How Do I Get a Podcast?
A Podcast is a like a radio/TV show but can be accessed via the internet any time you want. There are two ways to can get the Dentist Money Show.
- Watch/listen to it on our website via a web browser (Safari or Chrome) on your mobile device by visiting our podcast page.
Download it automatically to your phone or tablet each week using one of the following apps.
- For iPhones or iPads, use the Apple Podcasts app. You can get this app via the App Store (it comes pre-installed on newer devices). Once installed just search for "Dentist Money" and then click the "subscribe" button.
- For Android phones and tablets, we suggest using the Stitcher app. You can get this app by visiting the Google Play Store. Once installed, search for "Dentist Money" and then click the plus icon (+) to add it to your favorites list.
If you need any help, feel free to contact us for support.
What path should you take to practice ownership – start-up or acquisition? For the past decade Jayme Amos has coached numerous dentists on how to achieve greater satisfaction from practicing dentistry. On this episode of the Dentist Money™ Show, Jayme shares with Reese how personality traits should be factored into business decisions. And he discusses the important differences between starting a practice from scratch, or purchasing an existing practice. As an expert on work/life integration, Jayme also has some suggestions on how you can build a practice that reflects your personal values.
Reese: Welcome to the Dentist Money™ Show, where we help dentists make smart financial decisions. I’m your host, Reese Harper, here with Jayme Amos. Jayme, welcome to the show.
Jayme: Thank you, my friend. One fun fact about me that you nor anybody else knows: you ready? Big reveal! *drumroll please* my middle name is the same as your first name. Jayme Reece Amos. I was so excited to share that with you!
Reese: No way! Are they spelled the same way?
Jayme: Well, no, I have a “c.” R-E-E-C-E.
Reese: Okay, yours is the better way, the way that people assume my name is always spelled, so…
Jayme: (laughs) I like my middle name so much. My parents were hippies, so back then they spelled Jayme with a “y,” because back then, I guess that was the cool hippie thing to do, and then they gave me the middle name Reece, nobody knows why, and so I did the same thing to my daughter: I gave her the middle name Reece! So now you, me, and my daughter, she’s ten, and so now the three of us, Reese, we’re connected.
Reese: That’s interesting! Our parents must have been in the same wavelength in that generation because you and I are similar ages, I think, and there must have been something going on in the hippie generation that passed on to both of us. I like it.
Jayme: From “hippie-ness” to helping dentists all over the country. Isn’t that a natural progression? (laughs)
Reese: It’s a good pivot for both of us! That’s awesome. Well, I’m super excited about this interview. I’ve been excited to do it for a while, and I’m really excited that we finally got you, on your busy schedule, to get on the show. Your audience is really in tune—your audience and my audience are really similar, and I think that ultimately, this interview is going to shed some light on a lot of challenges that people struggle with starting a practice, and a lot of questions they have. I appreciate you taking the time, and I just want to get right started with the one question that I think is kind of at the top of my mind, and at the top of a lot of dentists’ minds, which is: what is the number one issue that you really see that impedes people from finding that level of success that they want?
Jayme: I really appreciate that you mentioned the thing about our two audiences overlapping; I totally agree. There’s something about the tone that you have, and there is something about the people you attract and the dentists you serve that appeals to people who are like a pragmatic, maybe a no nonsense, but still deeply values-based, and compassion-filled, almost like, “listen, I understand there’s the “numbers” side of stuff, but I’m also a human with an actual thing called a life. I am not a calculator; I am a person. I am not a spreadsheet; I am a person.” Maybe with a spouse, or kids. Like me: I have two kids. And you have a family. I love that about our two audiences, and I would agree. I have the deep privilege, and I think it’s the daily honor to be able to help people who are humans, not spreadsheets. So, I think a couple of things that are important to recognize in that is that there is this advice out there in dentistry, particularly about startups, where it’s hilarious: any time a dentist says, “I think I’m going to do a startup,” all this advice starts coming out of the woodwork. Like, “you need a big sign! You need visibility! You need the demographic support.” You need all this “quick! Check these things off the boxes! Quick! Fill in the numbers! And then, tah-dah! You’re done!” And the truth is, that’s not true! I mean, Reese, I know you have seen people who have checked off the boxes, and who open startups, who hate what they have created, right? They’ve invested half a million bucks, and all this time, and they tried to follow some person’s advice on Facebook, so they think they’re doing the right thing, because some guy in some other town with some other ideal patient profile said, “this is how to do it; you have to do it this way!” So they tried it that way, and then they get nowhere from it, they disappoint it, or they regret it. Now there are a couple reasons for that, so we can talk about some of those things…
Reese: Well, I want to pause, because you said some really insightful stuff in the first few sentences. The one that resonated with me—and you say insightful stuff all the time, so I wasn’t surprised—this first line was about advice coming out of the woodworks, and if you think about advice as something you have to take, from a single data source, right? Like, if someone tells you something, if your brother tells you something, or your best friend tells you something, or your parents tell you something, that is not necessarily the thing that you have to do. I think that it’s important to recognize that even people who love you and care deeply about you are one source of advice; they’re one data point of advice. If you were in the stock market and you were investing, you would never take one analyst’s report as the advice that you would take about a particular company, but you would take the consensus of hundreds and hundreds and hundreds of reports and find what that consensus was. Sometimes that consensus is right, and sometimes it’s wrong, but the more advice you get, generally, the better that advice can be, if you have informed advice-givers, and you get lot of consensus opinion, then eventually you find that the average of all that advice is typically worth considering, but what I usually find to be a problem is that people get advice from non-experienced professionals in that area, whatever that is: it might be advice on a startup, it might be advice on taxes, it might be advice on marriage, but you’re getting advice from people who know nothing about marriage, taxes, or startups, right? You’re just getting advice, but then you take it so seriously, and sometimes it’s just one or two data points, one or two sources of advice, and they are uninformed advice. And so, sometimes for me, I feel like we need to understand that there is no perfect path, but I like getting advice from people who have experience, like Jayme Amos is a person I would trust as an important data point on startup advice, but I just think that too many times, people get one piece of advice from a non-expert in that area, and they go with it! And sometimes, that’s really bad; sometimes, that’s really damaging.
Jayme: I love it! I love the data points concept. I’ve been helping dentists for over ten years do startups. So, here’s one thing I would say: don’t get advice from Jayme Amos from fifteen years ago (laughs). That guy is not a good idea. Like, same brain, same human, different advice. Because now, after helping hundreds of dentists, my director of consulting, for example: he has literally helped over 500 startups. There aren’t that many people in the country, as you said, who have data points for 500 different startups, and it’s one of the reasons why—oh, get this. I just got a message on Facebook from one of our clients, and I thought this would be cool to share. His name’s Danny, I won’t say his last name just to protect the innocent, but check this out—
Reese: Danny DeVito (laughs).
Jayme: Yeah, he’s doing a dental startup. Wednesday, 1:14 AM, I get a Facebook message (laughs) from Danny. He’s one of our high-level consulting clients, and he said, “missed one million in collections by $4,800 for the year. So close!” Now, guess what? Danny has been open for twelve months from a cold scratch startup practice. And the cool thing is, when Danny first came to us, he was actually living in Alaska (laughs). And yeah, I get this question all the time: you mentioned that I have a busy schedule, and I know you do too, and I know everybody does. One of the goofy things about my schedule is traveling and speaking all around, and I was at UNC speaking, and somebody raised their hand, and they said, “Hey! I’ve got a question for you: where is the best place in the country to open up a practice?” That’s a fair question, right? Everybody is like, “what’s the calculator? What’s the spreadsheet that says where is to open? And I like to joke with people, and almost in a snarky way I like saying, “I’ll tell you if you promise to go there” (laughs). You bags are packed, right? Here we go! It is Alaska. “Noooo! I don’t want to go to Alaska!” And the reason I know that it’s Alaska is because I helped Danny. And, you know, you talk about this ratio—if anybody wants to check out my book, I wrote a whole book on the topic. I’m not here to plug my book; I actually have a way for people to get it for free. It’s called Choosing the Right Practice Location; there’s a way you can get it for free; we’re doing a big giveaway this year. And in that book, we talk about some of these things like demographics. One of the rules of thumb: do not—please, under penalty of horrible things— if you’re listening to this doctor, please please don’t write this down and base your life on what I’m about to tell you, but this is a rule of thumb, what I’m about to say, and it’s 2,000 to 1, meaning 2,000 people for every dentist in a particular geography. There are lots of danger zones there, lots of things we have to re-analyze, but as a simple first glance, almost like a periodic eval for a patient, or a comp eval for a brand-new patient who sits in your chair, it’s your first glance, right? You haven’t done x-rays, it’s just you first glance. So, it’s 2,000 to 1. In other words, the more people per dentist, the better. If you have 4,000 to 1, that’d be better! In Alaska where Danny was, 40,000 to 1! (laughs) but here’s the craziness: we strongly advised Danny to move. Him, his wife, and his kids. They moved; we ended up choosing a different area in the Midwest for them. Why? Because this is their life; because they are not a calculator; because they’re not a spreadsheet. So, their life moved, we built a plan around what they wanted, their future, their hopes, as a lot of our clients say, their quality of life that he wanted for his family, we built it all around that. And it took a little while to get there, but now, twelve months later, verbatim: “missed a million dollars in collections,” collections! “by $4,800 for the first year.” Holy moly! That’s crazy! That’s not what you hear about with startups, like, I was speaking in Jamaica two or three months ago, and one of the doctors comes up to me after speaking, and he sits at the table where we’re doing some private Q&A, and he says, “Jayme! Jayme! I’m one of the doctors that you talk about!” And I said, “uhh… I don’t think we’ve ever met. I’m so sorry, I didn’t mean to talk about you!” And he said, “no no no! I’m one of the doctors that you talk about! I’m one of the people who opened my practice five months ago, and I’m still only producing $20,000 a month.” Uhhhh. Like a gut punch, right? So, here’s the truth—and I don’t mean to keep going on and on—
Reese: But the good news is he had a multi-generational inheritance, and he had $10,000,000 in the bank. That’s the good news. (laughs) just kidding.
Jayme: (laughs) I don’t know if that was his story. The look on his face didn’t communicate that part of the story (laughs). But here’s the reality: there is high risk in startups. Like, you can be like that doctor, and I guarantee he is losing thousands of dollars a month: taking money out of his pocket, and paying just for the privilege of being a practice owner, and that’s horrible, because he followed advice like Reese, like you said, that was based on a couple of data points that were not right for his life. Meanwhile, somebody like Danny ignores that typical, unfortunate wisdom in startups: he ignored all that junk, and he leaned back on hundreds of data points with custom advice, and he has this massive success where he is literally one of the proudest, high-level consulting clients that I currently work with, and he is just loving his new-found position in his community, he has control over everything in his startup, all the protocol, all the CE he takes, and the way he treats patients… it’s just a wildly different universe of experiences, and that’s what happens when you can open up a startup the right way. And so, anyway. That’s my passion on the topic; I’ll step off my soapbox. Done.
Reese: No, I think it’s really insightful, and it’s really good to get the visualization of that. I think one of the questions that probably pops into people’s minds, or at least into my mind: if you look at these data points, and if I were to ask ten industry association—let’s talk about lenders, or accountants, or attorneys, or supply reps, just industry people—if I were to talk to dental industry people—not dentists, but just industry pros of any sort, channel, or occupation—generally the advice would be to buy, don’t start; that will generally be the advice. I’m not saying it’s right, I’m just saying that the majority of data points that I hear are, “man, startups are a grind; you should buy, not start.” Why do you think that advice is most commonly given, or one, maybe before that, do you believe that is your experience interacting with industry professionals, and number two, if so, why is that given? So, let’s start with the first one: do you hear that most commonly, or do you not hear that most commonly?
Jayme: Well, my perspective is a little skewed because of the people who I speak with; we only help startups, and it’s wildly successful. So, my opinion is skewed, however, I do emphatically believe that sometimes, acquisitions are better. I don’t think startups are always best, I really don’t. Can I give you a couple little rules of thumb for when I think acquisitions are inherently better? I mean, intrinsically, inherently better, in the full sense of the word. So, two rules of thumb that I’d like to recommend: one is that a surfer dentist should only purchase a surfer dentist’s practice.
Reese: (laughs) I have a few of those clients, okay?
Jayme: Well you can probably relate to this then! Here’s the thing, if you’re a doctor, as you’re listening to this, and you’re thinking “I heard about a practice for sale,” or “I wanna do this thing—everybody tells me to buy the cash flow”—whatever the heck that means. Like, “buy the cash flow” doesn’t really happen in dentistry, but I’ve been told to “buy the cash flow”, and so I’m going to go do this acquisition: I’m going to go buy a practice, I’m afraid because I don’t know if I’m going to be able to get patients, and that looks like the broker told me there is opportunity, but by opportunity, the broker actually means you’re now responsible for convincing all the patients to accept a different kind of treatment plan, and so that’s what brokers mean by opportunity with acquisitions. But here’s when an acquisition is really good: if you are a surfer dentist, and you find another practice for sale, that is for sale by a surfer dentist, then it’s a perfect fit. That’s the first of two rules of thumb. And here’s what I mean: imagine—we literally had this happen with a client, and it worked out great for him. He was happy because, let’s pretend the surfer dentist owner, Dr. Senior, when his practice in California that looks out and can see the water from the building, when there’s a good waves day, what do you think that doctor does? He closes early! And all the patients who have committed to that surfer dentist over the last twenty or thirty years, they love that about him! That’s why they go to him! Because of that culture; because of that DNA; because of that rhythm in that practice. And every culture has those little things like that. Now, a surfer dentists concept, I just want that to stick, but when you’re looking at a practice, remember to please please only consider practices that match your DNA, that match your values, that match your treatment plan philosophy, that match your desires for growth, because if you are not going to purchase it today, then you will spend five to ten years fixing what is not you.
Reese: So, you’re talking about how from a personality perspective, you’ll mesh better with the current patients, in addition to treatment planning, in addition to style? I mean, you’re just saying that if you’re a lot like this person, there’s going to be a lot less to adjust. Is that what you’re saying?
Jayme: Yes, that’s right. And that’s one of the things that the brokers never talk about.
Reese: So in my case, I’m a farmer dentist, so I have to find another farmer dentist like me who likes to farm (laughs).
Jayme: Yeah! Right! I mean it! No joke.
Reese: I’m a pragmatic kind of (laughs)—I’m just laughing about that because there’s probably two of them, and shout out to those two who are listening right now who are like, “I’m that guy!” I’m that farmer dentist!” Shout out to you.
Jayme: I drive a combine on the weekend—
Reese: Combines and implants. You could go bushel of wheat, or a bushel of crowns. Okay? Anyways… so you’re just saying culturally—there’s not a transition to make that’s so severe so the risk isn’t there?
Jayme: Yes, and that’s the more significant risk than dollars and cents.
Reese: And you’re worried about that in an acquisition? You’re worried about the risk of, “I overpaid for something that I don’t really—” because when you buy a practice, you’re paying for it; you’re paying twice as much as you borrowed for it (laughs), so, it’s an expensive acquisition too… this is the scary thing: I have a bias because I was a scratch start. I’m a scratch start business in an industry that is notorious for acquisitions. I mean, financial planning… you’re supposed to buy a book of financial clients. I mean, it’s much easier, and there are five buyers for every one seller, just like dentistry. There’s more than that in dentistry, but ultimately, in my experience, the reason that I have a bias for a scratch start is because I was able to organically shape something that was exactly what I wanted it to look like with no influence that I couldn’t overcome, meaning no existing staff problems, no wrong target audience, there was no service model problems, there was no deliverable problems, and I think that’s what you’re speaking to to some level, and I just think that for me, I have a bias for that, but I have to be honest. Part of me feels like the startup option doesn’t get enough credit, because when I’m interacting with hundreds and hundreds of people in the dental industry everyday, professionals, by far the majority of advice I hear is, “do an acquisition, don’t do a startup,” I mean I just know that the majority of dentists aren’t hearing, “do a startup. Take the risk. You can do this; it’s okay!” And when I talk to new dentists, my experience is that they’re worried about doing a new startup, because they’re like “I have to borrow money to start it from scratch and see if it works out?”
Jayme: And that’s the scary thing: to see if it works out.
Reese: But the reality is though, even if you buy an acquisition, it’s important to remember that you’re borrowing hundreds of thousands of dollars in financing that, and it might not feel like you lost money, right? It might not feel like you lost money because there is cash flow to pay the debt and to pay your standard of living for a while, but you can borrow enough money to pay your standard of living for a while and get that practice up to the point where it’s at, and you’ve got to do the math and wonder sometimes if you could get this thing off the ground for, you know, like this example you just shared, let’s say that’s an unusual example, where a guy can go from zero to a million dollars of collections. I mean, if you can do that in a year, you didn’t really borrow any money to start that thing.
Jayme: So, better than the money, do you mind if I mention something even more? Beyond the money, there’s this topic of fulfillment, and I know that sounds kind of squishy—
Reese: Well you notice I mentioned that first too, right? I didn’t mention that I started from scratch for the money either, but hopefully I don’t want to discount that either, so, let’s talk about that for a minute.
Jayme: Yeah, a lot of our clients will say things like, “there’s a night and day difference for the quality of life I get to experience now!
Reese: Why do you think they say that? Is it because they consciously got to choose everything they wanted to have?
Jayme: Yes. It is the intentional choice—
Reese: Of what specific issues?
Jayme: Of things like: what community do you want to be in? How close to your home do you desire to live? We have a little test that we take all of our clients through called the pajama dentist test. We say, “do you want to be a pajama dentist?” And the answer usually starts with, “huh? What?” And the pajama dentist test is this: There will be a time, some night at midnight in the next few years where you run out of milk, and you have to the grocery store to go get milk.
Reese: For me that’s every couple of days because I drink like a gallon a day.
Jayme: (laughs) Chug chug chug. So you’re in line buying the milk, and you look over your shoulder, and there’s a patient there, and you are in your pajamas, and you’re buying milk. So the question is, is that okay with you? And for some doctors, they’re like, “heck yeah, sign me up! I wanna be deeply ingrained in this community pajamas or not! Like count me in: little league, grocery store, gas station, whatever.” But then there are other colleagues who will say things like, “oooh. That makes me uncomfortable. I don’t know about the pajama thing.” Awesome. let’s pre-plan for that. Now we know that you should be x number of miles from your home, and we get to pre-plan that. So there’s the reward of pre-planning things like how far you are from home; there’s the reward of hiring team members who commit to you instead of buying a practice where you buy this pre-commitment to Dr. Senior, where Dr. Senior had this loyalty, and everybody has felt it, where the team says, “well…. the way we used to do it,” or, “the way that Dr. Smith says it should be done,” or, “no no no, this patient has been doing it that way for fifteen years. See, the cool thing with a startup, the thing that I love is that you get the control to pre-plan all that stuff, and that’s the real power. I mentioned fulfillment, and Reese, it sounds like you and I are on the same wavelength with this: I believe firmly that fulfillment, and defining your version of fulfillment, is one of the first steps in the process, because if you don’ define what that is, then you’re going to get pulled in different directions, and you’re going to be told to follow this other advice, but if you don’t know specifically what you desire, then it’s hard to go create that, so we define that first.
Reese: I totally agree with that, I just want to ask a question that you’ve probably had to grapple with yourself, and with various clients, which is: can that sometimes be a moving target? Because if you would have asked me what my ideal practice looked like five years ago, I would have created a scope and a definition that definitely has changed for me, and I would have not thought that I was going to be running a business that was making me be quite as busy as I am right now, and making me travel as much as I do; I’m finding a different type of fulfillment today, but man, it’s a lot more complicated than my life was five years ago, and I struggle to find that same level of satisfaction as I move through stages of growth. And I think some people do that; it’s one thing to say, “look, if I just were to live in the place I love, and have the schedule I want, and have the type of practice I envision, then life is going to be amazing.” But all of us go through these transitions where it’s like, “you know what, I really feel like I could have a bigger impact, or I could make a bigger difference, or I could do something—if I open that second location, I think I could employ ten more people, I could help another community experience the standard of care that I’ve designed, this patient experience that I believe in,” and yet, I just feel like sometimes it can be a moving target… do you ever experience that, or do you kind of not get to see that part of people’s lives, because you get them through that startup phase and then maybe not have the same interactions with them ten years down the road? I’m just kind of trying to understand what your philosophy is on that, because it seems like a moving target sometimes to me.
Jayme: Yeah, life is a bit of a moving target. “Oops! Wait a minute! I have another kid now; how did that happen?” So, here’s the thing, what I like to recommend is that we go through deep answers to serious questions like, what do you want to be known for in your community? And let’s pre-plan that. What kind of legacy do you want to pursue? What kind of philanthropy do you want to be involved in in a community? Literally defining things like the ideal patient experience: what kinds of patients do you enjoy most? What kind of experience is the best possible experience for patients? If we can define all those things, then we can attract team members to help up create that. So, you asked about the moving target: I’d love for all doctors to know that you can define it once and be done, like a set it and forget it kind of thing, but that’s not true. What I do like to say, however, is if we’re not aiming for something, then we’re technically aiming for nothing, so if we haven’t chosen a destination, it’s a little like an aircraft carrier being put in the water. We’re going to set this aircraft carrier in the water: “where are we going to go?” “I don’t know! Let’s just start going.” “Okay, let’s get the aircraft carrier going.” (laughs)
Reese: Okay, so you’re just saying that one of the primary reasons for a scratch start is you can choose where you live? I mean that’s a big factor, and I don’t want to minimize that factor.
Jayme: It’s a huge factor. It’s part of it. The location book that I mentioned, that is a piece of it—
Reese: Now I know some practices that will find a place they love to buy in a place they wanted to live in a place that’s close to home. Now that’s the exception to the rule, right? It can happen, but it’s usually in highly densely populated—it would be like if you grew up in San Francisco, and your dream is to live is San Francisco, then you’re going to pay for it. It’s possible, because there are a lot of practices there, but if you grew up in a spot where there wasn’t maybe as much density, which is maybe a lot of people, or if you want to live in a place you didn’t grow up, I mean you just don’t have as much control sometimes over that decision, and I think that’s huge! I think that’s a big decision for a lot of people. Some people though I think would say, “I don’t care, I just want to follow the money”: what do you say to that? Like, “I don’t care, Jayme! I care about my values, clearly they matter to me, but the money is the driver for me; I got into dentistry because I wanted a good career that paid me well that was something I enjoyed, but money means a little more than location. How do you coach people on that?
Jayme: Well, you actually asked two different things, but the first one, you said that money is the driver, money is everything. For those people, I’d say, “I wish you well, good luck on your journey, that’s awesome, but I can’t help you. I don’t know how to help people like that; I only know how to help people who actually have a heart. That’s it.” If you’re looking to be the human ATM—that’s actually one of the reasons why my team and I chose a long time ago to never ever work with corporate dentistry ever: private practice only. And the reason we do that is because we only accept five or six people into our program per month, and could we see it radically grow into some bazillion-dollar organization and help a bunch more? Maybe, but we’re only interested in caring for people who we can invest in at a really deep level, because it’s the customization of this process that makes it rewarding. It’s the hyper-customization of a startup like—okay, a doctor just outside of Denver, Colorado, who we helped open up, she’s just around her twelve-month mark too, really cool. For her, she is an outdoors person. She and her husband Raoul, they’re just awesome people: they’re rock climbers, mountain bikers… they’re just always in streams, and lacing up their boots, and fighting grizzly bears on Instagram, and pulling salmon out of the stream with their bare hands…
Reese: Of course! Who doesn’t fight the occasional grizzly bear, while mountain biking, with a set of cross-country skis? (laughs)
Jayme: Arm-in-arm with their husband, while they’re both on mountain bikes; that’s their life. So, for them, we took them through part of what we call our GIVE Process. This is one of the things I spoke on in Jamaica. I was on stage describing this exact GIVE Process, how we align your values with a practice and connect that to your philanthropy so that the community can know what you stand for. In Lauren’s case, she teamed up with a mountain bike organization, and she restored the mountain bike trails. So, in a really cool way, this non-profit was able to align with Lauren and she with them. One of the results was that they invited their 1,000-person mountain biker community to her open house! It’s one of the reasons why she had 209 patients in her first four days! Like, four days in? 209 patients. That’s not common with a startup. But better than just the number– like you had said, the people who just want the money—the reason this is not just about the dollars—the numbers are important; we have to hit profitability, otherwise it’s a non-profit, and I’m not interested in that. So it has to hit profitability. Whatever. For Lauren, she literally said, “Jayme, I can’t believe it! What you guys said is true! Eight out of every ten of these patients, they’re like, all my ideal patients!” They’re all people who she connects with. Why is that? Because they showed up connected with her values; they showed up having something in common with her; they showed up choosing her, and not just her discounts; they didn’t just show up for a coupon, they showed up because they wanted to be with her as a person! And that’s the cool thing that happens when we can hyper-customize this process. It starts with location, it does: we have to get financing that aligns, my team negotiates financing, we negotiate construction, we negotiate equipment, we do all those things, but it’s for the purpose of defining and implementing a plan for fulfillment. Does that answer some of the question for why the need more than just the money?
Reese: Yeah, I think so. I think it’s really important, I mean, that philosophy I think is clearly a huge driver for you; obviously it is for me as well. I think it’s just challenging for each person to find these values no matter what stage they’re at in their growth process and hold on to them, and whether you’re a very large organization or a small one, these principles still really matter, I think it’s just more and more difficult, and I see people lose their way in the growth journey a lot of the time. They lose their way in terms of having the same compassion and fulfillment and love for what they were doing as money becomes more of the focus, and the service and the experience and the craftsmanship is minimized. And so, I just wanted to say that, because it’s important.
Jayme: I love looking at case studies of startups with doctors who are freakishly happy but not even producing a million dollars. Here’s an example: one of our clients in New Orleans—I won’t say her exact area, and you’ll see why in just a second—but she came to us and she said, “I want a practice that feels like ladies’ night.” And we said, “what?” And she said, “I want people to feel comfortable! My ideal client is a high-powered, high-income woman: she can wear high heels; it will feel like she can carry a glass of wine through my practice; I want a chandelier in the waiting room. Guess what? She will probably never produce a million dollars of dentistry, and I think she’s our happiest client of all time, because it’s not about the money for her! She has her CEREC, she loves the dentistry she gets to do, she is so fulfilled by the relationships with her patients, and that is what I love supporting. Creating high profits is great; we can do that, almost like a “check it off the list.” Can we get you profitable? Check. Can we get you triple the profitability of the average startup in America? Check. Can we get you the right location? Check. But here’s the tricky part: the part that is most rewarding is, how do we define what is going to make you happy? How are we going to create a plan to get that? Because more money will not make her happy if she has some other kind of practice. And remember, where you go to practice? That’s a lot of your life. You’re a human! You’re going to spend so many hours in that building! How can we create a plan that has you enjoy your team, enjoy the control you’re going to benefit from, enjoy the patient relationships by defining your ideal patient? It’s that kind of stuff that I want to focus on. So, if that gives you a little perspective…
Reese: Yeah, you’re just saying ultimately: no matter what the actual circumstances—someone can be rich, poor, in-between, someone could be the owner of a very large DSO, someone could be the owner of a very small $500,000 in collections GP practice, or less, right? But their happiness is a much different product than the objective reality of money.
Jayme: Can I just throw some gas on that fire? Let me just throw some gas on what you just said: let’s pretend that you’re a doctor whose miserable, but you want five practices, so you’re working your tail off, and you’re showing up every day, and you’re driving this commute, and you hate the commute, so you show up unhappy, and you are Dr. Grumpy. If you’re Dr. Grumpy, then you can’t lead your team; if you’re Dr. Grumpy, then there’s no way you’re going to get case acceptance; if you’re Dr. Grumpy, like, forget the next couple of practices; if you’re not enjoying it right now, today… then who cares about the future? Let’s figure out a way to get you loving it right now; let’s figure out a specific plan for you: a customized, beautiful way for you to enjoy this, and that includes the process to get open, not just being open. The process of getting there; the process of hiring; the process of attracting patients who you are going to connect with on a deep level. Let’s do all that, and then the byproduct will be you showing up super inspired, able to lead a team, able to motivate a team, have a team say, “yes, Doctor! We’re on board with that! If you say so, we’re in!” Like, how cool would that be? So, that will only happen if you’re intentional about what you’re doing.
Reese: That’s great content. I’m going to end with a lightning round here, okay? We’re going to go through—we have less than one minute for each question. Let’s see if we can do 30 seconds to one-minute responses, and I’m going to ask you a bunch of financial questions that you shouldn’t have any idea… some are outside of your scope, and some are totally inside of your scope, and you’re just going to give opinions on each of these. I’m going to try to keep them as close to your wheelhouse as I think, but some of them are interesting enough to where I just want your opinion about random stuff too. Alright? So, I have not prepared Jayme for any of this—
Jayme: (laughs) hang on. May I take a deep breath?
Reese: Take a deep breath. There you go. How much is it going to cost the average person to open a startup? No context?
Reese: Okay, it’s going to cost me $500,000. How much money will I be able to make back of that within the first year on average?
Jayme: All of it.
Reese: Okay. What is better for practice ownership: leasing or owning?
Jayme: Wrong question.
Reese: (laughs) that’s not part of the game!
Jayme: (laughs) the right answer is… what’s best for the business health! What’s best for the business health is how you determine ownership vs. leasing. If you’re watching infomercials, it will tell you ownership. If you’re asking me, I would say, “let’s get the right location. Let’s get the right demographics. Let’s get the right ideal patient profile. And when we define all those things, what if that perfect utopia town for your practice doesn’t have buildings for sale? Do we give up on that town? NO! Don’t give up on the town; lease a building instead. I’ll show you how to buy real estate in other towns. I just bought another big compartment building in South Carolina; I’ve never been to that part of South Carolina! I can show you how to make money in real estate, but it doesn’t have to be owned by your practice. That was probably 45 seconds; I’m done.
Reese: We’re close, but it was good (laughs). Okay, what advice do you have about student loans for residents and associates?
Jayme: Don’t pay off your student loan debt. Pay your minimum payments, and stockpile cash. You don’t need to stockpile 100 grand, but here’s the thing: if you desire to become a practice owner, if you’re an associate and you want to become a practice owner, it’s okay to have student debt. Do not pay off your student debt at the expense of having no nest egg of money, because when you go get financing for that loan for your startup, the banks will prioritize the doctors who have a nest egg over the doctors who have a really low debt balance. So, you can hit rewind and listen to that again, but it’s all true.
Reese: Great. Love it. You and I have a few podcasts that we probably share on that topic, so our advice is aligned there similarly. The next question is: when do I hire an associate?
Jayme: It depends what you want out of life.
Reese: You’ve got a minute! (laughs)
Jayme: Okay. Buhh… when you’re too busy! (laughs) when you’re too busy based on your standards, then you hire an associate to satisfy the demand that you can’t handle on your own when you’re too busy.
Jayme: Unless you’re busy enough, and then you stop attracting new patients, or you stop taking lower reimbursements.
Reese: What if I just don’t want an associate? How do I know that?
Jayme: Well, maybe— I say go back to my first answer: when you’re too busy. If you’re not too busy, you’ll never need an associate. So, I like to say when you’re too busy, or when you want to start increasing profitability by kicking out—let’s cut to the chase: when you’re too busy, you can either hire an associate, or kick out PPOs. I don’t want to be crass about it, but the reality of it is when you’re too busy, you either bring in more people, or increase your prices. That’s just the nature of business. So, you can increase your prices, and step one of increasing your prices is starting to cut out PPOs, but, to get there first, don’t open a fee-for-service startup, please don’t do that in this economy, it’s not smart. I can go on and on about that another time… I’m going over my one minute… but to answer your question, an associate is when you’re too busy.
Reese: Okay. As a general rule, as a startup, what should my front desk team look like?
Jayme: If it’s a cold scratch startup, you’re going to have a part-time front desk and a part-time assistant in general, this is not a hard rule of thumb. Don’t do you start up and say, “Jayme said a part-time front desk and a part-time—” no. Because there are some startups where we say, “you need a hygienist on day one.” And I gave give you lots of reasons why another time, but in general, casual rule of thumb, we need a part-time front desk person and a part-time assistant, and part of the reason for that, we can save this as like a cliffhanger for another episode, is that we must never ever let a phone call go to voicemail, and here’s the rule of thumb that I like to use; write this down: phone calls never go to voicemail under penalty of death.
Reese: By… electric chair?
Jayme: Your choice. By whatever method is—
Reese: (laughs) “I never took the analogy that far, Reese. I just thought death was enough. I didn’t think I had to specify the type.” (laughs)
Jayme: It is a finality of death. So, a part-time front desk for that express purpose—
Reese: By naval cannon. By navel cannon, okay?
Jayme: Navel. Is that like navel as in it goes through my navel? Or—
Reese: From San Diego. Off of The Good Ship Merryweather. Okay, the next question is: how much should the average dentist be making?
Jayme: Whoa. Enough to make them happy, of course.
Reese: Okay. If you saw an average income that you thought was average based on your experience of getting one location up to a normal standard, what would personal take-home be including the profitability?
Jayme: Okay, are we talking, like, all profitability plus personal income? Like, net after taxes?
Reese: Yes. It’s my production plus—it’s my gross income before I’ve paid taxes. It’s the collections minus all the overhead, and whatever the doctor’s compensation was plus his profit.
Jayme: You and I are both faculty at DSN, and I love that you and I share that; I love that we are part of that same tribe; I love the energy of that group; the DSN community is just powerful. Dental Success Network, guys… Reese is one of the most respected people on this topic; that’s why he was invited as a faculty member; listen to whatever words this guy has to tell you: that’s why he is faculty there. (laughs) like, no joke. So, here’s the deal: in that community, there is one guy who we all know and love, his name is Dr. Mark Costes, and Dr. Mark Costes talks a lot about 30%-40% overhead as a target, and then he’s now coming up with extra strategies to get to 50% overhead, so you’re literally keeping up to 50% of what the practice makes. That’s kind of cool, right? Keeping 50% of what the practice makes? Here’s the problem. With a startup, here’s your overhead percentage. Are you ready? You can write this one down, and you can circle it: your overhead percentage for a startup is 100%.
Reese: 160% actually! (laughs)
Jayme: (laughs) right. So, I like to say, “okay, the profitability stuff is cool in theory, but let’s deal with today right now!” So, if you’re asking me about startup, I’d say 100% overhead; if we’re talking more broad, like, okay, let’s say you’re up for five years, you’ve got a million-dollar practice, you have your systems in place, you’re coasting now, if that’s what you’re asking, you’re mid-career and you’re coasting, 35%-45% on your collections.
Reese: Okay. And if I said I’m making $300,000 in raw dollars, is that good, bad, or neutral for a startup that’s at its maturity? Would you say it should be more than that? I know this is totally subjective, I’m just wondering—this is your opinion. If you’re talking to a friend, he comes to you and says, “I’m making $300,000 dollars…” he says, “I’m not making hardly any money; it’s really frustrating,” and you look and he’s making $300,000, what do you say to that?
Jayme: Uh, so you said a startup at its maturity? Do you mean a like a startup in its first year, or a startup in like a few years?
Reese: One doctor can’t produce any more; there are no associates. He’s producing as much as he can, and he’s making $300,000.
Jayme: Oh! Yeah, totally. That’s a fair number; that’s a good number.
Reese: It’s good? You’d say that seems reasonable? If he’s making 200, what do you say?
Jayme: Uh… Are you happy with that? First, are you happy with your business? Are you happy with your business, are you happy with the way you’re able the care for your family? Are you happy or unhappy with your life as it is? Do you need more funding to create more of that? Should we focus on expense reduction? Should we focus on new patient—
Reese: So, you’re concerned a little bit. You’re a little bit concerned if he’s at max production, and that’s the income level; you’d at least say, maybe there are some things we can do to improve it.
Jayme: Maybe. It depends what they want.
Reese: But if they don’t want more, then that’s fine; it could be great.
Jayme: Yeah! Totally fine. I feel bad for the doctors who feel this pressure that “I’m supposed to be making more, or as much as the guy who has this podcast, and he runs some Facebook group, and he throws out big numbers, and how come I’m not like him” like, stop it! No! That’s not cool. What’s good for you and your family? Are you taking vacations? Are you going on date nights? And I mean that! Are you showing up at your kids’ things?
Reese: I’m forcing you to answer financial questions, though, that aren’t the most important! This is not a good topic for people like you and me who are willing to sacrifice the financial almost every time for the life. So, if I said this person, for a single location practice that you’ve consulted, has a very very high income. It’s not too —it’s more than 300, now. What would be a number where you’d be like, “man, that person is really successful for a single doctor, single location, max production, no associate,” what does that income number look like of you had to just throw it out there?
Jayme: Spit balling, let’s say a million net, because that means you have a $2,000,000 practice at a very efficient, 50% overhead. Like, wildly efficient, and super productive.
Reese: Okay! Cool.
Jayme: So, a million net is a pretty impressive number. And you’re going to get that with a startup your first year out. Could you get it in year three, four, or five? Yeah! First year? No. No chance.
Reese: So, you heard it folks! The possibilities for you are basically, like, you could make $50,000 a year to millions.
Jayme: Unless you open your startup the wrong way, and you’re like that dude from Jamaica at the table who’s literally paying to own a startup! Here’s the power punch for the whole thing: you can do it right! You can open a startup and love it and make a great income; we’re helping doctors all over the country do this, and it’s incredible to see their lives be changed. Their quality of life actually improves, and that’s what I love.
Reese: Well, it’s great. I really appreciated your perspective today. You gave some great advice; you did awesome at the lighting round. It’s an uncomfortable round that people get put through, and you did really great, and I just live your perspective. I think you’ve got a huge heart that is in the right place and that you are trying to really make sure that you leave the world a better spot than where you found it, and I think that is really admirable. Thanks so much. Any parting thoughts you’d like to leave with the listeners?
Jayme: Yeah, two final takeaways: one is, I practice what I preach. When I mentioned the thing with the nonprofits and the charities—here’s a little inspiration for you, Reese, and for the listeners—just so you guys know, every time that we open up a startup practice in the United States, we simultaneously provide the funding for ten startup businesses in third world countries. So, we provide the money so that people in these third world countries can have access to loans, non-profit loans, that we provide the funding for, so that they can start businesses. Why? Because I know that entrepreneurialism and small business growth literally changes communities, and changes peoples’ lives. The worst of life’s situations can be improved through entrepreneurialism; I’ve seen it over and over again, and I’m so passionate about that. So, find something that you’re passionate about for your practice, for your values, your integrity, your reputation, and figure out a way to have your practice reputation wrapped around that, and that’s one of the ways that you will always always always love practice ownership. Number two: do you mind if I mention the free book thing that we’re doing? The thousand books that we’re giving away?
Reese: Yeah! No, I think that’s great. Let’s just talk a little bit about Choosing the Right Practice Location.
Jayme: So, I won’t belabor the point, but I wrote a book, and it’s been a bestseller, it sells every money on Amazon, but we’re doing a thousand for free this year, we are just giving away to associates, and students, so if you’re an associate, or a student, and you’re listening to this, and you’d like one… if you cover the cost of shipping, we’re covering the cost of the book. It sells for $67 every month on Amazon, or you can get a free copy. Reese, if you’d like to include this like, here, it’s just idealpractices.com/free , and I know, I am 100% sure as you will see with all the reviews on Amazon, it will guide you well, and it will be a big “a-ha” eye-opening useful tool that you can use to go open a practice.
Reese: Well Jayme, thanks so much for taking the time; we’ll put all the information in the show notes, and we’ll look forward to having you back on again for a round two, and thanks so much for all that you do for the dental community! We look forward to having you back on again soon.
Jayme: You too! A huge honor! Thank you for having me.Practice Management