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Should You Hold, Sell, or Find a Partner? – Episode #376


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DSOs are in a buying mode, but before you act too fast, there is a lot to consider as selling a practice is a huge financial and emotional decision. On this episode of the Dentist Money™ Show, Ryan talks with Kyle Francis of Professional Transition Strategies about industry consolidation, how DSOs make money, and if selling, finding a partner, or just holding is right for you. 

 

Show notes:
ProfessionalTransition.com

 

 

 

 


Podcast Transcript

Ryan Isaac:
Hello everybody, welcome back to another episode of the Dentist Money Show brought to you by Dentist Advisors, a no commission, comprehensive fiduciary financial advisor just for dentists all over the country. Check us out at dentistadvisors.com. Today on the show, I have a new friend of the show. It’s Kyle Francis. He is Founder and President of Professional Transitions. It’s Professional Transition Strategies to be exact. And man, we talked everything DSOs today from deal structure, equity earnouts, clawbacks, the future of the industry, multiples, how DSOs make money, how to protect yourself in negotiations, all of the pieces to it, what he’s seen in the past with consolidation of other industries, how private equity works. Really down to earth conversation, and I thought it was really fascinating, and super helpful. And many thanks to Kyle for spending time with us today. So I hope it’s helpful to everyone listening and if you have any questions, he leaves his contact information, Professional Transition, contact information at the end. And if you have any questions for us, we love helping pointing people in the right direction and answering your money questions. So go to dentistadvisors.com, click the book free consultation button. Let’s have a chat. Thanks for being here. Everybody enjoy the show.

Jess Reynolds:
Hey there, it’s Jess with Dentist Advisors. Did you know we recently launched a new service called the Dentist Money Membership? It’s an affordable way to support your personal financial strategy with cutting edge technology and guidance from dental focused CFP advisors. The Dentist Money Membership includes the elements financial monitoring app, and annual financial checkup, CE courses, an automated investment platform and more. To learn more about the Dentist Money Membership and to get started, go visit dentistadvisors.com/money.

Announcer:
Consult an advisor or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor. This is Dentist Money. Now, here’s your host, Ryan Isaac.

Ryan Isaac:
Welcome to the Dentist Money Show where we help dentists make smart financial decisions. I’m your host, Ryan Isaac, and I’m here with a new buddy old pal Kyle Francis. What’s up Kyle, thanks for being here, man.

Kyle Francis:
Hey, man, thanks for having me. I appreciate it.

Ryan Isaac:
Yeah, the name of your company is?

Kyle Francis:
Professional Transition Strategies.

Ryan Isaac:
Okay, so I was just asking you, and then I was like, We gotta just hit record to do this, ’cause you’re gonna have to repeat all this. You connected with Matt Mulcock Advisor at Dentist Advisors. You guys were in an event together and tell me about what your company Professional Transition Strategies… Did I get that right?

Kyle Francis:
Yep.

Ryan Isaac:
What do you guys do? What’s your space? What do you work on?

Kyle Francis:
Yeah, so I guess we are mergers and acquisitions advisors. Long story short. So think of us like a boutique investment bank for dentists. We probably are a little bit different than most other local brokers, hopefully, from an acumen standpoint, but I would say that what we’re good at is gonna be helping doctors understand the equity that they have within their business, and then helping them leverage whatever type of equity they want to out of it and at what point, right? And so sometimes, that means working directly with individual buyers and sellers. Sometimes that means working with, that four letter word DSL, right? [laughter] Sometimes that means bringing private equity to bear. And sometimes that means bringing actual DSOs and groups out to market from a private equity standpoint. So long story short, we work all the way up and down that spectrum.

Ryan Isaac:
You started the company?

Kyle Francis:
I did 15 years ago.

Ryan Isaac:
In ’07, that’s when we started, ’07.

Kyle Francis:
Yep.

[chuckle]

Ryan Isaac:
Well, what was going through your… Okay, it’s funny when I think about that time, too, we started a financial planning firm in ’07. And we were like 26 years old. So that was hilarious. But what how did you do that? What was the beginning? Why did you start it? How did it evolve?

Kyle Francis:
Well, so yeah, I’ll just kind of go way back. So graduated from Baylor down in Texas, very much thought I was gonna get involved in institutional capital. So I had an offer on the table to go to Goldman Sachs at that point. I did a one week shadow program with them and figured out that’s just not the way that I wanted to live life, right? So…

Ryan Isaac:
Dude that’s exactly how I ended my four year mechanical engineering major, like one year shy of graduating, I spent a week watching someone in their job. And I was like no, no. [laughter] Sorry, no. Yeah.

Kyle Francis:
Yeah. Yeah, completely it was pretty boring, it really was, like 100 hour work weeks, 200 days a year on the road I was like, Oh, man, I care about some other stuff than that. And so the other way of getting involved in that type of world is by specializing in an industry and so it’s kind of goofy, but I took a couple 100 interviews out of college. I was willing to knock on doors and found this funny Little World of dentistry…

Ryan Isaac:
In what aspect? What niche of what part of dentistry did you knock doors?

Kyle Francis:
Yeah. So…

Ryan Isaac:
What did you knock into?

Kyle Francis:
One of the guys who graduated one year before me is actually now an advisor on my team, I started working with Sullivan Schein Dental at the time now Henry Schein and building offices up in North Texas. And I called them up and I was like, “Well, hey, you gotta let me know what’s going on out there.” He’s like, “Francis, you need to come see this.” If you know Matt Zolfo, that’s exactly how he talks.

Ryan Isaac:
Okay.

Kyle Francis:
So anyway, yeah, he said, you just need to come see it. So I did. I went up and chatted with him for two days and kind of saw all these entrepreneurs, some of them knew what they were doing some of them didn’t, and I was like, “Well, shoot, I can help these guys.” So I guess 2005 started in the dental world. I had to learn it first. So I went on board with Sullivan Schein to build offices on West Texas.

Ryan Isaac:
Okay. When you say build offices, what are you meaning exactly.

Kyle Francis:
Ground up construction.

Ryan Isaac:
Okay. You are involved in the ground up construction of people who were starting up practices and existing people moving to a new space like building…

Kyle Francis:
Exactly, or if they’re needing a brand new i-CAT. Right? Or if they’re needing a 5th operatory, or they need a 10th operatory whatever else.

Ryan Isaac:
Expansion growth, yeah, new bedrocks.

Kyle Francis:
Yep, exactly.

Ryan Isaac:
Okay, cool.

Kyle Francis:
They had larger ticket sales in total, so I mean, as far as selling sundries, I wouldn’t be very good at that.

Ryan Isaac:
So what was the finance background guy doing in the construction part of that? I’m just curious how that all meshed?

Kyle Francis:
Well, so part of it was a plan that I had, right? And the plan was going to be if I could learn…

Ryan Isaac:
Scheming.

Kyle Francis:
Well, I guess maybe.

Ryan Isaac:
Yeah, maybe.

Kyle Francis:
But I was like, Well, if I can learn it a little bit, then suddenly I can provide value, and so…

Ryan Isaac:
Okay. Yeah.

Kyle Francis:
I guess I’m not the best sales guy in the history of the world. I’m really just not, but I am good at making contracts and making numbers work, all that kind of stuff. So I started to do a whole bunch of… I guess horse trading right? So I would do lease renegotiations, buy/sell agreements.

Ryan Isaac:
Oh wow.

Kyle Francis:
____ Associate placements, all that kind of stuff.

Ryan Isaac:
Yeah.

Kyle Francis:
So that way people would buy their equipment from me. By 2007 I was getting more calls for that than anything else. So at that point I started the company. But yeah I guess long story short is that’s what I wanted to be able to do.

Ryan Isaac:
Cool.

Kyle Francis:
Was to be doing transactions within that space. And you also kind of get to know about what does over-leveraged mean. And what does hiring the right type of staff mean for that profile of practice? Understanding different profiles of practices in total, right?

Ryan Isaac:
Yeah. Yeah.

Kyle Francis:
Understand what different consultants can bring to the table. All these different types of things. Once you get to understand the entire practices on life which I can kind of break down in numbers in some way shape or form. It doesn’t tell the entire story but it kind of is a part of their story. It’s kind of the way that the numbers work.

Ryan Isaac:
Okay.

Kyle Francis:
And suddenly you can say like okay this makes sense for you and this is why. And so, yeah.

Ryan Isaac:
Okay. So just getting your story. So through that time you developed kind of this approach, in your mind it was this roundabout approach to like teach and gain like legitimate trust of people ’cause you were actually teaching them, helping them, educating them on business plans and financials and growth plans but that there became so much demand and then they’d buy equipment from you. But you’re saying there becomes so much demand for lease negotiations growth plans like that kind of planning of their business performance, I assume things like that, projections.

Kyle Francis:
Oh yeah.

Ryan Isaac:
That became… You’re like, Oh there’s a lot of demand. So that’s what started it in ’07.

Kyle Francis:
Yep. Exactly. So…

Ryan Isaac:
Cool. Cool.

Kyle Francis:
I found out that I was pretty good at the transactions, and so I found out that I was okay as a consultant. And I found out that I was okay as an operator ’cause during that time I started to buy practices as well. But I was an okay operator, I was an okay consultant but I was pretty darn good at coming up with structuring on different types of deals and then trying to make them cash flow better than what the current situation was.

Ryan Isaac:
Wait back… Okay. So let’s back up. What you owned some practices too along the way like co-ownership or like how did you… And this is Texas the whole time?

Kyle Francis:
So in 2007 I moved up to Colorado so that’s where my wife is from. And so we just kind of decided that we could live wherever and do this, right?

Ryan Isaac:
Yeah, yeah, yeah.

Kyle Francis:
So but anyway I got a lot of friends still down in Texas. So, yeah, started out in Texas. I’ve owned practices in Texas, Colorado, Arizona, New Mexico.

Ryan Isaac:
So these are states where non-dentist can own practices or be…

Kyle Francis:
Not all the time. Nope.

Ryan Isaac:
Oh, okay.

Kyle Francis:
Yeah. So as funny as it was I mean DSO whenever you say Dental Service Organization.

Ryan Isaac:
Yeah.

Kyle Francis:
Or whatever type of acronym you want to use.

Ryan Isaac:
Yeah.

Kyle Francis:
That’s just a marketing term. Really what it is, is it’s an umbrella to siphon net income up the stream. And so if you put an umbrella over any of these things it gets around what we would consider…

Ryan Isaac:
Oh yeah totally.

Kyle Francis:
Corporate laws of dentistry. Yeah, so originally I called them umbrella companies, so I put an umbrella over something. I would be an owner in that umbrella siphon net income to the top. And a vast majority of why I did it was not because I saw aggregation was going to be important which by the way it is. [laughter]

Ryan Isaac:
Yeah.

Kyle Francis:
But I didn’t see that I actually did it because I would take on a listing and let’s say the person has a incurable disease of some sort. Right. Unfortunately that’s sometimes what we have to deal with. Right?

Ryan Isaac:
Oh wow. Yeah.

Kyle Francis:
And in that case I’ve got a certain time horizon in order to sell.

Ryan Isaac:
Yeah.

Kyle Francis:
And then let’s say I’ve got a buyer who wants to buy but maybe they just went through a bankruptcy two years ago something like that then I might buy it and essentially kind of vest that other person into equity and then whenever they can buy it from me they’ll buy it from me. So a lot of it actually had to do with functional transaction type of things, more than the aggregation of.

Ryan Isaac:
Interesting man. Okay. So fast forward to today. What do you spend most of your time on with clients?

Kyle Francis:
Yeah. So I would say that now a lot of what I end up doing is going to be… So for instance, I’ve done a really good job of delegating all of the backend prospectus creation stuff. I’m a geek. I love that kind of stuff. I really do. I love the actual like putting together and coming up with a plan and a protocol that kind of stuff. But once that plan and protocol are put together then essentially it’s up to me to go through it with the client. So I do that a fair amount.

Ryan Isaac:
Okay. Yeah.

Kyle Francis:
I also so kind of getting vision to the process, I guess is probably a lot of what I end up doing. And then also end up working on kind of larger style transactions. So if a group of 20 clients come to us and they all want to be put together under a certain consulting platform then brought to the market. Right?

Ryan Isaac:
Got it.

Kyle Francis:
Or if a DSO that has 35, 40 locations comes and then wants to be brought to market. So I can be very helpful with those type of transactions. And then I end up on probably arm’s length on a hundred… Well, we probably work with anywhere between 140-150 additional folks simultaneously just kind of looking at individual transactions. And so sometimes I’m brought in to kind of talk through the different mechanics of different types of letters of intent all that kind of stuff.

Ryan Isaac:
So is that the more typical engagement where big groups are coming to you to like kind of package and move on to the next step? Or do you work with like… Do individuals come to you? Like individual sellers? What’s the typical client profile?

Kyle Francis:
Yeah. Bread and butter for us are practices doing somewhere between 1 million and $15 million in revenue. So it may be in one location, maybe five locations, maybe eight locations something like that. Looking to go out and either test the market from a DSO perspective or potentially being a platform for private equity. I would say that’s kind of our bread and butter type of deal. And then kind of the more unique ones are the ones I’m probably more involved with at this point which are gonna be a lot more locations, a lot more complexity all that kind of stuff.

Ryan Isaac:
Interesting.

Kyle Francis:
But…

Ryan Isaac:
Yeah.

Kyle Francis:
I still, I would say what 90, 85% of our clients end up being kind of 1.5-15 million in revenue.

Ryan Isaac:
Okay. Something you said earlier too about helping value a business and figuring out like what’s the value here and do you as a seller want to take liquidity off the table and put it somewhere else in your life? What’s the ratio of people coming to you because they’re late stage dentists and they’re like kind of just want to find their exit and be done, maybe with dentistry business altogether or maybe there’s three. Maybe there’s that late stage. Maybe there’s the I’m still in the middle of my career but I really want to grow. I wanna go to like the next big phase of growth and attract team and size and growth. And maybe there’s… I do actually just want mostly just to cash out and get some cash and put it somewhere else in my life. Does that accurately describe the different personality profiles? Are there more than that, or how does that all…

Kyle Francis:
There’s probably more. I think those are good buckets overall. So maybe I can tell you this, our average age of client is 41. I think a lot of that is kind of like attracts like in a way.

Ryan Isaac:
Yeah, yeah, yeah, yeah.

Kyle Francis:
: And so I’m kind of in that same stage in my career as well, so… [laughter]

Ryan Isaac:
Totally. Yeah.

Kyle Francis:
And so I think I probably end up connecting recently well there. But there’s a fair amount of folks that we end up working with that are gonna be later stage in their career and just kind of looking and seeing, okay, what are the different types of options? I think that if we had to put them into buckets, yes, there are folks that are looking to retire, right? So if I look at the total amount of folks that we end up working with, maybe, oh, I don’t know, 10% of them maybe fall into that bucket. If I look at different folks that are looking at, “Hey, what does my life look like over the next, five to 10 years as I’m starting to think through retirement,” all that kind of stuff. And what does life look like beyond that, all those kind of things. I would say that probably 30% are going to be in that world. I’d probably say that another 30% are going to be folks that are looking to actively grow something, and grow something big. And maybe could be stressed out in one component of their life. Whether it’s gonna be, “Oh my gosh, look at my debt leverage [laughter] right now.” Or, “I didn’t think I was gonna be starting an HR company whenever I did all this.”

[laughter]

Kyle Francis:
All these kinda things.

Ryan Isaac:
Yeah.

Kyle Francis:
So I think that there’s probably another 30% there, and there’s probably the final 30% ends up being, “Hey, I’ve grown something to this point, and is this what I want life to look like into the future?” Right?

Ryan Isaac:
Yeah.

Kyle Francis:
And is there another way of thinking about where my current situation is, and that’s kind of more younger, in total in terms of like what I wanna be when I grow up, all that kind of stuff, which I think, again, are valuable discussions to have.

Ryan Isaac:
Totally, man. Yeah. I know this is probably an annoying question you probably get all the time, but Where’s this going? The whole consolidation DSO in the market, Where do you see it?

Kyle Francis:
Well, maybe I can… I’ll probably start with a story, which is…

Ryan Isaac:
Yeah. I love stories. Alright.

Kyle Francis:
Okay. So early on in my career, this is actually before I started the company in west Texas. I sold a couple of practices to a very well-known DSO. It went horribly. [laughter] The doctors got ticked, they left. Staff I’m sure got ticked as well. They left as well. DSO was mad at me, I put everybody together.

Ryan Isaac:
Okay. [laughter]

Kyle Francis:
And so at that point I said, “You know what? I’m never doing this again. I’m just gonna go individual to individual transactions. Just kind of see how that ends up working.” It’s just kind of funny the way it never works, I guess. And so I guess what I mean is that like, if we look at DSOs and if we look at dentists, I actually think they’re a reflection of each other. I think that DSOs, there’s a lot of really good ones and there’s some bad ones. And I think there’s some, a lot of really good clinicians. I also think there’s some bad ones. And I’ve interacted with both sides of both these [0:16:38.1] ____ sections. Right?

Ryan Isaac:
Totally.

Kyle Francis:
And so because of that, I guess what I’ve seen is going to be, as consolidation has ramped up over the last 10 years, the competitiveness of the types of deals has also ramped up. Right now we’re somewhere between, call it 30 and 35% consolidation if kind of based on the best white papers that I know of. And I think that we’re going towards something like 60-70% consolidation. Again, there’s a lot of backend on why that’s the case, but if you look at medicine the way that it’s consolidated, a lot of retail and the way that it’s consolidated as well, there’s a lot of comps that you can use there. And I guess whenever you say, “Where are we going?” Part of me ends up saying where we are is going to be, we’re in a really unique place. Right? Ten years ago, the types of deals and the types of structures didn’t exist, right?

Ryan Isaac:
Totally. No, no, no.

Kyle Francis:
They just didn’t. Right?

Ryan Isaac:
No.

Kyle Francis:
And in another ten years…

Ryan Isaac:
I even feel like five years ago, man. Like this stuff was not… Being bought out by a giant corporation was only evil [laughter] And there was like no upside and it just never happened. It was like, this just exploded on the surface.

Kyle Francis:
And by the way, I’d actually say that there’s good reason for people to think that it was all evil.

Ryan Isaac:
Totally. Yeah. The press was like historically set before that.

Kyle Francis:
Yeah, that was an earned reputation that they had. And so like… But if you look at all of it, and what… There’s 350 different DSOs that are out there now. And they’re called all sorts of different things. So if you ever hear the term DPO, IDSO any of these other things, it’s just marketing, right?

Ryan Isaac:
Yeah, yeah, yeah.

Kyle Francis:
But if you look at it, if you know there’s good and there’s bad, my thought is is like, okay, so if multiples have arisen to a place and doctors are put in a position where they can become private equity investors, then suddenly it can outpace the annuity of owning a practice.

Ryan Isaac:
Yeah.

Kyle Francis:
It can.

Ryan Isaac:
Totally.

Kyle Francis:
That doesn’t mean you should do it [laughter], right?

Ryan Isaac:
Yeah.

Kyle Francis:
But it means that 10 years ago people didn’t have these options. People now have them and people in 10 years won’t again. Right?

Ryan Isaac:
Yeah.

Kyle Francis:
And so my thought is like, it is at least a good enough reason to consider what is out there. I guess that’s what I’m looking at is going to be, you say, “Where does it go?” We’re gonna be going to a place that’s 60-70% consolidated. There’s going to be different groups out there that are gonna be traded publicly, maybe not majority publicly, but they will be. And if you look at overall multiples, the reason the multiples are where they are right now is going to be because there’s still enough attractive practices out there that if as a group they can be bought at 12, 13, 14, 15 times EBITDA.

Kyle Francis:
And they go out and buy each one of the individual ones at six times, seven times EBITDA, they’re cost averaging themselves down. Which means they can have a really, really, really nice exit. At some point or another that doesn’t happen. And whenever that happens, multiples from a top end end up going down and we end up seeing a dividend paying stock like DaVita. [laughter] That kinda thing. So my hope is if you think about, from a passion standpoint, what I’m passionate about is making sure that we don’t make the same mistakes from a dental standpoint as they did in medicine whenever they consolidated.

Ryan Isaac:
Which were like what? What were those mistakes?

Kyle Francis:
Yeah. So essentially letting private equity and [0:19:41.2] ____ quantiness [laughter] take over the entire ecosystem.

Ryan Isaac:
____ Quantiness?

Kyle Francis:
Yeah. Exactly.

Ryan Isaac:
Yeah. I like that [0:19:48.8] ____ quantiness.

Kyle Francis:
If you think about somebody like me, I would be making decisions based on P&L and I’ll be making it based on costs, and I’d be like looking at efficiencies and all these kind of things. But that has nothing to do with the doctor patient relationship, which is the foundation of this retailer based industry, right? And so my thought is the best people equipped to make those decisions are dentists. And so if we can get out of the way on that kind of stuff, and we can create organizations, by the way, there’s a lot of them out there.

Ryan Isaac:
Yeah.

Kyle Francis:
That have been created to get out of the way, [laughter] and not mess with all that kind of stuff. Then suddenly economies of scale can help where they need the help and the private practice of dentistry can still thrive into the future. But if we end up letting, one of what I would consider the big corporates win, that’s not gonna happen. And so anyway, I’m pretty passionate about that side.

Ryan Isaac:
Yeah. Like maintaining not only the integrity of the clinical medical side of doing dentistry, delivering dentistry to patients and communities, but also the artistic side of ownership and entrepreneurship.

Kyle Francis:
Right. Yeah.

Ryan Isaac:
Maybe it’s different in medicine. I think of like a doctor, a hospital. It was probably like this 50 years ago, but I don’t think of my local town doc. I gotta go see Dr. Suzy over there because she’s the town doc and that’s where everyone goes. But I still think of dentistry that way. Dr. Suzy DDS is the town dentist, and she’s the one you go see. And there still is that very communal local feel to dentistry even with multiple locations that that person still drives a lot of the, I don’t know, just the brand and the, just the whole thing with the care of the patients. That’s not only clinical. So hopefully that’s maintained.

Kyle Francis:
Right. And so my thought is if you put enough really great clinicians under the right platform they can compete against the economies of scale that have been developed by people you may not want to win. And so… Anyway, that’s kind of what my thought process is.

Ryan Isaac:
Interesting. Who are… And we see this all the time in our business a lot of mid 40s. I mean, dude, the opportunity to be financially independent from selling a small group of, or even one dental practice in your mid 40s is nuts. That didn’t exist. I was like, you don’t do that. But it’s funny because I see probably the same amount, obviously, as many as you do, obviously, but I see probably the same amount of 40 somethings turning down deals as they are taking them and it’s usually has something to do with just how much time is left in a career. And they just have a really hard time thinking past that, like the big sale, cool. Then the work back. But then what? Like, I don’t want to [0:22:37.4] ____.

Kyle Francis:
Well, I might also tell you, if I can tell you that I think the biggest fallacy that is out is the need to be that if you are a dentist and you own a practice or a group of practices thinking that you are going to get the best deal from a private equity firm that is really, really, really good at negotiating these things, it’s just not gonna happen. And so as funny as it is, I end up saying like, Look, if private equity firm X or DSO-X ends up transacting with that certain dentist that just… Well, I guess that’s just more money for me on the next deal. And again, it has nothing to do with my acumen, it really doesn’t, but it has to do with putting people in a very competitive environment. So we see people all the time get an offer, transact on that offer. We end up looking at the offer afterwards and it’s just like, Oh, shoot.

Kyle Francis:
And it’s just like, well, I mean, look, it’s not a bad deal necessarily but oh my gosh, it could have been so much better. And so if I look at different reasons that people turn down offers, I think a lot of it is because they don’t understand the breadth of the market and what they’re worried about is going to be okay, not only what happens if I keep the practice over a 10 year time horizon, which means no one’s [0:23:52.1] ____ doing the Monte Carlo analysis for them, or if… Oh, there’s always gonna be that next better one. And so my thought is if you can have everything put out on a scorecard where you get like five offers, all of them are on a scorecard. And by the way, one of the columns is don’t do anything.

Ryan Isaac:
Which I love, by the way. I was so glad you said that. I think that is when you make financial decisions or life decisions, that there should be a comparison of the do nothing option. Keep going.

Kyle Francis:
Very much so.

Ryan Isaac:
Yeah. Totally.

Kyle Francis:
Very much so.

Ryan Isaac:
And sometimes that’s… In life, money decisions that’s often a great decision. So that’s cool.

Kyle Francis:
Absolutely. And my thought is like, you should layer that onto what you like, who you like and who you trust. I always think through, like, there is a doctor that I worked with in Augusta, Georgia and I’m not gonna give away his specialty, but he was a specialist, $2.6 million practice, single owner. And if I look at the different types of deals that we brought for him, we got really, really strong offers from very good DSOs in general. And whenever he was really looking through them, he’s like, You know what? That’s just not what I want. Really what I want is somebody to share life with. And so they wanted a partner. And so that partner we ended up finding from Walla Walla, Washington, moved him across the country, and they ended up transacting one half of the practice for $1.1 million. And here’s the thing, I can pretty well empirically prove that his three choices of transacting with a DSO, keeping the practice all for himself, and then transacting with a partner, he chose the lesser of the three options in terms of his overall economic outcome but that’s not all of it. The other like, life stuff matters with all this stuff.

Ryan Isaac:
It’s huge, man. We talk about that in terms of like, What do you want to maximize for? Because you can’t always maximize for wealth and balance or size of company and total control. And yeah. You have to weigh that. What’s more important to prioritize or emphasize at this point in your life? Maybe it’ll be different down the road for them but… That’s…

Kyle Francis:
Yep, exactly. I think you make the best decision by having the most data points in front of you. And if you have the data points in front of you, and your choice is going to be, I’m gonna keep on rocking it, I’m gonna give you high five. I’m like, “All right, sweet. You understood what the different things are. And you’re gonna keep on doing it. Hey, maybe you can start buying some practices for me. Maybe we can start developing some other stuff. There’s different ways we can work together over the next 10 years.” So that’s my thought process.

Ryan Isaac:
Yeah. I don’t know if you were saying this before or after we hit record, but you’re like, I’m a crappy salesman. And I think it’s because you’re a really, really good teacher. Because this is how I think teachers think. A teacher’s brain goes, like, “I really have a huge bias on what the outcome is you pick, but I really care that you know as much as possible before you ask something.”

Kyle Francis:
Yeah, dude. Completely, completely.

Ryan Isaac:
If I have a selfish agenda in a decision making process, it’s not the outcome. It’s like you just have to know as much as you possibly can before you choose an outcome. And then I’m stoked for you, good for you.

Kyle Francis:
My thought is like the coolest thing to me is gonna be like watching someone go through a process like this, agonize over the decision and then make that decision.

Ryan Isaac:
Yes.

Kyle Francis:
Right? Because if you do that, then suddenly it’s like you’ve thought this through, you know what you’re getting into.

Ryan Isaac:
You thought. Because it should have been agonizing.

Kyle Francis:
Right.

Ryan Isaac:
If it wasn’t agonizing and you did it quickly, like you didn’t give it enough time and you’re gonna have some regrets there.

Kyle Francis:
Yeah. Or maybe you’re making a decision just purely out of the pain point that you’re in or whatever else, right?

Ryan Isaac:
Yes.

Kyle Francis:
And so, like, my thought is like, if you can kind of take all that out and strip it out, understand the economics, understand the emotions, and understand that founder’s syndrome is a real thing and all this kind of stuff, right?

Ryan Isaac:
Yes.

Kyle Francis:
So if you can kind of understand these things, then well, your decision is sweet then, I’m happy for you.

Ryan Isaac:
It’s great. And you’re excited, man. How important is that to be like, Hey, slow down a second. Are you forcing something just because you have like this new stress in your life that showed up three months ago, and you’re just trying to get rid of it as fast as possible because you gotta sit in that. You gotta think through that.

Kyle Francis:
Yeah.

Ryan Isaac:
I wanna go back to something. We fast forward 10 years, and when you talked about like multiples changing, and maybe there’s less room for higher multiples and resale and that kind of stuff. Does this all eventually just shut down one day or does it trickle out the big multiples and how hot this market is and the desire for DSOs to keep growing and gobbling up practices? How does it transition 10 years from now?

Kyle Francis:
Yeah, so keep in mind, I’ve found out that I’m really terrible at projecting these things because…

Ryan Isaac:
Yeah. That’s…

Kyle Francis:
If you go back to ’19 when I thought multiples. I thought they were great. You’re right. And so like…

Ryan Isaac:
Yeah, totally, man.

Kyle Francis:
____ Like I do think that…

Ryan Isaac:
Totally.

Kyle Francis:
You’ve gotta be near your plateau, but like…

Ryan Isaac:
Yeah.

Kyle Francis:
So I think that the most likely scenario is going to be that once there are some comparables, comparable transactions happening that end up going public, then suddenly public money ends up transacting at much higher multiples than private money does in total. That doesn’t mean it’s sustainable there, [laughter] but it doesn’t mean that they do transact at higher multiples.

Ryan Isaac:
Yeah.

Kyle Francis:
So, in total, I think that’ll bolster multiples for a while, as people kind of start to either get sucked into those solar systems or actively go against those solar systems or whatever else. So I think that will occur. I think that the first group that ends up being hit are gonna be to call it like the million to $2 million practices.

Ryan Isaac:
Okay. Yeah.

Kyle Francis:
Where suddenly they’re going to start to, instead of getting six, seven, even sometimes even eight times multiples on practices of that size, suddenly there’s going to be a lot more warrants on a deal, or suddenly the multiple ends up dropping implicitly because the overall large group needs more room to cost average themselves down from and maybe [0:29:44.7] ____.

Ryan Isaac:
More warrants on a deal. Explain that warrant. There’ll be more warrants on the deal, you mean?

Kyle Francis:
Yeah. So there’s different ways of risk being dispersed over a deal. And so let’s say that you have a $2 million practice and someone’s willing to offer you $3 million cash at close and that’s it, right?

Ryan Isaac:
Yeah.

Kyle Francis:
You might say, Okay, well then maybe I just don’t wanna be a dentist anymore, [laughter] and you may choose to do that. Another bucket is going to be, earnouts. So maybe you’re helping finance some of that over the future. So you’re saying, Hey, the practice isn’t gonna drop more than a little bit over a course of time, lots of people end up calling those like, don’t move to Cabo clauses, that kind of stuff.

Ryan Isaac:
Yeah. Don’t move to Cabo. [laughter] Yeah. I like it. Yeah.

Kyle Francis:
The next one is gonna be equity. So like, either you keep a certain amount of equity at your practice, you roll a certain amount of equity into the group, suddenly you’re just kind of tied into the overall health of the organization, all that kind of stuff. But they didn’t actually have to give you cash for it. Now, there’s also a lot of upside with that as well. So we like equity going forward. In a consolidating marketplace, just ’cause equity grows really fast, all that kind of stuff. So whenever I say more warrants, what I’m meaning is going to be maybe it’s not as much cash at close and it’s not as much equity. Maybe it’s going to be more earnout specific. Right?

Ryan Isaac:
Totally.

Kyle Francis:
Maybe it’s going to be retention bonuses. Maybe it’s going to be a certain amount allocated towards finding that new associate. Right? And whenever that associate is placed, or that new partner is placed, you can cash out a certain amount. So it’s just kind of lengthening the time in order to get some cash.

Ryan Isaac:
Yeah.

Kyle Francis:
Is kind of what I think. So you asked a really specific question, I wanna give you a really specific answer.

Ryan Isaac:
Yeah.

Kyle Francis:
Which is do I think it’ll be a cliff or do I think it’ll be a trickle? I think it’s gonna be a trickle. Right?

Ryan Isaac:
Okay. Yeah.

Kyle Francis:
And I think that you’ll feel it over the course of a year. It’s just like, huh? Just doesn’t… The types of deals that we’re seeing…

Ryan Isaac:
We’re not hearing them. We’re not seeing them.

Kyle Francis:
Yeah, exactly. So but I think it might take us that long to figure out that that’s occurring.

Ryan Isaac:
Yeah. In the deal structure. I get, this is actually one of the questions when Matt connected us, shout out to Matt, Dentist Advisors. Yeah. What’s up Matt? I don’t know if he listens to this. I don’t know, I don’t, who knows, but Matt was like, Hey, one thing that would be cool to talk about that people do wonder a lot about is, how do DSOs make their money? How are they making their money? That might seem obvious to some, but I think a lot of people wonder that. Can you walk us through a little bit about just how is on the other side of this… How are these corporations, these private equity groups, these DSOs themselves, How do they make money? What is their future?

Kyle Francis:
Yep. So probably the easiest way to answer that, so I’ll give you a quick crash course in private equity.

Ryan Isaac:
Yeah.

Kyle Francis:
So let’s say that you owned a manufacturing facility and you end up selling it for a $100 million. In that case, you have your 401ks maxed out, your 529s maxed out. You already have a ton of money sitting in the market. You have a couple of houses, you probably have a plane, all these different types of things, right? And in that case, you might have another $10 million that you don’t know what to do with yet, right?

Ryan Isaac:
Yeah.

Kyle Francis:
It’s kind of a crazy problem, but some people have it.

Ryan Isaac:
Yeah. Nutty problem to have like millions of dollars, like, I don’t know where to freaking put this. Everything else is just growing and I bought stuff. I need more places to shove money.

Kyle Francis:
So in that case, you’ll probably could be contacted by hedge fund managers, private equity, general partners, all that kind of stuff. And what they’ll say is like, “Hey, we want access to that money.” And in that case, what you might say is like, “Well, I know that you want access to money, but what are you gonna give me in return?” And they may say, “We’ll give you a defined rate of return of 14% year on year if we have access to your money for a five year time horizon. Here’s the thing in the interim, you can’t ask for it back [0:33:09.7] ____.

Ryan Isaac:
Yeah. Liquidity. Yeah. You trade… Look, yeah. Which I just wanna pause there because this is a whole other subject, but a really important lesson in trade-offs because some people hear… They stop when they hear 14% and they go, “Well, like my 401k and the S&P was getting like nine or 10, so why wouldn’t I want 14? Isn’t that a no-brainer?” Or let’s say brokerage account. The point is like there is trade-offs because you just said you have to give access to your money for this period of time which is like, access to liquidity is a cost. It’s not a fee, but it’s total the cost. So I’m just side baring because it’s really important that you just mentioned how different investments are not necessarily like that’s better, that’s worse, that’s good, that’s bad. It’s just that’s different than that thing. And you have to be willing to understand the differences and then is that okay with you? So anyway…

Kyle Francis:
Right. Yeah, exactly.

Ryan Isaac:
I just think that it’s important to…

Kyle Francis:
And that’s why people like that are targeted with $10 million of excess liquidity that’s just kind of sitting there. And so like because they have the ability to make that type of trade off, right?

Ryan Isaac:
Yeah. They don’t need it. They’re like yeah I’ve got 90 million more.

Kyle Francis:
Yeah exactly. So if you can double your money over a five year time horizon, okay, maybe that sounds pretty good. So they’re gonna go around it, they’re gonna do a two year fundraise, right? That two year fundraise, they’re gonna try to put together big old piles of money maybe $200 million, $300 million, $400 million fund, right? They’re gonna go out and leverage that fund with debt, and they’re gonna say, we’re gonna put a certain amount of debt onto this overall fund. And what we can do with it now is go out and implement whatever type of strategy we think is gonna be best for our investors. Whether that’s aggregating coffee shops or aggregating anything. So it could be car washes or medicine or whatever else, right? And so one of the things that’s been very hot for quite some time is dentistry because it’s very hard to aggregate all these little tiny mom and pop practices way harder than medicine.

Kyle Francis:
So because of that, they’re gonna go out and they’re gonna have a choice and they’re gonna say okay, We can go out and aggregate each one of these individually and we have to build the infrastructure all that kind of stuff. And we’re gonna start with one and we’re gonna build up to however many but it’s gonna take way too long to do that. So what they’re gonna do is, they’re gonna go out and look for a platform. A platform is gonna be, okay, so they already have 30, 40, 50, built out. They already have infrastructure built out, levels of management, all that kind of stuff taking care of all the different practices and they’re gonna say okay, we’re gonna pay a much higher premium on this because it saves us so much time and then we’re gonna try to cost average ourselves, right?

Kyle Francis:
So they might buy the original group for 12, 13, 14, 15 times, go out and buy each additional practice for call it six, seven times. The crazy thing is, you asked about how they make money, this is how they do it. It’s just a straight M&A play. What they’re gonna do is they’re gonna say okay we’re buying the original group for 15 times, each one that we buy at seven, we’re doubling their value the very day that that transaction occurs, because they’re gonna go out and sell that entire platform again. And so, they’re gonna put, let’s say they bought a lot of… For easy numbers, let’s say they bought 25 practices to start out with at a 12x, and then they go out and buy another 75 practices at something like a 7x. They’ve just cost averaged themselves with efficiencies, economies of scale, that kind of stuff. It’s something like an 8x buy. Then they’re gonna go off and sell it and that sell is gonna happen, call it like a 12, 13, 14, 15 times, you take off the debt which is the low cost of capital, and essentially you get like on average an 80% return on invested capital. And so look, that’s the way LBOs work. Leverage buyouts. That’s the name of the game.

Ryan Isaac:
Yeah. And then you go back to all these people with 10 million bucks that help them create the fund and then they’re like there you go. There’s your return. And that was worth it to you. And that’s, you know, thanks for [0:36:43.4] ____ locking up your money.

Kyle Francis:
And the crazy thing about all this is like dentistry is the hedge against the risk investments that all these private equity firms are doing like if you go out and look at structures of different funds, dentistry is like, it’s so darn predictable. And so…

Ryan Isaac:
What you’re saying, if you go look at portfolios of these big private equity capital firms, you’re saying they have like their portfolios of like risky stuff. Like they’re investing in tech and startups and then they’re like we got our dentistry tranche because that never fails.

Kyle Francis:
Exactly.

Ryan Isaac:
Totally man. Yes.

Kyle Francis:
Yeah, it really does. And so yeah, you think about like… So the reason it’s so impactful in dentistry is because banks have been limiting the overall practice value for so long, because of provider risk. So it’s all about these person’s two hands, and they’re gonna make a loan on it, but if that person’s two hands, say they get in a mountain biking accident, then suddenly those person’s two hands are not [0:37:31.1] ____ working really as much, the practice value tanks and then the one left holding the bag is the bank. So because of this arbitrary financial mechanism that is out there, there’s this undervalued asset. So whenever you see the types of returns that we’re seeing in dentistry, everyone’s like, “Oh my gosh. This is great. I can get an eight or nine or a 10x. It’s just like, yeah, that’s just like normal in other places. So it’s not like an outsized return, it’s just kinda like…

Ryan Isaac:
This is what happens in other industries when there is efficiencies of capital and risk.

Kyle Francis:
There you go. Exactly.

Ryan Isaac:
I feel like we can keep going. Most of this has been my curiosity questions. Before I ask one more that was on my mind, Was there anything we didn’t cover that you really wanted to say?

Kyle Francis:
Man, so if you can’t tell there’s a lot of passion behind what I do.

Ryan Isaac:
Yeah, dude. I love it.

Kyle Francis:
I Love it. And so, yeah, that’s why…

Ryan Isaac:
Again, that’s why you’re a teacher. This is why you’re a teacher not a salesperson. And a teacher is gonna just talk way too long where a good salesperson like cuts to the chase, knows what their outcome is, and gets it sold. And shout out to good salespeople because that’s an art and talent and science.

Kyle Francis:
Completely. I’m astounded whenever I see ’em. You know all that kind of stuff, it’s like man I don’t have that ability.

Ryan Isaac:
I don’t know how to do that. I can’t explain something to you in five minutes and make you make a decision. I need like three phone calls.

Kyle Francis:
Right. Yep. Completely.

Ryan Isaac:
Yeah. I need four hours of your time. Yeah. Yeah. Oh sorry. But what… You were gonna say?

Kyle Francis:
No, I said, but I mean long story short is there other stuff we go… Yeah, there’s… You said we could talk for a long time. I think that’s absolutely the case. I love your idea about liquidity as well. It’s something I’ve been thinking about in real estate. So at some point or another I’d love to pick your brain on one of those things. But yeah, I mean, long story short, I’m glad we had the conversation, so.

Ryan Isaac:
Yeah. Cool man. Okay. My other question I’ve been thinking about, I’m hearing this question thought about more frequently now and I’m seeing it tested. Here’s the question. A seller puts together a deal, he gets some cash up front, they have a buyout bonus or earn out bonus or something along the way and then have equity in the structure, the DSO itself, yeah, right? They roll it up. They sell it, they get the cash, they do their thing, they work back three to five years whatever. And then the DSO has another roll up. They have another capitalization event, they recap, whatever. And that could be whatever, 12 months later or five years later, whatever. They get their money, but the question is becoming and I’ve seen it… What’s funny is, there’s been so many transactions but a lot of the recaps haven’t happened yet.

Ryan Isaac:
So this is like fun to kind of wait and see if they hit their expectations and whatever. But the question is becoming, wait a minute, if I keep let’s say a million bucks in the DSO as part of my package, my buyout package, I’m gonna roll that into their equity, when they recap like let’s say it doubles and now I have $2 million just to keep numbers easy. Do I just like get 2 million bucks? Or is it wholly dependent on the new buyer coming in saying well you get your 2 million but you have to keep half of that with us and roll it again into the next recap? Or it’s dependent on you signing another contract or…

Ryan Isaac:
So that’s the question. And then another sub-question is, Can I do anything in the original agreement when I sell my practice to a DSO to like know that ahead of time? Or have an expectation about how… How do I actually get my money out of this next recap and roll up and how much of that is just in the next buyer’s hands and nobody knows, and I might be at the mercy of something I don’t like in the future. A future buyer I don’t even know yet, that might not be good for me. Do you know what I’m saying? Does that make sense?

Kyle Francis:
It does.

Ryan Isaac:
And is there any way to think about this as people go through these transactions?

Kyle Francis:
Yeah. So biggest thing, thing one is going to be if you have equity within an organization, make sure that your equity is the exact same type as the private equity firm, right?

Ryan Isaac:
Explain that. What do you mean?

Kyle Francis:
So I mean, there’s different classes of stock. Different classes of stock do different things, so there’s like preferred stock and preferred stock and may be acts more like debt. So you get a certain coupon rate, all that kind of stuff. Sometimes preferred stock ends up also converting into common stock. All that kind of stuff. Sometimes there’s multiple tranches of common stock, sometimes those things allow for either earlier liquidation or it allows for different types of preferences within it. And so overall you want the same type of stock that a DSO has. And it’s called being pari-passu, which is on the same footing. So if you’re on the same footing as the largest stakeholder within the group, you know that they’re going to be making financial decisions that is going to be… They’re gonna be good for them.

Ryan Isaac:
That’s gonna align with you.

Kyle Francis:
Exactly. And so suddenly if you are aligned in that way, then most likely you have all these, again, [0:41:56.1] ____ quanti folks that are behind it, right? That are kind of deciding what is the best way of leveraging this cost of capital? So if we’re contemplating a transaction, it’s not just good for a PE firm X, it’s actually good for entire ecosystem, right?

Ryan Isaac:
Yeah. Okay.

Kyle Francis:
So I think that’s thing one. So and by the way there’s…

Ryan Isaac:
Real fast. Can I jump in? How do you make sure you’re on equal footing? Is that even a negotiable thing where you can be like, Hey, I noticed that I have a different class of common stock and the main equity is like some kind of preferred share is like, I don’t want… I want that too. Can you…

Kyle Francis:
The way that you negotiate it is by having comps. So by finding a group that you feel comfortable, you are getting that, because there’s different investment thesis. So there’s different groups out there that say, No, we’re going to limit the total amount of upside on certain types of stock. We’re gonna limit the total amount of upside on a certain amount of JV, or we’re only gonna allow you to sell down to a certain amount on recap one or on recap two. So by having those types of comps out there, you can have the entire marketplace dictate where it is that you end up going, on the back end.

Kyle Francis:
Now again, part of that is emotional, to making sure that you like and trust the folks, all that kind of stuff. That matters a lot because they’re gonna be living with it in the future. But a lot of that is also going to be most likely if they’re putting out a package for you, the chances that they can suddenly say, Hey, we’re gonna change the way that this stock offering is gonna work for you, but not the person we just bought. Right? That’s probably not gonna happen. You may not be comfortable with that. It’s the exact same thing with the idea of clawbacks. I really don’t like clawbacks. I think that once you end up getting money or equity, you should be able to keep that money.

Ryan Isaac:
Clawback. How are those showing up? What does that mean in those deals?

Kyle Francis:
: Yeah, so on a clawback it’s going to be, Hey, we are going to give you an eight times multiple on this EBITDA. However, if the EBITDA doesn’t perform over a 12 month time horizon, we can come back after either the certain amount of equity that you have or a certain amount of cash that you have. I really don’t like those. I think once that original transaction is done, it should just be done. There aren’t very many groups that are still doing this. But in those cases if you don’t have comparisons, what we end up seeing is people are like, Oh, okay, this is just kind of the way that it works.

Ryan Isaac:
It is what it is. I’ll take it.

Kyle Francis:
Yeah. But if it’s not though, it’s just like, no, there’s a lot of different ways this can work.

Ryan Isaac:
Okay. So that was thing one. We’re gonna do a part two or like a webinar or something ’cause there’s like so much you wanna go through. So that was thing one. I don’t know if you remember what thing two was where you wanted to take thing two.

Kyle Francis:
Yeah. So if you look at the first side, which is going to be understanding where your equity lives, right? Then the second thing is going to be understanding your potential time horizon. And if they have gone through any sort of recapitalization events. So if they’ve already gone through one, you’re gonna have an idea on what the expectation is going to be in the future. Now with 350 different groups out there now, you’re right, a majority of them have not gone through recap events but a lot of the best and biggest acquirers out there…

Ryan Isaac:
Have, yes.

Kyle Francis:
Have and have [0:45:00.1] ____ gotten…

Ryan Isaac:
And they’re coming up on their like second and thirds and fourths.

Kyle Francis:
Exactly. And in some cases fifth. And so if you look at that, then suddenly you’re gonna have an idea on how people end up looking at these things. And so even if it’s not going to be your specific group, if you have an advisor with their salt, they’re gonna say, Yeah, this is gonna be very similar to this type of recap that has been out there in the past. And is it possible that you end up having some of your equity tied up for a certain period of time? Yes. But it may not be the worst thing in the world to have that equity tied up because if you have pari-passu equity, maybe you’re in a good place to start out with. Final thing to think about is going to be projecting off of a projection is typically a fallacy right?

Ryan Isaac:
Yeah.

Kyle Francis:
And so if we already project out one recap event and now we’re projecting a second one in seven years, it’s just like, Okay, how accurate can I be with all of this?

Ryan Isaac:
Totally.

Kyle Francis:
So if I look at like the return on investment calculator that we end up using, we try to guess low side on all these different things, and so that way they can be achieved in higher… Better than what we were expecting. But at the same time, it’s really, really, really hard to project off the projection.

Ryan Isaac:
Man, yes. And now as you’re going through all this, I’m just thinking like no dentist should go through this transaction or entire process alone. Like willy-nilly…

Kyle Francis:
Well, and it always sounds like self-serving whenever I say it, right? [0:46:16.6] ____ So it’s like, I…

Ryan Isaac:
I know.

Kyle Francis:
So my fallback is this, at some point or another I’m gonna be selling this business. I don’t know when that’s gonna be. If there was a huge aggregator of niche investment banks out there, then honestly I would be doing what I’m preaching, which is going to be, I would be considering those options because I should. If there’s a certain amount of arbitrage that I can handle. Okay. Then I’d wanna know what that looks like. I don’t know of any of those yet. So if anybody’s out there aggregating investment banks [0:46:43.8] ____.

[overlapping conversation]

Ryan Isaac:
It’ll happen. Some finance person will figure it. Yeah, they’ll make that happen. If there’s money to be made, they’ll make it happen.

Kyle Francis:
Well, and that’s my thought. It’s like, but at some point or another, I’ll be thinking about this. And at that point I know for sure I’m not going to be the one running that process. I know how to run this process. But my emotions would be way too ingrained in like what the outcome would end up being.

Ryan Isaac:
Totally.

Kyle Francis:
I wouldn’t need somebody to kind of say, “Okay, this is what the market is looking like and this is why it’s looking this way for you.” And all that kind of stuff. Because I’m gonna have the exact same type of emotional response from a founder’s syndrome perspective that all these doctors are. Right. And so like…

Ryan Isaac:
Yes.

Kyle Francis:
Yeah, it sounds self-serving, but I know for sure I’m gonna do that whenever I end up selling.

Ryan Isaac:
Yeah, I mean, I just think about this and I’m like, “A lot of dentists have people in their lives. They’ve got a CPA, some have financial advisors. Everyone’s in a Facebook group or a mastermind.” But like, you can’t, like get your final resolution on something this big and variable from a Facebook group or a couple buddies or just chatting with your CPA for 20 minutes. Or even… Like as financial advisors, we talk about this stuff all the time with our clients, but we’re not experts in deal negotiations. That’s not our business. That is someone’s actual full-time business is deal negotiations. Breaking it down the legal side of it, the different aspects of it. Things to think about all the variables.

Kyle Francis:
But also think about it from an incentive standpoint as well. So you hear it from a deal guy and I’m not right. And so you say like, “Hey, you should consider your options.” Okay. There’s an implicit reason that I’m telling you that. Also think about it from the different people you end up having in your life as well, right? Which is going to be your buddy that already had that happen. Okay. Well maybe they’re getting a referral fee for telling you to kind of consider that group, right?

Ryan Isaac:
Yeah.

Kyle Francis:
Or maybe it’s from a financial advisors like, “Well, I’ll sure would like to have another $2 million of your money in the open market.” Right?

Ryan Isaac:
Totally, yeah.

Kyle Francis:
Or, and not that you’d do that.

Ryan Isaac:
Never.

Kyle Francis:
But, or maybe it’s a CPA and they would say, “Well, hey, I really liked it, the fact that I’m getting $30,000 or $40,000 from you on an annual basis and I don’t wanna lose you as a client.” There’s all these implicit biases that are out there. And so if you end up hearing… Again I think that it kind of comes down to data points, which is going to be, Okay, they’re like, understand what the entire thing is looking like and then you’ll make the best decision for you.

Ryan Isaac:
Yes. Totally. Man, that is so good. Okay. I don’t want to take up your whole day, peppering you with questions. We’ll do this again some other time soon. How can people find you? Where do you exist on the internet?

Kyle Francis:
Yeah, so if you go to website professionaltransition.com, both of them are singular Professional Transition. I have an amazing PR person that handles all that kinda stuff for me. ‘Cause I’m really bad at social media and all that kinda stuff. I’m just not… Again, it’s not the thing I like to do. But if you go to website, if you go to Facebook, you go to any of those kind of places and look up professional transition, you’ll find us.

Ryan Isaac:
That’s the one. Okay. Kyle, thanks for doing this, man. I appreciate Matt for connecting us, but this was super fun. I think it was really informative, for me too and I’m sure our audience, and we’ll do it again soon. So thank you very much.

Kyle Francis:
Great. Appreciate it man. It was great.

Ryan Isaac:
Yeah. Thanks everyone for tuning in. We’ll catch you next time on another episode of The Dentist Money Show. Take care now, bye-bye.

Practice Transitions

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