Overcome Burnout and Find Balance in Dentistry – Episode #629

On this episode of the Dentist Money Show, Matt and Ryan join Elevation Association’s Dental Industry Expert Panel at their Life Summit in Nicaragua. Joined by other professionals, they all discuss the role of leadership in dentistry and the challenges that come with managing a practice and a team. The panel also explores the different seasons in a dentist’s career, the struggle for work-life balance, and the transformative shifts happening in the industry. They highlight the influence of private equity and DSOs to the moral responsibilities of today’s practitioners. Don’t miss this insightful discussion on taking control of your leadership journey and shaping the future of your practice.

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Podcast Transcript

Intro: Hello, everybody. Welcome back to another episode of the dentist money show brought to you by dentist advisors. We have a very special, a little bit of a different show today. from as if, if you’ve been listening over the last few weeks or months, you know, we, Ryan and I went to Nicaragua, with the elevation association.

While we were down there, we did a panel discussion with a few doctors, including Mark Costas, Dr. James Heaton. Dr. Michael Allen, and Dr. Jared Hill, of course, with Elevation Association, we had an amazing conversation, with questions that have been submitted. We talk all things leadership, the importance of leadership and practices, and then we get into a very detailed discussion on DSOs and all the things that, go into DSOs and the pros and cons, the things to consider if you’re out there considering selling to a DSO, depending on the stage of career that you’re in. So we had a great conversation, a little bit of a different again, show, or it’s not us hosting. We just share the recording from Nicaragua as always. Hope you enjoy the show.

Elevation Association Panel: Okay, so I wanted to welcome everybody back. This is our second panel discussion. We’re at our 2025 Life Design or Life Summit, Elevation Association Life Summit. We’re in Nicaragua at Rancho Santana, and we’ve got a unique opportunity to have, again, our second panel discussion, and we’ve brought some ballers for this panel discussion.

So I’m going to go ahead and turn it over to the panel to introduce themselves. James, if you’ll kick us off. Yeah, sure. I am James Heaton. So I, just a little bit about me. I grew up in Roosevelt, Utah, a little small town. we moved to Ohio for school, my wife and I. I went to Ohio State, go Bucs.

And, we now work in Chandler, Arizona. I only do cosmetic dentistry. I have some, a couple dentists that work for me and do everything. So if you need root canal or a denture or something, I am not your guy. Only veneers. But you, you, you got a little side hustle going. Something called. Yeah, we also, uh, Just a little sub, just a little side hustle.

My partner, Michael Allen, he’s going to introduce himself in a minute. He and I run, uh, the Smile Trend Institute. And, uh, we train other dentists to do veneers. And, uh, one thing that we push pretty hard is no prep veneers. Um, both cosmetic and functional. So, it’s kind of new to dentistry, but we’re excited about that.

Awesome. Hi, my name is Michael Allen. I am James partner for SmileTrend, but I grew up in the Phoenix area. I currently reside in Tucson, Arizona, which is about two hours south of Phoenix. Nobody knows that. Everybody thinks that Tucson is like Scottsdale. It’s right next to Phoenix. And I’ve actually had people fly into Phoenix thinking that it was that close without even looking at the map.

But, uh, kind of funny. Um, I have no business being on this panel, so listen to me at my own, at your own risk. Uh, don’t, don’t take anything I say. Asterix, everything you say is it. Asterix, everything I say. But I’m excited. We’ll put a disclaimer at the bottom. Yeah. I’m excited to be here and uh, and this is going to be lots of fun.

Oh, I’m not here with these fellas. I’m here for the free food. It’s been great. My name is Jared Hill, and I, uh, I’m full time practicing general dentist at Wood River Dental Care in Idaho. Dan is my partner, and together we also run Elevation Association, which is a community for dentists to get resources to elevate their practice and elevate their life.

We also run another organization called the Legacy Foundation, which is a 501c3 nonprofit where we’re currently doing some humanitarian work over in Tanzania, Africa, which we love. And amongst all those things, we still are trying to find harmony amongst all three of those things in our families, in our lives.

So we’re grateful to be here. Beautiful Rancho Santana. We are grateful for everyone that’s here in this conference participating. And it’s only day three, but I feel like we’ve gotten so much, uh, So much knowledge and impact and inspiration and rejuvenation so far that it’s been an amazing conference.

It’s FLIRB’s day, November 38th I think today is what, according to my mental calendar. Uh, Dr. Mark Costas, based out of Prescott, Arizona, founder of the Dental Success Institute, the Dental Success Network, Smile Outreach International, Front Office Academy, um, hosted the Dentalpreneur podcast, previous owner of 16 dental practices, which I don’t own anymore and I hung up the handpiece in April of 2023, spend most of my time traveling for um, the.

Aforementioned, uh, institutes and training facilities, et cetera, uh, that I’m affiliated with. Oh, Colorado Surgical Institute as well. I travel a lot. Uh, I love what I do. Super privileged to be on this panel and, uh, to have been invited here to Nicaragua. So thank you guys so very much. Awesome. Thanks, Mark.

I had to follow Mark Costas. That’s awesome. We put Mark in the middle for a reason. It’s like a build up. We’re on the downhill now. I’m Matt Mulcock with Dentist Advisors. I often round up my purchases and the extra goes to charity. Like when you’re, like, every time. Like when you’re checking out at Albertsons?

Every single time. I feel great about that. So Dentist Advisors, we work with about 600 dentists. It’s all over the country, uh, financial planning, investment management. We like to say we help dentists make smart financial decisions. So happy to be here with this, uh, baller group for real. Wait, does that imply that dentists make poor financial decisions?

Okay. So we should probably get into that. Yeah. All right. Can’t believe you said you rounded up. That’s amazing. I also love how this whole thing has been like, doctor, doctor, doctor, doctor, not doctor, not doctor. Uh. Just be glad you’re not sitting on the short chair, right? I almost did, actually. I’m Ryan Isaac, yeah, uh, advisor with Dentist Advisors, been, been around since the beginning of our company and Like Mark said, super privileged to be here in such a beautiful spot having these conversations, so thanks for the invite.

Stoked to be here. Awesome. So again, amazing panel. Um, I could go on for another ten minutes easily talking about each one of these guys and what they bring to the table. But instead, let’s actually get into some of, the discussion and what we want to talk about and the, the, object of today, is really to open it up and, and get some, um, resolution and maybe address some of the problems that are facing, our, industry today and specifically private practice and, but, I want to kind of kick off with, the Dentist Advisors on, uh, the Dentist Money Show, uh, a few episodes back.

Uh, they polled their members, uh, on Facebook and said, what did you, what do you wish you would have? I have learned in dental school that you didn’t. The resounding answer, uh, the overwhelming answer was basically leadership. And I want to kind of touch on that. You guys did a great podcast on that so I encourage anyone that’s listening to this to go and listen to that podcast, but I want to kind of delve into that.

And because When we say leadership, I don’t know that that translates over well in the brain of like, oh, what does that mean for my practice? Or what does that mean for a practice? So really quickly, like what, what were your guys findings? You podcasted on that. You’ve had time to reflect on it. What do you guys think?

Why is that such a deficit in the, in the dental industry today? Yeah, again, we should probably ask the doctor, doctor, doctor, doctor sitting here. Uh, yeah, I’ll just recap what that was. It’s in our private Facebook group and it was just a question. What do you wish you learned in dental school that they didn’t teach you?

And like you said, there was dozens and dozens and dozens of comments in there. And yeah, every, the overwhelming majority was leadership. I wish I knew how to run a business. I would actually love to hear from actual dentists what it, what that means to be a leader. I, I doubt it means just. How to be inspirational and motivational.

I doubt it’s just that. I’ll bet it’s a lot more like, how do I, how do I deal with how hard it is to work with human beings this closely, this constantly? Like, how do I have hard conversations? How do I give people tough feedback? Um, how do I actually make someone want to grow, want to do better, want to treat their job like they’re kind of an owner in this place?

So we’ll actually, yeah, ask everyone else what they think. But yeah, it was. That’s what everyone said. What do you think, Matt? Yeah, I’ll just add to that, and then, yeah, I’d love to pass it to these guys, but, um, I think we’ve observed that it’s one of those things that dentists don’t realize till, like, pretty far into their career.

They’re, like, grasping for all these different things of, like, my, like, the KPIs, which I think are, that’s absolutely something you should focus on. These, all the KPIs in your practice, um, you know, I’m having these problems, it must be my new patients, or It must be my, my open back door where I’m not getting enough patients back in or, or whatever it is.

I think at some point most, if not all dentists at some point, unless you’re just, you have these natural skills, eventually realize at some point a few years in or mid career, like, oh crap, I think the problem is me. Like, I think the problem is my ability to lead people. And I think that realization comes simultaneously with like, I’m running a business.

It’s, it’s crazy how many dentists don’t realize, like. It’s a business. This is private equity that you’re running, and you’re the leader of, you’re the CEO, and it’s not their, it’s not Dentist’s fault. You don’t, you do not, you’re not taught this, ever. I was not taught this in my, in my job. So I, I definitely feel, or I definitely vibe with Dentist in that sense of, all of a sudden you’re the leader of this group, and there’s a huge responsibility there.

So I think it’s just one of those things, it’s like the frog in the water. It’s like all of a sudden you’re like, holy cow, I’m running this thing. It’s a huge challenge. I got a, I have a quick story. I, uh, early on in my career, I had this, older cantankerous hygienist, if you will, who, uh, didn’t really have much of a filter.

And she would say whatever, I know they’re, they’re very few and far in between, never happens. Maybe one or Two in every practice maybe, and been practicing for several years. I’d worked for several dentists and this was probably three or four years out. I, I bought a practice my second year out of school.

Um, I wasn’t planning on it, but I was planning on partnering, but after a year, the, the, the seller doctors that decided he wanted to go do something else. And so I bought the entire practice. Having him. No idea how to run a business, but very confident that I could run it because that’s that’s who we think we are.

And so I ran the business and I focused. Of course, I was still getting my clinical skills underneath me two years out. As you guys know, you’re still learning things. You’re still experiencing things. You’re still Having failures that now are coming back a year later or a year and a half later and thinking man, what did I do wrong?

So you’re you’re constantly focused on patient care. So you’re improving your skills. I was doing a lot of continuing education uh on implants on On just regular restorative dentistry materials and so forth and about three or four years into it I was feeling pretty confident about who I was and my skills and dentistry And then then I was approached by my hygienist hygienist.

We’re having a conversation. She said, you know what? Dr. Hill She said, you’re a great dentist, but you’re a piss poor leader, quote unquote. Right. And I was like, of course I took offense. I was like, you gotta be kidding me. What are you talking about? How dare you talk to me that way? And then I thought about it.

I was like, you know what? She’s not wrong. I was, I was not leading my practice. I didn’t know what it meant. And that’s, that’s when you think, you know, after a few years, you come to the realization, like, oh man, I, there’s a lot more that I. Not only could be doing, but I should be doing. Your team is Clamoring for leadership like they want you to provide a vision for them.

They want to be part of the boat They want to have an oar and row in the same direction, but I realized I wasn’t providing that right I wasn’t I was focused on my clinical skills my treatment of the patients and I was in I was busy day to day But what I wasn’t doing is I wasn’t engaging them with what I wanted the direction of the practice to go.

And so what happens when they don’t feel engaged in a vision that you set for them? They will row in their own direction. They will take what they think is Because they want to have a purpose and a value other than just assisting or cleaning teeth or whatever it is. They want to be a part of this thing.

And I didn’t realize that. I didn’t know that that was what that meant to lead that team. And so, I had to come to that realization, that come to Jesus moment. Like, I really am not agreed to this. Like, I need, I need to find, you know, I need to have a direction. I need to have some sort of leadership. And I think it takes a few years for Dentist to get there.

And I think it took me a while to get there. I agree. So, leadership. And culture versus KPIs, PNLs, balance sheet, cash flow statement, new patient flow, attrition rate, you know, those are all a bunch of different things that they throw at you when you’re taking a practice management course or you have a, you have a consultant.

But, I mean, if you look at those topics, there’s right brain stuff and there’s left brain stuff. There’s subjective stuff and there’s objective stuff. We were talking about KPIs yesterday. It’s like, okay, yeah, that’s really easy to track. You can track your baseline, you can track your progress. I mean, you always know where you are, if you know what you’re looking for.

So you can always just kind of say, all right, objectively, here’s where the practice is from a number standpoint, from a systemization standpoint, from, uh, you know, a KPI standpoint. All across the board, super easy, lag measures, boom, done. Then you come to stuff like culture and leadership, and it’s like, well, how do I even measure that?

How do I baseline that? How do I improve it if I don’t know where I am right now? And what is it to begin with, you know? So it’s this nebulous thing. And I think that leadership for a lot of people, it falls back to, well, you can’t be a great leader if you’re not super dynamic, right? You can’t be a leader.

Uh, great leader if you’re not charismatic and can’t get up in front of 500 people or 12 people and deliver an address flawlessly. Well, that’s not leadership at all. I think for me, leadership defaults to just a few things. And if you are going to try to take something subjective like culture and leadership, you have to figure out what it is to you and what it is to your organization and what can make you more effective in those particular areas.

So I think leadership for one. A lot of people don’t know what success looks like for their position. They don’t know what success looks like for the organization. They don’t know what their expectations are for their day to day life. Right? So, I think if you break those things down, the leader has to have a compelling vision about what they want the practice to be.

Every single day in three years, five years, 10 years, what the ultimate goal is for this practice, not just clocking in, clocking out, sucking spit, but here’s why you’re important to this organization. So the overall vision has to be compelling, what’s in it for them. Okay, so vision number one. Number two, I think that it’s really important that you have clear expectations and that every single person knows what success looks like for their position.

Clear expectations, this is exactly what I expect from you. And I’m going to give you all the resources and support in order to get that done. And we’re going to surround you with people that are going to also know what your clear objectives are. And they’re going to support you as well. And then accountability.

Like, alright, I asked you to do this. Here’s my clear expectations. I’m not just going to leave you for three months now, come back and get mad because you didn’t live up to the five things that I said were my expectations. We have to have some sort of regular accountability to make sure. that you are supported, that these aren’t overwhelming expectations and then we can kind of direct the ship that way.

Same thing for culture. I think that you can easily take something that is a typical subjective measure, turn it into an objective measure, baseline it, track it, support it. So, that’s my leadership kind of thing. You bring up some really good points about culture and because there’s There’s, there’s management and then there’s leadership and there’s a lot of confusion about when is it management, when is it leadership, right?

And there, we were talking about this on the, as we were driving over to, to surf the other day about how, I think it’s funny, that leadership to me is akin to driving. If you were to ask a room full of 10 people. So, are you a good driver? It would probably be 10 would say they’re good drivers. Well, we’ve all driven out in, especially you guys in Arizona.

And, oh, I just called it out. It’s Utah. I know. It’s Utah. Everybody, you know, I’m just offending, I’m just offending people left and right, right now. But it’s true. We’ve all driven and not everybody is a good driver, right? But if you were to ask a room of dentists, dentists equate being a dentist with instantly being a good leader.

And I don’t know where that comes from. I think it’s being, you know, type A or determined or whatever it is. And they, they misalign leadership and management or even their own assess their own ability. So I want to kind of talk about the other side of that coin. And you know, cause I really think that there are four things that inhibit good leadership, right?

Ignorance, arrogance, ambivalence, and fear. And I think if you have any combination of those four things, that’s going to inhibit you to be a good leader. So I’m going to throw it out to you guys, and what do you guys see are the manifestations of poor leadership? How does it manifest in an office? What’s it look like?

I would come back to your manager versus leader, um, comparison. I think that’s a really good comparison. It’s worth talking about for a little bit. So I think like a micromanager or somebody that’s kind of looking over somebody’s shoulder, making sure that they do every single micro step of, you know, a clinical procedure or any task that they have, an administrative procedure, that could be.

You know, viewed as a micromanager, I think the difference between a micromanager and a leader is that a micromanager is extremely, concerned with every step of the process in order to get to the desired result. When a true leader actually says, here’s where you are right now, I need you to get to over here, find the best way to do that and I’ll support you in your way.

Um, micromanager must make sure that every single tiny little step is done their way. And I think that’s a, that’s a big distinction. And a lot of people, when you’re, when you’re trying to develop as a leader, a lot of people default to, okay, I’m being a leader right now. I’m watching everything that you’re doing and I’m correcting you every two seconds.

That’s micromanagement. And that’s actually not leadership. So That’s, that’s my idea of that. Yeah. Amen. I think that, uh, you’re talking, when, when you first opened this, you talked about you want to talk about this from a private practice aspect. I feel like leadership is the biggest threat to private practice because these big DSOs or the private equity, they understand that.

They understand that we just want to be dentists. Like, I, I do not get excited to manage my team. Not at all. I will put that off forever and ever and ever, but if I got somebody who Slides in my DMS is like, I’m interested in a new smile. I will take time to nurture that relationship all day long from the start of that all the way till the end and the follow up and then the six months follow up much faster than I want to do leadership.

And so the DSOs know this, and that’s why they come and I don’t want to say they pray. On on us, Dentist, who just want to be clinicians. But is that is that accurate? You guys probably see this all the time, right? And so and so our lack of desire. Initially, when we’re young, we were like, Yes, we can do it. We can crush it.

And then when you get into the reality of it, I feel like I my time is better spent. nurturing new patients than it is nurturing my team because they know me. It’s cool. Like everything’s going fine, but could it be killer if I put some time into that? Absolutely not. My practice has been neglected. My private practice.

General side has been neglected the last two and a half years, a hundred percent as my cosmetic dentistry has ramped up. Uh, and I’m not ready to sell to a DSO or anything, but I want somebody to come in and do it for me. And is is that what you guys do, ? Yes, that’s absolutely, that’s what we do. Yeah. So you you have options.

There’s options, yeah. But I, but I really feel like it’s a huge threat to private practice, that it’s not taught in school that we don’t understand how to do it, and that there’s no real, as I say, easy way to do it. Uh, to measure the engagement of your, the, because it really is the engagement of your lowest engaged staff that the level of your, culture is going to be.

So I think that’s, that’s a tough, that’s a tough ask for dentists, for clinicians who just want to be in the mouth, make it pretty smiles. Well, I appreciate your candor on that because I think that that’s a sentiment that is shared. Um, and I think that partly, you know, with SmileTrend being, successful, you, you have that maybe a little more ability to be honest with yourself about some of those stuff where what we find is, again, you know, ambivalence or denial that exists and it’s like, no, my practice is great.

My culture is great. If your culture is so great, why do you have so much turnover? You know, if your culture is so great, why do they not, why is everybody rolling in a different direction, right? Like, why is there confusion and there’s bickering and, you know, it, there’s people coming up with you asking you to constantly put out small fires.

You know, those are the things that we see in a, in a office with a lack of leadership, lack of vision and a poor culture is that. The docs burnt out and we’re going to talk hopefully about that. We just got a message to talk. Can we talk a little bit about burnout, but maybe this is the segue, right? Like it leads to burnout, poor leadership will burn you out faster.

Mark, we were talking about the other day is like the dentistry itself is really actually quite fulfilling. When we’re doing dentistry, dentistry is fun. We’re in it. You get a feeling of accomplishment. You can look back at what you did, but it’s. It’s, it’s dealing with people in difficult situations where it’s hard and I think that that is one of the primary, you know, culprits in burnout.

What are you guys seeing? I think it’s tough. So I think that when you said every dentist thinks they’re a leader, I think that’s actually an accurate statement. It is an accuracy. It’s an overstatement. Are you a good leader or a bad leader? And I think that, I’m glad that we’re going to talk about burnout a little bit because every dentist who’s burnt out is a bad leader.

And he’s showing up, going through the motions, his team is showing up, going through the motions. And, you know, just because you have a team that’s been with you for 20 years doesn’t mean you’re a great boss. It just means that everybody else is okay with the mediocre culture that you’ve set. And sometimes, you know, I’ll hear Dentist say, man, I just need to figure out how to, how to create a culture in my office.

The reality is you have a culture. It’s just not, it’s just the default culture of you showing up, kind of not wanting to be there. And so, that’s tough, because I mean, also as Dentist, as you guys know, like, we only have so much bandwidth. Right? Like, we can only manage so many things, from the marketing, to the building, to the, every little tiny aspect, looking at our P& L, all these numbers, these KPIs that make us want to throw up.

Like, there’s so much, and we only have a certain amount of bandwidth. And so. So, you know, I think that it’s important to do a few things. One, it’s important to be a part of a group like this, where you take time and like sit down and figure out what things are important and start tackling the most important things.

Um, and then tomorrow we’ll talk a little more about this, but like, I think that every dentist needs something a little bit different to get them out of that rut, out of that burnout phase. I think, you know, what SmileTrend has really connects with some dentists. We’ve seen dozens and dozens of dentists, like, learn to get that fire about dentistry again.

But, you know, Smiletrans is not going to connect with everybody. So I love that this organization exists. And I love that there’s a Dental Advisors and, you know, a Mark Costa organization. So, it takes something different for everybody, I think. Yeah, like, burnout is honestly probably one of the biggest reasons people come to see us.

For real. They’re looking for something new, something exciting, uh, something that’s cutting edge. And And they find it. A lot of them find it. Not everybody finds it. And, uh, but I think, I think you need that. It’s, it’s just like your, your relationship and you’re like, you just need to re spark that fire sometimes.

And, uh, and that’s what they’re doing with dentistry, but it’s because they get burned out. Not only on clinical dentistry, but the leadership burns them out. And so they’re looking for something clinical to unburn them out. We, we need a leadership wing of SmileTrend who can help us with that. If only there were some people in this room that could help.

You know that there’s a one of the pearls, I think, maybe to talk about this. And we talk about being able to take something home immediately, you know, and implement Monday. One of the principles that we love at Elevation Association is Is delegate to elevate. So, like James was saying, we have so many things as private practice owners that we technically should be in charge of.

In my presentation, I had the list of all the responsibilities just of the CEO, just of the business owner, the practice. If you were to do all of those by yourself, which a lot of CEOs do for the companies, that is, that’s a full time job. That’s eight to five. That’s Monday through Friday. That’s a lot of responsibilities.

You don’t have them to do that because you’re also the practitioner. You’re the one providing the dentistry, which is actually the part that most people really love. But the problem, the problem that I see with most dentists is they want to delegate without understanding what that is. So they say I don’t like X.

I don’t like KPIs. I don’t like numbers. I’m going to hire somebody to look at the numbers and they’re going to come in and they’re going to talk to my team about the numbers and set the expectations for them. That’s coming from a consultant. That’s coming from a coach. That doesn’t, that, that totally undermines you as a leader and destroys the culture of your practice.

I think, and what I found in my personal experience is You have to, you need to know and understand and have a basic understanding at least of what those things are and then work with somebody and then inspire people and then, like Mark said, you’re not micromanaging them, you’re not, you’re, you’re empowering them to take this and saying, I have faith that you can do, you can do this part of the practice.

I’m turning this over to you and we’re going to check in however often we need to check in. For us, we’ve got a scorecard. Let’s check in on a weekly basis. How’s this coming? How are you doing with this aspect? How can we help you? Great. What are your, what is your feedback? How can we work together? but essentially that, that’s your responsibility, but it’s not like, hey, I don’t like this, you take it, run with it, and then do whatever you want with it, because that’s not part of the vision of the, of the entire practice.

And I think that’s, I think that’s, that causes burnout as well, because that gets people rowing in the wrong direction. So it has to be, my opinion, guided by the dentist, by the owner, whoever the owner is, guided by the owner. The vision is set, you’ve worked through, you understand, you’ve got everybody’s got by and you’re working together.

And then you say, okay, we’re going to divide and conquer, we’re going to delegate in order to, in order to elevate.

I’m so glad we’re talking about burnout here and it’s actually, this is why these discussions are so cool because in the financial planning side of things, in the investing side of things that we deal with, there’s a huge phenomenon in the field of dentistry that always baffles us as non dentists that wish we were smart enough and had chosen to go to dental school.

Which is, we watch people in the middle and peaks of their careers, from the outside looking in, hitting all of the success. People have the income, the savings, the numbers, the million, like they have everything. And then, for what seems like no good reason, they’ll just start deviating into all these like side projects.

And side hustles. Hey, easy, easy, right? Know your audience, bro. Know your audience. Yeah, not to say that, yeah, not, not to say that. Pretty much everybody here, I’m like, oh, okay. Yeah, and not to say that some of that isn’t worthy or doesn’t end up being very productive or helpful. But so often it’s baffling to us to be like.

What are you doing? you have this multi million dollar business. You have millions of dollars in the bank or even hundreds of thousands of dollars in the bank. You want to just keep it going? And we watch people derail decades of progress, and it’s never occurred to me, which isn’t shocking, okay, but it’s never occurred to me that so many dentists probably They’re not trying to chase something cool or sophisticated or sexy or whatever.

They’re probably just freaking burned out even at the pinnacle of success, which again, from the outside, it’s just like, just coast on that thing, man. What are you doing? It’s just Don, I’m just, I’m just reflecting it, man. I think burnout probably plays such a huge role because anyone would look at any of you guys and be like, why are you guys going into these side things?

Why are you starting other businesses or chasing down these other assets when you’re sitting on a gold mine? And it’s probably, you’re burned out. You’re sick and tired, you’re, it’s draining, it’s depleting, and you’re totally burned out. So I just wanted to observe that and say, I just learned something that will help me hopefully be a better advisor because that, that was just really good insight.

So I’d love to hear what you guys have to think about what that means. alright, so, we talked about some numbers, uh, the first day, and there’s about 185, 190, 000. Practicing dentists, 72. 5 percent of practicing dentists own their own dental practice. Um, the average dental practice has an overhead of 68 to 72, and if you, that’s excluding doctor compensation.

So if you add just a regular 30 percent doctor compensation to that, the typical dental office is negative. two to zero percent profitable, all right. So you have a bunch of people walking around out there. I mean, that’s the median. So half of the half the dental ownership world is not profitable at all.

And they have all of the things that come along with owning a dental practice, the liability, the risk, the stress, the management, the leadership that you have to have if you’re not just an associate. And then the other half are either partially profitable to wildly profitable. So if you’re looking at a bell shaped curve, right.

It goes left, it goes right, super not profitable, very profitable, still the vast majority of dental practices are, dentists own their own dental practices, and it’s heading the other way and we’ll talk about private equity and consolidation and stuff in a little bit, but, my theory about burnout is the fact that most people either don’t take the time to learn about practice management and leadership and KPIs and all the stuff that we’re talking about, so that adds another added stress And constant fatigue of worry.

And then, additionally, people don’t understand the seasons that it takes to, to get to where this panel is right now, right? So, it’s interesting that, you know, I’ll have a kid come up to me. I speak at, I’ve spoken at more than half the dental schools. I’ll have a kid come up to me and they’re like, I want to be just like you.

I want to have 16 dental practices and, and it seems like such a cool life. And look at you, man. You just get, you get to travel around. You’re doing mission work. I want to be just like you. Cool. Um, and I’m like, okay, what do you got going on? You know, after your D4 year, they’re like, well, I’m going to be an associate and then I want to own my first dental practice in three years.

I want to own five and five years. I want to own 10 and whatever. So they have this whole thing planned out. I’m like, that’s awesome. Do you, are you married? Do you have kids? Yeah, well, I’m married right now and I want to have three kids by the time I’m 40 years old. Cool. Sounds good. So what does your work week look like when you envision all that out?

Well, obviously, I listen to your podcast, Mark, and I have to, I have to believe that the four futures are important and I have to have work life balance and, and I want to spend great quality time with my wife. And of course, I want to go to all my kids soccer games. And I’m like, okay, that’s cool. So you want to have Five practices in three years and all that stuff.

That’s cool, but it’s not possible, right? So you have to understand that there’s seasons, bro. Like, you’re gonna have to work. I mean, I worked six days a week for the first six years of my dental career, right? Fifty hours a week and multiple practice ownership. And guess what happened? All of my personal relationships were suffering and my wife was a, my wife was a single, basically mom, raising our three kids.

So there is give and take and there are seasons, you have to be aware of that. Right, the problem is that people don’t recognize that there’s seasons and the hustle season continues. Past the first decade, past 15 years, past 20 years, and now they’re still seeing 120 new patients. They’re still doing 160 recall exams per month, and of course, they’re going to be burned out because additionally to that, they have all this turnover because they don’t understand practice management.

They don’t understand the numbers. They’re constantly worried. Of course, you’re going to be It’s not just the clinical stuff. It’s a compound of owning a dental practice and the lack of awareness of where you are in your career arc and that there is even a career arc, right? So if you’re in the hustle phase hustle and make sure you have a discussion with your significant other that says, Hey honey, I’m in the hustle phase right now.

It’s going to take about 18 months to 24 months. I’m telling you right now I am going to be. Exhausted. I might not be the coolest person when I come home. Give me a little bit of grace, but here’s what I commit to you. Here are my non negotiables. I will still be at all the kids, you know, baseball, football, soccer games.

I will still do date night with you one day a week. I commit to you to that. And if I can commit to you to that, can you commit to giving me a little grace for 24 months? And then after that, yeah. The next plan goes to this and if you can set your life up like that with those definitive markers and know that you’re in this particular season right now and then figure out how to run a dental practice so that you can expand to bring on another provider so the whole weight of the practice isn’t solely on your shoulders and then you can, learn to develop an executive level team that could take all of those administrative duties off of, off of your shoulders.

Those are the things that I think Decrease burnout. Additionally, after that, I mean, after you are a very successful dentist, Dentistry is so much more fun if it’s optional. It’s so much more fun if you’re seeing the patients that you want to see, doing the clinical procedures that you want to do. And then the rest of the practice can go to another associate or you can just limit your practice to whatever it is that you love to do.

And then you can go and do missionary work and you can work on your purpose and stuff like that. But a lot of kids are like, I want to work on my purpose day one. And they don’t recognize the seasons. They don’t recognize the fact that they have to educate themselves as far as practice management in order to avoid that burnout.

Because, If you’re leaving that 20 25 percent on the table like we were talking about the first day, you’re never going to escape the rat race and that trap. I love, I love your showcase of expertise here, Mark, because you, I think you really illustrated well this idea of a professional vision, right? You have this vision of what you want, but also how it keys into family life, which is why we’re here on this, you know, at our life summit.

is those things are intrinsically tied together. You can’t divorce the practice from your personal life when you are a dental practice owner. It is. Part of what happens. And I love that you’re like, yeah, go to your spouse and be like, can you give me 24? That’s part of the vision. That’s part of the plan.

And then you have someone that’s on board Rowing with you, you know, and I think that’s such a big part of being a good leader in your home being a good leader in your office is is Expand or expounding on that vision so that all the key players are rowing with you And that is, I mean, I, I love that illustration because that’s really, it doesn’t shock me that people are like, Mark, can I just have your life today?

I want, I want my cake and want to eat it too. And I think there’s a little bit of that ignorance. And I do want to shift a little bit, of the discussion towards, that kind of in that, in that vein, in that thought process of in private practice, Why is it so hard to, and again, we talked about harmony and balance, right?

I don’t think there’s balance. I don’t think that exists. Balance doesn’t exist. Harmony, on the other hand, can absolutely exist. So in your guys view, how does a dentist, as we’re talking about avoiding burnout, and, you know, establishing a vision, how do they, find that life harmony? What’s that look like for you guys get to see it on the outside, which I think is nice to have that 30, 000 foot view looking in, but Michael’s locked and loaded.

So you have to wait. No, I know. Definitely. This is more. I have more of a question. So you mentioned that 70 whatever percent are owners of their practice of Dentist. Is it, Jared, from your opinion, has it been easier for you to achieve that harmony having brought on a partner than doing it all by yourself?

That’s a great question. I think it depends on, on your partner. Well, obviously you have Dan, so that’s a rough one. Right, I know. It’s, uh, it’s, uh, Some have more luck than others. I didn’t realize what I had brought on when I brought it on. That’s a great question. I, I think what, uh, I, I think absolutely, so it, it can be absolutely beneficial, um, to bring on a partner.

For me, it was. For me, it was a huge relief. But Dan and I still had to find the right system to lead our practice. So we still deferred and wanted to do the clinical. And that was the more fun part of doing the dentistry. And, and it’s so much easier to neglect. The leadership portion, which is what we all feel, I think, at some point in time, you mentioned that earlier, but for me, I’ve been reflecting on on your comment for the last 10 minutes and thinking about, I think that part of that reason why I neglected the leadership so much is because they I didn’t, I didn’t understand, I didn’t know where to find it.

I didn’t know where to find the right system to do that. And so, um, and so for us it was a revelation one when we brought on Ryan to help us analyze the data and then start to understand the data component. But then when we found, uh, the traction, the operating system there and then the messing with that and playing with that and, you know, and customizing that to a dental practice, that’s when I started to enjoy.

The leadership portion of the practice and the entrepreneurship I, I was able to identify here’s, here’s what traction does for you too. And Matt can speak this. This is really cool. when you dive into traction, dive deep into that operating system, it helps you identify. Who you are.

And I’ll just speak to this real quickly. You’re probably, I think most everybody here, I think as far as owners in the practice, you’re probably what’s called a visionary, as opposed to an integrator. And there are strengths for both visionaries and integrators, and you need both of those people within your practice.

Because a visionary is the one who’s going to set the vision, a visionary is the one who’s going to To come up with a hundred ideas and 90 percent of them are terrible. And you need somebody to tell you that. You need somebody to say, these are awful ideas. Don’t do this. And, and you need to be able as a visionary to understand this is who I am.

Okay. I get this now. I used to take offense when people would, would put down my ideas. Now I just throw out ideas and if Ryan or Dan’s like, that’s dumb. I’m like, okay, let’s move on. I, cause I’ve got seven more today that I’m going to throw at you. And so please, you know. We do throw a lot of stuff on the wall though, to see what sticks, to be fair.

You know, there is a certain amount of like, I mean, cause there’s that component too, that we don’t talk enough about is that, yeah, there’s for every good idea you have, you know, 99 bad ones that may be true, but sometimes there’s. You know, ideas within the ideas. And so you can throw some stuff on the wall, but I digress.

Yeah, no, but having having a partner for me helped having somebody else besides you is whether that be the community, whether that be a group, whether there’s somebody within your practice full time or not, I think is absolutely necessary because going back to burnout. One of the key, one of the major, major, major factors of burnout, I think, is isolation, you know, when you’re by yourself.

And you’re busy with your head down in your practice, you’re working on people, and you just can’t quite make time for the CE or for the getaways. You can’t justify the week away from the practice closing it down. You, you dig yourself deeper into a hole without realizing it. You need these moments of clarity to get out, step outside.

Listen to other people. Listen to the struggles. Identify with these people and say, Oh, I’m not the only one. I guess it’s kind of feeling this way. And then that’s where the magic comes. I mean, think what Dan said earlier on our conversation in the bus on the way down to surf. That’s when the magic happens, right?

While you’re sitting by the pool, that’s when a lot of these things happen. When you’re, when you’re, when you’re hovering out there on the surfboard, waiting for the wave, having these conversations, that’s when a lot of the magic happens as far as inspiration, rejuvenation for leadership. So it just really helps with burnout.

That’s why, that’s why we have, you know, these things are so, so important. Jared, while you’re on, you know, in the, in the And while we’re talking about, partnerships, uh, Nicole said, I imagine that a huge part of success with a partner involves having a shared vision. Oh, absolutely. You know, and, and I think, uh, what was interesting is I, I think we lucked out, honestly, Dan and I lucked out as far as, you know, it’s like, we had to sit down and we, we actually had to work out our vision together.

So if you have a vision. And you want to take this practice and, and, and you want to have a partner, then you really need to work, make sure your partner understands that vision. You need to be able to articulate clearly that vision before they come on and make sure that they’re, they’re on the same page.

If not, yeah, it’s going to be a total nightmare. It’s going to be a train wreck because they’re going to push you this way and you’re going to go that way. This half the staff is going to choose this one, the other half is going to choose that way. And now you’re in this ugly divorce a couple of years later, which I think happens.

So many times, that’s why partnerships don’t work out is because you don’t have the clarified vision before you go on into it, are clarified, articulated, written down vision. This is in 10 years where I see the practice goes in this part of traction is 10, 10 years. This is where we call it the BHAG. What is the big, hairy, audacious goal for not for me?

Not for my wife, not for Dan. For Wood River Dental Care, what is the practices BHAG? And I think that’s, and then if you’ve got a partner who wants to come in and say, Are you in? Does this resonate with you? Can we work together to build this BHAG? Then that’s when the partnerships work. I think that’s where a lot of dentists make a lot of mistakes.

Hey, I want to come in. I want to buy half the practice. Okay. Well, what does that mean? That means more than just, you don’t, you don’t owe anybody anything for coming in and working as an associate career. They don’t automatically qualify to become a partner there. It’s a lot more that goes into partnership and ownership and division of responsibilities that CEOs of the practices have to divide.

I just want to highlight that Ryan and I are wildly selfish. We’re sitting over here being like, this is such good podcast material. Like these guys are, these are such, this is such good insight. just to again, not really add anything unique here, just maybe another observation as you guys are going through this is, I think to your, the heart of your question, is dentists have to break the cycle of reactivity.

I think dentists are so, understandably so, everything you guys are highlighting, you’re playing defense all the time. This is what we observe. It’s just constant defense, constant being reactive to everything in your life, everything coming at you. Dentistry truly is, as we’re pointing out, we pointed out yesterday, and you’re highlighting now, is the last kind of frontier of what we talk about, or what we call the entreprofessional.

Again, this combination of clinician and practice owner. There really isn’t a profession out there anymore that has this unique challenge. So, you’re constantly reacting, as I’m sitting here, especially what Jared was saying, and I love what Mark said about this, reiterating the term vision. You have to, at some point, As the leader, take a step back, put in the important, but doesn’t always feel like urgent work of sitting back and saying, and setting your intention and starting to figure out how to delegate, like, what do I even want out of this?

It’s crazy how many dentists we talk to that those types of conversations will come up and they have no idea because they’re just busy dealing with their wonderful hygienists, you know, they’re, they’re super nice hygienists. So I think again, it takes work, but it takes work that doesn’t feel super urgent, but it is wildly important to take that time to have those meetings, to actually, even if it’s just sitting down with your, you and your spouse and partner, what do I want out of this in the next 10 years?

It’s amazing how just that alone. And as some type of operating system built around that, it’s amazing what will, what will change pretty quickly when you start playing offense and not just sitting and playing defense. Yeah, it’s interesting, right? How many, a lack of vision, a lack of leadership within a practice transforms a dentist into a fireman.

Because all they do all day long is put out fires, and ironically that leads to burnout, right? So, we really believe, and this is, this will probably be, you know, a somewhat shameless plug, but, to compete with, the, the, the landscape in dentistry is a hundred percent changing. If everybody thinks otherwise, they’re fooling themselves.

We’re seeing a huge shift in the market and where things are going. Um, we’re watching a big transformation and there are still a lot of docs out there that want to own their practice. There’s so many perks that come with practice ownership. It’s so, uh, incentivizing and there’s so many benefits to it that they should want to have practice ownership.

But the big asterisk next to that is that there’s a lot of them that maybe don’t enjoy the business aspect as much or doing, you know, maybe they don’t enjoy data. But the important thing is, is that we really believe that that. It is time for part of that shift is to be unfortunately reactive and maybe get it for the new newer docs get ahead of it.

Hire somebody like DSI, get Mark on your team, get dentist advisors on your team, you know, get Elevation Association on your team, get there. You have options out there that we can help. You know, this panel right here is meant and built to help private practice owners and maybe even like group practice owners, not just survive, but thrive in a changing dental market.

And it’s. If you want to avoid those things, you need to have like, why would I pay an accountant and a lawyer, but I’m not going to pay, uh, you know, a, a good financial, the only good financial advisors. There you go. why would I not hire elevation association or DSI or have somebody in my corner?

So that I can, you know, you got to slow down sometimes to speed up and sometimes you have to Dr. Buck Drew taught me that. You have to slow down to speed up. These are things that are, they’re key components and they’re not just cliches, right? But I want to, I want to shift now a little bit to talk about that whole, let’s shift to talk about the shift.

Let’s talk about what is happening, Mark. You and I were chatting a little bit and, uh, we were talking with, with Colt about this last night about private equity and what that is doing to the market. What’s happening. Let’s, if you just kind of speak a little bit to the, you’re, you’re in your own life and your own business that are having a big shift, you guys are adjusting with the changing in the market.

Yeah, I mean, it’s a very, very common theme nowadays. Everybody’s heard about private equity. A lot of people don’t actually know what it is. It’s a multi trillion dollar industry where certain companies gather private funds from sovereign wealth nations, from family offices, from uber wealthy families and individuals.

Typically a 10 million dollar minimum investment and the Goal is to triple their investment in three to five years. Okay. That’s, that’s what, that’s what private equity is. So if you look at, if you look at the funds that they put together, typically there’s something that’s very high risk and high reward.

And that’d be like a technology company, some sort of fancy startup. And they will purchase this in hopes that it’ll hit, but the rest of the fund has to make up for it. If it doesn’t hit dentistry, healthcare, those are the types of businesses that are tried and true. So a lot of people think that private equity companies are just coming and they’re snagging a DSO.

for a recap and that is all that they have in that particular fund. No, that particular, that DSO has maybe 12, 15, 20 other businesses that are in that particular fund and dentistry’s job is to offset the risk of a more risky investment. Okay. So that’s, that’s what these guys are going out and doing like a black rock.

They have, you know, a 500 billion. assets under management. It’s just ridiculous. They have so much, so many funds to go out there and find good companies, put them in funds, and then there’s a recapitalization. So a recapitalization, a recap basically means that one private equity company buys you, creates a fund.

And they are beholden to the investors to give that money back in a cycle. The cycle is typically three to five years. That’s a recap cycle. So in three years, they’re looking for a bigger fish to come and buy that particular fund. You say goodbye to your previous private equity company and hello to your new financial partner.

And if you’re doing it right, you can get. a two or three recap situation so you can sell your practice two or three times. Here’s the reality of the situation. Private equity and dentistry have had a partnership for over a decade now. And white hot money came into dentistry several years ago and it was good for the dentist and private equity learned a lot.

Like, for instance, We’ve all experienced and heard about terrible DSOs that buy crappy practices, they duct tape them together, they go to market, and they try to sell to private equity. Well, private equity in the beginning was like, I don’t know the difference. It looks like the EBITDA here is 25 million dollars.

We’re gonna buy you at a 7, 8, 10x. That private equity company or several deals fell apart because the assets The practices were terrible. They were managed by non dentists that were mandating the type of clinical procedures that you’re going to do. they led with an iron fist and these DSOs failed.

So private equity got a little shy as far as investing in dentistry. And that is kind of where we are right now. Still big money. But, if you’re gonna sell to a DSO, it’s really important that you have a strong DSO because the private equity companies are a lot more picky about what they’re gonna pick up nowadays.

And then you can have the salesperson, you know, it’s like the recruiting guy when your son is, you know, uh, Johnny football and they come into your, your living room and you sit knee to knee and they’re like, we love your dental practice. Here’s what we’re going to promise complete autonomy. You can use your own lab.

You can keep all your own staff. And the good news is we’re going to give you a five X. And what a 5x means is it’s a five times multiple on your EBITDA slash your profitability for a single year. So basically they’re prepaying you for five years of your profit for this particular valuation. However, the thing is They’re going to give you a 70 or 60 percent cash down and then you’re going to reinvest in the holdco, the new company, and you’re going to get 30 percent of the value of your, of your valuation in stock.

Okay. So what you’re hoping for is that they’re going to put a bunch of great practices together. You’re going to have a great valuation. You’re going to go to market bigger fish, bigger, uh, private equity company comes and gobbles you. Everybody gets a three times their reinvested capital of the stock that you reinvested into the whole code.

Unfortunately, what’s happening is these largish DSOs are going to market and they’re not able to find a private equity suitor because their assets are crap. The practices that they put together are crap. Or the doctor has 70 percent of this 5X valuation and comes and lives in Nicaragua and leaves the practice to an associate that runs it into the ground.

So. A lot is happening right now, in, in full disclosure, I have a DSO that we, that we have a very nice offer on, a nine figure offer on with 13 practices, all DSI practices, and we have a pledge for 700 hundred, several hundred million dollars more to buy good practices. What’s different is that it was difficult for us to find a buyer because of the number of times that private equity has been stung by bad DSOs.

So, the recap market is a little shaky right now. But if you have a good asset and you find the right DSO, you can really, really do well from a financial standpoint. but the deals are fewer and far between. So there’s maybe two or three or four legitimate DSOs out there that are going to be able to easily get recaps over and over and over again.

But these outliers, you gotta be careful because they these people, the business development, Vice Presidents are out there to sell you a bill of goods. They’ll give you that first 60%, but that, that remaining 40 percent is whether or not you get it at all. And I know that you guys probably agree with me.

Everybody’s selling the recap. Who knows if the recap is ever going to happen. Um, but there are certain DSOs where the recap does happen. But those, that, those are the rules of the game right now. Sorry, that was, that was a lot of words. That was, uh, that was super informative, I think, excellent. I’ll just add one thing as far as a factor here that we’re seeing as well.

A macroeconomic factor being and what Mark said is actually 100 percent true of what we saw from like COVID through, you know, just after COVID, the cost of capital went way up. So we were dealing with an environment where cost of capital was basically nothing. It was, it was literally zero. A lot of these groups are highly leveraged.

They’re using cheap debt at one point to leverage up to go put together a fragment of industry, which is dentistry. That is a. Perfect environment for private equity, take fragmented industry, try to consolidate, create efficiencies, recap, as Mark’s saying, it’s a really easy environment when cost of capital is nothing.

Cost of capital goes way up, all of a sudden, deals dry up, all of these groups, I shouldn’t say all, a good chunk of these groups, all of a sudden, they’re overly leveraged, and now they’re in trouble. Uh, we don’t know the exact numbers, but somewhere between 25 to 30 percent. Of these current DSLs that are out there are in conservatorship.

Meaning they’re going under. They’re in trouble. Uh, we, there’s so many horror stories we see. If you’re not doing property diligence. If you haven’t put in the work, again, to be intentional and say what do I want, if you’re, if the answer is just money, I promise, or the promise of recaps, we see some of these groups out there promising three, four, five recaps, and they’re showing like outlandishly ridiculous numbers.

It’s like, oh, you’re going to be a billionaire. Cool. Like you and Warren Buffett for 2 million. It’s, it’s an absolute joke what’s happening out there. It’s calmed down a little bit because of what’s happened, the environment itself has kind of pushed a lot of these bad groups out, but there are still so many bad ones out there that are selling you false promises and a bunch of crap.

And we’re pretty passionate about this because we’ve seen so many dentists be, sorry for, get absolutely screwed by this. I actually want to ask you guys, So, scenario do you guys feel like it makes sense for a dentist to sell to a DSO and, you know, what specific things should be looking for in that DSO to know if they’re legit or not legit or if it’s going to go well.

And then, you know, which, I guess try to put dentists into groups like, Hey, this is the type of dentist I’d recommend just let Finding a private buyer. Um, like, what’s your advice? Because there’s a lot of dentists out there, unfortunately, who are looking at selling their practices, who are wanting to get out of the rat race.

Yeah. Yeah, that’s such a good question. Um, this is just anecdotally from my experience. I would say Back by your data. Back by my data. My personal, in my brain data. Um, I, my, my experiences has shown me that the people that seem to be the most satisfied with selling their practice The, the biggest group of people that seem the most satisfied are just the older group of people.

Someone who’s, let’s say, late 50s and older. People who are already considering being done anyway. They’ve already got a runway of five working years left. So, signing a deal and having a contract of three to five years. It just, it aligns perfectly with their end of career path. And they’re going to get more money.

So, a lot of that group. Tend to be very satisfied ’cause it just aligns. The other group that seems to be pretty satisfied with it, uh, on the younger side are people who are looking for a, a life change or a change in business role anyway. So someone who wanted to move, wanted to leave the town, wanted to divest from some big beast that they built and wants to get back to something more simple.

Um. I do think, on the other side of things, the DSO space provides opportunity for dentists who love clinical dentistry and hate running a business. And, in my opinion, it provides more opportunity for people to enjoy a career without the pressure of ownership and still have a well paying job in a good system.

Because there are good DSOs and good systems that it’s creating, for sure. I will say, oh yeah, just one more thing, I will say that the most dissatisfied group in my experience, Watching it are the, the people in let’s say their 40s, who see the price tag, but they don’t have a big why, they didn’t want to get out of it, they weren’t looking to make a big life change, they weren’t done anyway, they just saw the money and they might be burned out currently, they’re stressed with something in life and they see, you know, they see 7 million dollars on the table and they don’t take the time to do the math or really parse it out like Mark’s saying like, hey, a big chunk of that is just It’s front loading your income anyway and then it’s a gamble.

If you’re, you’re basically putting like a million dollars in one single tiny private stock and hoping it triples in the net. So the, the most dissatisfied group are owners in their 40s that don’t have a big reason other than money, which Matt said. And that seems to be like the biggest problem area from what I’ve seen.

Yeah. okay. So first of all, the private equity is looking for a few things. Typically 400, 000 plus in EBITDA. So if you’re looking at a 2 million gross revenue practice, that’s at a 50 percent overhead. Excluding doctor compensation. 50 plus 30 is 20. So 20 percent overhead. That’s a very, very well run largest practice.

That’s 400, 000. That’s typically for a good DSO. That’s the low end of what they’re looking for. Minimum of seven ops so you can have multiple, multiple providers because they don’t want to buy, a single doctor practice due to the vulnerability of that, you know, um, yeah. That key man risk. They’re not gonna, they’re not gonna buy that.

Typically in a growth area, typically non Medicaid. Every DSO is slightly different. I think that I, I’ve seen it a little bit. I agree with you. And I think that, people that, are the safest and it makes the most sense for in a lot of cases are late career dentists, but I’ll tell you right now, the new wave of DSOs is not paying high multiples for late career dentists that are going to walk away because, um, they need to make sure that the provider stay with the practice after the purchase for a minimum of that.

Okay. One recap cycle, preferably two. Okay. three to five years, three to five years. So if, I mean. The benefit I see for, and this is, I mean, this is a crazy new wave of docs in their mid 30s to mid 40s that are selling their practices early. Because we see a lot of gunners, and I might be in a bubble, but I see gunners that are 35, 40 years old that have 6 million practices that are doing 1.2 in EBITDA and you’re just like, where did you come from? You, you are a Vulcan, right? And they’re getting offered an eight times. So even if they only got the first 70%, they’re looking at life changing money. If they, if they are a good steward of that money and they’re still, you know, producing a million dollars a year, they’re making 300, 000 off their dentistry for the next three years.

And they have, you know, 12 million in the bank pre tax. And then they talk to guys like this and they put that money to use. And then they have the dividends for life. And they have, they have, you know, the ability just to focus on dentistry. I will say one more thing, not to, I mean, I know that this is, I could talk about this for days, as you know, but I will tell you that that is a fallacy.

They will sell you. They’re going to tell you that, hey man, if you just want to do what you love doing, if you love that clinical dentistry, and you don’t want to deal with people anymore, you don’t want to deal with supplies anymore, you don’t want to deal with management, that’s a bunch of BS, because they are going to leave you alone with the exception of a call from a regional manager that says, hey, your numbers are low, you better fix those.

See ya, click. Or, or we have a callback and your second payoff is going to be decreased by X amount. So you’re actually not getting any help from an operational standpoint for many, many DSOs. And the DSOs that are more heavy handed and they are helping you with operational stuff, you just turned over your autonomy to them.

So my opinion is there are a handful of DSOs out there that give you autonomy. If you are a good operator. You’re a good option to sell. You are, you, you are the ideal candidate to sell because you are going to continue to manage that practice, whether you like it or not. So that’s what I’ve seen in the marketplace.

Not to be self serving, a DSO like mine would be hands off. I’m buying brown belt and black belt level practices that are already there with a little bit of meat on the bone. And we’re not going to have regional managers, we’re not going to do any of that. You do what you did best, I wouldn’t have offered you a 6 or 7X if you weren’t awesome.

You do you, you stick with your vendors, you stick with your, your team, I’m gonna leave you alone, continue doing what you’re doing, and, uh, we’ll, we’ll be partners that way. So, I mean, there’s a million different things we can talk about, but that, that’s, that’s basically the way that I see private equity.

DSOs or corporates does not shield you from Uh, your assistant, you know, having issues or your hygienist having a meltdown in your office that does not still on you, man. Yeah, that is still on you. Michael’s like, oh, my whole all my plans have just changed. Shoot. I to this point. This is such a good discussion.

Um But this creates a bit of a paradox here to this question, because what we’ve observed marks 100 percent right, which to maximize value from a DSO, to actually have it be worth it, if you’re younger, and not just use it as an exit strategy, you have to be the doc who would. is running your business, your practice, like an actual business.

It’s the ones who are tracking profit margin, who are delegating, who have built an actual business that are operating a business like a CEO. The paradox is, so you might get max value there, but those are the dentists that I’m like, why would you sell this thing? And they’re usually the ones that are not burned out because they’ve actually implemented an operating system.

They’re actually running a business. so again, it creates this kind of like, the ones that are selling, that haven’t put in the time, effort, and work, that are living in reactive mode, that are just, they basically just own a high paying job, and they think this is their beautiful exit to a different life.

I promise you it’s not. I’ve yet to see a dentist in that situation come out of it feeling good. Cause to Mark’s point, you’re still doing the same thing for less money. And maybe the recap works out, but a lot of times it doesn’t. And so this, again, this paradox, and I’ve had this, I just had this recently with a client, client back East running a insane practice, got approached, went through the whole process, working with a broker down to the final one yard line.

And we had a conversation and it was a good deal. It was a pretty good deal. And. We had a final conversation of like, do you want to do this? And he, he was after this back and forth, I asked him a bunch of questions and he was just like, why would I sell this thing? I’m not stressed. I’m happy. I’ve, I’ve put in on the time and effort to run this amazing business.

I’m, it’s a cash cow. I’m not, it’s great. I’m working three days a week. Clinically. He built the life he wants. And when he took a step back, he was like, yes, good money. But like. I’m feeling good. So we turned down the offer. I got yelled at by the broker. Legit yelled at. Called me up yelling at me. but again, I just want to highlight this paradox that is created that If you’re already running the business you want, you almost every time are better off continuing to hold that asset, in my, in my opinion, in my experience.

I think that Ryan, Ryan brought up a really good point and I, I think you have to be in the right head space and you have to be doing it for the right reasons, right? So I think that if you’re extremely burnt out or you hate the operations and you know, maybe you, you’re failing, um, from a health perspective or something like that and, And maybe you have a very strong associate run practice, it could be a great option for you.

Um, there are risks involved with maintaining a large operation. I mean, for a lot of people that have two or three associates, I mean, really, you’re one death in the chair. Clinically, or, um, one sexual harassment claim away from a significant decrease in the value of your operation. So, there are risks to continuing to hold.

It’s not like these things are ever passive. So if you’re done with, or you just want a defined end date. You know, um, I, I refuse to get into a debate because you’re right and there’s, there’s two right answers. there’s many right answers. I was on a, I had a very spirited debate on the Say No to DSOs podcast just because they were very, very skewed in one direction and they refused to open their minds, uh, to my, to my views.

But, um, but yeah, there’s, there’s more than one way to skin a cat and There’s great times to sell and there’s times when you should probably hold. Can I add one thing? And I love this market. I don’t consider debate, just more of a discussion. But one thing I will say on the, to your question, and we come to this idea of like maximizing value when you are ready, when you are in the right headspace and you are going to go that route, because a lot of times it will get to a place.

If you’ve treated your practice like an actual business. That and you’re going to exit, you might be the place that your only, your only way to exit is a DSO because you built such a practice that you can’t, you can’t parse it out. There’s no buyer in the private market. Not to mention, not only will you have maximum value, but the different things they add to a contract are usually way more in your favor.

I’ll give you an example. Talk to a guy in California. He built a, something like a 5, 6, 7 million dollar collecting practice. Uh, killer profit margin. He was older, he was in his, you know, Mid to late 50s. He was working zero days clinically. He got the highest multiple you could get. I don’t remember exactly, but it was on the high end of the spectrum.

Zero work back. They literally bought his practice and he walked away. So again, if you’re going to go, if you’re going to go down this road, I agree with Mark, you’ve got to be in the right headspace. The planning starts well before the conversation with the broker of the DSL starts years before you’ve got to build the practice that’s viable, that can actually maximize your value and give you the most benefit of being able to be like.

I’ll just walk away in that scenario. I think it could make a lot of sense. I mean, thank you so much for bringing that up. Uh, you’re so right, Matt, in that you can price yourself out of the market after you have a certain size practice. A traditional lending institution is not going to lend to one or two doctors to buy a certain size practice.

Typically it’s about 2 million dollars. So if you have a 4 million dollar practice and you want to get out of that practice, you’ve actually handcuffed yourself, right? And, you know, the prognosticators are saying that we’re currently at 72 percent practice ownership, which is 38 percent consolidated. The prognosticators are saying in the next 7 to 10 years we’re going to be 50 plus percent.

Consolidated, which means you have two things working against you. You have the size of your practice if you built a behemoth that you can’t sell to a single practice. So you’re looking at maybe something exotic like selling a share to each of your three associates if they want to buy it. Secondarily, you’re going to have to sell to a DSO.

And if you’re going to sell to a DSO and you wait too long, then you’re, that’s going to decrease your, multiple because they want to buy from younger docs so they can stay and continue to produce a lot of dentistry. So there’s a couple of different things that you have to consider, like, is Oh, and the third thing to consider is that my valuation is going to be much higher to a DSO than it is going to be to doctor to doctor if they happen to qualify to purchase the practice.

There’s a number of different things that you have to consider, like if I’m going to wait 10 more years because this thing is pumping out a lot of cash, you just have to do some math. Like, okay, here’s my EBITDA over the next 10 years projected. Here’s my windfall right now. It’s taking all the risk away because it’s cash in hand versus, cash that’s going to come in over the next 10 years.

Lots of different things to consider. Yeah, I just want to say a non financial thing. Mark, you brought this up. You’ve built a whole business on this. Elevation’s built a whole business on this. Which is, there’s a lot of things that go on in our lives that make us feel like we have to make certain decisions.

You were just saying, maybe you’re burned out. Maybe you’re really unhealthy. Maybe your relationships suck, you know? It’s so worth taking the time to try to explore a broader area of your life. Um, you know, the mental, the physical, the relationship side. Yesterday we had a conversation, where, you know, James, you’re saying like, I had a goal to be done at a certain age, which is coming up, and then all of a sudden I switched something, I switched the thing I was doing in my practice, now I don’t even want to be done anymore.

And I think it’s so important, and you were just saying this, like, explore the big, broad, areas of your life before making these huge decisions because you might find that all you really needed was like to stop doing all this other stuff and just do veneers or, you know, maybe step out a little bit and hire some better clinicians or just, uh, do a bodybuilding competition, you know, and then, and then the rest of you hit or not, and then the rest of your life.

So I like that you brought that up to as a kind of a non financial piece to improve other areas of your life and then see how it all feels before making huge life changing decisions. Thanks. Dr. Clark, do you think you could speak a little bit to like the direction that DSOs are going in that it doesn’t seem like it’s a sustainable market model.

We had someone come to the AAE. Um, just for those who are listening, I’m an endodontist. So we had someone at our annual session come from Black, BlackRock and try to pitch us on the idea of a DSO. And he’s doing a good job trying to, um, to show us, you know, this is how the model works. And he, he put up this, this slide that showed, this is the company, this is our division of BlackRock that owns, uh, these tiramas or, Jiffy loops, sorry, rather.

And this is the model that we’re trying to apply to, to dentistry or to endodontics. And, and the thing that hits me is I’m like, we’re not Jiffy Lube. You can’t pick up somebody from the street and get them to work and change oil. You have to have a professional. And not only do you have to have A professional, you have to have one of the most type a gunner professionals that exists in the United States that is going to go through these because we have a vision of what we want.

And Oh, by the way, we’re, we’re going to pay you as a W2 employee instead of being able to run your own business. So you’re going to take a 20 percent hit there. Oh, by the way, we’re going to pay you 40 percent instead of 60 percent of take home. Um, and so you’re looking at like massive amounts and, and the only thing that they can offer is we’re going to make you more profitable.

How are you going to do that? You’re going to see more patients. And I’m like, this is, this equation doesn’t really add up. And I don’t like, I think again, there’s no stupid people in the room. So I see a bunch of acquisitions of practices. I’m like, who’s going to run these, especially with, you know, trends in the last year, I think it was last January, they were talking about getting rid of non compete clauses.

It’s like from an endodontic model, I can open up a practice across the street for 200, 000. And I’ll recap that in eight months, which just with the difference, probably more like six months, um, once I’m established. So how. How is there, like, is this just, uh, the Titanic that’s barreling towards the, the iceberg, it’s going to sink, it’s inevitable, or is there something in the line with DSOs that is going to give them a staying power where they don’t just implode in the next six years?

Okay, great, great question, and you’re absolutely right. I, I don’t understand the, consolidation of, say, endodontic practices or. Oral surgery practices or even pedodontic practices because that level of skill and I mean, it’s it’s not like an unlimited supply of providers that are going to keep this wheel moving, right?

So I agree with you when it comes to specialty. I don’t know why they dump so much money into these oral surgery. Conglomerates when they’re graduating 250 oral surgeons a year, right? It’s, it’s unbelievable and completely unsustainable. Same with endo, completely unsustainable. However, private equity is not new and they’ve been consolidating.

The problem is that there’s two different ways to increase the value of A DSO, you can purchase EBITDA, which means that they’re just going to go buy more practices and something that’s 10, is a lot less valuable. That’s something that’s 100, 000, 000 in EBITDA, so they’re not only concerned with same store growth.

They are concerned with that to a certain degree, but they can continue to add value to this DSO by just buying more EBITDA. And I’ll tell you, you know, as, as somebody that has a DSO that, that, um, has an offer, they not only offered a very high premium for our DSO, they also offered several hundred million dollars for me to go buy more like practices, just like those other ones.

So they’re not going anywhere. However, I do see exactly what you’re talking about. At some point. We’re going to consolidate ourselves out of supply, which is exactly what medicine did. So medicine, on the other hand, has 3 million physicians in the world. They are 70 percent consolidated, right? So they have the same number, roughly, of, uh, private medical practices as we have as private dental practices.

But there’s 1. 3 million of them. So they have consolidated themselves. To death, basically. So, there is something to consider about is this good for the industry or not? Do I go with the wave of hot money or do I fight it? and then you have to think about things like, am I going to wait too long? Are my valuations going to be much less if I wait too long?

Am I going to be able to sell this practice to a private buyer or not? Those are the, those are that’s kind of the checklist of things that you need to ask yourself. But, a very good point.

I was just going to say, is there, it brings up a great question. Is there some sort of moral obligation that we should feel as general practitioners or as dentists to our future profession? What is this going to do to general dentistry and upcoming professionals who want to enter this profession? We’re going to.

Or is it like, you know what, this is what’s best for me, I’m going to do this, this is how I’m going to capture the most money. I think that’s a moral question that’s difficult that everyone needs to ask themselves. And I don’t have an answer to that, I don’t know that. And to your comment earlier, you’re right, the room isn’t full, the profession isn’t full of stupid people.

But often we bury our heads in the sand. Often we We look at things one way, like Mark was saying, you get on a podcast and you fight for one direction. If you don’t, if you’re not allowing yourself to see both sides of the coin, then you make a very one sided decision, which could be more detrimental than expected.

I would also say for any, anybody, watching this was thinking, Oh, maybe I should look into more into a DSO or a syllable DSO. I would say. You need to understand first what your EBIT is the difference between profitability and productivity and collections and revenue You need to understand the ins and outs of your practice because if not you will be coerced into a contract that is not going to be to your benefit.

These guys are not your friends. They’re not here, they’re sharks. They’re not here to make this a win win, generally speaking, with a few exceptions of course. Obviously, you know, I didn’t mean to be like, Mark’s DSO for example, right? Mark, he’s the biggest shark, right? No, I’m just kidding. You have to be very careful before you enter into this conversation, you know, what you’re getting yourself into and make sure you understand what the long term implications are.

And people like Mark’s great resource, dentist advisors are an incredible resource. They deal with this. They deal with people all the time who are entering into these deals. Matt and I have had several conversations regarding this and what the long term future implications of this are for me and my personal situation, because every situation is different.

Just, just to this point really quick, uh, I love that you brought that up, Jared. Private equity is the epitome of capitalism. And I do not mean that pejoratively in any way. It is the epitome of capitalism in the sense of, it is, they’re not there to be your friend. And again, that’s not a negative, but they are, these people coming in, these private equity is what Wall Street quote unquote calls the smart money.

To your point, everyone in this room is the smartest in the country, but not when it comes to their game. They know what they’re doing. You have to, the biggest piece of advice I can give a dentist is never ever make a decision based out of fear. That will almost always, and desperation like, I’ve got to get in on this because this is going to go away at some point.

Like, that’s what a lot of these groups try to do. I see it time and time again, you have to make the decision from a place of intention to your question directly, such a good point, especially when it comes to specialty. I think that summary of that question is who’s left holding the bag because someone’s going to get left holding the bag and it’s not going to be them.

So you need to be very, very thoughtful about that. the one thing as well, just as far as like the actual landscape of private equity. The fact that there are other industries who have consolidated, Mark mentioned the MD space. There are some differences for sure when it comes to like, massive hospital networks that dentists don’t deal with that changes those, that landscape.

But if you look at the history of private equity, there is a cycle you can look at as, you can kind of parallel or see what, how this ends. Private equity, when people say full consolidation, they think of 100 percent consolidated. That is not the case. Full consolidation in any private market cycle is about 70%.

Roughly, give or take. So, we are not going to see a world where dentistry is 100 percent consolidated. That does not exist. That’s not how private equity works. There will always be a space, probably 25, 30, maybe 35 percent of private practice will always be there. Always. So this world that a lot of these groups will tell you, you have to do this because you’re going to get left behind.

It’s not true. If you’re running a good business, I don’t care if it’s dentistry or a tire shop, you’re running a good business. Dentists just have to shift their mindset. I like Jared’s point about do we owe it to the future of dentistry to the young dentists because that’s what we see all the time as we’re, we do most of our marketing through social media.

So we get the younger generations coming in and recently I saw that another dentist asked on their Instagram story, would you recommend your kids become dentists? Where’s all of our headspace with that? And I think the overwhelming majority said, hell no, I would not want them to get into this profession because of the experiences that they’re already having as a dentist.

I think that’s super, super sad is I feel like we. Should be obligated to make the future better for for dentists because we’re we’re here reaping the rewards of it We’re smart enough to be able to figure it out Like it would be really sad and not not that I’m saying that dental schools are great and that we need to fill the dental schools, but like If there’s an opportunity for us to make it better for the younger generation, I think that’s a big deal I think it’s a huge deal Well, I, I don’t, I don’t think we could end on a better note than that.

Maybe, maybe we could end on if there’s a theme. It’s, uh, Go to dental school, they said. It’ll be fun, they said. Right? Like, that’s the, uh, that’s, but to your point, I think that there is, I love that as a, as a final thought, because it’s true. Like, we have an opportunity, to keep our profession, an excellent profession and something that that is enjoyable.

It’s rewarding. we didn’t even get into a lot of the stuff about, you know, service and, and the other aspects that, uh, are so enjoyable about our profession and the skill set that, that we’ve been blessed with. So, but I just want to thank you, all you guys for participating, appreciate the, incredible insight and intellect that you guys have brought to the table and just appreciate you guys being here in Nicaragua with the Elevation Association Summit and just want to say thank you.

So thank you.

Keywords: dentistry, leadership, burnout, dental practice management, DSO, private practice, team engagement, burnout, isolation, partnerships, shared vision, private equity, DSO, market challenges, practice ownership, future of dentistry.

Behavioral Finance, Work Life Balance