what do you think that is?
Dr. Chris Salierno: Oy vey. There is tremendous difference. I think we have to pay attention to the difference between private and public schools, because we tend to get the national average, and for our friends who are graduating from private schools, it can be significantly more. So it is not uncommon to see numbers like, “oh, it is only $200,000 to $250,000.” But our private school friends, especially if hey also then went to a private say perio residency, they are getting more towards that three-quarters of a million or even more. And of course our good friend Mike Meru orthodontist was in the Wall Street Journal… he actually was lecturing this week at our conference, and he addressed it, it was fascinating. He is famously about $1,000,000 in debt.
Reese Harper: (laughs) yeah! Do you want to know that I got calls about that Wall Street Journal story about a year ago before they talked to Mike? And I just said, “you’re not gonna be able to find someone who out of school solely came with a million unless they have accumulated some other debt and back interest on top of it?” And they were like, “we don’t care, we’re gonna find someone.” That is going to be the headline! (laughs) I’m like, well, it’s going to be a great story. I guarantee everybody is going to be reading it.
Dr. Chris Salierno: You know, you may want to have him on the podcast, because he is one of the smartest people I know. He started the student professionalism and the ethics association for… it is a dental students ethics group. He’s a go-getter; he’s a fascinating person.
Reese Harper: I have noticed, man! His lifestyle, like hiking, and outdoors life, is pretty unreal, so…
Dr. Chris Salierno: And you know what? Good for him! I wouldn’t want to let debt get in the way of my lifestyle. He has a beautiful family, two young daughters… you know yeah, he is not spending insane amounts of money on luxury items, but he is enjoying his life, and he should. He shouldn’t have to live like a hermit for 30 years until his debt is paid off.
Reese Harper: Yeah, it is an interesting story. I am going to get him on. Okay, last two questions. What is the most regrettable financial decision you have ever made?
Dr. Chris Salierno: Not investing in retirement earlier.
Reese Harper: Okay. What is the best financial decision you have ever made?
Dr. Chris Salierno: Mmmm. Driving a Honda Accord for the past decade. I pay $200 a month to get me from point a to point b, and I have a good friend that will be like, “ohhhh, you’ve gotta up your game! You’ve gotta drive a Beamer!” I’m like, “no I don’t.” And his payment is like what, $400 a month or something? And I’m like, “dude. I get $200 a month to not drive a Beamer.” That is how I look at it.
Reese Harper: (laughs) oh, that is funny. Alright Chris, you have been super gracious with your, time, and you have been great on the lightning round, and I thought there was some really good content we got into today, so we will look forward to doing this again. I just want to give you a chance to leave any parting thoughts you have with the audience.
Dr. Chris Salierno: Keep the conversation going! We should not be passive dentists, too. Forget about your own practices; join your local and state and national dental society; get involved with private Facebook groups; keep the conversation going. Let’s challenge each other. Dentistry is changing around us, we need to change with it.
Reese Harper: Thanks Chris! I look forward to catching up with you again soon, man. I am sure we will be bouncing into each other at a conference here in the next bit, so thanks again, and we will have you back on soon.
Dr. Chris Salierno: Thanks Reese!Practice Management