Feeling Isolated? Here’s How to Build a Network of Dental Amigos – Episode 137

Are you creating a network of experts to help you build a successful practice? According to the Dental Amigos, Robert Montgomery and Dr. Paul Goodman, “Dentistry can be a lonely profession without good friends.” In this fast-paced episode of Dentist Money™, Reese, Robert, and Paul cover everything from servicing student debt to DSO’s to startup vs acquisition. And you’ll want to hear The Dental Amigos explain why networking is so critical to today’s successful practice. Plus, Reese pulls out a Dentist Money™ favorite—the Lightning Round.

Podcast Transcript

Reese Harper: Welcome to the Dentist Money™ Show, where we help dentists make smart financial decisions. I’m your host Reese Harper, here with special guests today, people that you may have heard of before, the Dental Amigos! I am super stoked about it; we are in a mexican restaurant right now, about to enjoy a huge plan of tasty nachos; I am with a seasoned veteran of the industry, Rob Montgomery, and Dr. Paul Goodman. Guys, how are you doing?

Robert Montgomery: Doing well, Reese! How are you?

Dr. Paul Goodman: Doing great, thanks for having us Reese! I’m jealous of the nachos.

Reese Harper: (laughs) let’s see if we can get the music turned down a little bit; it is a little loud in here in the restaurant; I’m going to ask this mariachi band if they can move to the back, and then we will be able to have our interview.

Dr. Paul Goodman: Make sure you tip them! They like the tips.

Reese Harper: Oh guys, I am super stoked to have you on the show, and I have always enjoyed the energy that your content has had. You have a really fun audience, and you both have a great breadth of experience, and practice issues, and some personal finance stuff, and so I just really appreciate you taking the time. I guess I want to start out by asking a question that is maybe open to both of you. A lot of my audience and your audience, actually, there is some cross path between them, between people that are in maybe the mid to latter part of their career, but a lot of younger students as well, and a lot of people in their early career stage. I want to get some opinions that you guys have about student debt, and maybe Paul specifically, but I would love to hear, Rob, your perspective on this. Students carry a lot of pressure and psychological pressure around debt, and sometimes, I feel like they don’t always make the best decisions with that debt, and after they leave school, it kind of carries a pretty negative psychological toll on them. I guess, what advice would you have for people about debt?

Dr. Paul Goodman: It’s a great question, Reese. I’ve had the fortunate opportunity— I have always been into helping younger dentists, teaching at dental schools in the residency program in Philadelphia, and for years, well before Dental Nachos, I gave a really fun course at Penn called “I’m a Dentist, Now What?” And that one, I usually asked the audience to give me questions, and even back from 2005, that was the number one question: how am I going to pay my debt? What is going to happen with my debt? I think one of the challenging points for dental students it that it is just hard for them to understand what it means when they graduate. It sounds like, “oh, I’m going to have $200,000, $300,000, $400,000 dollars in debt,” but they almost assume to get the final answer when they leave dental school, so I think if they try to find out— connect with people like you– what the math is going to be before they leave, they can make better decisions about whether they are going to do a GPR or AEGD, specialize, go right into private practice… but I agree that the pressure is just getting a lot higher for them. And I am one of those dentists— I am 40, so I consider myself a medium-aged dentist, and the debt load was not the same when I graduated in 2002; it has just gotten very high from a lot of schools.

Robert Montgomery: Yeah, well I think a lot of times, people do get a little overly freaked out about debt, and just spending money generally. You know, it’s like anything, especially in your world, Reese. There is a return on investment, and sometimes, you have to spend money to make money. Banks will still make loans to dentists who are looking to do startups, or to do acquisitions if they have debt, and they don’t really focus overly on the amount of the debt. I mean, you have to look at what the cash flow is of that debt. You know, what is the monthly debt service on that student loan? And if the monthly debt service is a lot less than what you can expect to make, then it is a good investment like anything else! I kind of analogize it to a conversation I had just yesterday with a new client, where they said, “well gee, I want to do this because this equipment comes with it and it’s free.” And I’m like, “well yeah, it might be free, but if you went out and borrowed the money to do this at a different location, it is going to cost you a few thousand dollars a month, but you might make an extra $20,000 a month!” So really, it is an investment like any other investment.

Reese Harper: Yeah. Well, in my experience, I feel like students are so worried about it that in many cases, they are willing to forego making a good investment in practice— you know they are very unlikely to do a startup, but they are less likely to do an acquisition. When they have this debt, they get really worried, and sometimes, they don’t make smart business decisions, or personal financial decisions, in my opinion. A lot of times, they don’t build up any liquidity; they have no emergency reserves; they don’t prepare themselves to be able to have a decent cash position to make the appropriate marketing investment, to make the right office manager hired, the right equipment purchase, because they are using all their liquidity from day one in that first associate job to hack down the debt as fast as they can. But for people who are going into private practice, I feel like they aggressively pay down the debt, don’t quite pay it all off, and then find themselves in a situation where they are halfway paid off with their debt, trying to start a practice. Because it takes a lot to pay off 300, 400, in some cases $500,000+ in debt. I mean, that is after-tax money you have to use, and it takes a long time… I sometimes feel like younger dentists don’t realize that the math behind this is– you took out a big loan to get this done, and it is just not worth stressing out like crazy. We have to put your energy towards a productive means, which is getting yourself in a great job position, getting yourself in a great practice ownership position, or getting yourself a great associate job that is paying you well, rather than obsessing over the debt, and I feel like it is a real issue. That is my perspective. I just want to get your thoughts on that; maybe you guys have a different point of view that is equally valid.

Robert Montgomery: No, I am with you on that. I think this is why we tell clients that it is so important to work with a good financial planner, and understand what the ramifications are, and what they should be paying down as far as debt, or not paying down the debt, just servicing it on a current basis. Years ago, I had an experience where I was representing a seller in a deal, and the buyer couldn’t get financing. She was making a lot of money, but she was living in her parent’s basement, paying down debt as aggressively as possible on her student loans, and she had decreased her student loans over a period of a year and a half by well into the six figures! It was a very impressive piece of work. But she didn’t have a dime in the bank, and she couldn’t get a loan to buy this practice, you know? It’s like, “oh no! You should have talked to somebody before you launched on that strategy, you know?

Reese Harper: It is great to hear that perspective. I really feel like if I were to poll two people, and one had $400,000 dollars of student loan debt, and one had $500,000, but the person with 400 had no cash in the bank, and the person with 500 had 100 grand in the bank, essentially you are in the same net worth position… you have a -400,000 either way (laughs), but one person has no cash, one person has 100 grand… I know the person who has 100 grand feels better. Like, I have seen it time at time again. If you poll, like, “how do you feel about your financial situation?” The person with more liquidity, the person with more cash, the person with more reserves, they just feel stronger; they feel more capable; they feel like they can be a little bit more decisive as an entrepreneur, and as an investor. And you know, I am not talking about putting that money in the stock market. I’m talking about— you know, as a young person, it needs to be very conservative, maybe something you can access readily; it doesn’t have to be producing a lot of return, but just the fact that it is accessible, even if it is in the bank. That person seems to have more confidence. And I worry that people, as soon as they get a little money in the bank— I mean, I get a text probably once a day from someone saying, “I just sold this house, and I have x amount of dollars…” when I look at, let’s say $100,000, as a business owner, or as a financial advisor to dentists, I say, “that could go in a flash. That could be gone in one embezzlement event that you don’t know is coming, unfortunately; it could be gone in one equipment purchase; it could be gone in one bad month of collections; it could be gone in one tax overpayment, or underpayment.” It can go so quickly that I feel like people can’t quite have enough liquidity in order to be successful in their career. And, I don’t know, the student loan thing— you guys have so many interactions with people about this at this age that I feel like it is an important one to touch on. I will let you wrap up if you have any other thoughts on student loans before I go to questions number two.

Dr. Paul Goodman: I just want to say one thing, because I have a good example just from last night. So, I do some buyer coaching, and I help young dentists make decisions, and I really enjoy it, and I was just speaking with a super nice and motivated dentists three years out of school who bought his first practice. It was a small practice, and I was asking about the loan, because he now has the opportunity to do a merger into this practice, and it could be a good decision for him or not, and he goes, “you know, I got the loan from a bank, but I was just going to use the money that I had saved, but someone gave me advice not to do that.” And I was like, “who gave you that advice?” And I think he thought I was asking because I was going to say, “oh, you should have used your savings,” and he said, “it was my accountant,” and I go, “well that was really good advice, because now you have $100,000, and you can be flexible.” But I asked him after that, “hey, do you work with a financial planner?” He goes, “no, I really don’t.” And I said, “you really need to connect with one and start to understand that process, because you’re young, you’re gonna have a lot of things come your way, and you need someone to help you make these decisions. If you had used your savings for this practice, you would be in a much different position for this merger just a couple years later.” So, I think it is really great that you help your clients with that, and Rob and I are trying to do similar things, just bringing a lot of understanding to this space. I’ll admit myself, as a dentist, I have learned a lot of this stuff hanging around with Rob, and going to lectures, and doing things, because they are just not things that really cross your path as a dental student, or a dentist, or a resident, and you could go your whole career and never cross paths with it!

Reese Harper: Totally, man. And I am a big believer of how I feel that dentists have a uniquely complex financial situation compared to almost any other professional. Their personal financial statement has more assets and more debts than almost any other business of their size. Just the number of things they have to keep track of is very significant compared to other people of a similar business size, and it is also super complex due to the fact that they had very little background in that area and they are handed a more complex financial situation. Like, an MBA student or an accountant, if you look at their business balance sheet, or business financial statement, or personal financial statement, it is not very complex… I mean, there is very little debt; there is very little equipment; there is not much real estate in most cases; the practice itself doesn’t have a lot of moving parts, because it is just services, revenue, or a one-product sale. A dentist’s business is multiple products, multiple services, multiple payers, multiple debts, multiple assets, real estate, in addition to a fairly large team, right? Not super highly compensated at the individual team level, but high quantity of employees for a million dollars of sales. It is a complex business, compared to any other business of a similar size, and they don’t have, like, any background, and it’s like, “just go do it,” and it is really tough. I mean, that is why DSOs are growing and making so much progress; there is a big gap there between the knowledge of the average person and the knowledge of an MBA student around finance and all the business operations issues. But, I really believe that all of the opportunities in dentistry right now are as robust and abundant as they have ever been, and I am just excited for the future, no matter what business model people try to go into. So, anyways. I am going to stop rambling here, if you want to make a comment about that, go ahead.

Robert Montgomery: Yeah, that’s an interesting point, Reese. And I think a lot of it is, when you look at dentists, unlike other health care providers, there are so many entrepreneurial opportunities. You know, the ability to go out and start up a practice, or acquire a practice, is something that physicians generally don’t have any more. But unlike non-health care business ventures as startups, or even new businesses and acquisitions, it costs a lot of money to buy a dental practice! You can’t start a dental practice in your garage or in your basement and say, “I’ve got low overhead.” But it kind of goes back to that debt conversation that when you have that student debt, you really need to do things and be more entrepreneurial, because the stakes are higher! You can’t afford to not make money, you know? You gotta do what you gotta do well.

Reese Harper: We always say, “you took the risk in the first place.” You took the risk day one (laughs), and you paid for the risk with your student debt… you have to go capture the upside.

Robert Montgomery: Yeah, so sort of a corollary to that, Reese, is that when you talk about that, there is good debt and bad debt, right? People here us talk about that all the time; they are probably sick of hearing it, but it is true. So, you know, the student debt— if that has a good return on investment with that, where you can make money as that type of profession throughout your career, then that is good. I see kind of a similar mentality when it comes to doing practice acquisitions in that people say, “well, I don’t want to buy a practice that is “that big,” and borrow that much money.” Like, well, yeah… you might borrow more money, but you are going to make a whole lot more, you know? You are still going to go to work every day, and you are still going to do the same thing, but it is nice to get a little more return on that debt. And it is the same thing if you talk about investing in a startup. People say, “okay, I want to do a startup, but I don’t want to spend money on marketing and consulting to do it right. I want to do it on the cheap.” Well, okay… you are going to have a lot of time on your hands for the next few years if you are cutting corners when it comes to those things. So, it is spending money wisely that is the key, and borrowing money wisely.

Reese Harper: Yeah, you are right. Sometimes, I will break that down into a really simple math formula: I talk about this concept of what is called “total lifetime earnings,” which is just adding up the amount of money that you could earn personally throughout your expected working life. So, for a dentist, let’s say that is a 30-year career; that would be pretty conservative for some dentists; some dentists work a lot longer than that, and some work a little bit less. But let’s take the ADA average GP income in the 2016 study: I think it was just over $300,000 dollars. So, if you take that average income, and you compare it to what we will call the average professional income… see, the average professional income is somewhere in the low $100,000 range. People like me, finance people, attorneys, MBA students, accountants, right? The average dentist is somewhere around $200,000 more in income than the average professional, and that student loan— let’s say the student loan costs $500,000– I mean, it’s really a $500,000 student package, and you could have got school done for 100 grand. So you are going to spend $400,000 more in school, but you are going to pick up about six and a half million dollars more in lifetime earnings (laughs). It’s worth it, right? I mean yes, it’s a bum deal, but I’m telling you that after taxes, you are still going to have $4,000,000 of lifetime earnings than you would have having done any other job on average. I’m not talking about the super successful dentists— I mean, I’m not comparing the successful attorneys like Rob to the successful dentists; I am just comparing the average attorney to the average GP and saying that on average, if you are just average, you are looking at $4,000,000 more of lifetime earnings for getting that student loan… It is totally worth it. And even if you say, “well it’s a 7% interest rate. It’s going to cost me a million dollars in student loans.” You are still $3,000,000 ahead in lifetime earnings! Which, for a lot of dentists, that is enough to retire on! So for me, I just feel like we sometimes don’t give dentists the motivation, maybe the encouragement, that they need to be able to go out there and just take advantage of the opportunity they have, because they have an opportunity to earn way more than the average dentist, and way more than the average person, and have a fulfilling career. Like, a great job with a lot of impact. U.S. News & World Report just ranked dentists and orthodontists as the number one job in the country in terms of lifestyle, career mobility, impact… I mean, it’s a great career.

Robert Montgomery: Hey Paul, you’re living the dream, man! Right?

Dr. Paul Goodman: I am going to ask the U.S. News & World Report to come to my office when two team members are crying, and one person doesn’t want to pay for their crown, and the two last patients didn’t show up, and be like, “oh, I hear it’s the number one job, but…” I’m joking, to some degree. I mean, I think that message is great, Reese. As somebody who kind of puts their hands in a lot of different nacho plates as a dentist, and a practice transition broker, and a teacher of young dentists… what I would like to add to your comments, which are really good ones, is that my dad— I worked with him for eleven years until he passed away, and we were close our whole lives, and we were very good friends— he saw the changes in the challenges of running a dental practice, and he was sort of fortunate, and we were both fortunate; he gave them over to my brother and I. But one of the things that I will comment on is that to earn a high salary as an owner/dentist, there is just this whole other set of muscles that dentists need to develop in 2018 that I just don’t know if all the dentists going into dental school knew that they were going to have to do that. It doesn’t mean they can’t, but a lot of it has to do with management, a lot of it has to do with engage— you know, my dad and his partner hired a grand total of zero consultants ever until I came into the practice and became the associate, and one of the things I talk to dentists about nowadays is that you need these different coaches and different people in your life at different times. There might not be a total awareness, to use Rob’s term, of all the aspects that go into running a dental practice.

Reese Harper: Oh, so true. It’s so true, and I feel like consulting itself, and coaching, is underutilized severely in the dental industry, in my experience. Our financial advisors here at dentistadvisors.com…most of the time, we feel like we are the ones encouraging the dentists to say yes to a consulting agreement. (laughs) we are the person they are turning to going, “should I do it, or not?” And we get that question a lot! After a proposal comes in of any meaningful amount of money. And we just have a super high conviction in the power of coaching, the power of consulting, whether it is an acute issue, a personal coaching issue, or a communications issue, or a clinical skill… I mean, if you are going to compete in today’s landscape, you have to invest in skills and knowledge that probably dentists did not have to invest in 20 years ago; the landscape has changed. Completely agree.

Dr. Paul Goodman: And the thing I was add is— and I encourage my own friends and clients to think about this— coaches, consultants… they come into your office and life at different times. And dentists, unfortunately— a lot of it has to do with our training, which is brutal, because everyone tells you you are bad at what you are doing. Like, it would be the worst way to do anything; the dental school instructors just kind of focus on the negative. They are more worried that they are going to lose by hiring a consultant than the chance that they could win a lot. And I tell them, “just mitigate your own risks,” and that’s a Rob term. Anyway, some dentists will say, “I spent $100,000 on a consultant, and it didn’t work in one year.” And I just want to say, “that’s on you for spending that $100,000, because you could have researched a number of different avenues to spend a lot less and kind of work on your practice in a different way,” but sometimes they just want too quick a fix in too short a time. I think it is important to understand that you are going to have to engage with people outside of your assistants, hygienists, and front desk in 2018 to run a successful practice.

Robert Montgomery: Yeah, well so many people just want the magic trick, like, “tell me the “one size fits all” that I have to do and I’ll be successful.” Like, if it were only that easy, right?

Dr. Paul Goodman: And it’s also a process of like— you know, I’m not very flexible; if you see my three-and-a-half-year-old, she is very flexible. So if I want to try to work on my flexibility, there is not magic wand that you can— and so sometimes, dentists wait too late until the problem has become too acute, and then say, “now I’m gonna try and get a consultant,” and I say, “hey, you can try to back track, but it was really six months ago when you should have tried to engage with someone.”

Reese Harper: The opportunity was a little bit further back, yeah. Well Paul, you have a lot of experience— and so you you, Rob— in consulting. Are you both involved in Rittenhouse and the Rising Dentists Study Club, or is that Paul’s endeavor? Help me understand that just a little bit more.

Dr. Paul Goodman: That was like the beginning of our collaboration together. So, Rittenhouse Square is in Philadelphia, so I named it after that, and that was just my group that was for my speaking, consulting, helping dentists—

Robert Montgomery: But I have nothing to do with that.

Dr. Paul Goodman: Yeah. Rob is not involved in that. When it sold for a billion dollars, he is not getting any. No, I’m just joking (laughs).

Robert Montgomery: I’ll do the legal work on that one, and get on the deal, though. Right? (laughs)

Dr. Paul Goodman: (laughs) but I am glad you brought up Rising Dentists Study Club, because that really started when Rob and I met a decade ago. When I left my residency program, I wanted to develop a study club— old school. I mean, thinking about it now, it was a rock and a stick–I tried to develop it with letters, and old-fashioned emails for dentists… I mean, my mission was to help dentists like each other. I said, “oh, if we have a study club right after our residency and school, and maybe if we talk to each other, dentists won’t hate each other as much.” So I had these events in Philadelphia, which Rob was nice enough to come to and sponsor— and that group has kind of just transformed into the Dental Amigos in a larger way— but that Rising Dentists Study Club, the goal was for young dentists to meet each other, and meet resources in the industry. There was no Facebook at that time, no texting at that time, and we had a lot of fun meetings where I would get speakers to donate their time. So it was a precursor to what we have today.

Reese Harper: Right on, that’s cool! And so ultimately— I wanted to just maybe hit one point that you guys made me think of on consulting. In my experience, a lot of people don’t look at their expense towards consulting as a step towards learning, and education, and tuition. I mean, when you get out of dental school, there is a big opportunity you have there, right? You have just spent 500 grand, and you now have— I am exaggerating the number a teeny bit, but not really anymore, when I say 500 (laughs) I feel like it is about where we are at for most of the calls I’m getting— so you have just put in 500 grand, and technically, there is nothing to show for it. I mean, you didn’t make more money. But you don’t view that one the same way as you do the consulting, right? The consulting— I mean, you have spent $100,000, and you are at the same place you were a year ago. But are you really? Are the really at the same place? Because you just learned a ton of things, if nothing else about what you are not going to ever do again, and if nothing else, what you are going to do next time when you hire someone the second time around, and how you are going to implement it better, or what you exactly need and what you don’t need. I mean, how many students go to college, and end up paying tuition, and then get out of school and never work in their undergraduate field, or their graduate degree level? How many attorneys go into law school and never earn a dollar of revenue from law? It doesn’t mean that that was a waste. There is a Thomas Edison quote about the lightbulb… he says, “I never made any mistakes inventing the lightbulb, I just made a thousand steps on the way to creating the lightbulb.” And I just think that consulting needs to be viewed more that way; you can’t engage consulting expecting some result that is always quantifiably and tangibly within that twelve-month period of engaging the consultant. Sometimes, it shows up three years later; sometimes, it shows up two years later; sometimes it only shows up inside of your head in your ability to make a few key decisions that protect your collections from declining. I would rather see people look at their collections and say, “you know, I’m gonna spend 2% of these a year on continuing education for myself,” or “I’m gonna spend 4% this year and maybe 1% next year.” Always have some kind of budget that you are going to apply, and say, “this year, I think we need team,” or “this year, I think I need some coaching. I’m kind of a mess. I need some expansion advice,” or “I need to call Paul and chat about where my gaps are clinically, and how I can bring implants in to my practice a little bit more efficiently.” I mean, everyone has a thing that they need, but you have to keep trying to grow, and you have to spend money on it. And I have been in the same situation as a lot of dentists… scared to spend money on it, worried that I spent money on it, felt guilty about spending money on it… and then realized that the more I did it, the more my business kept progressing, sometimes I couldn’t quite put my finger on immediately, but a year later, looking back, I’m like, “oh yeah, that really did change what we were trying to do, or what I thought about this issue.” I don’t know, I just wanted to kind of encourage that.

Robert Montgomery: Yeah, I think it is at a higher level, Reese. It’s like, just really paying attention to your business, you know? And so, an outgrowth of that is consulting and doing things. But thinking about your business, and how you can improve your business… know what you are doing and why you are doing it… and planning! A lot of times, it is easier said than done, especially in a professional practice. I mean, I share the same thing as dentists do. We go to work every day— it’s like that old Dunkin’ Donuts commercial: “time to make the donuts! Time to make the donuts!” You know? You can lose yourself in the practice of your profession, but that is not okay, because you still have a business to run, and you can’t just let “all that business stuff” go by the wayside. You have to have the same focus on that as you do with the clinical aspects of your business! Otherwise, you find yourself with potentially a very unfulfilling place at some point in your career! And so, hiring consultants is part of that, but it’s just the realization and the focus on, “what am I doing? Why am I doing it?” and “How can I do it better?” And a lot of times— especially, like I said, with a professional practice— it is hard to do, because serving your clients and serving your patients can just become the overwhelming thing that you do to the exclusion of all else, and you still have to keep enough bandwidth open, and free up enough time to not lose sight of what you are doing here that you are still running a business.

Reese Harper: That is great advice. Can you tell me a little bit— Rob, I want to talk a little bit about something you mentioned earlier, which is that all of the opportunity in the marketplace can sometimes be a little bit distracting for each dentist. Do I go build a ten-office, budding DSO acquisition target? Am I a 50-office kind of a guy? Am I a two-office kind of a person? Am I a single-office kind of a person with one associate, or no associate? I mean, the vast majority of the marketplace is in that single location to two location— the vast majority of dentists are in that kind of work environment, struggling with the choice to be bigger, to be smaller, to be more efficient, to— you know. In your experience coaching a lot of these transitions, and seeing a lot of what has happened in the market, how would you guide people to knowing what kind of business model is the right thing for them?

Robert Montgomery: Yeah, I mean I think that so much of it is personal. I think, like I was just saying a moment ago, it really depends on— if anybody is sitting down trying to figure out what they are and why they want to do it, then they are already a step ahead of most of their peers, right? It is really planning out what you want to do and how you are going to do it. I mean, I think it depends what your vision is, you know? I know you had Jayme Amos on the show recently, and we do a lot of work with Jayme’s clients, and I think what he does and the message that he delivers is to work with people to put them in a position with their practice that is consistent with their vision. And the great thing about Jayme and his group is that they force people to sit down and figure out what their vision is, and then how to achieve that. So I mean, there are some people who are happy being a single-practice owner, and have no interest, no desire, nor should they own five practices. There are other people who are wired and who are in this because they want to have ten or twenty practices. So I think it is not one size fits all. It depends on what these people want out of their life, and what their lifestyle is… what they want from a family standpoint, how much time they want to spend, what their appetite is for risk, and debt, and what is good for one is definitely not good for another. So, definitely not one size fits all.

Dr. Paul Goodman: I always say, Reese… I teach a lot on— you know, when you are a dentist, it is not— Rob and I have become such close friends, and I am one of the few clients who comes into his clients, and I say, “imagine yesterday. We had 56 human beings come to our practice. It’s not just me, but there are a lot of clients and customers coming through, so how do you know when to finish your work? How do you know when it is done and good enough? So I always say to the residents, “do you want the best haircut possible?” And they say, “yes,” so I say, “is it okay if it takes seven hours?” And they’re like, “no.” So I’m like, “well how do you figure out when you’re done?” And I use that for what Rob was saying, because if you said to a lot of dentists who were 27 years old, “do you want to make the most money as you possibly can?” And they’re going to say yes… “is it okay if you work 63 hours a week?” No. So, I think what Jayme does is so important in thinking about that, and I think that dentists, they get such haphazard advice, and they kind of look for— not even advice, but just feedback from other dentists. Sometimes, I’m a really big fan of general practice residencies; I have done them. Sometimes I’ll say to a dentist, “how come you didn’t do a general practice residency? You don’t have a job!” And they go, “well, you know, one guy told me that you just go right out to practice,” and I said, “well how old was he?” and he said “70.” Well, you don’t ask your grandmother how to text, do you? (laughs) and my message there is, ask people in the next decade. Rob has become such— I don’t have an older brother; I have a great younger brother— but Rob is a great resource for me. We are about a decade apart in age and friends, but also, he can give me some mentorship, and I think dentists should be doing the exact same thing. If you are 26, I tell them, “look for people ages 32-40 years old to ask advice to about what to do next.” If you ask someone who is 63, and he said, “back in my day, I just went down the street and worked with old Doc Smith as an associate,” it is not really that helpful to them. So, that is just my message on that.

Reese Harper: Yeah, you did your residency at the Albert Einstein Center, didn’t you?

Dr. Paul Goodman: Yeah, in Philadelphia here.

Reese Harper: And I mean, why do you think a lot of people choose not to do a GP residency?

Dr. Paul Goodman: I think really, it is because— in Penn, I would say about 85% of the students do… I think it’s just what is inside of the dental school and what information they have. We were lucky enough to get externships. There are a lot good parts and some challenging parts about Penn, but one is they send us for six weeks of externships, and we could do them at GPRs, and so we saw what was available. So a lot of times, it is just like ordering off a menu: you have to know what is on it. So I will say to someone, “why didn’t you do it?” They said, “oh… no one really told me about them.” To me, that is just such a great year to practice on patients you are never going to see again. It doesn’t mean you are going to do any bad work, just that they are not from your hometown, and you really have bigger, stronger dentists who are there to teach you and guide you. So to me, it is really a perfect environment to spend a year in. And I’ll give you a task, if you just think of it, when you ask your clients now, say, “did you do a GPR?” And if they say yes, say, “tell me about that year,” and most of them are going to say, “it was the best year of my life.”

Reese Harper: Yeah, you are right. That is great advice. Now, when you, Paul, were thinking about— do you have three practices in the area?

Dr. Paul Goodman: Well, we have two locations, and we have taken one practice and we just sort of stuff other small practices into it? (laughs) so we merge, we do interesting things that Rob helps us with—

Reese Harper: How has your journey been? How did you decide how big you wanted to get? Because you have a lot more going on than just practicing dentistry as well. I mean, you have the consulting, you have a lot of your community that you are trying to grow, and you also have some clinical and faculty work as well, if I’m not mistaken. It seems like the journey for you has been probably one that has been something that you have had to think about, and reach some crossroads at. How did you decide for your life to shape out the way it did?

Dr. Paul Goodman: That is a good question. For me, my dad always had a partner, and that is rare. They got along well, but most dentists practice solo when they are from the 1970s, so I always saw working with more than one dentists as a value. I do like people a lot, and I wanted to create an environment where more than just one dentist to work together. We added specialists to the practice. And one thing that I can share: when you are growing a practice, you thin that you can grow it to an infinite level, right? People just say, “go back and work on your practice and keep growing it.” But we have doubled my dad’s practice in size, adding specialists, doing stuff, but it reaches a point where that is as big as that one practice is going to grow. I mean, it is in a place with other human beings and a town, so we acquired a satellite location, which we could manage for multiple dentists, and that has been an interesting road. So, if someone is like, “should I buy a satellite practice? I would be like, “I don’t know.” “When did you buy yours?” “Six years ago.” So (laughs), it is an interesting time. Your second practice is much different than your first, but I like it, because it allows me to bring associates on, help train young dentists— I tried to create this private practice environment that is like a GPR to some degree, where we support the dentists, they can rely on us, but they also get to do work. So, you have to have the right mindset for it, because what is the right mindset to multi-practice ownership? And I saw you speak at Mark Coste’s event, which was great, and I have gotten to know Mark, and I think he has nine practices or something like that… and what is the skill you need to own multiple practices? It is the ability to answer an unending number of questions for people. That is the skill.

Reese Harper: (laughs) and manage an unending number of people, you know?

Dr. Paul Goodman: And their questions! And that is what you signed up for; they are your people! The associates are texting me… and the technology is great! I handle clinical problems through text. You know, “this patient broke their tooth,” and I’m like, “whatever you do, do not mention a crown.” “But the tooth needs a crown,” and I’m like, “I know it needs a crown, but Mrs. Smith is going to hiss at you like a snake if you say crown. Just say, “ah, we’ll patch this up.” (laughs) and that, you know, it’s valuable advice, but when you own multiple practices, there are just a lot of things that go on. I think you have four children, am I right, Reese?

Reese Harper: Yeah.

Dr. Paul Goodman: So, you know, if three of them are in one room, and one is in the other, you are probably like, “I wonder what the other one is doing in that room; I better check.” So, that is like the practices.

Reese Harper: I just had this conversation with the co-host on my podcast, one of my best friends Ryan Isaac, and we were just talking about how there is a personality profile that really gets a lot of energy from answering an unlimited-ending set of questions, which I would translate that also to meaning, like, being responsible for other human beings (laughs), right? And then, there are people that just don’t get energy from that; it’s draining. Some dentists want the responsibility to come in, interact with their patients, produce the dentistry or the type of work that they like to do, do it quickly, get out of there, and have no responsibility to anyone else, and some people just thrive on continuing education, and training, and really seeing other people like— and some people like to teach, too, which is slightly different than being responsible for an unending list of questions. A lot of times, teaching can be a one-way endeavor, right? You can speak and not be responsible for the audience (laughs). And so, I think being a manager of multiple practices, multiple associates, multiple hygienists, multiple specialists, I mean… it is a different game, and you have to really tackle that slowly, and make sure you really love the responsibility of managing others.

Dr. Paul Goodman: I tell them, we are going to send them to dentist fantasy camp. Rob is going to get a pair of scrubs, and run these two offices, stick to the back, and say, “you should make more money!”

Everyone: (laughs)

Dr. Paul Goodman: I always wish a non-dentist, I could get them to do a filling, and they would hand back the handpiece and be like, “you guys should make more money. I would never want to do this again.” So… (laughs)

Robert Montgomery: You know, Reese… so much of that stuff, though— kind of back to what we were talking about a while ago— it is just realizing what you want, and understanding, and being realistic with yourself too. Some people say, “yeah, I want to have ten practices,” but if you don’t want to do what comes along with that… like, it’s easy! I can say, “I want to become a vegetarian and start running ultra marathons.” Like, great, Rob, but I don’t necessarily want to do what has to be done to make that happen, right? So, it just goes to the planning process.

Reese Harper: Yeah, I have tried many a day, and I just get about a third of the way through that race, and I just say, “I did a good job, give me a water bottle” (laughs). Anyway. Well, it has been really interesting. I want to wrap up with just a couple of rounds of lightning questions, okay, that both of you can give a tip on. And we will try to go through these— try to make your responses fifteen seconds or less. We will give one question, and I want you to both reply to it; you might have different perspectives on it, alright? First thing: do I do a startup, or do I purchase an existing practice? Rob, you hit it first.

Robert Montgomery: It depends on what opportunities you are presented with. A good acquisition could be better than a good startup, but a mediocre acquisition is not necessarily better than a good startup.

Reese Harper: Okay, so you would rank practice acquisition above startup, as long as it was a high-quality acquisition.

Robert Montgomery: Yes. Yes. But, there are a lot more low-quality acquisition opportunities than high-quality opportunities. And let me say this too, Reese. With that, that is compared to a well-done startup. So that is not just like… trip through the process, and not use the right people, and do it the right way, because that is a dangerous thing.

Reese Harper: (laughs) and also, that is the usual startup. So (laughs) yeah. They don’t have Jayme on their side, it sounds like, in that scenario. So, Paul, what is your perspective on that?

Dr. Paul Goodman: Uh, similar sentiment. I would say if you have a partner in life, whoever that is, who can support you financially, exploring a startup is a cool endeavor if you have the right people. But a well-done acquisition is probably going to fit into a lot more dentists’ lives at this time.

Reese. Cool. Okay Rob, do I buy the real estate, or lease my real estate?

Robert Montgomery: Again, it depends on the opportunity. But real estate because it makes sense as a good investment; don’t invest in a bad piece of commercial real estate; if you want to own real estate, buy something that is good cash flow, good return. Don’t just own your building for the sake of owning it. It is an investment, like any other, and it should be evaluated the same way.

Reese Harper: Cool. What about you, Paul?

Dr. Paul Goodman: Knowing the dentist mindset and being one, when it is possible in the acquisition process, do everything you can to buy it, unless it is really going to strangle your short-term finances.

Reese Harper: And why do you say that? What feels good about that to you?

Dr. Paul Goodman: I mean, we are the owner and operator our own building, and we do lease a small space… it’s just if you are going to be dentists in there, like I made a term for 30 years… you are going to pay rent to somebody; it could be to yourself. But I have used the caveat of, “it’s gotta make sense.” A lot of these real estate acquisitions and practices are not overwhelming in cost, so if you can get the down payment during the acquisition deal, I would do it, but I wouldn’t prevent it in ever having you buy the practice; the practice is much more important.

Robert Montgomery: I agree with Paul, and let me say this sort of corollary to that. I Think that typically, if you have the opportunity to buy the real estate with an existing practice in an acquisition, I agree with you, Paul. What I am less enthused about is when someone has a practice, they are leasing their space, and then they was to relocate their practice, just for the sake of the fact that they can own the location where they are moving to… you know, that is not necessarily a good thing, and you have to evaluate that from a cash flow standpoint. At the end of the day, dentists make money from running a dental practice, not from the dirt underneath the dental practice. So, go be in the location where the demographics are good, and the setup is good and allows you to maximize the revenue in your practice. You don’t get an award for making $300,000 a year or less, just because you own your real estate.

Reese Harper: Yeah, that is great advice, Rob. Okay guys, one more question. I just want to know one big mistake that a new dentist makes.

Robert Montgomery: I think no availing themselves with the proper consulting; either no consulting, or the wrong consulting. Seeing how people vet or don’t vet consultants is also a disturbing thing that we see. I mean, it is so important to use people who other people have used successfully. Go to your network; build a network; get referrals for other people from that trusted network; don’t just go online and say, “hey, does this guy or woman seem okay?” And think, “they’ve got a bunch of four and five-star google reviews.” That is not how you go about hiring a consultant.

Reese Harper: That is cool; good advice. Paul?

Dr. Paul Goodman: I have two things: one is buying a house before you buy a practice, and one is not immediately doing everything possible to learn about implant dentistry right out of school or right out of residency.

Reese Harper: (laughs) I love it. I mean, if you can do a 30-year rental contract on a house just so I wouldn’t have to move my kids around, I would do it. Your own primary residence is probably one of the lowest-returning investments you will have in your life, because you forget about all of the money you have dumped into that thing (laughs).

Dr. Paul Goodman: Yeah, it is very emotional, right?

Reese Harper: (laughs) anyway. Okay, last question is: should a dentist engage a professional financial planner, or DIY?

Robert Montgomery: We are not fans of anyone ever DIYing anything. If anyone ever comes to our seminars where Paul and I are doing our thing together, that is a recurring theme: avail yourself of professional assistants. Just because you can do it doesn’t mean you can do it well or better than somebody who does it 100 times a day. This cost is cheap.

Dr. Paul Goodman: My same message is spend the time interviewing and researching ones that fit into your personality type and what you want to do with referrals, but not a DIY for one of the most important things: your own money.

Robert Montgomery: And Paul, I am going to take a “steal Paul Goodman” line, because he is in the room with me here. You know, it’s like, “it’s okay to DIY your deck or your house, and if you destroy your house, that’s okay, it’s one thing… but you can’t destroy your practice. The stakes are too high.”

Reese Harper: Okay, final question: at the restaurant that we are going to go order at together next week, do we order steak nachos, or chicken nachos?

Robert Montgomery: I defer to Dr. Nacho on that one.

Dr. Paul Goodman: Actually, my favorite nachos are El Vez two blocks away, the macho nachos with shredded chicken, so I am going to say chicken nachos. The steak is too much to deal with on the chip. The chip breaks! You need a fork for steak, so it is not my favorite one.

Robert Montgomery: I like the nachos at Blue Corn in South Philly. Give them a plug, Paul, on 9th street, where we have been. The chicken there is good too.

Reese Harper: I love Blue Corn. My nachos would be a little bit lighter, because I am trying to lose a little bit of weight, and so I would go with the blue corn with some fresh guacamole. Which, that is not the way to lose weight, but I love it, with a little bit of fresh salsa (laughs). Okay guys, it has been great. I really really appreciate you taking the time today. You are both legends and super helpful to the industry. I’m excited to continue to see your success, and I really appreciate you taking the time today to make a difference to everybody.

Robert Montgomery: Thanks for having us!

Dr. Paul Goodman: Thanks for having us, Reese. Great content.

Reese Harper: We will have you back soon! Talk to you soon.

Practice Management