Episode : #1,189: The Future of Private Practice Is Actually Very Bright

Podcast Description

Did you know: Today’s dentists are waiting five years longer to buy a practice than they were a generation ago?

Kiera is joined by Brian Hanks of Dental Buyer Advocates to talk about delayed ownership traps and why the future of private practice is an encouraging one (Brian shares numerous data points to back that up). They also touch on overcoming fears and all the information out there that makes everyone seem more prepared for business ownership than they actually are, and how to go about buying a practice while asking the right questions.

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Transcript:

Kiera (00:00)

Hello, Dental A Team Listeners, this is Kiera, and today is an awesome day. I am so excited to be podcasting with one of my favorite humans. He and I have spoken across the country together. We go to different things, we share clients together. I have Brian Hanks, the owner of Dental Dental Buyer Advocates. And today we’re gonna talk about like delayed ownership trap because I think so many people get stuck into this of should I buy, should I not buy? And Brian and I are just here to have a fun rift. So, Brian, welcome to the show today. How are you?

Brian Hanks (00:28)

So nice to be back, Kiera. You’re one of my favorite people too. Thank you for having me.

Kiera (00:32)

Of course. I’m excited, Brian. It’s a good time. It’s been a hot minute since we podcasted together. So it’s time, it’s time to talk about this. Because when we were chatting about episodes, you were saying that dentists are now waiting like five years longer to buy a practice than they were a generation ago, which is fascinating to me because I’ve been on this like whole hot to trap of like, do people buy? Are DSOs taking over? Like, is there still money to be made in private practice? Like literally my chiropractor and I were talking about this the other day because she’s like,

My dentist told me that they were like not able to make any money. And I was like, well, they sh just give them my card. Like private practice to me is still one of the best businesses and industries, even if you have to buy a top dollar right now. and so just like super fascinating to talk about like delaying that purchasing, why people do it. But Brian, I’ve jumped right in and pretended like everybody knows who you are. Brian, give us a little intro of like who you are, how you got into Dental Buyer Advocates, what your background is, and then like let’s talk about to delay or not delay buying a practice.

Brian Hanks (01:29)

Sure.

Yeah, I one of my favorite stories. I’m an ex-Wall Street guy, so I’m a reformed Wall Streeter. And my father-in-law is a dentist. And I would watch these Wall Street people come in and like sell a very aggressive investments. And when they went bust, they would turn around and sell the crappy investments to dentists who at the time my was my father in law. Active practice, he lived in the Seattle area. And anyway, I went to go work for a dental CPA in the Dallas area. I went to work for another one. So I’m I’ve lived in the accounting world, Kiera.

And when I was in that world, I got younger dentists who were in the pro they were the associates and they were asking accounting questions and tax questions and you know financial planning questions. And inevitably they would come back to dental practice ownership. Like, how do I do this? How much do I pay? Is

Kiera (02:13)

Yeah.

Brian Hanks (02:13)

is this a good deal? And so I went looking for the book. I was like, well, where’s the book? I was on Amazon, I was other places. There was no book. And I thought, all right, well, let me try writing this book. Famous Last Words, by the way, it’s way harder than you assume. But the book is called.

Very creatively, How To Buy A Dental Practice. And that helped me start my own business. And that’s

Kiera (02:30)

I like it.

Brian Hanks (02:33)

what I do. I I only help buyers of dental practices. And, you know, Kiera, my business is good, your business is good. Dentist business, we can talk about why the future of private practice is very bright. I can give you some stats and

Kiera (02:46)

Mm-hmm.

Brian Hanks (02:46)

statistics. But one of the interesting, the most interesting facts for me is Health Policy Institute has data that shows that.

Dentists get into ownership, like they they end up in ownership. Okay, so I’ll give you like they’ve broken it down by like graduation rates. So like the the

Kiera (03:07)

And what I

Brian Hanks (03:08)

dental school grads from 1990 and then 1995, and everybody between 95 and 2000, so and so forth. So they have these like vintages of graduates. And

Kiera (03:16)

Mm-hmm. Mm-hmm.

Brian Hanks (03:17)

very reliably, they’re showing that nine out of ten dentists, of which you know there’s 203,000 in the US, nine out of ten end up in ownership.

At some point in their career. But like you said,

Kiera (03:27)

Fascinating.

Brian Hanks (03:28)

they’re waiting longer to do it. And I think that’s what we’re going to talk about.

Kiera (03:32)

Yeah. Which like again, I think people are scared. So many students I worked at Midwestern and they’re like, Kiera, should I buy? Should I go associate? And I was like, listen, you’re just delaying the inevitable so like get in there and get it done. Now, I like always throw an asterisk on that. Like if you’re not good at your hand skills, like yeah, go go associate for a hot minute. like if you aren’t confident with your speed and with case acceptance and like presenting, that’s gonna be but I’ll tell you there is nothing more thrilling than throwing yourself into a business that you have to produce for.

You learn case acceptance really freaking fast. Like, ask me how I know. We surely did that. Like I took a student, we took our first practice from 500,000 to 2.4 million in nine months. Like she was a she was a power producer. Do I have an office right now that just bought a practice less than a year ago? We’re already on track for two and a half million. Yes. Like there are a lot of success stories from that small town. It’s not like they were just given the keys to the kingdom. Like they’ve had to work for it, they’ve had to build things. They don’t have full schedules. But

I just, I don’t know. I’m the same way and I I don’t know. I’m I’m at a space of but do what makes you happy. Like, do not go

Brian Hanks (04:37)

Yeah.

Kiera (04:38)

own a practice and make less than being an associate. That’s like a hard line for me too. I’m like, ’cause if you’re gonna like not be a good business owner, keep associating. But I

Brian Hanks (04:43)

No. Yeah.

Kiera (04:46)

agree, I feel like the trajectory of dentists is always to purchase. Like they want their own stamp, they want their name on the building. I will also highly recommend don’t put your name on the building. Like that’s really fun and not scalable. Ask me again how I know that. Like

Cura’s dental consulting was real fun till it wasn’t. Like the things you the things you evolve on, but truly I I’m excited to hear why you think people are delaying, what that’s costing them. Brian, I love that you always come with a bunch of stats and facts. And I love that you named your book, like How To Buy A Dental Practice. That’s what people want to know. so it sometimes simple is no, that is the best.

Brian Hanks (05:13)

I know. I just yeah. I’m not the best at marketing, right? So yeah, like we we call Kiera when we need

marketing advice. So okay.

Kiera (05:24)

Mm-hmm.

Brian Hanks (05:24)

So Kiera, here are some more stats for you.

Kiera (05:28)

Okay, ready?

Brian Hanks (05:29)

the average owner, dentist, makes $151,000 than the average more than the average associate. Okay, 151. Now that’s

Kiera (05:37)

I was like, hold on, 151

is bad. That’s more than if you’re being an associate. You’re gonna make 151,000 more. Okay.

Brian Hanks (05:43)

Yep. Yeah. And think about why

that is. Yep. That’s obviously the you’re taking on the risk. You’re taking on the the pain and suffering of being an owner, right? So there’s some compensation involved in

Kiera (05:51)

Mm-hmm.

Brian Hanks (05:52)

that. Those are two medians, right? And there is a bell curve around both of those numbers. So is it possible

Kiera (05:57)

Course.

Brian Hanks (05:58)

to make less as an associate? Yes. Yeah. Is it possible

to make a hell

Kiera (06:01)

Mm-hmm. Uh-huh.

Brian Hanks (06:02)

of a lot more than $151,000 more than an associate? Absolutely, yes, right. So there’s there’s room on both end of the ends of those those bell curves. but think about

So here’s why I one of the data points why I think private practice ownership and dentistry is still it’s bright and it’s getting brighter. Is you think about the average associate you talk to, Kiera, the average associate I talk to when we’re standing around a cocktail party or at mid mid the you know, wherever, some conference, Yankee, Midwestern.

Kiera (06:30)

Mm-hmm.

Brian Hanks (06:31)

And I will tell you the average associate that I talk to isn’t saying, gosh, Brian, you know what? I love my boss. I love the DSO I’m working for.

I love my hours. I love the insurances we take, the assistant they force me to use, I love her, right? It’s the future of private practice dentistry is bright because dentists are people. And people generally like

Kiera (06:52)

Mm-hmm.

Brian Hanks (06:52)

a little bit of control over their career if they can get it. And dentists absolutely can get it. So that’s one of the data points that

Kiera (06:55)

Yeah.

Brian Hanks (06:58)

I love. Now, are dentists scared to get into ownership? And do higher on average student loan balances scare them marginally more than they did 10 years ago, 20 years ago? For sure.

Yep, absolutely. Here’s the mistake

Kiera (07:11)

Absolutely.

Brian Hanks (07:11)

they make. So I’ll give the associates listening or the students or whoever it is that’s maybe telling you, Kiera, or telling me, or they’re telling their, you know, the the person next to them on the treadmill at the gym while they’re listening to this, like, sure, Brian, easy for you to say, but I don’t feel ready. Right? I haven’t taken all of Care’s courses.

Kiera (07:30)

Mm-hmm.

Brian Hanks (07:31)

I haven’t, I don’t know how you know, I’m not the pro at treatment planning. My hands beat because you I I want to take this implant course first, right?

You come up, your brain comes up with all these excuses of why you don’t feel ready. And I’m not gonna dismiss your feelings. I think your

Kiera (07:45)

Mm-hmm.

Brian Hanks (07:46)

feelings are valid. You should listen to them, but don’t here here’s another thing to consider in addition to your feelings. Is you know how there were like a hundred people in your dental school class, probably ish, right? And 10 of whom you would never let near your teeth. Like you watch them go through all four years of dental school and you’re like,

Okay, of those 10 over there, like they’re never getting, they’re never giving me a shot. They’re never in that nothing, right?

Kiera (08:10)

Yep.

Brian Hanks (08:10)

Because I guarantee you, nine out of ten of those dentists, they already own their practice. They’re not bankrupt. They’re making more money than you,

Kiera (08:16)

Yeah.

Brian Hanks (08:17)

and they are killing it. Meanwhile, you’re scared to run a practice. And those, if

Kiera (08:22)

Mm-hmm.

Brian Hanks (08:22)

those jokers can figure it out, you can figure it out.

Kiera (08:26)

Totally. Well, and I think also on there like, Brian, let’s be real. Is anybody ready to be a business owner? Like I wasn’t, I’m sure you weren’t.

Brian Hanks (08:31)

Nope. Nope.

Kiera (08:33)

I think are people ready to be parents? The answer is no. Like nobody feels ready for that. Were you ready when you went into dental school? The answer’s no. I think that there’s this imposter syndrome that hits us all that we think, like, give me a little more time and I’m gonna get ready. Give me a little more time. And I will say that like the brass taxes, you jump into owning a business and you figure it out. Now, should you listen to some podcasts? Should you do some things? Like for sure.

But

like how many consultants and coaches are there that literally are gonna like grab your hand, walk you through, and make sure you don’t make the mistakes? Like how many people like yourself are gonna walk you through buying the practice to where it’s an actually great practice? I I think that I think there’s more help today. Now, do I think there’s a lot of noise and a lot of people that might be like posturing out there saying that they know what they’re doing? Yes. So make sure you like vet them a little bit before you go and jump on a bandwagon of somebody, like someone who’s been there, done that, done that successfully multiple times is who I’d bet on. But like

We are in such a day and age where there is so much information out there. You need to be a great clinician. We’re gonna teach you how to be a great business owner. And as long as you’re comfortable realizing that you’ve got to learn that side of it, that’s to me, like if you’re a good producer and you’re a good human, like go for it. There’s dentistry is so fun owning and practice because the sky is the limit. And ultimately there is no cap on what you’re able to do, what you’re able to produce, how you’re able to do it.

And I think that there are very few careers out there, very few job opportunities that really are the sky’s limit. Now, remember how I told you about that dentist who bought their own practice. They’re now doing like two fifty this year, whatever they’re he was making five hundred thousand as an associate. And so this

Brian Hanks (10:06)

Yeah. Hi Bart.

Kiera (10:08)

is one where like people be like, Well, gosh, like, you know, he went from five hundred thousand and now he’s at a two point, I think he’s gonna end around two to two point four this year. But like he had a great associateship. And so I think

There is still this just like uncanny, unnatural desire that you want to just own, you want to build. And I think dentistry is also if I look at like banks, they lend to dental practices, like almost guaranteed, like they have a they’re pretty lucrative with like just shelling money out to your dental practice. And I’m like, if banks are willing to back, you’ve got to also see that your dental practice, like you have the greatest opportunity of not failing.

of any business venture you’re going to do. Why is private equity coming in strong? Because they know dental practices are almost bulletproof of an investment to have. So when I look at all those reasons, I agree with you, Brian. People don’t feel like they’re ready, but I’m like, you’re never gonna feel ready. But you have so many things stacking in your favor to help you be successful.

Brian Hanks (11:03)

At the beginning of that, I

I don’t I don’t want people to miss that. If they missed the wisdom that Kiera just shared at the beginning of that, as she said, yeah, you use parenting. I think you use business ownership as some advice. Like I I just want to repeat what you said because it’s so important. Dentistry is not like, I don’t know, Kiera, scuba diving, right? If you go get scuba certified, you like practice in the pool. And then they like make you, you know, they learn, you know, you you learn taking the regulator out of your mouth and putting it back in and all that. And I imagine like dentists think

ownership, like there’s gonna be some course I can take that’s gonna prepare me for ownership kinda like scuba certification. That’s like you gotta help me come up with

Kiera (11:38)

Yeah.

Brian Hanks (11:39)

a better example, but it’s not it’s not true. It’s like parenting,

Kiera (11:42)

I got you.

Brian Hanks (11:42)

it’s like marriage. It’s like I don’t know, business ownership, whatever it is. Like the the thing that prepares you for it is just doing it. Just just

try it out.

Kiera (11:50)

Mm-hmm.

Brian Hanks (11:50)

Yep.

Kiera (11:51)

Well, and I think Brian, to that point, like the analogy is I think people think business ownership is a skill that can be learned in a one, two, three step versus like marriage, relationships, child, like being parents, business ownership. It’s an evolution of soul and it’s a it’s a creating of who you are. It is not a skill. Like there are skill points to it, like learning to read a p PL, learning how what profitability is.

But business ownership in and of itself, I had a friend she’s like, Kiera, you have to have kids. Like it will strip you down to your core and it will like show things to you that you’ve never had. And I said, Have you ever been a business owner? Cause I’ll tell you that I’m pretty confident. I’ve got a lot of that stripping over here that’s like breaking me down to my utter like most. But I think we think business ownership and running a practice, I’m not here to say that there’s not like tactical pieces and we’ve broken it down. Like our team actually just went through this something. I’m like, there’s really like

10 things that you need as systems that are really gonna make or break it. And you gotta know a couple of like core foundations and you got to know your numbers. Like beyond that, that’s kind of your checklist. But to your point of like scuba diving or cooking or whatever, it’s not this like checklist skill that you’re going to have. And so I think, like you said, you’re gonna look for this course. But I’m like, the course is life, the course is doing it, the course is going through it. And I think you’ve got to have the confidence of are you confident in you that no matter what comes your way, you’re gonna be able to figure it out. And if so, business ownership is there for you.

And I would give more confidence to you than you give yourself. I’ve watched a lot of students. I worked at Midwestern. To your point of those 10 students, there was probably like 50 of them. Sorry, Midwestern grads, I was not letting any of you touch my mouth. Like genuinely, you needed a few years to practice and I’m not your practicey. But like I think I think you’re more equipped than you give yourself credit for. Just like you’re more equipped for life than you give yourself credit for. And I think business ownership is the same.

Brian Hanks (13:31)

So Kiera, let’s break down some of those numbers. by the way, better

analogy for business ownership is like health. Do you remember the first time by the way? if you’re listening to this, it’s pretty obvious if you’re watching, but if you’re listening, Kiera’s in a lot better shape than me. But if if Kiera, I don’t know if you had this moment. I I did when I was like 21, 22, that I realized at the I was at the gym, I was like lifting some weights, and I realized, I’ll never be done with this. Like you’re never done with health. So I think business ownership is a lot like.

Kiera (13:59)

I do remember my moment

of that. Mine was

Brian Hanks (14:01)

Yeah.

Kiera (14:03)

not at the gym, Brian. Mine was actually in Bali, like a little flex there. I remember because

Brian Hanks (14:07)

There you go.

Kiera (14:07)

I was like having a lot of like knee and hip pain. And I was like, okay, I just have to like work out and then eventually this is gonna get better. And I remember I was walking down to the pool overlooking the ocean. I was like, I’m never gonna be done. Like this is my forever. Like I’m not like I used to just work out to be like skinny and fit. And now I’m like, no, you gotta do this so you don’t freaking hurt and you can actually walk and get out of bed. Like it’s never gonna end. And

I

sat there and read a book, quite depressed. And then I was like, okay, like this is what it you’re right. It’s it’s a constant evolution of soul. You’re never done parenting, you’re never done in a relationship. Like you don’t hit this, like, check the box, we’ve got a golden thing. It is a forever perpetual. But I also think that that’s what drives dentists to go into that because they are of this obsession of wanting to be the best of the best. You want to get a better prep. You want to get a better crown crop. You go to CE, you’re CE junkies out there. Like, this is just another level of obsession.

Of a space that’s going to evolve you as a human and it’s gonna allow you to grow. So yeah, thanks. That was that was a great that was a great analogy, Brian. Good good call on that one.

Brian Hanks (15:02)

Yeah. Yeah, the the

the negative of the health analogy is that you’re never done, but the positive is you can break it down. Like you can learn how to do certain lifts a little better. You can learn how to macro track. You can learn diet and exercise.

Kiera (15:14)

So you’re right, Brian. Like that was a solid call out on the health analogy. Like this is what people are obsessed about, but they want to have that evolution of soul. They want to like I think that that’s why dentists are drawn to ownership, but I think they’re just afraid. But I’m like, we’re also afraid to work out. We’re afraid to have kids. We’re afraid like, so don’t let fear hold you back. I think it’s just a like, I don’t know. It doesn’t be like Nike, just do it, guys. Like that sounds like terrible business advice on my side.

Brian Hanks (15:37)

Well just do it and but remember

remember how good you weren’t at at all the clinical stuff that you’re really

Kiera (15:44)

Mm-hmm.

Brian Hanks (15:44)

good at now, right? So dentists, the the superpower that most dentists have is that attention to detail, like the obsession over the details and and the the minutiae. And and as a patient, like I gotta go to filling next week, and as a patient, I want my sister thinking about all of the all of the little details, right? and

Kiera (16:04)

Mm-hmm.

Brian Hanks (16:04)

that superpower is real.

And I want the density like lean into it. If you’re listening to this and that evolution of soul that that Kiera’s talking about, part of that evolution for you is just remembering that that superpower that you have comes like there’s another side to that coin. It comes with a downside. And the downside is the overthinking when you’re not.

You know you’re not that good at a thing. And if you know you’re not that good at finding a dental practice to buy, analyzing a dental practice to buy, actually buying that practice, applying for a loan, like talking to lawyers, all those things, your brain is gonna start to spin a little bit. And j but but but here’s the good news: your brain spun a thousand times already. Remember that first time they opened up the little mannequin to like practice, like prepping a crown or something, and you were like, How do I even do this? Right.

Kiera (16:49)

Dexter, their little type

it on.

Brian Hanks (16:51)

Yeah, like seriously, like you figure this out. You like and if the dentists that I deal with they’re the smartest people on the planet, they’re awesome. And and so if you can figure that stuff out,

Kiera (17:02)

Mm-hmm.

Brian Hanks (17:02)

my gosh, like first of all, hire somebody else like you to just be amazing for you in all the areas that you aren’t amazing, and just remember that it doesn’t this isn’t rocket science. yeah, so you can figure this stuff out.

Kiera (17:14)

Mm-hmm.

Brian Hanks (17:14)

But okay, so speaking of minutia, speaking of details, I gave you the hundred and fifty one thousand dollar number.

Okay, here I did some math. I’m an accountant. I I know I know spreadsheets.

Kiera (17:22)

Yeah.

Brian Hanks (17:24)

I know how to do like compound interest and some those things. Here’s what I did is I just is I said, what’s the cost? Okay, if dentists aren’t feeling ready, they want to feel like they have their student loans under control, which is smart, right? I’m a financial planner. Yeah, don’t get yourself over your skis in debt. That’s great. But like, how much is it gonna cost if you’re the statistic?

Right. And the statistic is you’re you, listener, right now, if you’re not a practice owner, are waiting five years longer to own a practice. How much does that five years cost you? Right. And if you do the math, and I did the math at like a 38-year-old dentist versus a 33-year-old dentist. And I assumed that they actually retired at age, both retired at age 60. Okay. So like different lengths of associate part of your career and owner part of your career.

with compound interest, assuming 7% and some of those other variables that I put in there, it was a $1.14 million difference between those two numbers. So don’t forget that while you’re busy like taking care of your student loans so you can feel ready to buy a practice, it’s costing you an enormous amount of money. And Kiera, I would just add, and I’m curious if you can think of any others, I would say the compound.

the compound effect that I’m talking about is not just money, although money is a big part of it. I think the compound effect applies to other things. Like how many more times and at bats would you have for treatment planning, for managing that difficult assistant, teaching someone how to answer the phones better, hiring, firing. Like there’s a compound effect on all of those behavioral things too and and it’s gonna cost you some money. So any thoughts on that?

Kiera (19:04)

Mm-hmm.

Yeah, I think it’s a I I was fascinated. I’m so glad that you went into the 1.1 because we had talked about that pre-show and I was just very fascinated of like, my gosh, like that’s so much for people. That’s so many things. Like there’s a financial dollar amount, which I love because I think dentists really do. Like that’s an easy one for me to be like, gosh, like me delaying this decision can cost me that much. But I think like there’s also you still have to go through the

growth of learning to run a business. So not only is there a financial delay, but there’s also the growth of you getting good at running a business and having it profitable and being able to make this thing run longer. And then you have more opportunities like I think about yourself. And the longer you’re able to build this practice and like maybe do multiple like there’s to me that’s like such a it’s fascinating. And I think I think the the call to today is there are some people that definitely are meant to be owners and there’s some that aren’t.

but I think if you have that itch, that scratch, I would really ask yourself, like, what truly are you waiting for? And when are you going to know that you’re actually ready? Like you’re never going to feel ready to have a child. You’re like, I need to get these ducks in a row. Well, those ducks get in a row and then you got seven more ducks that come behind that you’re like, I need get those in a row. So to me it’d be if I’m really wanting to buy a practice, what things do I need to have? Cl schedule a call with Brian. Like, I think Brian, this is why we put you on the podcast. I think you’re fantastic. You don’t put people into weird zones. you’re very much like

If that dentist is producing and you don’t do those skills and you don’t do those type of procedures, don’t buy that practice. Like you’re not, you’re gonna be broke. You’re very, very pro making sure people feel confident and that they’re able to buy it. And I think it’s like buying a home. I remember when I first like went and talked to somebody about buying a home, I had no freaking clue and I wish I would have known more. But like until you start having the conversations, I think it can feel more daunting than it actually is. Then from there, like listen to the podcast, start listening to there’s our podcast, there’s other podcasts out there, start reading up on how to buy a practice.

But I think to me, there is like two parts to it. One is finding the right practice. Like what you buy, and I say like eyes wide open when you’re looking in, and then rosy glasses as soon as you sign on that dotted line, and you’re gonna see a lot and you’re just gonna deal with it. From there, make sure you got somebody really solid in your corner. Like our practices, as soon as they buy, we take them on. I try to get them two to three months before they close. I wanna make sure we’re getting things in. If you don’t close on time or things happen, no problem. We’re gonna pause you, get your practice in place. Like it’s happened twice in hundreds of offices we’ve helped.

But then, like from there, just have somebody in your corner, somebody who’s gonna help you grow in your first year. Most practices are seeing like a 10 to 30% increase in their first year. So if I’m buying a one million dollar practice, that’s a hundred to three hundred thousand dollar uptick just by having somebody in the corner. That’s very conservative. A million dollar practice, like we are usually growing those exponentially. But like you don’t have to stress and freak out. Hey, I’m pinned.

Brian Hanks (21:45)

Yep. By the way, I I d pin put a pin, put a pin, Kiera. You you gotta you gotta underline that. Yeah.

That’s like underline that, underline it. Like keep going, keep going. I I’m throwing you off. I’m interrupting you, but like I will tell you the

Kiera (21:59)

Yeah.

Brian Hanks (21:59)

average buyer I talk to on the phone is so scared of patient attrition. They’re like, Kiera, like

I’m gonna have 10%, 20%. What if 50% of the patients don’t show up? Listen, that’s a real fear. By the way, I want you to have that

Kiera (22:10)

Right. Mm-hmm.

Brian Hanks (22:12)

fear when you’re like doing the margin on my crown, right? Like again, it’s your superpower dentist,

Kiera (22:16)

Mm-hmm.

Brian Hanks (22:17)

but like my stats show exactly the same thing, Kiera is saying I have data to support what Kiera is saying that the average

Kiera (22:22)

Mm-hmm.

Brian Hanks (22:24)

dentist doesn’t they have a negative attrition, which is just two negatives, right? So it’s a positive. They the average buyer has more enthusiasm, they’ve got some more energy, they’re gonna update the website, they’re gonna maybe get rid of.

That one employee that everybody kind of knew probably s needed to go. And suddenly the practice is just gonna it’s gonna take off. Ten to thirty percent. That’s yeah, right in line with what I’m seeing. That’s awesome. So sorry, I I’m interrupting you, keep going.

Kiera (22:47)

Mm-hmm. And I think, no, y you are always this is a conversation. It’s not like a dictation. So we’re like this is real life rift here. I just think people like when you look at it, I think you’re more capable than you think you are. I know that you can get the skills, you can figure it out. Like you said, I’m always like, okay, play the what ifs, lose 50% of your patients. Great. Well, we’re gonna take those 50%. And there’s ways you can actually grow a practice without even needing to have more new patients.

So

we’re gonna maximize all those, we’re gonna optimize them. You’re going to pull in more people. Like it is one of those things that I’m like, I have yet to have a practice go bankrupt. So knock on wood, like you can be my first challenge accepted. Like I feel very confident that I’m not like, unless you completely botch it and you go into malpractice, like we’re probably gonna be just fine. So odds of it happening, so minimal. Are you gonna be a little stressed out? Yeah. Like, welcome to business ownership, but you’re also looking for growth, and that’s why you’re being called to this moment. Like

It will not go away. That itch will not go away until you scratch it. And scratching it, and I love that you said like they’re waiting five years and that’s a $1.1 million minimum. There’s so many other pieces to it. So I think I think a lot of dentists like to have facts. I think a lot of dentists like to have that decision make logical sense. And then we back it up with emotional reasons. And I think it’s a wise way to make decisions. But I I would just say if you’re even remotely curious, like start going down the path. I know when I was going to buy a house.

I needed to go find out, like, I don’t know about lenders, I didn’t know about interest rates. I did and until you get into it, just like you wanted to be a dentist, but until you got into it and you started working on that type it on and you learned about dropping the box and like waxing it up and working on Dexter and then taking x-rays, like you didn’t know it. And I think most of the time the fear comes from the lack of knowing. I will also say, and I’ve seen this a lot, Brian, a lot of dentists feel like because I’m a doctor and I’m a dentist, if I buy a practice, I should know how to run a practice. And

Brian Hanks (24:38)

And

Kiera (24:38)

I just want to like

Scratch that out. I want to tell you that that’s not true. But I know a lot of you come in feeling like but Kiera, I’m a dentist, or Brad, I’m a dentist, like I’m a doctor, like people expect me to know this. And I want to say you think people expect you to know that, but the reality is you don’t. You just need to be scrappy enough to figure it out. No one’s expecting you to know anything. Honestly, you probably know way more than you think you do already. But I I want to just cut that because I know a lot of you have perfectionism like fear of being exposed that you’re not that great.

Except that you don’t know how to run a business just like you didn’t know how to prep a crown, but you learned that and you’re gonna learn how to do a business and you’re gonna do it exponentially well because you are so detail oriented and you’re gonna hire a great team around you, hire great coaches around you that you’re literally like it’s impossible for you to fail. And so I think Brian, like kudos on it, kudos on the stats, any other thoughts that you have around people and like how do they get to the nitty-gritty of actually going through

Brian Hanks (25:26)

Let’s get some yeah. I’ll hit I’ll hit you with more stats. Yeah.

Kiera (25:31)

that.

Brian Hanks (25:32)

Some more facts for dentists. You and you mentioned the failure rate. What is the actual failure rate in dentistry? It’s it’s 0.14% of dentists go bankrupt. Okay. And it’s always, always, always one

Kiera (25:43)

Incredible.

Brian Hanks (25:43)

of three things. It’s drugs, divorce, and then jail. You know, some kind of felony that doesn’t have anything to do with practice. so you stay away from those

Kiera (25:51)

Yep.

Brian Hanks (25:52)

three things and you’re guaranteed not to go bankrupt.

And it so what do dentists actually need to buy practice? We’ve done a good job of pumping people up, given the rah-rah speech. What do you actually need? You need five things, okay? and I almost guarantee you, unless you’re in dental school right now, listening to this, you have the five right now. All right. almost guaranteed. and I’ll go from hardest to easiest, Kiera. Okay. Hardest for people to get is you need 50k

Kiera (26:18)

Okay.

Brian Hanks (26:19)

cash. You need some cash. 50k is your magic number.

Has to be liquid. It’s gotta be in a checking

Kiera (26:24)

Mm-hmm.

Brian Hanks (26:24)

savings money market account. Can’t be in an IRA or home equity or something like that. but you need that money to show the bank that you’re responsible. And by the way, you don’t actually hand that money over to the bank. You keep it. Yeah, the bank just wants to see that you have some money to see that you’re responsible.

Kiera (26:39)

Mm.

Brian Hanks (26:40)

And if you know COVID shuts us down again, can you still pay the bank the bank back a few months? All right. So most people have that.

Kiera (26:46)

Mm-hmm, mm-hmm.

Brian Hanks (26:47)

They’ve got fifty K or access to fifty K. That’s like a side thing we could talk about.

Kiera (26:51)

Totally.

Brian Hanks (26:52)

Yep.

Kiera (26:52)

Mm-hmm.

Brian Hanks (26:53)

you need production history. You got to be able to do about 80% of the production of what a seller could do. So million-dollar GP practice, let’s say 250 of that Kiera is hygiene, means the doctor was doing 750k a year in production. that means you as an associate need to do about 600

a year

Kiera (27:12)

Mm-hmm.

Brian Hanks (27:12)

to buy a million-dollar practice. Okay. Most associates listening, you know, public health, military, there are some special exceptions where we need to learn how to count.

procedures and things

Kiera (27:22)

Mm-hmm.

Brian Hanks (27:23)

like that. But most associates, they can do 600 to buy a million dollar practice. Okay, the 80%. most dentists don’t have any problem with numbers threes and four, number three and four. Number three is you got to have a credit score over 680. It’s pretty low. And it’s a green light, red light. 681 credit score gets you the same interest rate as an 820. And and then you need a clean credit history is number four. And so no bankruptcies, no short sales, or a really good story.

Behind a bankruptcy or short sale. And then you need one year of experience out of dental school or a residency program. GPR, AEGD, specialty program, whatever it is. If you’re in a residency program, you could buy a practice the day you get out of your residency. So that’s it. And so technically, Kiera, you need number six. Number six is you need a practice to buy. And I’ll be I’ll be really blunt with people, that’s the

Kiera (28:17)

Mm-hmm.

Brian Hanks (28:17)

hardest step.

Finding a good practice to buy is the hardest thing because everybody

Kiera (28:21)

I agree.

Brian Hanks (28:22)

wants to look for the practice in their pajamas. They think it’s like buying a house. Like I’m gonna go on the MLS and I’m gonna look

Kiera (28:28)

Mm-hmm.

Brian Hanks (28:28)

for a dental practice. There is no such thing as the DLS, there’s no dental listing service. And so if you’re in your pajamas looking for a practice to buy, it’s

Kiera (28:34)

Mm-hmm.

Brian Hanks (28:36)

not there. Sometimes it is, which is why people do it, but it’s almost certainly not there, especially in the city you want to live right now. and so we’ll have a podcast episode about how to

Find a practice well. But the sh here’s the short version is you go talk to dentists. Build a network of dentists that know like and trust you. That’s the

Six things and and most associates have And so attitude, like don’t let us stop you, don’t be scared. Like we did the like pump you up version of the speech. And here’s the facts to back that up, is it’s not actually that hard. Like with those six things, banks will not only give you a hundred percent of the purchase price, they’ll give you a hundred percent of the purchase price, and then they’ll hand you another seventy-five K in cash just to make sure you don’t run out of money on the first day. Sometimes it’s a hundred K. I’ve seen d banks give two hundred thousand dollars in cash.

Kiera (29:21)

Mm-hmm.

Brian Hanks (29:21)

before they even walk through the doors with you know the key in hand as an owner. So it’s awesome. If if you’re thinking about ownership and nine out of ten dentists are at some point in their career, it’s it’s really not it’s not it’s simple. It’s not necessarily easy, but it’s simple.

Kiera (29:41)

Yeah. And Brian, even on the I’ve been talking to the Bank of America guys, and they were like, we even give like thirty to forty thousand to a new startup practice for consulting fees in addition to our working capital because

Brian Hanks (29:52)

Yeah.

Kiera (29:53)

we know that it’s also going to help grow them. So there’s so many pieces, and I think you’ve just listed off like really, I agree, like finding the practice and like sending out the postcards, getting to know the network, finding the dentist, like the practice that actually works for you, finding a seller that wants to sell for the price that you want.

I agree with you 100%. That is the hardest part. But I think Brian, you did an incredible job of breaking this down from the like, okay, you’re probably gonna do it. Nine out of ten is do buy that. What are the exact steps that I need to take for this? And then I agree with you. Like, absolutely a follow-up podcast on like how to actually find a practice. But Brian, I’m curious if people are interested, like they want to start connecting and like this is what you do. And I know you guys are really generous with your time. How do people connect in with you to like even start the process? Like, again, I feel like curiosity.

Is the best place to be. Like let’s just ask the questions. Let’s figure it out. So Brian, how do people get connected in with you?

Brian Hanks (30:41)

Pop over to Amazon, type in How To Buy A Dental Practice. That’s the book. if you want, by the way, if you want a cheaper copy, you can go to the website. The website is DentalBuyerAdvocates.com. I’m happy to ship it to you like as a publisher copy, no strings attached. but yeah, just pop over to Amazon, DentalBuyerAdvocates.com. Care if people want to email me directly. I always offer this. And it’s so fascinating to me how few people actually take me up on it. I would be more than happy to have a half an hour conversation with whoever you are, free of charge.

Send me an email, [email protected]. It’s B-R-I-A-N and Hanks like Tom Hanks. So yeah, that’s how you get a hold of me.

Kiera (31:20)

Amazing.

Well, Brian, thank you for breaking this down and for all of you listening. I hope that today was just a really insightful podcast for you. I hope it gave you the facts to back it up. I hope it gave you the emotional piece. I hope it gave you kind of the like step by step by step of how to get there. I’m so grateful for Brian being here. Everybody connect in with him. And for all of you listening, thank you for listening and I’ll catch you next time on the Dental A Team Podcast.