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Welcome to "The Dental Business Hub." Join us as we explore actionable insights and strategies for dental professionals. From marketing and practice management to industry trends and personal development, we provide the tools you need to grow your practice and achieve financial success.
Hello, and welcome to the Dental Business Hub podcast. I'm thrilled to introduce our guests today for our very first episode. Barb Stackhouse has a rich background in dentistry, having worked as a dental hygienist before launching her entrepreneurial career with a Bachelor of Science in Dental Health Education and a Master's in Educational Leadership. Barb brings a well rounded perspective to her work as a coach and consultant. She founded More to Life Dental and is the author of Profit First for Dentists, empowering dentists to master the financial and operational aspects of their business.
Monica Cappelli:Barb, thank you so much for joining the Dental Business Hub podcast.
Barb Stackhouse:Yeah, Monica, thank you so much for inviting me. It is my pleasure to be here. Happy to chat with you.
Monica Cappelli:Sure. You know, very few dentists have business training. I'm the spouse of a dentist. You've been in the dental industry for a really long time. You know the drawbacks of not having that business education.
Monica Cappelli:Tell me some of the reasons you got into Profit First and what was the motivating factor for you?
Barb Stackhouse:So I've been coaching and teaching dentists on the business management side for this is 21 this year. And prior to that, I helped my husband in his construction company on the business side. So I kind of learned it just from the ground up because I had to, I was helping him. And when I started coaching dentists, what I found years later, they would still come back and say, I still need some help with my finances. We could get the systems for the team.
Barb Stackhouse:We could get efficiencies. We were even tracking things, Lots of good things happening, but they would still come back and say, I still need some help on the financial side. I'm just not understanding something or this isn't working, something like that. And I actually had a dentist that I was coaching told me about the Profit First book written by Mike Michalowicz. So I said, sure, I'll read that book.
Barb Stackhouse:And I got a copy and I started reading it and I couldn't put it down because I knew I had found something that would work. And it has. Having those additional bank accounts, more than just one savings account. A lot dentists tell me, Oh, I have an extra account. I do that.
Barb Stackhouse:Well, not really. So having all of the accounts for all the specific reasons and really understanding your own percentages to put in there made the difference. So what I saw happen when I started this was that the dentist I was coaching at that time started implementing this and every one of them, every single one saw more success because of it. And I knew at that point, this was something key to change the behaviors.
Monica Cappelli:Dentists can be making $1.02, $34 5,000,000 a year and still not feel personally fulfilled because they're not setting aside profit. They're not paying themselves first. They can actually be living paycheck to paycheck, even with a hugely thriving practice and without running your practice like a business, that's likely going to be the outcome. And that's why the burnout is so high in dentistry too, and the frustration levels. And I mean, I've seen that firsthand as well.
Monica Cappelli:And I know when I first started working in my husband's office, I didn't know a thing about collecting money. I didn't know anything about it at all. And so having, eyes on the numbers, having a having a systematic way of thinking about revenue and thinking about your practice as a business, what is what is in that was a that was a a major paradigm shift for us. What is involved in in getting that mindset into the daily practice?
Barb Stackhouse:Yeah. I think we all have a story with money. I've had my own story and had to learn. I had to learn the principles about what money is, what it isn't, what it can do for you, what it doesn't do for you. And I think one of the big questions is how much is enough?
Barb Stackhouse:I think that if we're always chasing more, there will never be enough. So I'm a big proponent of organizing the money further beyond profit first, especially for dentists, organizing the chart of accounts, understanding what it takes to run the business and no more. Start learning where you can stop, stop the spending and keep that money in your own pocket. And so that's one thing that's super important to me is to help them learn how to put more in their own pocket, but then also answer the question, how much do you really need? Because we all know the more that we put in our own pocket, the more that goes in that checking account, the more we spend.
Barb Stackhouse:So it's fine to have more profitability, but then what are we doing with it? How are we keeping it? I can help create that additional profitability. I can't help you
Monica Cappelli:be What's funny is a lot of dentists only have extra money at the end of the year to buy equipment. Yes. Or they make some money.
Barb Stackhouse:Which may or may not be the right thing to do. Depends. So I'm a big proponent of setting those goals at the beginning of the year. What's on your wish list? Don't just get to the end of the year and say, your accountant says, Oh, go buy a piece of equipment.
Barb Stackhouse:And you just go buy something because your accountant said to go buy it. That's not a good reason. No. And in fact, it's probably a bad reason. It's probably something that you don't necessarily really need.
Barb Stackhouse:So I like setting those goals at the beginning of the year, knowing exactly what we're planning for, knowing the taxes we're planning for, knowing what the strategy is that we're going to use to mitigate some of those. So have that set up early on in the year. I don't like to use the word budget because it always seems so negative. People are like, I don't want to have to follow a budget. So here's what I say.
Barb Stackhouse:I say, you're going to spend money both personally and in your business. So how about we have a spending plan? Let's have a spending plan in place. So that's what I teach dentists to do. And honestly, I think the personal spending is just as important.
Monica Cappelli:I'm smiling because I'm a pathological shopper and that sounds really like a good idea.
Barb Stackhouse:I
Monica Cappelli:actually get to the point where I will list things everywhere I go, farmer's market, grocery store, whatever. And if it's not on my list, don't buy it. I'm extremely disciplined that way. Might vary the
Monica Cappelli:color. Yeah. Could vary the color or maybe the brand if something's on sale, but if it's not an item on my list, I don't buy it.
Barb Stackhouse:Yeah. So I I have started creating menus for
Monica Cappelli:Oh, good.
Barb Stackhouse:Maybe three or four key menus for the week. Mhmm. And we'll eat out maybe one night a week, something like that. You know? So when I do that and I and I don't necessarily say like, oh, this is what we're eating this night.
Barb Stackhouse:I'll just have I'll make sure I have the ingredients for those four or five dishes that I wanna make. And then I'll ask my husband, well, hey. Out of these four or five, what do you want tonight? You know? But what that does is it keeps me to that grocery list because I have to check and see, do I have the things in my pantry for for these menu items?
Barb Stackhouse:And and then I just get the things that I need.
Monica Cappelli:Make it Yeah, that's kind of like the secret sauce. And when you're doing that for your family, why aren't we doing that for our businesses?
Barb Stackhouse:Absolutely. Yeah. So one of the things that I help dentists do, and actually it's probably a team member, whoever is doing the ordering in the practice. I have a very solid system for how to order and how to manage her lab fees too, because those are two variable expenses. So variable means that the dollar amount of those can fluctuate from month to month depending on the amount of dentistry that's done.
Barb Stackhouse:So if we have a month that's a real high production month, likely we're going to spend more in supplies and we're going to spend more in lab versus you know the opposite of that a lower production month we're going to spend less in those areas but the percentage should stay the same. Okay so what we do is create a percentage for where we want those expenses to be. And I have a spreadsheet all set up and I teach a team member to do that. What we do is we take the prior month's collection because it's always a percentage of collection. We take the prior month times whatever percent we want our supplies to be.
Barb Stackhouse:Okay. And that's our dollar amount we can spend for the upcoming month.
Monica Cappelli:Oh, I love that.
Barb Stackhouse:So it really puts us into a position of these are the dollars that we have to spend. And if for some reason we find we're out of something, we absolutely have to order, we can, but now it comes off of the next month. We're borrowing into the next month. So when we calculate our next month, we have to take that off because we've already spent it. And really that is the only way I have found to get your expenses into the percentage that you want them to be as far as your variable supplies and lab.
Monica Cappelli:You know, this is deeply significant. Just that one gem that you just gave would be transformative in a lot of practices.
Barb Stackhouse:Absolutely.
Monica Cappelli:Then you have costs that maybe you don't have as much control over. Nowadays you have a lot of temporary employees coming in, whether it's for hygienists or assistance or whatever. What do you do with those kinds of costs that are rising so fast that they're hard to control for?
Barb Stackhouse:It is hard. And I've had to adjust those percentages with what I've seen. Have a lot of offices that I work with that are tracking their statistics. I get them doing that. So I have access to these statistics from six years ago to what they are now.
Barb Stackhouse:So I have a pre COVID picture. I have a post COVID picture. And I have adjusted what I feel like are those averages for team compensation because it has impacted our practices hugely.
Monica Cappelli:It held up.
Barb Stackhouse:And not just dentistry. I mean, I think if you look at businesses across the board, they will all tell you that the labor cost is up along with other costs too, but especially the labor costs. So I have adjusted those. And the other thing that I think is a big contributing factor is that we've been seeing the cost of all of our supplies and running a business go up, yet the insurance companies that are reimbursing these dentists for care are not keeping pace. And I see year over year, maybe a 1% or something ridiculous.
Monica Cappelli:It's incremental and it's also usually only applied to certain fee categories.
Barb Stackhouse:Exactly.
Monica Cappelli:It may be giving an increase in crown, but they'll decrease your exam.
Barb Stackhouse:Yet the premiums are going up. You know, and to me, it's just, it's a game. However,
Monica Cappelli:insurance, you have to live with it.
Barb Stackhouse:I think there are, were finding alternatives such as membership plans and doing things alternatively to attract patients who maybe don't have the opportunity to have insurance, but would be loyal to a practice with a program like that.
Monica Cappelli:I agree. And I do think that there are a lot of dentists who are already so wrapped up into their insurance relationships. I think your program might be able to help them see a pathway to success even if they are weighed down under multiple plans that they're in
Barb Stackhouse:network Absolutely. Yes, absolutely. It's about understanding truly what your overhead is. And I say that and everybody's thinking, well, have a profit and loss report. I have a balance sheet.
Barb Stackhouse:I can look at those things. But there's so much stuff that's missing from those. That's what entrepreneurs by and large, I'm not just speaking to dentists, but all entrepreneurs. I happen to work with dentists, so of course that's near and dear to my heart. But if you don't understand what your true cash flow numbers are, it's really hard to make decisions.
Barb Stackhouse:And as Mike talks about and as I talk about in my book, this concept of Parkinson's law, and that is the supply will meet the demand. And so when you have more money sitting in your account, we all do this personally too. We open up our bank accounts, we see how much we have. We know what we have to pay the bills and what we can spend. And if we have money in there, we spend it.
Barb Stackhouse:I mean, it's just human nature.
Monica Cappelli:It is.
Barb Stackhouse:And when we have less money in the account, we will be resourceful, we will spend less. So that's the whole concept of having the multiple accounts because get that money out of that main account, put it over here in these other accounts where we're saving it for a specific purpose. Now we can really see what we have to spend on our operating expense.
Monica Cappelli:What percentage of dental practices would you say right now, just if you looked broadly across The US or with practices that you had consultations with, what percentage would you say are already doing it right versus the ones who really could use some tweaking to their systems?
Barb Stackhouse:Yeah, it's hard to know because by the time they're reaching out to me, the doctors I'm talking to, they're struggling. I do believe that there are quite a few dentists who are pretty savvy and they're just maybe more business minded. Maybe they had a parent who owned a business. So there are dentists out there who are savvy. And I get messages from dentists who read my book and say, Oh my goodness, this helped me so much.
Barb Stackhouse:I'm able to implement it. And they are able to do it. And the instructions are all there in the book. I mean, don't hold anything back. It's everything that I do when I'm doing an assessment, I lay it out.
Barb Stackhouse:And so some dentists can pick that up and they can run with it and go. And a lot of dentists look at that and say, Oh my goodness, this is overwhelming. I can't do this. And I say, You know what? You need to stay with what you're really good at, which is doing dentistry, and let someone help you.
Barb Stackhouse:Because the time they would put in trying to do it and then not feel successful is a waste.
Monica Cappelli:And sometimes they don't even have a team member who's equipped to do it either way.
Barb Stackhouse:Exactly. Exactly.
Monica Cappelli:It's good that you have the ability to come alongside them
Barb Stackhouse:Yeah.
Monica Cappelli:And help them out. And I get the idea. Most dentists are gonna wanna try it on their own first. Right? Yeah.
Monica Cappelli:And and reach out to you. But what I love you know I have a one of the reasons I wanted to have you on, Barbara, honestly, is because my clients who have read your book, and I have two I have three, but two I've gotten fantastic feedback from, one I don't see as often. But I do feel like you've made an impact in their life. And just in the way they think about not only money, but actually about being business owners. I think, I don't know that dentists come out of school thinking of themselves as business owners.
Barb Stackhouse:Yeah. Oh, that's a great statement. Yeah. Dental school doesn't prepare them to be a business owner. I'm not I don't mean to speak badly about a dental school because I'm not.
Monica Cappelli:No, no, no. At their job They're focused on what they're supposed to be teaching.
Barb Stackhouse:Exactly. And just like in dental hygiene school, the focus was to help us be able to pass those boards and get licensed. Dental schools are paid to do that with the dentist to make sure clinically they have what they need to pass the boards to get into practice. They might have, most of us tell me we have
Monica Cappelli:one Honestly, want that. We not want them who can't do dentistry. And so it's huge hat to wear though, to be a business owner and to step into it as a novice. You know, that's why a lot of dentists, I think go into other situations. They work for someone or they work for a corporation.
Monica Cappelli:They get a lot of training and they hone their skills. But even then to find someone who is mentoring you on the business side is really hard to do. I don't think that happens as often as we might have. In the old days, even when my husband went into dentistry, you could literally, if you wanted to graduate and hang a shingle and you'd be fine. This was in the eighties.
Monica Cappelli:That's not happening anymore and that can't happen. So for a new dentist, say, who's coming out of school, who maybe has worked for another dentist or dental organization, maybe they've worked two or three years and they've said, okay, I'm ready to go out on my own. What should they be looking at and what kind of advice do you have for them?
Barb Stackhouse:Yeah. I definitely think that do everything you can to keep your costs down And start small and grow. You don't have to have, you know, eight ops to start. You can do it with three or four. And I've seen some scratch starts recently that are killing it starting with three or four ops.
Barb Stackhouse:And the other thing too, I think that you have to find what your own personality is. Not every dentist is created equal. Some dentists want that 10 or 12 op practice. They want to grow into that. And that's their ultimate goal.
Barb Stackhouse:That suits their personality. That's what they want. They want to have associates. And then I talked to other dentists who say, you know what, I'm just really happy working by myself. Maybe someday I'll have
Monica Cappelli:one
Barb Stackhouse:associate. And they're happy with a smaller practice like that. And I'm here to say both of those can be profitable. But you have to know your cash flow. And so Profit First is a cash flow system.
Barb Stackhouse:We're looking at the cash that came into the practice and then what we do with that cash, where does it go out and what do we keep? So every dollar that gets deposited in the account is accounted for. We know what category it went into and we've streamlined it so we know how much we need for each of those categories. But that's the key is knowing where every dollar goes and then setting those plans and those goals for any other expenditures outside of that spending plan. Let's say the doctor has a goal of, by the end of this year, I want to purchase a CBCT.
Barb Stackhouse:Great. Then we can plan for that. But this is what you're going to need to set aside every month. And maybe we have half of it saved and then they borrow the other half. That's still in a better position than if they wouldn't have to borrow all of it.
Barb Stackhouse:So we can make a plan like that and we can structure the profit account to help fund some of those things that are growth into the business. What I see happen a lot is that dentists think that they have to just plow money back into the business. Just plow it back in. Just plow it back in. I need this.
Barb Stackhouse:I need this. Blah, blah, blah. Really what that does is it makes your operating expenses go sky high. And I'm here to tell you, you can set aside profit and do that too. Can do both at the same time.
Monica Cappelli:I love the fact whether it's a new dentist or a dentist who's been in practice for years and years and years. First of I don't think it's ever too late to start minding your money. But the second thing is this has a trickle down effect on all the other things in your business, because if you're really planning and watching what comes in and what goes out and planning for your expenditures, it's also going to require you, I think, to tweak some of your systems inside, like your revenue collection systems, maybe your treatment, your case acceptance may need to improve. It's going to affect what you market for. You know, maybe you need to market for different services than you have before.
Monica Cappelli:You're going to be looking at your vendors and those relationships. It's going to really have an effect across the practice. And I think maybe that's a lot to think about, but it's absolutely necessary, right?
Barb Stackhouse:It is. I believe it starts the course of a practice transformation if you continue the work. And I believe that the financial piece has to be the foundation. I see it happen opposite all the time where we work to improve our efficiencies and our team and all the things that we're doing on the clinical side and the front office. And there's nothing wrong with that.
Barb Stackhouse:But if we aren't tracking our numbers ahead of that, how do you know what impact that had on your practice? I get the calls where the dentist says, okay, well I did this and I did this and I did this and I hired blah, blah, blah. And then I had to have extra team members. And what they found was their overhead went up in the same exact amount that their revenue went up. And so they're not taking home anymore.
Barb Stackhouse:They're like, I'm taking home the same amount of money and I'm working harder seeing more patients. Now that does not make sense to me.
Monica Cappelli:No. It doesn't. And it's very frustrating for the dentist because you have the emotional well-being of your team and your family, honestly Yes. And self. And I I feel like if you're not if you're in business and you don't feel like you're making progress towards the goals that you've set, what you're really doing there's no such thing as stagnant.
Monica Cappelli:You know? Business is like a living organism. You're growing or you're dying, honestly. Right?
Barb Stackhouse:Yes. Could
Monica Cappelli:be hanging on by your thread for a really long time. But if you're not growing, you're not growing. And because people around you may be growing, the effect is going to be you're shrinking. So I think this is absolutely crucial. And I hope any dentists listening are beginning to understand the importance of this.
Barb Stackhouse:I would say you've got to know your numbers. And if you aren't tracking some key things and numbers, and you go changing a bunch of things in your practice, you're never going to know the true impact that's happening. You're only going to know months later when the crisis happens. And then you're left wondering, why did this happen? Why am I struggling?
Barb Stackhouse:So you have to know the numbers. And I believe wholeheartedly that that is the foundation of any business is setting up a good structure, a good system for your money. We're used to having all these systems in our practice. Dentistry itself, the clinical part of dentistry, there are systems. Everything is linear.
Barb Stackhouse:And I'm here to say the system with your money is the same, is linear. And you've got to get that set up and you can pull your team members in on it too. They can be a part of that. So for me, mean, that's what I do. So it's near and dear to my heart, but I will say I've done it the other way.
Barb Stackhouse:I've been there and I've got twenty one years experience. So my last six years have been put the money part first, do profit first. Then let's look at what's going on over here and we can measure. And so data drives decisions.
Monica Cappelli:If we
Barb Stackhouse:don't have data, I don't believe in making decisions just
Monica Cappelli:thinking see your I'm going say dollars pride decision.
Barb Stackhouse:Yes, but you have to know, you can't just make decisions. I say all the time businesses run by the seat of their pants and dentists are doing it all the time because there's so many moving parts. And that's the other thing too that I would also want to say is that this system, it takes some work to get it set up. I can hold your hand and help you get it correct. And then going forward in as little as ten minutes a week and one hour a month, you can know your numbers 100% And make decisions.
Monica Cappelli:Okay. That's freedom right there because as we were talking about the scenarios, you know, dentists wear a lot of hats, their office managers wear a lot of hats, sometimes their wives get sucked into the business. Who has time to do this? You're saying ten minutes a week and one hour a month.
Barb Stackhouse:That's it.
Monica Cappelli:That if you can't invest that much in your business, then I mean, that's a lot of that's nothing compared to the risk you take for not making a change. Am I correct?
Barb Stackhouse:That's right. Yeah. Absolutely. So who would want I can get you to that point. I you know, there's some setup time.
Barb Stackhouse:There's some work that has to be done up front as with any good system. Right. We have we have to kinda tear it apart and put it back together. That'll take a few months to do, but you can get into a position where literally ten minutes a week and one hour a month. I know your numbers.
Monica Cappelli:That is real freedom, to be honest with you. As a business owner, I can't think of anything. Like, if I was thinking of what, as a business owner, I want out of my business, one of the things I want my business to deliver to me is freedom. Right? And so when you're crushed under or you're just feeling anxious because you don't know where you stand, you don't know even if you're profitable, you don't know if you're gonna make your mortgage, you don't know if you're gonna make payroll, you don't know if you can make your taxes, That's not freedom.
Monica Cappelli:That's stress. Yeah. So I'd love that ten minutes a week and one hour a month after you do the hard work. And I guess if you're a startup practice, I imagine this is a lot easier to implement than if you have to undo a lot of stuff.
Barb Stackhouse:Yeah, I get asked that all the time. How do I do this? How do I know by percentages on a startup practice? And there are ways to start figuring that out and we can look, we can do a mock spending plan and we can project. Chances are most of the dentists that are doing a scratch startup have probably worked somewhere as an associate for a year or two.
Barb Stackhouse:So we have some numbers of what their capabilities are for producing. So there are ways to start to project that. And then most startups have some capital that they can use in the meantime. So it can be done.
Monica Cappelli:Yeah. Well, I'm optimistic for the dentists out there who choose to reach out to you and make connection with you. I'm optimistic, even if they just get the book. I know you have a workbook now as well that goes along for those who want to DIY, correct?
Barb Stackhouse:Yes, yes. The guidebook, it is a workbook, but the guidebook is just out. And so I've learned things these past five years since writing the first book and I wanted to share that information and just dive a little deeper in for the do it yourself. So yeah, I think if you get the book and the companion guidebook, and you are a savvy dentist and you like doing things yourself, you may be able to figure it out. But once you get in there and you get to the part about doing your self assessment, if that just seems overwhelming to you, would say reach out, have a call with me.
Barb Stackhouse:Let's see what that looks like. If I can just help you by answering a few questions, I'll be happy to do that. If it's something you want more than that, I'll be happy to do that. Either way
Monica Cappelli:is I love that about you, Barb. And just before you got, I just wanna say I had the privilege of sitting with Barb to consult with one of my clients, and it's so easy. She is absolutely what you see is what you get. She really has a heart for the dentist. Non threatening, non no pressure whatsoever, and just totally open to answering questions.
Monica Cappelli:And I can really see that your heart is for the dentist. And I guess I know a lot of fantastic people who support dentists, but there's also a lot of vulnerability in the dental world. I would just say that anyone who wants to reach out to Barb, please do so. I am going to include all of her contact information in the links below. Her book is available on Amazon as is the guidebook.
Monica Cappelli:And you're just fantastic to work with. I'm so thankful to you and I'm hopeful that as you work with more and more dentists, we'll begin to change the story for some of the dentists and help them, you know, embrace business ownership, CEO, put their CEO hat on and really actually enjoy it and enjoy it.
Barb Stackhouse:They are so deserving of that and truly one of my goals as a businesswoman helping dentists is to help them find that freedom. And so the name of my company is More to Life.
Monica Cappelli:I love that.
Barb Stackhouse:More to Life Dental. And the reason why is because dentists would say to me, there's gotta be more to life than this. And so I want to help them find more to life.
Monica Cappelli:With that, thank you. Thank you so much, Barb, for taking the time to talk about the business side of dentistry and what your contribution is in this world is going to have major effect. Thanks so much, Barb. It's wonderful to
Barb Stackhouse:see
Barb Stackhouse:you
Monica Cappelli:Thank
Barb Stackhouse:you.