Why Exit Planning Should Start Long Before You Sell – Episode #684

On this episode of The Dentist Money Show, Sara Stock from Stock Legal joins Ryan to discuss practical strategies for growing — and eventually exiting — a dental practice. Sara introduces the “crawl, walk, run” approach and how phantom equity can help test a partnership before committing to full ownership. They talk about why every purchase should start with a cost-benefit analysis and why smart exit planning can lead to a smoother, more profitable transition.

You can view Sara Stock’s full presentation here!

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Podcast Transcript

Ryan Isaac: All right, everybody, welcome to the Dentist Money Show. This is where we help dentists make smart financial decisions. I’m your host, sir Ryan Isaac, as people affectionately call me over the past decade or so, I’m here with Sarah Stock, a longtime friend and guest of the show. Hey, Sarah, thanks for joining us again.

Sara Stock: Thanks for having me.

Ryan Isaac: Okay. So first of all, we, were just talking. We’re gonna recap a little bit of, you came and, spoke and, met with a lot of people at our, our Dentist Money Summit conference in Park City in June, 2025. Um, the next one’s already starting to get planned, but give us a little intro of, of stock legal and Sarah Stock and the things you do for, now, you know, some of our clients too.

Sara Stock: Yeah, well, the quick background is that I was an equity partner at a large regional law firm. Um, had a wonderful career there. Kind of came to a point right? Before I turned 40. And that point was like, who, what kind of clients do I really wanna be serving? And you know, I went to law school to help people that look like my parents. They run a trucking company over in Lebanon, Illinois and have for 54 years now called stock transport. And at that point really felt called to make the move to working with clients that looked more like my family than large publicly traded companies, working with general counsel. So I left back in November of 20 14, 11 years ago. If you can believe it, Ryan. Like, it’s just blows my mind. I know, right? Uh, it was me and a hundred clients. Uh, today we are 16 lawyers, several thousand clients signing 30, 50, 60 engagement letters every month. And while I have been working with doctors, I’m sorry, yes, I’ve been working with doctors. Doctors and lawyers. Not lawyers. I’m a lawyer. I’ve been working with. Doctors and

Ryan Isaac: You work with lawyers, you work with lawyers, they’re in your office.

Sara Stock: Do, and we represent lawyers. You can tell it’s the end of the day on a Monday.

Ryan Isaac: Yeah, that’s fine. Yeah. I think it’s a Tuesday too, by the way.

Sara Stock: Is Tuesday. I know. I’m

Ryan Isaac: It’s been a long week already.

Sara Stock: Wow. So everyone is on vacation in my office right now and you know how that goes. Like, it all just lands on my shoulders. So love that they’re on vacation, making it work. Right. so, you know, the short version of the story is that I’ve been working with doctors and dentists my whole career, but in 17 I had the opportunity to jump in and really help build my first DSO and that was exciting. Uh, we worked with, um, what was the, what was Tusk then? Um, you know, some of the guys left and then started Polaris. Um, we really liked working with them. They really liked working with us. They thought, wow, these lawyers can actually speak English to their clients. Right. Ah, so.

Ryan Isaac: Novel concept. Yeah, basic communication. Yep.

Sara Stock: Exactly, so we really jumped in with two feet, uh, in working with dentists and, you know, today we help people form companies. We help dentists build group practices. We help them with incentive equity, we help them with real estate. We help them build DSOs, we help them with m and a, um, you know, really the entire life cycle of building a dental practice and a lot of the directions that you can go as you’re building out your, your practice structure.

Ryan Isaac: Thank you for that intro. There’s probably a hundred different questions people would like to know and ask right now through all this, especially. Especially around consolidation and DSO and group practice and where the industry is going today, we were gonna cover a little bit about what you did in the lunch and learn, at our summit. Maybe let’s outline that so people know what we’re gonna dive into, but I would love, not now, maybe throughout the, the conversation you’ll probably get to it, but we can ask it at the end if we don’t. Just some of the, the big trends right now. What’s happening? Where do you see things going? You know, when they talk about consolidation, I think a lot of people only picture private equity backed big corporations. But also consolidation is regional group practices with four or five partners and, you know, a handful of locations. So I’d love to hear more about trends. maybe sprinkle in things about big mistakes people make when they’re contemplating this stuff and going through the process. I’m sure you’ll hit that all. So let’s start with, um, OO overview. What did you, it was really cool. You, you had a chance to do a lunch and learn in our dentist Money summit. what were the main topics that you, that you hit there that we’re gonna cover today?

Sara Stock: Yeah, so, you know, I really approach it from the perspective of if I was a dentist and I was going into one of the four areas that I get hit up by most dentists to talk about, what would I wanna know? And I was very clear, I’m a lawyer, I’m not giving legal advice. But, uh, I try to build out what I share with potential clients. We do a complimentary 30 minute call or zoom with anyone. And, you know, I try to give as much information as I can during that time. So I was trying to really outline in this presentation, you know, what are all of the baseline things that you wanna, you want to know, you want to understand. and we started with incentive equity because incentive equity is so important in retaining key associate dentists and then moved to IS A DSO right for you? Uh, because I talk people out of DSOs all day long. It’s, it’s right. And uh Right.

Ryan Isaac: Comment. Yeah. Uhhuh,

Sara Stock: I’m sure you

Ryan Isaac: Especially the younger crowd.

Sara Stock: That. Yeah. I’m sure you guys are hearing that from your clients quite a bit. You know, in this presentation I talked about adding real estate to your growing empire because, you know, it is a, a really smart step in a lot of situations to buy a building, lease it out to your practice, it can be a good use of your capital.

And then we talked about m and a because sell-side m and a is really scary. Buy-side m and a is really scary if you’ve never done it before. but when you’ve spent your entire career. Building out a practice or multiple practices, the idea of selling it and all of the ways you can potentially sell your practice can be overwhelming. I mean, I, I have a number of stock legal clients that are dentists that, you know, we talk every couple of months, Hey, I’m still thinking about selling my practice. What do you think about this? What do you think about that? How does this structure work? You know, what’s, what’s my next best move? I mean, it’s, it’s intimidating. And so the understanding, the arc of the transaction from a legal perspective, I think can be really helpful.

Ryan Isaac: Okay, let’s begin there. I love this topic of incentive equity and it, it’s huge in other industries. Obviously for a long time that’s the way a lot of key people have been, uh, retained and, you know, motivated through, you know, in other industries over the years, it feels newer in dentistry, usually it’s been very cut and dry equity. It’s like you buy half the practice or a third and you’re a partner now, whatever. But walk us through what does incentive dentistry, incentive, uh, equity mean in today’s world of dentistry? How is it applied? Who is it for?

Sara Stock: Yeah, so we try to talk about it in a crawl, walk, run style, right? I think it makes the topic of incentive equity really approachable, um, and it kind of helps people. You talked about mistakes just a minute ago, you know, it helps people not make some of the big mistakes that we see very regularly, and those mistakes often look like, you know, Hey, I just hired this new hotshot associate. He or she can get financial backing. I’m gonna let them buy 40% of my practice. Right. and you know, that might be a good move, but the challenge in that situation is that you haven’t really had a chance to get to know each other. You haven’t really had a chance to see if you can work together. You haven’t really had a chance to see if they can produce or if they have business acumen. You haven’t been through a disagreement with them. And so when we

Ryan Isaac: It’s a lot like getting into relationships too

Sara Stock: It’s exactly, I

Ryan Isaac: Married. It’s like getting married too fast. You’re like, hold on, hold on, hold on.

Sara Stock: it, right as I’m saying it,

Ryan Isaac: Let’s go on some vacations. Let’s have some fights. Let’s spend some money. Yeah.

Sara Stock: Any relationship has to start that way. And so rather than jumping in like that, we talk a lot about phantom equity as a great first step. And for a number of our clients, we’ve actually built out a paradigm of, let’s start with phantom equity. Phantom equity looks like equity, smells like equity, tastes like equity, but it’s not actual ownership in the company. So it doesn’t come with all of the strings that real equity comes with. And those strings are things like, you know, as an owner, you can make certain demands of books and records and you can cause all kinds of problems and tie up, tie the, tie the business up in court in a number of different ways. Phantom equity is just contractual equity, and so it can mimic real equity from a net cashflow distribution perspective. So you’re actually as an associate dentist getting compensated a little bit like an owner. So it’s training wheels, right? Like we’re trying to figure out, you know, is this partnership going to work?

And boy, like if you can take a year or two, or ideally three or four to go through that process, really get to know the person to figure out if they’re the right partner for you. We see so much success when you take that approach.

Ryan Isaac: And it makes all the sense in the world to start and begin here. It does seem like it’s not that common or dentists don’t employ, um, the usage of phantom equity and, and beginning here. Why, why would that be? Is it just new? Is it hard to do? Is it just not familiar in this industry among dentistry?

Sara Stock: Well, I think because. Incentive equity is so trendy right now. when you say it’s contractual equity, people are like, oh yeah, no, no, no. I wanna be an owner. I wanna be an owner right now. Right. I think it’s shortsighted on everybody’s part because the, the associate dentists actually don’t wanna become an owner and a practice that they’re not going to stay at it is fraught with problems as well. And so, you know, it really does behoove everyone to go through a getting to know you process. And when you have competitive compensation and the cherry on top is phantom equity, I think that feels really good to both parties. And so, you know, you really have to build out an overall compensation, uh, package as an owner and not just, you know, really focus on one incentive equity or another, just compensation. Does that make sense?

Ryan Isaac: Yeah. Got it. Yeah, that makes sense. And um, I, is it a thing where, is it intimidating for dentists to go through this? Do they just not know where to begin? Or is it really it you just said it? I think that’s probably a big part of it is. A lot of newer dentists or associates are like, I just wanna be an owner. I’m not gonna do this. And you know, may, is that the barrier to entry or what? What kind of prevents people from doing that?

Sara Stock: Yeah. Well, you know, I think number one, nobody’s really talking about phantom equity, right? And so that’s why when we talk about, I mean, we speak very regularly on incentive equity. And when we do, we always talk about this crawl, walk, run, because we want people to think about it that way. We want people to have that in their awareness and to go kind of roll all the way back to where we started. It’s why I was trying to build this not legal advice playbook, So let’s talk about exactly what our options are. Let’s put them all on the table. Let’s then evaluate them based on what your specific set of facts are. And you know, when I have a dentist that comes to me and they’ve had. A, an amazing key associate dentist that’s been with him or her for years, plural, you know, 5, 6, 7 years.

They’re the crux of what’s holding the practice together. We might immediately jump into incentive equity while mentioning phantom equity. so it’s, it’s really a facts and circumstances test. You know, there’s no right way to do any of this, but I think just bringing awareness to the opportunity, getting it out there, letting people talk about it. And you know, one of the things that we do at Stock Legal, that, and we do it with, you know, whether we’re using phantom or actual equity or there’s a buy-in, we always offer. Of course, giving the caveat that we represent the practice or the owner, we always offer to do a zoom where we walk the recipient through what exactly all of this means. We encourage them to get their own counsel, of course, but you know, sometimes just having, again, someone speak English to these people, the recipients of incentive equity in whatever form, you know, it helps them to be able to wrap their heads around what we’re talking about.

Ryan Isaac: Yeah, that makes sense. Can you walk through some of the, maybe the, the steps of it or the, the stages of when this happens in a practice?

Sara Stock: Yeah, well, you know, it, it, again, it really depends. So, you know, if you have a practice where, you know, you are hiring your first associate dentist, right? At that point, you know, you’re probably not ready to think about incentive equity. You’re really just growing your practice. it’s when that there’s multiple associate dentists and you have one that is, or two that are really leading the charge and they’re, they bring something to the table that would be hard to find in the market. Otherwise, that, I think that’s where the conversation begins, right? You’re trying to figure out what can I do as a practice owner to retain these amazing people that someone else isn’t doing right? so I think that’s an opportunity, um, you know. Then as you’re thinking about succession planning, that’s another opportunity.

If you’re thinking about building a group practice structure or you’re thinking about building A DSO, obviously incentive equity becomes a key component of that. but you know, when you’re really just starting out or as you’re scaling, you know, there is that kind of tipping point where you have some people that are really key to your practice and how can you incentivize them to stay, incentivize them to think like an owner, you know, have someone that you can collaborate with as you’re building. And that’s when I think incentive equity is a, a great topic of conversation.

Ryan Isaac: Great. Yeah. I want to talk about the DSO discussion. Uh, I wanna ask you first though, in your, you know, vast experience. do you have a, a number where you think the dental industry will consolidate to a percentage that will end up technically in this group category? That’d be one. Question number two would be how do you think that splits out between, in that category of, you know, of group practices, how much is big private equity, corporate stuff versus how much is regional, you know, small group of partners. How does that split out in your opinion? Where’s your crystal ball? Do you, do you know the

Sara Stock: Yeah, I,

Ryan Isaac: You predict what’s gonna happen for us?

Sara Stock: I wouldn’t even hazard a guess. I mean, I just heard a like crazy prediction at my lunch meeting today about the financial planning industry. So like, you should be really interested in this. Right. Um, and the crazy prediction was that with ai, you’re looking to see 15 to 20 financial planning companies or firms in 10 years. That’s it, 15 to 20. And I thought that makes absolutely no sense to me. I mean, this is such a relationship based business, right? Relationship based business. Um, so when people are start throwing things out like that, I don’t even hazard a guess on consolidation. You know? I really don’t. But hey, before we move on too quickly, I wanna go back to incentive equity

Ryan Isaac: Oh, please. Yep,

Sara Stock: Because we only talked about crawl, and I wanna talk about walk and run. So if you don’t

Ryan Isaac: Thank you. Thank, no, no, no. Thank you. Yes,

Sara Stock: Of course. Okay, beautiful. So, you know, when you think about how to build out a, a plan, if you are in a place as a practice owner to start with phantom equity, you might plan out a year or two or three of phantom equity before you get into what is your more typical incentive equity and your more typical incentive equity. You’re looking at profits, interest, or some sort of restricted stock or restricted stock units. and I won’t go into the details or the nerdy legal stuff about what each of those things mean. The, the ultimate result though, that anybody who’s listening to this podcast should really care about is that those are ways to attach milestone vesting cliffs to grants of incentive equity.

And when those, the, the grants are made, the recipient. Actually becomes an owner in the company. And so it may be non-voting, it may be with profits, interest distributions over a hurdle that hurdles the value of the practice, the date of the grant. That’s all the nerdy legal stuff, right? But when we talk about walk, that gets us into an a kind of incentive equity that is real ownership. And as I mentioned earlier, sometimes you might leapfrog into walk because of where you’re at in growing your practice. so I’ll pause for a moment, any questions about that, and then I can talk a little bit about run.

Ryan Isaac: Only question would be, are there typical like years in a practice or that an associate’s been there that where you’d kind of move from these stages, crawl, walk, run? I mean, are

Sara Stock: Yeah, that’s a great,

Ryan Isaac: Spent?

Sara Stock: Yeah, that’s a great really practical question. And I wish I could say yes at year three you do yet this, and at year five you do that. But

Ryan Isaac: Highly dependent. Yeah.

Sara Stock: Is, it’s so subjective and it’s based so much on the value that the person is bringing to the practice. So, you know, any associate dentist out there listening, you know, to the extent that you wanna really prove that you’re ready to receive incentive equity, like think about the value you bring to the practice and the value can come in production or taking over some of the business operations pieces, growing the practice, opening new practices, leading new practices. Uh, that’s a great, those are all great ways to demonstrate value and to make yourself, make yourself valuable to the point where it would be detrimental to the practice to lose you. You know, those are the more subjective criteria that we look at from a more traditional incentive equity perspective.

Ryan Isaac: Yeah, that, that makes sense. I was just looking at the chart too, that you use for, uh. That you sent over the, the walk and crawl and run, and it seems like a lot of people skip some of these steps, uh, which might be part of the mistakes that get made. Do you, do you have any comments on why, like, you know, what happens there, why that ends up being the case?

Sara Stock: Yeah. You know, I, I mean, I, I think number one is awareness, right? You know. I find that legal is such a gating item to entry even into bus, into owning a business. But legal is also a gating item into scaling a business, and that is industry agnostic, right? And so part of what we’re trying to do is get the word out that there are all of these options out there because you know when you don’t have a savvy lawyer or you don’t have a savvy CPA or you don’t have a savvy financial advisor. You know, your, your team of advisors can only talk to you about what they know. And so, you know, you guys are often boots on the ground with, with clients. You talk to them all day, every day. Um, getting out there, the word that there are all of these other options that they could consider, and the pros and cons of those options, I think just makes these businesses, it, it helps to build a stronger foundation for these businesses so they don’t get tripped up in the things that often take down companies or detract from the growth trajectory.

Ryan Isaac: Yeah, that makes sense. Okay. Yeah. Thanks for, um, covering that. did we hit the run stage

Sara Stock: Not yet. So,

Ryan Isaac: Yeah. And that’s where we’re And run, like that’s the kind of, now we’re the full buy-in, which is so interesting. ’cause that’s where everyone begins. It’s like everyone begins in the run stage. Yeah.

Sara Stock: It’s, and you know, I mean, it, it, some of it depends on the market, right? I mean, when you are having trouble trying to find these amazing associates, when you’re really struggling to grow your practice because you can’t find the right people. You know, people, uh, business owners get anxious and they jump to, I need some stability. I’m just gonna sell 30% of my practice. Right? Uh, and there may be a good reason to do that. Someone’s bringing a specialty or, you know, they’ve been out there practicing for 15, 20 years. So they bring incredible experience there. There are, there are definitely good reasons to start with a potential buy-in.

But I go back to my original comment, which is you really need a chance to get to know each other before you jump into being business partners. Any relationship works the same way.

Ryan Isaac: Yeah, that makes sense. it’s probably a whole other discussion. Maybe we could do like a part two on this. I would love to take a bit of a deep dive. I don’t know if you’ve ever done this before, but it seems like there could be a checklist of milestones or things to get through or experience with someone as a business partner before really like diving in. Maybe we could build a checklist like that and it’d be kind of a

Sara Stock: Would be so much

Ryan Isaac: Know, give out to

Sara Stock: Yeah, that would be so much fun to tinker with.

Ryan Isaac: Yeah, it’d be interesting. Anything else you wanna say about this stage of, uh, incentive equity or, um, you know how to do it, when to do it? Any, any other comments on it?

Sara Stock: Yeah. Just one last, which is anytime you’re using incentive equity, having a really strong set of projections I think is key. You know, if you’re saying to someone, I’m going to give you incentive equity, you also have to say to them, and it’s going to pay out like this, right?

Ryan Isaac: Yeah. Give them some kind of like roadmap of where this is even going so that they, they, yeah. The, the incentive part of incentive equity. Yeah.

Sara Stock: Right. Is it even worth it? Otherwise, I just become an owner and you complicate my tax life. You complicate the way I get paid. Right? You’ve gotta have some sort of a projection on how the practice is going to grow, and that projection ties itself really nicely to milestones, right? Vesting milestones for your incentive equity. So you know, I think they can really go hand in hand. Finding the right person to help you build out those projections, I think is key.

Ryan Isaac: Okay. And is that gonna usually consist of. You’ll have, past financial data, p and ls, uh, you know, practice data reports, but that’s just gonna be someone sitting down and, and knocking out some kind of performa, uh, different scenarios of growth and assumptions and Okay. Is there, is there a usually a template for that, or is it kind of,

Sara Stock: No, sadly no. You know, so, you know, if you have a controller or a CFO, you know, there are also fractional folks out there that do this work that are really good, that you can bring in on a very specific consulting basis. I think those are great options too.

Ryan Isaac: Okay. All right. let’s talk about the most hot button, three letters that exist in all the content that we do these days.

Sara Stock: Right?

Ryan Isaac: DSO. What do we, what do we wanna say to, we could, we could do multiple episodes in this. What do we wanna say today about DSOs? What’s the, what’s the direction of this?

Sara Stock: Yeah. You know, I mean, here’s what’s fascinating to me. more so in the last year than in any other time have I had more dentists come to me and say, I am not building out a DSO, but I wanna build out this. And then they, they explain to me essentially what their creative idea is around building out something that allows them to grow multiple practices in, in a different way. DSOs become a dirty word, I think, in the market, right?

Ryan Isaac: A DSO. They’re describing building A DSO without private equity, without corporate. And then they’re just like, I just want like four or five partners in seven locations in my region.

Sara Stock: Right. And, and, and then they all say this, they all say the same thing. Like, Hey, let’s create some efficiencies by putting all of the back office

Ryan Isaac: Group? Yeah. Group buying services under one company. Yeah. Centralized. Yeah. Front, front desk and Uhhuh. Yeah.

Sara Stock: Yes. And you know, I understand, I really do. I mean, DSOs have gotten a bad rap and probably rightly so. Um, you know, given what’s happened in the market and the way that, you know, they haven’t, not all of them have been run or administered in a financially responsible way. So I get understand and appreciate it. But I will say this, I think the concept is sound, you know, if you are looking to create efficiencies, economies of scale by putting all of your back office services in one entity and having that one entity service, multiple practices, I mean, that from a business perspective makes all the sense in the world. We don’t have to call it a DSO, you know, I mean, we can do a lot of different things, but you know, just creating those efficiencies makes your practice run, run more effectively and increases your margin. So that, that’s been my experience.

Ryan Isaac: Yeah. Okay. And I like, I like this take, and this is kind of what I was asking earlier about, you know what, and you’re right, it’s impossible to, to guess the, I’ve you’ve heard all the statistics, I have too. what I’m interested in though is, and I do believe that there will be, and I don’t know a percentage, but it’ll be a good chunk of what we call consolidation or group practice in this model. That’s not the dirty word everyone’s thinking of. Which I, I mean, to be fair, there’s a lot of great opportunities in that side of it too. Like, whatever.

Sara Stock: Yeah, yeah.

Ryan Isaac: But let’s, let’s talk about, um, what that looks like. How people go about setting up, you know, what they, what essentially is a small regional DSO privately held, but what does that look like? What’s the process and who’s the, I guess who’s the person who’s the candidate? What’s the avatar? The characteristic, the personality that is cut out for this, because not everybody is.

Sara Stock: So you know, we say a couple of things, like if you have two, three or more practices already, or it is your stated intent to grow into more than three practices and you’re gonna grow by acquisition or you’re gonna open de novo practices, you know, if that is your stated intent, let’s just call it consolidating back office services.

Right. That makes a lot of sense.

Ryan Isaac: An organization consolidating back office services in an organization.

Sara Stock: It, that

Ryan Isaac: Put the O in

Sara Stock: Of sense. Exactly. I like it. Now we’ve said all the things without saying all the things. Right.

Ryan Isaac: It’s more palatable that way.

Sara Stock: Language is important. Right? So, you know, if, if that’s your stated intent, then, and especially if you’re gonna be a multiple states, right? I do think that there is a, a strong business case for consolidating back office services. Now, what kind of person is a really great question? Um, you know, some of our most successful clients that have built out DSOs are dentists who have either. Either come into this with an MBA or while they’re going through this process, have have procured an MBA. So, you know, they are intent on understanding the business model. and they are dedicated to learning the financial parts of administering a business like this.

Ryan Isaac: Yeah. Would you say, okay, so would you say it’s the type of dentist who maybe they don’t hate clinical, but they want to get out of, out of clinical, do less of it, I guess, and they want to spend more time in the numbers, the growth, the management. Does it, is there a characteristic, uh, or a personality trait? Where is leader is being a good leader required here, or can you just be strictly a great business number, spreadsheet minded person,

Sara Stock: Well, I mean, I think. I think if you’re not a great leader, you’ve gotta have a great leader on your team. Right? Because, you know, one of the benefits of building out this structure is that ultimately you are able to diversify some of the risk for the entire group of practices, right? Diversify. Because you’ve got the centralized location for all back office services, um, to the extent that one practice is up and another practice is down. Well, the overall financial health is still good if you can, if you can manage that, right? but you have these people that ultimately are overseeing multiple practices. So you’ve gotta have someone that can lead, that can mentor. Um, you’ve gotta have someone that understands the business of running a practice. That can be one person. It’d be great if it was, you can wear all the hats in the beginning, but if it’s not, you know, having a really great CEO and COO that contain all of those characteristics or personality traits, I think is really key.

Ryan Isaac: Okay. That makes sense. Thank you.

Sara Stock: Yeah. And then, you know, having access to capital, right? If you’re looking to grow by acquisition, you know, A DSO can offer some different routes to capital that you may not be able to get as a single practice owner or, you know, building out more of a group practice structure. So I think having access to capital, getting access to capital, I think it could be really interesting or a really interesting reason to think about building out A DSO. And then just to come back to it for one more moment, you know, one of the things that I really like about A DSO is the ability to offer incentive equity at the DSO level. Because, you know, if

Ryan Isaac: Be more incentivizing

Sara Stock: Incentivizing for, you know, your key employees right now, they don’t all have to be dentists, right? So your key employees in this situation are incentivized by the growth of the whole and not just the growth of one specific practice. And so it gets really exciting when you start thinking about the projections for that and what that can look like.

Ryan Isaac: Yeah, it, it, yeah. Provides just a, a bigger, a bigger pie for everyone to take part in. I was curious too, if the Yeah. And you, you were talking about, uh, the person who already has maybe a couple locations or is trying to get there. There is, and I think you mentioned this too, there is a point where it becomes difficult to find buyers in the future when your practice is a certain size. It’s either, you know, who’s gonna buy this thing, or it’s corporate in private equity. So I can see where the incentive equity and the, the phases and steps of it become more and more useful and helpful to try to. Build yourself an exit plan. Like how, how do I get out of this if it’s not going to giant corporate something?

Sara Stock: That is exactly right. You know, really, and you know, one of the things we talk about a lot with our clients is the end, right? We wanna talk about the end in the beginning. You know, cast your vision for me. Let me understand what you really wanna build. Because as much as I would like even on this podcast to say like, there’s one answer and here’s what it is, right? There are a thousand shades of answers for what you know, for how just to build a legal structure based on what you’re trying to build, what vision you’re casting in this moment.

Ryan Isaac: Yeah. That, that makes sense. Okay. Any other, anything else? Uh, I know there’s, there’s questions around the timing of how you do this and, and the actual structure of setting your own. Again, it is funny to say DSO ’cause some people immediately

Ryan Isaac: Shut it off me. Like I don’t wanna be,

Sara Stock: They’re like, I’m out.

Ryan Isaac: Grow your own privately held, tight-knit, family-oriented regional group practice.

Sara Stock: Right. Where you, where you put all the back office services in one entity.

Ryan Isaac: Bundle everything and consolidate and you have group buying power and purchasing power, and it’s a service organization in the dental industry. Uh, we’ll come up, we’ll come up with a different name for it,

Sara Stock: Yes.

Ryan Isaac: But I know we’re, well, there’s like some structure we wanna talk about in the timing. Anything else you wanna say about the benefit of doing it and why a person would end up Don going down that road?

Sara Stock: No, I mean, I think we’ve hit on all the, the high notes. You know, the only one maybe we haven’t talked about yet, and I see this one occasionally, but not regularly, is someone who is, you know, coming in and casting a really big vision, even though they either aren’t a dentist. Or they only have one practice. We love working with those folks too. Um, you know, I do try to counsel them that timing is really important because yes, you wanna build out the structure and you wanna have the structure as you’re executing, but please don’t pay us to build out this very complex legal structure and have it not actually happen.

Right. And so, you know, it’s a little bit of a chicken and an egg kind of thing. Um, but you know, I, I do think it’s important to think about, you know, there are certain entrepreneurs that, you know, they have a really high risk tolerance, but they’re still very type A and those folks want. Everything, you know, set up, signed, sealed, delivered, and so do I I get that. I’m a, I’m a lawyer, right, right there with them. And also we don’t wanna do too much too soon. And so there’s again, no bright line or bright answer for this. It’s just, you know, definitely talk to counsel. Definitely understand what your options are. Definitely understand cost and timeline, but wait to pull the trigger until you know you’re ready.

Ryan Isaac: Got it. Okay. Yeah, it’s probably a, a fine dance. I was gonna, and maybe you’ll hit this. Who are the people on the team who needs to be there in this structure? As you build, you might be getting to that when you talk about the logistics of the setup, but that’s a question I, I think a lot of

Sara Stock: Yeah. Well, and we, you know, we always talk about having a really great CPA who is familiar with, you know, I’ll say the word, DSOs. Right? because that person is gonna help you figure out, you know, exactly how to set up. All of the financial aspects of this, you know, what are nonclinical assets, what are clinical assets, what needs to go where and how, you know, how, how to really set up the schedule of services because, you know, we’ll jump into structure just a little bit here. You know, when you’re looking at what a structure looks like, and, you know, we include in our presentation, the very basic DSO organizational chart, you know, and you’ve got a DSO entity up here. You’ve got your practices down here, and then you’ve got service agreements between each of your practices.

And those services agreements have to have schedules of services for how your back office company is providing services to your practices. And, you know, getting a a, having a really great CPA help you through that, I think is, is key. and then. We also talk about having a great transactional advisor. you know, having someone who has been through this process a hundred times, especially if you’re looking to build out a capital stack to grow, you know, having a really great transactional advisor on the team who can help you build a plan, who can help you build those projections for incentive equity that we were talking about earlier. You know, all of those are important pieces to building out a really great, well-rounded team for this.

Ryan Isaac: Okay. That’s good. And I, yeah, I’m just thinking through it. You, you have this in some of your notes though, too. Just the entity structures, the tax implications. Yeah. A, a, savvy CP a’s familiar with this space is probably really the, the key

Sara Stock: That is it.

Ryan Isaac: Really important. Mm-hmm.

Sara Stock: A hundred percent. A hundred percent. So, but yeah, I mean the, you know, I can get into the really dorky legal details about how the structure is set up and all the legal agreements. No one has a strong enough cup of coffee for that. So

Ryan Isaac: Part two. Yeah. They can subscribe and pay extra for that episode.

Sara Stock: Give me a call, I’ll talk you through all of it. But, you know, I think, I think for the purposes of this podcast, you know, really just understanding, you know, DSO isn’t a dirty word. There are some really great benefits that can come from consolidating back office services if you’re gonna build out a multiple practice structure, and then how to do it in a way that allows you to maximize the value that you’re of what you’re building, and utilize incentive equity in a really powerful way amongst all of your, your various practices or clinics. I mean, there’s a lot of really good things that can come from this structure. Uh,

Ryan Isaac: Yeah, totally, totally agree.

Sara Stock: Perfect.

Ryan Isaac: Think it’s, and I think it’s gonna be more common than people realize. E even, you know, I found this just as an advisor, people who don’t necessarily set out to build huge group practices. They find that, like you’re saying, over time, access to capital and talent, consolidation of services, buying power be just because of those things alone, it might take someone who really thought they’d only be in a, a single location practice, and then before they know it, they’ve got three or four partners and half a dozen locations and it’s, it’s fine. They’re growing into it. They’re, you know, they’re learning. I do think it’s gonna be a bigger part of the industry and a big chunk of that consolidated number that everyone talks about wherever that lands. I don’t know. Um, I don’t, the only, the only word that’s like hotter than DSO in, content marketing these days in this industry is real estate.

Sara Stock: Yes.

Ryan Isaac: So here you’re, I don’t know if we’re done with DSOs, but like we’re going there next and Yeah. Okay. Really, it’s, I mean, there’s just nothing more exciting than, uh, you just say real estate and DSO in the same podcast, and this will be a, a high download if we, if we can throw the words like passive income and

Sara Stock: I was just gonna say, let’s talk about passive income, right?

Ryan Isaac: So what’s the angle about incorporating real estate? And I mean, I just wanna say that, I think you’ve seen more industries, industries than I have. This is the only industry I’ve spent my professional life working in. But it does feel like dentistry’s very unique in the way that they acquire and own real estate. There’s so many other industries that for their entire, sometimes generations of business, uh, family business, they’ll just rent the, you know, the space that they’re in. They’ll lease it. And dentistry seems unique in that everyone wants to own the buildings they work in. Whether it’s a good idea or not, it’s just owning real estate’s a big thing. So what, how do you see all this? What, what have you seen in all that?

Sara Stock: I mean, how I see it is just like everything else, it’s a cost benefit analysis, right? I mean, if you’re in a market where real estate is appreciating quickly and you as a practice owner have excess cash, you have liquidity and you’re looking to diversify your portfolio, well then this might be a really great idea for you. But you gotta go into it with your eyes wide open because you know, when you have a landlord, the landlord is taking care of all of the maintenance, all of the routine roof issues or light bulbs that are out or cutting the grass or landscaping. I mean, all of that is, are, are officially things that you will now take over. Right. And so, you know, that’s why I always joke about this old passive income thing. I mean, there’s nothing passive about owning real estate unless you have a, a very active property manager, one that you trust, one that you know you’re not paying a bazillion dollars to, that’s eating into all of the margin that you might be making here.

Um, you know, it, it, there is a, a strategy where you’re actually building equity and then when you sell your practice, you might continue to own the real estate and that rental stream will still be income for you. Maybe. Right. and then there is a strategy where you sell the real estate and you do make some money and that money is in excess of everything that you’ve spent maintaining the property and taxes and insurance and what have you. But it doesn’t always happen that way. Right. So,

Ryan Isaac: It’s right. Yep.

Sara Stock: You know, when you think about it, you know, it really is a cost benefit analysis and, you know, no one can predict the future, but you wanna look at how real estate is appreciating and you wanna look at, you know, are there tax credits available to help you do renovations? Or, you know, I mean, people talk about 10 30 ones and tax free, free exchanges, right? You were throwing out those words earlier. Well, you have to own real estate first in order to sell it and then qualify for a 10 31. So, you know, it’s, it’s not this like fast pass to, to becoming wealthy. It can be a tool that’s a part of your overall portfolio.

Ryan Isaac: I like that. Yeah. And the, and the advice that we have always given to dentists when it comes to their buildings specifically and owning real estate is just make sure that you, the practice is the first highest priority in that decision. Just because you can buy the building where you’re currently operating doesn’t mean that you should, because that might not even be the best place to be operating your practice. You, you might need to be in a different space completely for all kinds of reasons. So, yeah, I, I just like dentists putting their practice as the highest priority. And if you can build the biggest practice and make the most money with the most profit over the longest period of time by leasing and just do that.

But if you, yeah, but like you just said, if you have the opportunity, if you can make that work, the, it, it works from cash flow, it makes sense from an investment standpoint in your area, and it’s the best actual choice for the practice growth and sustainability, then yeah. I mean, why not have that in your, on your balance sheet? To eventually pay off and have someone else manage and have, you know, that income later. I, you know, it, it can be a huge, huge tool for people.

Sara Stock: And you know, I see two really big mistakes made when it comes to real estate. The first is that no one really sits down and calculates the debt service. On the mortgage for the building, and the next thing you know, you’re not house poor, but you’re building poor, right? All of a

Sudden your, all of your excess income is going to paying off the debt and you can barely make your house payment or you know, you’re having trouble making the payment on your kids’ private school bill, or, you know, those things are, are startling if, if you haven’t really thought through them. Have you, have you had that experience,

Ryan Isaac: Completely a million percent. Yeah. I mean, real estate is just such a big ticket thing and it’s not, it’s not liquid, it’s not easy to like get in and out of which is why we tend to hold it longer, but. Once you’re in Yeah. The, the cost, uh, what you said is, is so real. And most people, because it’s hard, I think it’s hard to do this, most people don’t actually calculate the percent return that they get on the asset. Because like, you know, when we hold real estate, we usually hold it for longer periods of time. We slowly pay down. We do maintenance over the years, we pay taxes. It just is a part of the experience. We don’t really notice. And we might sell it 10 years later and we get that big Es escrow check and we think, oh, you know, $500,000 in a check, I, this was such a good investment.

But when you do the math of the interest and the taxes and the costs and the insurance and the maintenance and the upkeep, yeah. All, all the things that are part of owning the investment that are part of the cost of an investment, the returns aren’t often what people think they’re going to be. It’s not, you said it, it’s not this outstanding, phenomenal, like home run. It’s just not, it’s like a lot of asset classes slow and steady, and the longer you hold it, the better it’s gonna be for you. But I, you’re right. I find the same thing. It people don’t probably just know how to calculate what’s happening. And once you’re locked in though, those payments can, they can bleed you dry pretty fast. I, I definitely have seen that a lot. Oh

Sara Stock: Yeah. So, you know, making a really good financial decision, a thoughtful, you know, well, well projected, uh, financial decision is incredibly important. And then the other big mistake that I see is that they don’t form a separate entity to hold the real estate. And from a risk mitigation perspective, I mean, you are just exposing all of your assets now to one bad slip and fall, right? And so one of the things that we talk about in this presentation that’s, you know, really just, you know, low hanging fruit, you know, form a separate entity to buy the real estate. Once you buy the real estate in that separate entity, put a lease in place between the entity that owns the real estate and the entity that operates the practice, right?

They have got to be very separate transactions. And then you’ve gotta run a separate set of books for the entity that owns the real estate. You’ve gotta operate it as it is a separate entity that is incredibly important.

Ryan Isaac: Mm-hmm. Yeah, totally agree. And, thanks for pointing that out. I, it is. Do you find it a lot where people don’t do this, where they own the real estate, it’s all commingled into one entity and bank account, and it’s all just tied together? Do you find

Sara Stock: I wouldn’t, I wouldn’t say a lot, but I would say 10, 12, 15% of the time it’s still happening. Right. And I feel like that’s a pretty common strategy that that’s out there. Right. Um, but we have tons of bootstrapping clients that, you know, they’re gonna figure it out themselves and an opportunity arises and they don’t reach out to a lawyer or their CPA or their financial advisor and they just do the thing and, you know, they come to us. Then, you know, as new clients, one of the first things that we do is kind of a peer under the hood. Talk to us about your legal structure. That is a big red flag when we see that the, the real estate is in the same entity as the practice, you know, and it’s a, it’s a pretty easy transition to get it out.

But once you have financing on the real estate, you know, to the extent that you transfer the real estate, you trigger what’s called the do on sale clause, which is in almost every deed of trust or mortgage that I’ve ever reviewed. So, you know, it, it, it, it actually means the lender can call the note,

Ryan Isaac: As soon as you move it to a different entity of ownership.

Sara Stock: Yes, yes. Without their consent or without refinancing or what have you. And so, you know, you wanna make sure that you are, are addressing that upfront. I’m getting a little deep into the legal dorky weeds here,

Ryan Isaac: Think that’s helpful. I think that’s helpful. Let me ask you this question. It’s a little bit same topic but a little bit different. Um, how often do you find dentists hold the real estate, the commercial real estate that they purchase past their retirement date? What’s more common To sell it with the practice or close to it or hold it indefinitely after?

Sara Stock: It’s, yeah, it’s pretty common to hold it. because again, you know, everybody thinks about this passive income. I’ve got this rental stream, right? but you gotta be careful, like if you’re looking to retire to Costa Rica and you’re only gonna come back to the US once a year, right?

Ryan Isaac: Yeah. How’d you know? Was it all the surf pictures behind me? Is that what you, is that what’s going on? Give it away.

Sara Stock: Oh, I, I am dying to go to ns. It is like on my, it’s been on my bucket list for 20 years, let me tell you.

Ryan Isaac: Don’t put it off anymore. That is a magical, magical place.

Sara Stock: Ah, okay. I can’t wait. I can’t wait.

Ryan Isaac: Book it as soon as we hang up, that’s, that’s your call to action today is book the trip.

Sara Stock: That I’m putting it on my checklist. Yes. but if that’s, if that’s your plan, why are you holding onto real estate? You know that that is going to require regular attention, right?

I mean, it’s going to require maintenance. And again, you might find a great property manager that’s very reasonable that you can trust that’s gonna proactively manage this property for you. And maybe again, maybe it makes sense in the overall financial picture of the real estate, but you’re in Costa Rica and the real estate’s here in the us like, what are we doing? Right? So,

Ryan Isaac: Yeah, totally. Yeah. I totally see, you know, one thing I notice, we talk about this a lot in our content is. To get the most return, especially as a percentage, but really dollars too out of the real estate that you own. You have to own it after you are not the tenant anymore. And especially after the notes paid off, which is usually after retirement, someone else is paying it and there’s no note on it anymore. But I, I find that, I think it’s just a, a psychological, emotional thing. When dentists sell their practices. They kind of wanna wash their hands of everything and just be like, take the billing, take the practice. I’m done. And I totally understand that. But to get the most return from the asset, uh, that it is, dentists should be holding it well past the retirement if it makes sense. Part of their plan. Of course, you gotta do your due diligence, but I wish I saw more people holding it. It just, it seems like a common theme that people will sell it close to their retirement date, even though if they’re trying to get the most return, they should hold it longer. But podcasts for another time.

Sara Stock: Yes, yes,

Ryan Isaac: Yeah. Yeah, yeah. anything else you wanna say about real estate as part of this? I mean, again, we could probably go so far into the weeds, but anything

Sara Stock: Yeah. No, no, no, no. I’ll save you my like soliloquy on choice of entity and what should go into your lease agreement. How to do diligence. I mean, really, like

Ryan Isaac: That’d be a good, let’s, we should do that. Let’s do, let’s do a follow up on, um, yeah, just, just the real estate alone and the legal side. Yeah. The lease agreements and, you know, whether you’re the landlord or you have one and Yeah. I think that would be really

Sara Stock: Yeah. And how to run diligence. I mean, that’s not something people think about unless there’s a lender that’s dictating diligence, but really the diligence when you buy real estate is critically important so that you understand what you’re actually buying, so,

Ryan Isaac: Com completely. Yeah. And it, and it gets, uh, you know, and I’m even just thinking about this in the reference or the frame of. It’s, you know, one, one unit that the doc, the doctor occupies quite often it’s multiple tenants in this, in this piece of real estate that the doctor owns. And then they, they’re a landlord now to other tenants and they’ve got lease agreements and it becomes a lot more complex. For sure. That would be a good discussion to, to go through and have, can we talk about, let’s go to the last one on your, on your list here was m and a. Why is this a thing on your list? Uh, yeah, I mean, it’s a thing you hear in other industries, but it’s very much dental in the world we live in. Talk about what, what, what does that mean and how, you know, how does it affect the dentists in, in these scenarios?

Sara Stock: Yeah. Well, you know, when you think about buying, uh, growth by acquisition, so buying a practice or when you think about, you know, I’ve built this amazing career, I’ve built this amazing practice group, practice, DSO, and I wanna sell it. Right? so many people are in a position where they just are lacking information, right? They don’t understand how to even get started. And so we like to talk a lot about, you know, like what is, when, when is the time, right? what does your team look like and how do you, I’m gonna use the words exit plan if you’re selling, right? Because I think exit planning is something that is often overlooked and, you know, it can, can. Very much increase your purchase price when you, when you go to sell. So there’s a lot of ways we can talk about m and a. We can talk about it from a buy side perspective, growth by acquisition. We can talk about it from a sell side perspective. where do you wanna start?

Ryan Isaac: Let’s go from a buy side. I’m, I’m interested in the, and by buy side, I, I’m referring to if this is what it means, a dentist who’s trying to grow through acquisition. Um, that’s what, okay, so let, let’s talk about that, uh, and speak to a lot of our audience are still growing their careers mid-career. And then let’s, end with the sell side, but talk about the buy side first. Yeah, please.

Sara Stock: You know, so I think it’s really interesting, you know, if you are, if you are employing a strategy where you are going to grow by acquisition and you’re looking to acquire multiple practices, right? One of the very easy things you can do from a legal perspective is find a lawyer that can help you craft a form of transaction that you think is going to make sense for the paradigm that you’re looking to employ when you’re growing by acquisition. And if you can do that and you have the right set of projections and the right team, ultimately, you know, you can really create a very efficient process. Right? we have so many clients that started, you know, as they’re, as they’re setting out to grow by acquisition, they find that really awesome solo practitioner lawyer, and he or she is perfect for doing their first.

Or maybe even their second acquisition. But the moment that they’re really looking to employ a strategy of growth by acquisition, that one person gets incredibly overwhelmed, or the moment that we’re trying to utilize different deal structures, that person gets very overwhelmed, right? And so building the team, I think is so important. Finding a law firm that you can work with, that you can grow with, I think is incredibly important. Finding a really great CPA that understands m and a, that understands growth by acquisition, critically important. And then if you’re thinking about how you find these practices, finding a practice broker or a consultant that you can work with to find those right sellers, also critically important. And then of course, financing, right? Like we can’t, how are you gonna pay for all this? That’s a really important one as well.

Ryan Isaac: Yeah, completely. Is there any, um, way to know how it breaks down, how growth typically breaks down when people are adding locations? Uh, whether it’s, um, you know, a, a, a scratch start as they’re growing into areas or cities, or if it’s acquiring something existing? I would assume that acquiring is probably the higher percentage of. Growth strategy, but is any, any idea what that looks like?

Sara Stock: Yeah, I mean, I would say acquiring is the, the higher percentage of growth strategy. Uh, you know, you’re, you’re buying a team, right? You’re buying employees, you’re buying a, you know, you’re buying a patient base, you’re buying a community, right? Um, you’re paying a premium for that because you don’t have to build it from scratch, right? But you know, when you’ve, when you’ve gotten to a certain level of success and you wanna add fuel to the fire, growth by acquisition is a really great way to do that. Of course, like I said, you’re paying a premium for that, right? You’re paying for what? Someone, all of their blood, sweat tears, right? You’re paying for that, and you’re also hopefully.

Getting with that, um, the, the owner that built the practice, at least for a couple years, right, because he or she could be key to the culture of the team, to the patient base, staying, you know, attrition is a real thing when you’re growing by acquisition. Um, you know, ensuring consistent service at a different location. I mean, we could spend hours just talking about that, right?

Ryan Isaac: Yeah, totally. let’s talk about the seller side. Um, which is maybe, I don’t know if, if there’s like, I was gonna say maybe bigger, more extensive. There’s a lot, a lot of moving parts to that. But, uh, walk us through kinda what, what that perspective looks like.

Sara Stock: Yeah. Well, you know, um. I think that this is the most anxiety producing thing for any of our clients, right?

Ryan Isaac: Okay. Yeah.

Sara Stock: I mean, they’re getting ready to sell their baby, right? They put so much into it. They wanna make sure that their people are well cared for, their employees and their patients, right? And so it is such a, you know, having, we see so many different kinds of representation, right? For buy side, we might see the seller bring in their estate planner, or you know, their divorce lawyer, or, I mean, you want someone that you can trust. And I understand that, but you also want someone that understands mergers and acquisitions and does this work regularly. So, you know, the key is to really find the right lawyer that you can build a strong relationship with, that you have a lot of trust with that also has the experience because it is so anxiety producing and it is a huge process that is going to take you away from the day-to-day operations of your business. Right. Um, I think most sellers are surprised at the diligence that goes into selling their practice. And, you know, I mentioned exit planning a little earlier. You know, when you’re sell side starting, you know, 1, 2, 3 years prior to when you think you’re gonna sell your practice to get your practice in order. From a financial perspective, from a records perspective, from an administrative perspective, systems, yes. I

Ryan Isaac: Okay.

Sara Stock: Mean, all of that, you know, really ensures a very smooth process and it becomes, it, it, it doesn’t become, it just is less overwhelming when all of that is organized. I mean, it’s still gonna be a lot, it’s still gonna be a lot of time and attention, but if you can go into it with it all wrapped up really nicely with a bow on top, right, it is such a better process for you,

Ryan Isaac: Yeah, I’m glad you said that. one to three years because you’re right, there are, there are some things that people should be doing that will take a couple, maybe a few years to get a practice ready and they shouldn’t sell until those things have happened. And it what processes, systems, team. Yeah. Profitability, a lot of those things. And some of ’em just take a lot of time. it seems like there’s probably a lot of it feels like there, there could be a lot of mistakes in the rushing or the lack of due diligence in those areas. So is that just where slowing down, preparing ahead of time, having the right people on your team really helps make sure you avoid those mistakes and pitfalls.

Sara Stock: It does because once a deal starts, everybody wants to get it done as soon as possible, right? Um, and so,

Ryan Isaac: Everyone’s eager.

Sara Stock: They are, they’re excited and, and I get it, but you know, not, again, not to get too legal and dorky, but in these purchase agreements, there are pages and pages of representations and warranties that are critical to the transaction, right? And you have to make sure as a seller, that you can make all of those representations and warranties and schedule all exceptions or all lists of information that the buyer is requesting. And as a buyer, you need time to digest all of that so you can get really clear on what, what it is that you’re buying. And so not rushing through that process. I mean, it’s, it’s, it is critical to ensuring that the transaction is successful at the end. And so the more you can do upfront, the easier it

Ryan Isaac: Yeah. Yeah. I feel like I could keep asking questions here and take us deep into the, uh, as you say, the legal dorky weeds of, uh, all the

Sara Stock: Yes,

Ryan Isaac: Which is why there’s always more follow-ups and part twos and threes and tens of, of these discussions. Um, anything else you would want to like kind of wrap with, there’s so much information here. Also, please let people know how to reach out. I mean, that’s kind of really where it ends up, is people in these situations, they just need to reach out and ask some questions and get some help.

Sara Stock: You know, the, the most practical advice I give sell side is go out and get your practice valued, have a valuation done. Um, it doesn’t have to be a full on opinion of value. Those are very expensive. I get it. But there’s a consultative valuation that you can have that should only be a couple, you know, $5,000. And it arms you with objective information. You can make decisions based on the value of your practice in that moment to either continue to scale, to get it to a place where the sale of your practice, the net proceeds of the sale of your practice will actually fund your retirement goals. And I’m sure you talk to clients about that all the time. Ryan. Um. And it also allows you to enter into negotiations with a buyer well armed with information. So, you know, really practical, just, you know, simple tip to help arm you if you’re, if you’re going to sell your practice.

Ryan Isaac: Great. Thank you. Um, where do people reach out? Where do people find you and ask questions. What does ENG engage? I guess, uh, it’s probably another topic too. What does engagement look like when someone reaches out? Is it some questions? Is it a full, big engagement? I, I, I don’t think people know how that process looks.

Sara Stock: Yeah, so I think we’re somewhat unique at Stock Legal. Um, I do a complimentary 30 minute consultation with everyone that is referred to me. And so, you know, in that 30 minutes I try to understand exactly what it is that the client is looking for, what their legal needs are. I share as much information as I can, and if it’s really clear what they’re looking for, I even start to build out a step-by-step process to accomplish their goals. And so, you know, I think that step-by-step process is incredibly important as a client, because legal is confusing, right? Legal, like we use words that aren’t really a part of the English language. They’re Latin, right? So.

Ryan Isaac: Yeah, they’re actually Latin. Yeah,

Sara Stock: So, you know, we wanna really help manage expectations, be incredibly transparent with what it is that we think we can do, and what the cost potentially could be for that. I think that’s also really important. And so, you know, should, should you decide after that complimentary 30 minute consultation that you’d like to engage us, we often start with an hourly project again, of just looking under the hood. Talk to us about what your corporate structure looks like. Send us all of your documents, organizational documents, employment agreements. If you’ve got a DSO, we wanna see your services agreements. We wanna look at your incentive equity. Uh, we wanna understand all of that so that we can really wrap our arms around what you have and then advise you on what you’re trying to build. And so once we get to the building stage, a lot of that work we do for a fixed fee at stock legal. So, you know, we get really excited about trying to really quantify costs for our clients. We feel like they shouldn’t go into it with like, they’re writing a blank check or legal’s this like black box where they get a $30,000

Ryan Isaac: That. Yep.

Sara Stock: Right. I, I, I’m a business owner. That would be terrible to me. So, you know, that’s what it would look like should someone decide to engage us. You know, we try to think outside of the box when it comes to fees.

Ryan Isaac: Yeah, I know that we’ve had a lot of mutual clients and everyone has been just so, they speak so highly and it’s been, uh, such a good experience for them walking through it all there. Yeah. You, you take really good care of people. Where do people find you? How can they reach out?

Sara Stock: Yeah. Uh, stock legal.com or if you wanna email me directly, I’m SARA Sarah dot ST k@stocklegal.com.

Ryan Isaac: Sarah? Stock, stock legal. Thanks. Thank you, Sarah, for coming back again. Thanks for being at our summit in Park City.

Sara Stock: Absolutely. Thanks

Ryan Isaac: Hope you had a good time out there. Yeah, anytime. Thanks for coming back to the show. Yeah, we’ll, we’ll do this again soon. There’s many more parts to explore, so thank you Sarah, for your time. I appreciate it and uh, thanks for everyone for tuning into another episode of the Dentist Money Show. We’ll catch you next time. Thanks. Bye-Bye.

Keywords: Incentive Equity, Phantom Equity, DSO (Dental Service Organization), Consolidation, Real Estate, M&A (Mergers and Acquisitions), Succession Planning, Exit Strategy

Practice Transitions, Practice Value