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This podcast covers from START to FINISH How to Acquire a Dental Practice. Michael Dinsio, founder of Next Level Consultants has literally seen hundreds of deals as a banker in the industry & he has personally consulted hundreds of dentists as a Buyers Representative. Michael talks with GUEST SPEAKERS about Due Diligence, Legal, Demographics, and more... He invites experts to the show to help you avoid those headaches and heartbreaks. So start at the TOP w/ Episode 01 and work your way through the transition process. We break it down step by step in a true #UNSCRIPTED and genuine way.
00:00
Oh yeah! Here we go! Practice acquisition! There are pitfalls throughout the entire process.
00:26
Hey guys, thanks again for joining us. This is Dental Acquisition Uncensored and we are in the middle of shark week. Here we go. Another great episode coming from NorCal, Northern California. And we're again, brokers across the entire country. In this particular episode, it didn't go 100 % in the direction that I thought it was going to. But Tim, my new next guest, man, he drops a ton of great information.
00:56
Fast talker, we had some connection issues. So hang in there. We talked about, you know, what a unicorn practice really looks like. We talked about the Delta issues with PPO and fee for service and buying practices in California and Delta premier and all that.
01:16
craziness, talk about how to actually qualify what a good practice is to buy a knot. And then what was really interesting at the end was we talked about how your professionals can actually get you into trouble on these deals. Everybody talks about how you got to have the best, the best professionals on your team. But Tim's right. Nobody talks about how professionals can really screw up your deal. So stay tuned, hang in there towards the end because we get to that.
01:45
And that's a real thing. Professionals can screw up the deal. Let's get it going. Acquisition uncensored. The truth when buying and selling a dental practice. And now your host, Michael Dinsio.
02:07
Okay, okay everyone. Thanks so much for joining another great episode here on Acquisition Uncensored. We're in the middle of Shark Week and we're having a lot of fun. If this is your first episode for Shark Week, this is Practice Brokers Shark Week. It's a week of the top practice brokers in the country from coast to coast. And today we have a special guest and friend of mine who covers
02:36
the Northern California market, some of Arizona and a tad bit in Nevada. And Tim, you can help me if I screwed that up, but it's Tim Drew with Western Practice Sales, a former past president of ADS, which for those of you that don't know ADS, ADS is a national brokers group or affiliation. And maybe Tim could get into that, but.
03:01
This guy is legendary and we got lucky to have him on the program. So Tim, thanks for being, thanks for being on brother. Hey, my pleasure. Thanks. So Tim, you cover NorCal and you're the guy there and NorCal and California in general. And you know what, I'll even take that one step further is the coasts are often challenging markets and practice sales for a lot of reasons. They tend to sell for higher and
03:29
all kinds of things like that. But the coast and particular NorCal can be a challenging market and we're gonna get into some of that. But Tim, you dominate in that market. so tell us a little bit about Western Practice Sales and the company that you have started or not started, but have been running for years. it's been around Western Practice Sales has been around about 40 years, believe it or not. And John Noble who's still with me was one of the main brokers back in the day.
03:59
I got out of dental school in 83, moved out here in 2000 and around 2001. Anyway, the guy that used to own Western practice sales was a past associate dean of University of Pacific. And I was gonna take a get a license here as I'm gonna take the board. They introduced me to Bob Gartrell who introduced me to the deans at UOP who were gonna get me patients. And he goes, hey, you wanna sell some dental practices before you get your license? go, sure, why not?
04:25
And in about four months, I go, hey, you want to sell me this business so I don't have to take the board? And he goes, yeah, you work for me another year and I'll sell you the business. And so that's how I just kind of fell into being only Western practice sales is of 2001. So I feel like, first of all, I'm a dentist. My wife's a dentist. We practiced together in Scottsdale for almost 20 years. And then my daughter just got out dental school four years ago. She's been a Navy dentist for the last four years. And she married one of her
04:53
We're classmates, so my son-in-law is a dentist, so plenty of dentists still in the family. I had one other kid, a son who was an investment banker, so we all joked that he was a smart one out of us all of us dentists. As an ex-banker, he is not the smart one. can promise you that. He's a pretty good arena down in LA. Both kids went to UCLA and then maybe went to Loma Linda Dental School. That's why I really enjoy
05:23
the interacting with the buyers because basically, I have a love for that. Obviously, us brokers, for the most part, always represent sellers, but we spend all our time and money trying to cultivate a database of buyers to try to make the perfect match. Contrary to the ADEPT program and the ADA, we've been doing that forever. It's not like we haven't been.
05:46
It's, you know, again, it's just, and since we have one of the best databases out here and some of that has to do with our affiliation with the ABS being a national portal that spends a lot of budget on those things. try to cultivate, you know, the most amount of buyers possible so we could make that best match for anybody that lists their practice with us. And, you know, I've got a DDS, John has an MBA, John has a,
06:12
an MBA and Ed has a JD and a CPA. So we kind of feel like we're at the top level as far as we're just not some brokers that got out of high school and thought we'd do real estate and then sell dental practices. we've been around for a long time and we're busy. We probably did 130 practices last year. Wow. Okay. folks, folks, me and Tim, I'm going to interrupt you and I'm sorry, but I need permission there.
06:40
when you say something that sparks something, 130 practices, is a lot, like a lot of practice sales. so just to give you an indication of like, and that's a great question, by the way, to ask the brokers how many practices did you guys transition last year? Because I'm gonna tell you that, you know, a lot of you may not know who the quote unquote biggest players are in the market.
07:08
And so that would be a quick question that you could ask a broker is how many did you guys work with? If they say five, well, they probably don't have a lot of listings. But if someone says 130, like Tim just said, like that's somebody that you want to call a lot and make sure that, hey, Tim, if you have a practice in this particular area, think of me like that. That's place that should spark something in you.
07:35
So yeah, that's a lot Tim, congratulations, that's great. Well, thanks. Well, again, that's interesting because as a, know, I still feel like as a dentist first, I mean, I tell all my young dentists, you know, they got to call every broker in the area that has a practice and, know, I always say, hopefully it's mine, but if it's my competitors and it's a practice that fits you, you know, go buy it. I mean, it's kind of a thing now. You know, they can ask me some questions, but they're better off if they give you a call and ask you some questions and just do some of the basics as you and I have done in the past, looking at different practices.
08:05
But again, that's the unique part. I I'll tell every young buyer, call every broker in your area. if sellers are listening to this, mean, they go, they'll hear that. Oh, I present personalized attention? Well, yeah. I I quarterback so many, John quarterback so many, Ed quarterback so many of other guys. mean, so you always have a personal touch and we have a phenomenal staff as Mike can attest through the deals. mean, when you ask a question and need a document,
08:34
bam, we have it like instantly. So I think we will run a pretty good machine where a lot of guys, they're a one man show. They're trying to do everything on their own. And the thing, that's the thing. We have this amazing database with one touch of a button. I can put a practice out to 4,000, 5,000 dentists in one touch in an instant. that's why we're trying to cultivate this database for the buyers. it helps the sellers. But again, that whole matching thing that we adapt kind of thing.
09:03
know, as brokers are missing now, we're, you know, we have every intention of making a good fit. The question is, what is a good fit? And, you'll get beginning into that because that's kind of what you're trying to help these buyers do. So, yeah, no, I get that kind of leads me right to my first question though, Tim is like, you know, this whole program, we're going through the start to the finish of an acquisition. And we've already talked about banking and we've talked about like understanding your vision and what you're trying to accomplish. But,
09:33
The thing that's really interesting is that the practice brokers, if you haven't heard that folks in the whole series of Shark Week is these practice brokers want a successful transition. That's what they want. They don't want to sell you something and then it fail. Like that's the worst possible scenario. And so I guess my first question to you is when you do get these calls from the buyers,
10:00
What's that conversation gonna sound like? And is there a difference between some buyers versus other buyers? walk me through that scenario because I've got to believe that you're attracted as a broker to certain buyers than others. Let's talk about that. Does that make sense? I'm not sure about that last one. I kind of have a reputation of being very frank, blunt and honest, but.
10:28
Having said that, you've seen our financial package. I'll say this, and people kind of chuckle because they hear it a lot, but I've been helping my son a lot, looking at practices out in North Carolina now when my daughter finishes off her Navy gig. And as far as I'm concerned, my financial package has everything you would need to make a reasonable decision on that. The point is that I write these articles. One of my favorites is the million dollar question. I mean, I think you can help these buyers basically
10:56
get through this information because I didn't even know these reports existed when I was a practicing dentist. So my daughter always teases me, devil, this is what you do for a living now. I go, you're right. I didn't run all these reports as a practitioner. So I'm trying to educate my buyers how to begin the process of what they're looking for. So that procedure code analysis, the procedures are there. To me, the profi count, exam count towards production, there's a range that you're going to start to see when
11:24
when you look at 150 practices a year like I do, you know, and then, know, and I can look at a practice and kind of go, wow, if I took that over, I know what my skill sets were, I'm going to kill it. And I look at other practices and kind of go, wow, I don't, I never did surgical implants. I never did ortho. I hated molar endo. I loved, you know, partial bony extractions and soft tissues. But I mean, there's, we all have our own, you know, kind of skill sets, but that's part of that package. And so that's where you start to kind of try to decipher this
11:53
process. And so I'm frustrated to be honest with you now, Mike, is that some of these guys, you know, they hire an attorney that does nothing about dentistry and nothing about the business of dentistry. And they start asking questions that have nothing to do to answer the biggest part of the due diligence is that is this a good match for me based on my skill sets? Number one. And, know, and my diagnosing, you know, some people, you know, we have an opinion that they overdiagnose. They think they're goldilocks. They think they're perfect.
12:23
And I kind of got past making that judgment after I started doing so many. I I used to judge like, wow, this guy's really an aggressive guy. I know, Wow, this guy is really too conservative. Man, he ought to be doing more dentistry here. Well, that's my opinion as a dentist. You could put a patient in a room of me and my wife, my daughter, my son-in-law, a couple of my classmates. We'll have 10 different treatment plans. And that's going to make a huge difference in this practice that we would purchase.
12:52
based on so how you're help these guys get there. even at end of the day, you know, they got to look at that chart to kind of go, that guy doesn't diagnose anything or they got to look at that chart go, Whoa, you know, I mean, you know, I'm looking at a bunch of occlusal fillings and there's, know, 15 crowns after that. was like, man, that's not, know, that that that looks crazy. You know, the thing is with those kind of practices, you don't, you know, make a low ball offer, you run away, you know, it's something like that. But, but so I mean, I really mean,
13:19
You need somebody like Mike to kind of coach you through that. But at end of the day, you got to own your decision. And to me, Mike is beneficial in helping you find this million dollar question. What am I going to be able to do with this patient base in my own hands? And an accountant doesn't know that. attorney doesn't know that. least something like Mike knows how to look at these reports and kind of help decipher and help you understand maybe where you fit in this Goldilocks,
13:48
this range of, and we're never exactly alike, you know, I mean, so maybe you do Invisalign and the guy doesn't, you know, maybe you can kind of tell you do some all around them now and he doesn't. Well, maybe his skill sets as far as communication and selling treatment plans are better than yours. Well, they should be after 40 years, know, years out of school. I found that like you going off on that topic. And I love that because I found that just because it doesn't
14:19
fit you perfectly. Okay, so you did five, 10 cases of Invisalign. Just because you don't do Invisalign, the impact of five, 10 cases is not that big of deal, right? And so my job half the time as a buyer's rep is to really analyze the true impact because half the time it's not as big as you might think, you know?
14:43
You get rid some of the surgical implants or you get rid of whatever, some molarendo that you say you're not going to do or whatever, the soft tissue impacts that you don't want to touch. But then you kind of look at, well, gosh, I'd probably be doing some of these other things instead. But the point is, at the end of the day, it's kind of like this gut feel. mean, and again, it really is more of a gut feel that you're, I mean, I don't think you say aggressiveness or whatever the case is, your opinion on
15:13
what needs to be done compared to what you could watch and things like that. If that somewhat close to matches, the funny thing is the accountants and the attorneys will see what I would call the really overly aggressive guy. Guess what? His tax return looks fantastic. know what I mean? He's making a ton of money. This looks like the best practice ever. And so all these consultants, you just paid $5,000 to go look at this stuff, say, oh, wow, this is awesome.
15:42
by golly, know, guess what? It's awesome on paper, but I mean, down to, you know, can you do the work? mean, so again, it's so, it's so funny because yeah, what we're trying to avoid is that mismatch of skill sets and the diagnosing aspect of what you know, you think needs to be done on these treatment plants. And so, so again, and guess what? Only the dentist really can do that.
16:11
you know, again, I'm not, you when I lump all these consultants, I'm not trying to lump Mike into that because at least, you know, my dental consultants that are used to looking at those reports can kind of at least help look at these things and steer, you know, the doctor to take a look at some of these issues to say, okay, yeah, do you do this smaller end of deal? know, again, Mike has a feel like when you see everybody has this, you know, active patients, don't know if you want to just keep me rambling and you're just gonna interrupt me whenever you want.
16:36
No, there's some really good stuff in there. So keep rambling. I'll cut you off. This is perfect. Keep going. Active patients. Wells Fargo still tells their clients to ask for active patient counts. We have it all in our material never to give that number because I can count a totally different number than anybody, is the point. What's that mean? I think it's anybody that's been in your office at least once in two years. Some people say it's a year and a half. Some people say, well, it's only counted only if they're in active recall.
17:04
Some of my best referring patients always showed up once every five years because they hated the dentists but loved me and they referred like the entire neighborhood to me. They wouldn't be considered an active patient. So the point is, I mean, I don't think that that number is not a tangible number, but know, exam counts and profie counts are, they're right there. And so start looking at your exam and profie counts compared to production. And then you'll start going, oh, this guy did a thousand profies last year and a thousand exams and he produced
17:35
700,000, that's kind of my average number. I had a practice, a great guy went to my school, but he did, did it, he did straight wire, he did implants, he did it, mean, was not one thing this guy referred out. He did 700, you know, exams a year and did 1.2. Well, you know, I mean, it wasn't a Charleston overdiagnosed or he just had skillsets that I didn't have, you know, so again, I mean, even I'm pretty confident dentists. look back at it.
18:04
well, I'd be lucky to do, you know, basically I'd be lucky to do 800,000 on that practice. mean, so, yeah, when I make my offer on that, yeah, you'd have to. Let's talk about that for a second. what you're doing, Tim, is you're kind of, I think there's a lot to be said for like, as a buyer approaches and you're doing it with your daughter and your son-in-law and...
18:30
you're approaching these practice brokers, prospectuses or reports. And in a lot of ways, they're very subjective. And, you know, there's the quality level of these prospectuses can range vastly. you, and I'm not saying this, because I'm not saying this to, because you're on the show, your prospectus is definitely one of my favorites because it gives me all the meat and potatoes.
18:59
I would say that's not very common. And now that you've been looking with your daughter, you probably realized too that it's, the quality is just totally off. But you know, the practice broker does the best they can in representing the practice that they have. And like I just said, that the range of the prospectus is different, but at the end of the day, if we could over oversimplify this is exactly what you're saying is it always comes back to the fit.
19:27
for you in that particular practice and you as a buyer versus another buyer versus another buyer are all gonna look at it differently. That's what I'm hearing you say. But the bottom line is again, we're all about, you want a good match. So you and I talked about this other issue we can bring up at the same thing. It's the Delta dental in California. mean, it's the states but that one issue that's to be some people run away screaming with their hair.
19:55
fire, which you see happen all the time, you have some accounts in some banks, they don't kind of start the buyer's hair on fire and tell them to run and scream and hit the panic button. Honestly, wouldn't buy a practice that wasn't Delta Premier. That's my honest opinion. Why is that? Nice is patience. They appreciate quality work. Now, having said that, I'm not going to let my daughter's son-in-law be a Delta provider in California. I would never let them work for a $750 crown. That's bullshit. Sorry, my French. You can edit that out.
20:24
But it's just, everybody should say no to Delta. This whole thing at this grandfather in it is just a stealth secret way to screw all you young buyers from Delta. They'll tell you that, oh yeah, of course you're gonna be both. You're gonna be a premier provider and a DPO provider. Well, 96 % of their clients are on the cheaper fee schedule and my sellers don't quite understand that. get paid 100 % of their clients get paid on the premier fee schedule. Now having said that, there's a way to...
20:52
some transition to be out of network. I know there's issues. don't want to get deep into the weeds on that, but they haven't raised that premier fee schedule for five, six, seven years. That premier fee schedules is usually 25 % less than most of my guys quality practices UCR already. So they're already taking a hit with the premier fee skills, much less to take another 30 % hit to go to the crappy fee schedule. So again, I mean, all of us dentists have to basically say no to Delta. And you know, guess what? I think they'll come around someday, but
21:21
only stops when you tell them no. So they've got such a control going on, send the checks to the patients, blah, there's ways to get around those things but the narrative would be like, we'll honor this fee schedule that hasn't been raised in six years and the patient should go, what? The fees hasn't been raised in six years? That's impossible. There's inflation going on. Yeah, I know. This fee schedule is already 3 % my usual fee schedule. No kidding, doctor, but you're going to honor that for me? Yes.
21:47
Well, yeah, guess what? The payment from Delta is going to be less than they anticipated unless they are one of those few premier. But I mean, again, at some point, unless you want to race to the bottom with crappy fees, you just have to say no. And eventually, don't you want the patients that appreciate quality work and want to see you and are happy to pay whatever, two, three hundred dollars extra for a crown every once in a while to get a nice quality crown from you? That's who you want to go to every day in your profession for the next 30 years.
22:15
You really want to go to somebody that doesn't care who you are. could give a crap, but you know, whatever. And, uh, you know, just, uh, lots of crown for 700 bucks. That's the guy you want to target your practice to. I hope not. I mean, if you're really fast and you have some cheap lab in Taiwan, you can make it work. But I mean, again, it's just, that's, it's your call. let's, let's talk about, let's talk about that. I I'll chime in on that. So we've had a lot of conversations about Delta over, I guess we could say the years now where.
22:44
Yeah, it is a concern. think this folks, this is a national program. We're in California talking to Tim Drew and Western practice sales and he is in California and Delta is very difficult to work with in California and Washington state. They're being very amicable on these fees and matching matching some of the sellers fee schedules and it's different across the whole
23:14
and I don't think everybody really does understand that. So it is a state by state type situation. with that all being said, Tim's making a great argument for going to fee for service versus staying and playing the insurance game. And I think it comes down to Tim, Doc, like to me, it's more about
23:42
does the buyer have the ability or does the team have the ability to have a good solid conversation with the patient and walk the patient through the actual process of insurance and what it actually means to them and how it's gonna actually affect their pocketbook. If you have the skill to have effective communication and you have your team has...
24:08
the skill level to have effective communication, you've got a better chance at fighting this problem. Would you agree with that? Like it's all about communication. Well, it's all about communication. I mean, I wish my sellers would, you know, dump the Delta a year prior to selling their practice and just, you know, them do it. It would be a better situation, but that's part of the process. I'm going through one of these now where, we're just going to,
24:32
once we get a agreed upon price and get through things, we're going to ask the seller to start that process before we even announce to the patients that we're going to have a sale. And the seller is going to stick around, some surgical implants, and we'll have some nice things as far as that goes. So it's all about the conversation. And so the patients need to understand that dentistry is not supposed to be for free. Obviously, Mike and I went through a
24:59
Well, but Mike and I went through a transition not too long ago in one of the most expensive neighborhoods in the country. Of course, this discussion came up, but why in the world if you're in the most affluent neighborhood in the entire world practically that you would want to do a crowd for $800? I think the buyer decided that she was going to try that for a while. I'm thinking like, why in the world would you do that?
25:25
Because this was the misinformation I think we gave years ago. We were all kind of guilty of it. told the buyers to go along with it, take the cut. And after a year or two, when you get to know these patients, then maybe raise your fee. But I think that's the wrong approach, to be honest with you. mean, once you already take the cut, you've already kind of told them what your crown's worth. then the whole point of this is like, let's say in this neighborhood, most of the crowns are going for $14 to $1500, let's say.
25:53
Delta's paying $1,150. So you're already at a 30 % cut already, and then you cut it down to $800. Then what, in two years, you're going to tell them, by the way, my crown fees double now compared to what you've been paying. So again, I think unfortunately, the idea was to have the buyer get to know the patients first. I don't know. I think you just need the seller support in that first is my humble opinion on this. Are you going to lose some patience? Of course you are.
26:22
you really want to work for $800 a crown for your whole life. at some point, aren't you going to have to make that decision how far? Some of these practices, some of the PPOs pay better than the crappy Delta. They'll pay even what the Delta Premier fee schedule is. Maybe you choose to keep those. But again, at some point, you've got to decide what to say no. And again, it could be neighborhood. If you're in other places, I'll say East San Jose. Well, yeah, the crown.
26:51
There's a lot of people race to the bottom there. have to figure out how to, if that's your turf, you got to figure out how to play that game no matter what, basically when it comes down to. So it is kind of a case by case basis. And it always will be. There's never going to be something that we say on this program or in a book or some seminar. You're going to get generic information, folks, but it really is a case by case. That's why some of these Facebook
27:20
these Facebook forums where I see people giving free advice and free advice is free advice. mean, you get what you pay for. a lot of cases, even this program could be considered free advice. It's a case by case folks, Tim's today are really related to NorCal. Don't take those to Kansas City and it's gonna be different, right? And so.
27:48
You gotta really weigh your scenario. Everybody has their own scenario. But Tim, let's transition real quick. I've been having the conversation with all of the practice brokers on the program. And it's this conversation of like a well-oiled machine practice throwing off tons of cash, the unicorn practice that everybody wants versus the fixer upper, so to speak. And it's that conversation of like, what do you get with
28:18
either one. you know, the reality is, is everybody wants the unicorn and there are only so many of those. Right. So then, so then the conversation then should go into what the other practices, what's good about the other practices, because you only get so many of the unicorns there's going to be a line out the door to buy those and they're going to be paid, someone's going to pay way over value, quote unquote.
28:45
way overvalued for those unicorn, right? Cause that's what everybody wants. But then the question is, like, how do you make one of these average bread and butter practices or the fixer uppers work? Like, do you get into these conversations with buyers? I'm sure you do all the time. Well, you know, that what's interesting about that is that, um, uh, again, that, I mean, we might have a different, different definition of unicorn on some of that, but, um, you know, the, the,
29:15
Obviously from what I just said there, comparing like I said, I have other practice. Well, I have about four articles that I think are the best articles for my buyers. And it kind of addresses that through a couple of them overlaps a little bit. the point is, I had a practice that was doing like 350,000 one time in San Jose and I priced it at like 325 and people thought I was nuts. And the reason I did is because it was like a 50 year old practice. The father sold it to his son. The son really didn't want to be
29:44
dentist who's going into real estate, you can just tell you just didn't do anything in this practice. This practice probably had 2000 active patients, let's say maybe back in the day, we counted them like that or whatever. I mean, could tell, well, the first year the buyer, I pointed that out, all her experts told her not to buy it. was overpriced. I went in there, showed her everything. We went over the reports. was like, if you don't do 800,000 out of here your first year, I'll buy you a steak dinner kind of a thing. And sure enough, first year she buys it, she does like 900,000.
30:14
you know, again, is that the unicorn? No, that's not the unicorn you're talking about. It was a dump, know, that had things had been fixed up for 40 years. It was the fixer upper for 325,000. But the point is, again, if you got to know what you're looking at, you know, so when you're just telling your accountant to look at this tax return, you know, he doesn't know how to look at the charge records and see what's really there. So, so again, that's, you know, that's some of the whole point of this, you know, is this, but it is, it's up to the dentist to kind of understand that.
30:43
And so many of think they just have to listen to every word, every syllable their attorney tells them or their account tells them. And again, you're the one that's best person to be able to make that determination on that. now if you have a practice that doesn't have this healthy patient base and you're in a spot that there's some competition and it's only thrown out 500,000 collections and maybe that's what it should be, there's a decent, maybe the patient counts a little higher possibly. So you think you have a little room to grow.
31:12
I mean, I'm not going to tell you that I, how you can grow practice. see people do scratch charts. see them do that. I would probably refer them to more to somebody like Mike or somebody in the territory that has had experience, what marketing works in that area. mean, have you done the demographics to say this is your spot? mean, again, if this is, you're making a 30 year decision. If this is the school district you want your kids to be in or close to it, or it's close to home. I mean, there's also many other factors to me that should make up this decision, but.
31:42
As far as somebody telling you that, I think you're going to get 42 patients a month in a year. All you got to do is show up. Well, I don't say that. I just don't know what to say. But do I see people actually do that sometimes? Yeah, I do. I wish I knew that exact secret sauce, but that's not the business I meant. Yeah, no, it's an interesting thing. Most of my buyers, they want specific things. And I hear all the time,
32:10
from practice brokers, oh, they're looking for a unicorn, they're looking for a unicorn. And to your point, people's definitions of unicorns are different. But the truth is, it is a case by case scenario. There's a lot to go into the decision, geographical, competition, you as a producer. I mean, there's a hundred things, but.
32:37
I think what you're gonna find in all of these episodes with all the practice brokers and Shark Week is you gotta have a game plan for how you're going to take the practice and run with it. You gotta have a game plan. And whether it's a fixer upper or a well-oiled machine, still, you gotta have a game plan post-transition. That's been the overwhelming.
33:05
advice from all of these interviews, Tim, and you're saying the same thing. Yeah. Give me... Yeah, go ahead. yourself. You got to know yourself. I I was kind of talking about you want that perfect practice for all these nice patients that really like you. guess what? I mean, there's a lot of us dentists that don't have a personality, that don't really like to talk to people, and they can't even see themselves doing that. Well,
33:34
You know, guess what? That, that PPO practice where the patients are going there because of the PPO and Hey, you're, you're pretty good with your hands. You know, how to run a business. That could be the best thing you ever do. You know, mean, um, you know, my practice was more personality based. you know, my wife and I both could talk to people. It was fun. You know, they're like first name basis things. That's not, that's not everybody's practice. Right. so get shocker, shocker, shocker, shocker, Tim, that your practice was.
34:04
the personality practice. No, sorry, I cut you off. yeah. But if you're a square peg, don't put yourself into a round hole. I'm not saying that on either whatever that means. I'm not trying to say, but that's the thing. And of course, think that's the square pegs and the round pegs are basically hiring all these same people to basically tell them, oh, yeah, that's a great practice to buy. And again,
34:30
looks like it on paper, but boy, got to own that decision. Like I said, the million dollar question, what are you going to do with this? But can actually say, you have to have your game plan and then at least recognize what you're looking at. Look at those profi counts, those patient counts, look at what procedures are being done and look and make some kind of determination on that, how you're diagnosing skills and aggressive nature relates to theirs. And of course, it's easier for a
34:58
more of aggressive diagnosed or with more skill sets to go into a practice that where the guys nod and he's referring a lot of things out. Yeah, that's not necessarily unicorn, but certainly that's your of your game plan. You can just look at the patient base that's there, the amount of work that's being done and know that you bring more to the table that's being done. And again, then you might look at one where it's the opposite. Maybe it's in your perfect neighborhood. It's exactly this, your kids school district and everything else.
35:26
your choices are you could spend $500,000 for a buildup in there with zero patients, zero revenue, nothing there. People still do that. I don't even know why. I think that's crazy. Or maybe pay $500,000 for this, and it's only doing $500,000 a year. Well, guess what? What's a better investment? $500,000 at 100 % gross receipt of the practice. That would be maybe 600 patients or whatever that would be, or starting with nothing. And was zero patients to try to meet.
35:55
So again, it's interesting, know, what are you trying, you know, if this is your best, you know, this is your sweetheart location that trumps a few things too. And if they want a hundred percent for their practice and it's going to go for that because it's in Cupertino next to Google or something like that. you know, yeah, if you want to be in that neighborhood, you know, it's like buying a house there. can't, know, if the, all the houses are going for 2 billion and you only, you know, you only have a million dollars to buy a house. Well, you're in the wrong neighborhood, you know, all those things kind of come up.
36:25
You can't put yourself into positions where you think you could do better, you know, so. No, that's that's perfect. That's been a common theme throughout the series. want to I want to finish on on this question, and I don't want the audience to get I've known Tim for a while now. I understand where he's coming from with with the comments. But by no, I could say this for Tim. By no means does he think you shouldn't have advisors.
36:53
or accountants or CPAs helping you. But I do want to cover this topic that I agree with Tim. It's why I'm a buyer's rep. You're gonna have advisors, bankers, CPAs, attorneys, he made some, hell, even some consultants that are only gonna look at the things on paper, the black and white. And you're 1000 % right. That if I get a piece of paper with a bunch of data on it,
37:23
It doesn't take a genius to tell you, this practice is profitable. You should buy it. Right. That's super easy. Folks be careful about the team that you do hire. I think that's, that's, that's a valuable lesson actually to talk about on this episode. think it's Cause you know, I appreciate you saying that because that's the takeaway something that I'll hear. I'll get, know, five attorneys called me in the next week about that. You know, and that's not, that's not my point. You know, the point is.
37:51
is that you should have your team, but you are the CEO of your team. And so you need to control them if they're giving you advice. And I just had a seller the other day tell me, me and this buyer guy went great. It was a fantastic transition. He thanked me. It's going wonderful. And he said, and we were getting along great, the buyer and seller forever. We both eventually fired the attorneys and just used your contract and it was awesome. Now, mean, so many fights.
38:20
between the guys and of course, that's how these sellers look at it too. Buyers hire an attorney, they totally write up all this crazy stuff in the contract that they're protecting them with and the sellers looking at this going, my God, you know? mean, you so then he asked our attorney to beat some of the stuff back because some of it should be beat back. And then all of a the fight's on and also these guys are getting along fantastic, you know, aren't getting along anymore. know, and I don't see my attorneys understanding that enough sometimes, you I know they want to protect their client.
38:50
But this is relationship. And guess what, buyers? You're buying relationships. You're buying the relationship between the doctor and those 1,000 or 2,000 patients or whatever there are. And the most important thing you're buying is that relationship and that goodwill. if you're the CEO, if you're seeing these changes that they're making, and A, you don't understand them, but B, you should have enough common sense to know that they're antagonistic,
39:14
You're the CEO, tell your guy, maybe you need to back off a little bit. Can you explain why I have to be so harsh about this or why that needs to be changed? mean, let's talk about reality here. What's the chances of that really happening? Do we really have to make this an issue? You're the CEO, this is your company. These are your advisors that you hired. My frustration is I see these guys spend $5,000, $10,000 on due diligence.
39:37
And honestly, sometimes they kill a deal that would have been fantastic. And I'm thinking like, well, whatever. Nobody wants anybody to buy the wrong practice, but the buyer, you've got to take control of the situation and understand what's going on here. And again, sometimes there's a nice practice with a seller I don't trust. Honestly, me, I'll even
40:02
I'll probably mention somewhere along the Well, you know, gotta be careful. Maybe, I mean, it's just not, everything's not rainbows in unicorns. I couldn't agree. That's not gonna always happen, but the point is, know, so the point is the due diligence is so important. Your team is important, but understand that you have to learn how to filter out the noise and determine what is important to answer the question.
40:31
of what you're gonna be able to do with that patient base. That's the million dollar question. And you have to be the CEO to filter out noise to be able to make a good decision. And you can't filter out some of the noise that you're gonna get, I mean, and they're not intentionally giving you a bad noise, but that's just how they're trained. Attorneys are trained in an adversarial system. That's how they're trained. Understand that, right? Your accountant's gonna be kinda like that too. He thinks he has to look up all the bad things that he sees on this balance sheet or something like that.
41:00
And again, even when they bless it, sometimes they're blessing the balance sheet of a guy that overdiagnoses everything. understand that ultimately you have to understand you're the CEO and how to process all this information you're going to get from your team. think that's a, it's really good. And that's very, that's spot on because that, I think that's a great place to end this, this episode because
41:25
I can talk for three hours, sure you want to end this? I know you can. I can tell you're having a lot of fun, but that, I think that's a really, really good place to end because it's a really important point in that don't rely 100 % on your advisors. Listen to them. Don't be stupid and not listen. But at the same time, this is kind of like your first act as a business owner and your first, have some.
41:52
have some ownership in the process is ultimately kind of what I'm hearing Tim say is like, don't just blindly lead even me, you know, a dental consultant, buyer rep, ask me questions. If you don't understand it, filter it through your own filter and, and own the process because I don't know everything. I'm not naive to know that your attorney doesn't know everything. I mean, at the end of the day, you do need to take some ownership.
42:22
in the process and I think that will do a lot of good. I always say to my clients, don't let the professionals screw this deal up for you. Don't let that happen. If you love this practice and it's a good fit for you, don't let the professional screw it up. And if it ever gets off the rails, pick up the phone and have a conversation with the seller because at the end of the day, you two are the ones doing this deal. Not all of us professionals.
42:51
I wouldn't say that I would suggest you go ahead and call the sellers all the time. You got to work through the channels. But if anything ever gets off the rails, that's kind of a 911 button. yeah, so I guess that's a great place to transition. any final words as we wrap this bad boy up? mean, you gave us a lot of knowledge here in 30, 40 minutes. No, that's exactly right. mean, you
43:18
We don't want you to call the sellers to negotiate the contract or anything else in there, but absolutely, it's a relationship. You're calling, so your first meeting with a seller is to convince the seller that you're the nicest guy to take over his patients and he's not gonna run into his patients in a way, that you start yelling and screaming about who the crazy person is that you sold my practice to. So, your first job is to convince the seller that you're the nicest guy in the world and you're gonna take care of these relationships that this guy's cultivated for 40 years.
43:47
After that, negotiations usually become easier. And like Mike said, if it gets off the rails, make that phone call again and just convince the guy, hey, I'm still the same guy. he's going to see the problem is the seller is going to attribute all these changes that the attorney is doing to you. He's going to assume you're the CEO. So you may have to disown that. And of course, saying, well, I got to listen to my guy because he's my attorney.
44:09
that's not going to cut it to be honest with you. You need to that relationship back and just kind of say, okay, what do need to talk about here? What are the concerns? what do you want? So anyway, my point is you always, I want you to become best friends with my client. I'm always amazed that these buyers don't call up and hang out and go to lunch, hang out in the office or do whatever. To me, if I'm spending anything, $250 to a million dollars on a practice, I want to get to know that guy. I want to be in his back pocket for several weeks.
44:37
just to have that happen. And I don't see a lot of buyers do that. I'm always perplexed. I don't want them to call and negotiate the allocations or the price or anything like that anymore. I do want them to become best friends. Yeah, that's perfect. Well, Tim, thanks so much for your time, dude. I always like working deals with you. It's always these super fun conversations we have. Wealth of knowledge, dentist yourself.
45:05
130 practices in one year. Imagine that over 40 years. I know you haven't been doing it 40 years, but I mean, that's a lot of experience. If you ever get Tim on the phone, ask him, ask him. He loves to give advice and I think he's a good one to get advice. So Tim, thanks again for being on the program, my friend. I appreciate it. Hey, thanks for having me. Thanks, Mike. Take care. All right. right. Be good.
45:32
Tune in next time for another truth-filled episode of Acquisition Uncensored. We want to hear from you. Interact with your host Michael Dinsio. Follow us on Facebook and YouTube. Comment and Subscribe!