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This Dental Specific Podcast is dedicated to the Dental "Entrepreneur" Michael Dinsio, Founder of Next Level Consultants, delivers #TRUTH when starting up a dental practice. From the very first step to getting the keys of a dental practice, Michael shares his raw & unscripted playbook with you. Not only does this podcast provide you with "What To Do" but more importantly "What Not To Do". With over over 15 years of experience & over 150 past clients, Michael delivers an educational and informative program in a real and genuine way. Start w/ Episode 01 - as we go through a STEP by STEP process.
00:03
question is so loaded, John. I don't even know where to start with Well, listen. I guess the problem is, and by the way, I love that question. Interesting. Yeah. This is an interesting topic. What's the solution here? Show up, understand your part, and just crush it. Pay per click, social media, we can talk about all this stuff. But what really matters is patient experience, that wow factor.
00:33
Please are you listening to yourself? Come on! What are you talking about? Yeah exactly, so sit back, take notes and listen. Oh, oh, I love this. This is gonna be fun.
00:48
Startup Unscripted. The questions you have with the truth you need to hear. And now your hosts, Michael Dinsio and John Bertagni.
01:07
Good morning, episode three. Super excited about today's episode. We've got Jason Greenland from Wells Fargo. Welcome, my friend. How are you doing? Thanks for joining us today. I'm doing great. Thanks for asking. know, the small technical problems at the beginning here, but I think I finally got it figured out. It's okay. John, my co-host and friend and partner. What's shaking bacon? Well, I'm wearing my baking blue.
01:36
Oxford shirt just for solidarity standpoint. Of course, of course. We were expecting a suit and by Jason today. Right. thought about it. You know, the blue with the stripe. Exactly. Jason, thanks for being a part of this. We're really excited about the banking part. Obviously, this is pretty instrumental in terms of building a dental practice that you have.
02:05
you have some money behind it. thanks for being a part of this. Most importantly, thanks for giving us the straight shooter mindset of the banking world as it pertains to dentists that want to start a dental practice. This is perfect. I'm excited to be here. Kind of the pinnacle of the whole process. A lot of people really start with banking there as we've already kind of
02:33
set up in our and this podcast series is there's a few others. There's a few other things to do before banking. But a lot of people go right into banking. And I and I bet you this is a pretty frustrating thing from you. I mean, I'm a I like to say I'm a recovering banker because I because I am over that life. But isn't it interesting, Jason, how doctors come to you with no plan?
02:59
and no idea about really what they're doing and they want you to tell them how to start their business. really what you want, correct me if I'm wrong, really what you want is for them to go to you with the plan, the vision, the budget. Does that sound about right? Yeah, that would be helpful.
03:22
We get everything, I hear everything under the sun, right? So, you know, there's some people that are in the very beginning stages, don't know where they want to open up, you know, don't know anything about their plans. They're just, you know, coming to me for information, right? Like you said, almost direction. And then there's people who have everything lined up, already have a space lined up, and then at the very end are looking to get financing, which, you know, can also...
03:47
not be a great idea. I think it's one of those things that you kind of got to explore more early in the process because it's going to dictate your project, right? How much can you afford? How much can you afford for your lease? How much construction? All of that stuff. I think it's important early, but yeah, you're right. People come very, very early, which is great because you can educate them and set them in the right direction. Yeah, a freshman in dental school is asking you to, let's get this thing
04:16
this ball rolling, right? But why is that? You know, how do you differentiate? I don't know if you ever dug in with some of these dentists that have said, you know, I'm coming to you, this is my vision, this is my budget, you know, where did they get that information early on? it, you know, how did that, what's the difference, the delta between those mindsets? It's so strange to me. Yeah, you know, I don't know, I think that people
04:45
You know, there's a certain percentage of dentists out there that know they want to start a practice. They're very entrepreneurial and you know, they know that they want to start rather than acquire. so they just kind of have a thirst for knowledge, right? And so they might not know exactly the steps they need to take, but they know enough to reach out and ask a lot of questions. And so I think it's great. You know, I do love fielding phone calls like that because you could tell they're
05:11
They're very excited about starting a practice. They want to know more. They want direction. They're like sponges, you know? And you can introduce them to the right people and kind of guide them along that path, which is, think, one of the most rewarding things about working with startup doctors. Well, I think that's what we're trying to do here, Jason. I know that you guys were super excited, the Whole Wells team, because we are trying to give those steps in a sequential manner.
05:39
You don't have to dig into demographics. You don't have to dig into real estate and really guide them, which is outside of your, you know a lot and you've done a lot of these things, which is fantastic. And most bankers across the country have, but we want to put them in the right buckets with the right people and with the right mindset for these meetings. you know, this is, this is a, I'm looking forward to this, this session here today. Yeah, go on, man.
06:08
I guess that I got a question. So like, forget COVID, you know, because COVID is happening kind of as we're doing this recording. But yeah, just just big picture. There aren't 100 banks that are doing startup loans, right? Like startups traditionally are by the metrics riskier. But the the mind blowing thing about startups is they're not that much more risky. Like
06:35
I remember when I was saying more risky than a buying a practice, correct? Correct. Or we're talking about or all all dental loans, real estate equipment, the entire the entire banking portfolio in in the dental space as I as I knew it when I was a banker was really less, it was less than 1 % default. So we're already working with a very low default rate. But
07:04
of those defaults, you know, the higher percentage would be the startup. And so it's kind of we're working with fractions of a percent here. So they're already really, really good risks, no matter which direction you go. But big picture, why? Why? Why is Wells Fargo doing startups? Why do you guys believe in them? Why do you think they work? Why do think they make sense?
07:30
Yeah, well, think you hit the nail on the head. We believe in them, right? So we've been doing them for 20, 30 years and they have a high rate of success. Like you said, they are the riskier loan within acquisitions, expansions and other dental loans. But generally speaking, the vast majority of them are successful. And I think it's a great entry point and
07:56
and way to build a relationship, a long lasting lifetime relationship with the doctor and the doctor with the bank. And so I think there's just a lot of benefit to it. And if you're going to be in practice lending, got to do all phases of it. So I think that there's a lot of value in the fact that, yeah, we can do a startup, we can do an acquisition. As your practice grows, we can do an expansion. So we're with you throughout the entire journey of your career. By the way, really quick.
08:23
Thank you for cleaning up the background with all your Trapper Keepers and all that kind of stuff on your shelf. You look really well organized. I appreciate it. I don't know if our audience knows what a Trapper Keeper is, I... My buddy, my buddy. It's really fun because when we started this whole Zoom thing in April after coronavirus set in, we started doing our team meetings.
08:53
on zoom. And my manager said, you know, let's critique everybody's background. And what does it say about the person? And someone commented that it looked like I was gonna be scrapbooking after work. Yeah, ironic, think that's my wife scrapbooking stuff right there. So you said I don't give a crap. I'm gonna keep it. I'm keeping it.
09:17
I think it adds color. And I might send you a thank you card after with a personalized red heart stamp. I'll put it there. You'll see it next time. That brings up a question, you know, and I'm just I'm not the banker of this conversation here, but, know, how do banks actually really make their money? It's not really in the interest rates, right? It's not really in the interest. Like, how do they make
09:44
What does this relationship look like and how is it a symbiotic relationship with the the the the borrower and moving forward? How do they make money? Yeah, I think that, you know, ideally that we can win the relationship, right? When the whole banking relationship, that's I think the goal, right? We want to we want to be able to help the customer not only with the loan, but also with the banking relationship as well. So.
10:09
The loan is one component, right? But it's kind of a transaction in a sense because it's, you you get it and then it's done, right? But a lot of times when you choose a lender, they're going to want you to bank with them as well. And so you got to think of it more as a relationship because the loan is one aspect, but it's going to come and go. But then you've got everything else, right? You've got the banking relationship, the merchant services, you know, all the other services that you're going to need from a bank are going to have to play a role in that as well. So.
10:38
I always tell clients, you know, maybe lender X is seven basis points below lender Z, but think about the relationship as well. Are you going to be paying other fees to do other services that you need? What requirements do they have? You got to look at the whole picture. I really think that into consideration. that's a great point because as you bolt on services, and I think this is with a lot of banks, as you bolt on services, you sometimes get
11:05
different rates for merchant services, you get different rates for loans, get different. the more, you know, it's kind of like my insurance, the more things that I have with it, home, auto, you know, whatever it is, you get discounts. Same thing happens with a lot of banks. Is that correct? I, I some- Yeah, you're correct. Yeah, it's very important to think about the whole relationship versus just that transaction, right? I get the rates important, right? You want to get rates.
11:33
and you want to get a competitive rate, but at the same time, you got to look at the whole picture as well. Because if you're going to a bank that, you know, maybe they have three branches and it's not near your office and they want you to bank with them, you know, take everything into consideration and look at more than just the rate. even in the merchant, let's talk just merchant services alone, there could be a delta of two percentage points on the transaction fees.
12:02
So suddenly if you're doing, if you're a million dollar practice and you're doing 80 % of that in merchant services, I mean, you're talking tens of thousands of dollars extra in, in just in that percentage of swiping cards. So everyone has to think about the overall relationship. Thank you. I, I, and that Jason, I'm just kind of teeing it up for you just to keep, keep this momentum because
12:32
At the end of the day, you I think doctors are so analytical and they have to be they're wicked smart. But when it comes to, you know, data points and statistics, it's really easy to see, you know, a three point five and a three point six. Oh, that's higher. You know, and it's really easy to make a decision. But there's fees, John Merchant Services, payroll, you know.
13:00
scanners, credit cards. I mean, the banking industry really does make their money over all of this, not just interest rate. And Jason, you tell me, like, I'm starting to see loans as a loss leader these days. The interest rates that I'm seeing today, and I know kind of putting a timestamp on it, the interest rates we're seeing today are kind of a loss leader for the bank. And so I guess my advice to the
13:28
to the doctors is really look at this whole thing because when I used to do these calculations, like back in the day, I used to compete against Wells, I think you know that. And I remember pulling up amortization schedules and between me and my competitor in this scenario, Wells Fargo, it would be like $2,000 for the entire course of 10 years. And I'd be like, are we really even talking about 2,000 over 10 years?
13:58
So that interest rate is so, it's just a fun little exercise. I just want all the viewers to understand that. Bank with people you feel comfortable with, that you know you could have a relationship with, that you know. I remember my dad who's a dentist, he would go into the local bank and everyone knew him, it didn't matter and you can do that at Wells. But that's the relationship and he banked with that bank throughout his entire career.
14:28
I mean, crazy, but think with people you want to deal with. It's good to have that camaraderie that they know who you are. You know, I think it's important. You know, from a banking perspective, this day and age, you could do a lot of things remotely. So that's definitely an option. But for some people, you know, maybe they take out a loan with Wells Fargo, but, you know, banking with Wells Fargo is not going to meet their needs because there's not a local branch. So.
14:58
That's a possibility too. You don't necessarily have to have a banking relationship with us in order to get a loan with us. We'd love to have that, but it's not required. It's not necessary. John makes a good point though. How do you deal with the cash? I had to deal with that at B of A all the time. The cash relationship is very important to all banks. I'm assuming it's pretty important to you guys too. How do you manage that cash if you're in
15:28
Juneau, Alaska, and there's no Wells Fargo branch.
15:33
Yeah, I mean, I think you have to have a banking relationship elsewhere, right? If there's not a branch and you have cash, you know, you gotta work with a local bank then. I mean, Wells Fargo obviously has a huge footprint, so the majority of folks are gonna have a Wells Fargo that's local. Yeah, and I hope you guys also sell Wells Fargo mattresses, right, that they could put the money in, correct? Yes, yes.
16:00
You can your money under the Wells Fargo mattress as well. I haven't heard about that product yet, but maybe it's on the horizon. It's coming 2021. but to that point, you guys, your technology is solid. You can transfer money super easy these days. You are going to need some kind of cash relationship with the bank to your point. But am I hearing that, you know, it's not required in areas that the bank's not?
16:30
in or the state or the area that the bank's not in? it required to set up and checking account or no? No. Okay, cool. It's not even required if you're in an area with a Wells Fargo. We would love to earn your whole relationship. Right. And I think we do a lot of great stuff. We have a whole relationship manager team that specializes in healthcare. That's kind of like the doctor's one point of contact and they're going to be familiar with the business and the doctor.
16:59
And so I think there's a ton of value there because they're really going to understand that business. But no, it's not required. Yeah. Yeah. I I could tell you the practices that we had with my partners. We use Wells and it was a was a great experience and the app, all that kind of stuff. And this is not just putting you guys on a pedestal, but it was a it was a really simple solution. And we happen to have brick and mortar.
17:25
in our area of Colorado. it was was really simple for us for merchant services, etc. So yeah, a broad stroke of product offerings. So well, how how important is it like I'm kind of I'm like, I'm going to throw you a softball real quick. Just John always says, leading the witness softballs, but
17:50
You know, it's kind of important and I think it needs to be touched on. Why working with a bank that is healthcare specific so important? I mean, the pitfalls are in my mind endless, but I'd love to hear it from you. It's a little self-serving, but you guys are healthcare specific. You've been in this space for years and years and years. It's why you do startups.
18:18
right where a lot of local schmokels don't do dental startups. You know, at the end of the day, working with a healthcare dental vet medical team that understands the industry, why is that so important? Yeah, I mean, it's very important because, you know, we understand the business, right? That's all that's all we do. So our underwriters don't underwrite a loan for a restaurant and then a loan for a gas station, and then a loan for dental office. They're
18:48
they're underwriting only loans for dental offices. So we understand the business. We ask the right questions. Our products are the right fit. So I think we can add a lot of value. then talking about, for example, the sales team, right? So we're well-networked within the dental community. And so we can connect the doctors to the right partners that they need, whether it be consulting or equipment or a CPA. So I think there's a ton of value that could be added versus them.
19:17
You know, just going into the local bank that, you know, doesn't have a specialty dental product. They aren't well-versed in the industry. They don't know the players. You know, think the doctor's missing out on a lot of value that could be added. I couldn't agree more for anyone that does dental-specific loans from an underwriting standpoint, because you guys know that ramp-up period. You know that hockey stick. You know, it's not going to be, you know, a direct vector to the moon.
19:47
from day one, you know, it's going to be a gradual growth. So what that's going to do, the local Yoko bank and nothing's wrong with them, by the way, certainly people can use them. But, you know, they might not look to working capital, the correct way to preserve enough of that money for that payroll for that rent for that, you know, hockey stick. And what I mean by hockey stick is, you know,
20:17
slow growth and then, you know, large growth. It's really difficult sometimes on these videos to do that. Yeah, there you go. That's it. But am I right? Like, that's what underwriters do. And you might even be able to say like, hey, man, let's pump the brakes a little bit on some of this stuff. We need to preserve some of this loan for working capital or for marketing. that's honestly, that's what Mike and I are trying to do is
20:46
Make sure people preserve the right buckets so that they don't get in trouble with you, the banker, saying, hey, man, slow down or hey, man, we need more money from you. Exactly. Exactly. Let me ask you a question here. When when someone comes to you with a definitive business plan, you know, I'm not saying spiral bound, but something on paper that's saying, look, this is what I want. Like a trapper keeper.
21:15
Hey, hey, let's from this episode, moving forward, every every one of our followers on our private group should get a business plan Trapper Creek keeper. And I want a Wells Fargo sticker right on the front of it. Like, let's let's roll with this. I love it. But you know, how does it
21:45
How does that process, does that move it forward? Like how do you guys look at something like that? Does that allow you guys to say, okay, you're at step six out of 10 versus you're starting at, know, step one. Like how do you look at things? How do you move people forward? What's the process in terms of banking? Obviously you have to get your shit together, right? You have to get what you need together and
22:14
get your fiduciary mindset. But you know, these guys are coming to you with, you know, debt, right? Jason, they have debt. So how do we we can't avoid that? How do we give these guys hope and direction that they're going to be able to get a loan and get the rate that they want and put themselves in the best light when they open their doors, then turn on the, you know, the open sign outside their door.
22:42
Give me predictability here, Well, first off, there's a misconception that you can't get a loan if you have a bunch of student loan debt, right? Well, the thing is, since we only lend to dentists and doctors, most of the people that we're talking to have a bunch of student loan debt. So that doesn't mean you can't get a loan. So in regards to the business plan, I think it's a great tool. I recommend that everybody starting a practice do a business plan.
23:11
We actually don't require a business plan, but if a business plan's not provided, we certainly have a list of questions that we wanna know the answer to, specifically in regards to why did you choose the space, what are the demographics like, how are you gonna market it? So basically, a business plan in a different format, right? But I think it's really important. You need to put thought into what you're doing. You need to understand why you wanna open a practice here versus here.
23:39
What's the competition like in the area? The underwriters want to see that you've done that research and they want to see that from a demographic perspective. It's a favorable spot to open a practice. Yeah. Could that be the difference of getting more money, Jason? Yeah, I mean, it can make a difference. I wouldn't say yes. But, know, if you lay out the case for.
24:05
If you're asking for more money and you can demonstrate, I'm opening in this location, you know, this is what I need. This is why I need it. Here's a bid for the contractor showing this is the minimum it costs to open up. The underwriter is more likely to sign off on a larger loan in some cases. Well, put it into their world, right? Hey, you need a cap on that tooth, right? You have some pain, you need a cap. Or do you take an inter-roll camera? Do you...
24:33
give them a full treatment plan, the hows and whys, do you give them a brochure, the propensity for that patient to say, yeah, you know what, I do need a crown because you co-diagnosed and you gave them all the materials to say yes, same thing goes, you give an underwriter and a banker information to get what they what you want, the more chance you're going to be able to get exactly what you need. 100 %
25:01
100%. It's full circle where we started with this beginning was go prepare. Don't go to the banker and correct me if I'm wrong, Jason, but I used to hate it when people came to me and asked me to basically write their business plan over the phone. I wouldn't write it, but they would call me and then I'd literally give them the eight steps and
25:29
They're, you know, they literally could have wrote it all down and made that a business plan. And it was like, come on, come on. Like, like, if you want to go into business, what what worked with that corporate office? What didn't work? What do you want to do? What what areas you want to serve? What technology are you going to have? Like, yeah, I mean, why why wouldn't an underwriter give you 25 grand more if you laid out all of those details for them? You know what I mean? Yeah, yeah.
25:58
Well, I think to differentiate though, you I don't think you need to have a business plan all set before you call a banker, right? Like I'm fine if people call me and they want to ask questions about, hey, what are the next steps? What does it look like? All of that stuff. But when you're ready to move forward, yeah, there should be some thought put into it. And definitely, obviously, before it gets to the underwriter, right, you have to have a plan in place and you have to show research and know the competition in the area and things like that. But I don't think you should.
26:26
Hesitate calling a banker to get more information about what the loan looks like or the process looks like. Or be intimidated by that because you don't have a business plan yet. Because I get people who call and they say, oh, don't know if I should be calling. I don't really have a business plan yet, but I just wanted to know more information. And that's totally fine. I'm happy to kind of guide and coach people along the way. Like you said, I don't want to write someone's business plan, but if they need questions to help, like, hey, you should know this or that and think about this, I'm happy to do that.
26:56
For sure. Well, OK, so getting into some specifics about the loan real quick. So I get this question all the time as a consultant. feel like I, you know, some clients are very, very interested in it. Some are just like, yeah, with whatever, it's part of the process. But I feel like it needs to explained a little bit more in detail, if you wouldn't mind. So there's actually two interest rates on a project loan, correct? So there's one.
27:25
There's one interest rate that's during the project and then there's another interest rate that's once the project's over and the loan technically closes and you start your payments, that's another interest rate. And that's the interest rate that everybody knows, right? Oh, I got a 4.7 or I got a 2.1, like whatever, right? They know that interest rate. But no one really talks about this other interest rate.
27:52
Break it down because it makes sense to me. I was an ex-banker, but I think it deserves its own spotlight. Yeah, it's a topic that I always go over with clients when we're talking about the approval and kind how the loan works and things like that. But it's always one of those topics that you got to explain twice, right? Because it's hard to digest the first time. And so maybe we'll have to do it twice here as well. I don't know.
28:20
The way I try to explain it is there's two phases to the loan. There's the draw phase and the repayment phase. So as you mentioned, the repayment phase is the 10-year term of the loan, typically 10-year term. Some banks offer seven or higher, but that's the one that gets the most attention, right? But the progress interest rate is the rate during the construction period. So while you're taking...
28:45
while you're drawing down your loan, because when you get a startup loan, let's say you're approved for $500,000, the bank doesn't just wire $500,000 into your bank account. Why not? That's a great idea. Just wire a half a million dollars right into someone's checking account. I just graduated. Give me five hundo. I won't go over budget, promise. No, so we monitor the project as it goes, right? Because we want to make sure that we're staying within budget and things like that. So
29:14
As the borrower is drawing down the loan, the money that they draw starts accruing interest and it's at that different interest rate. It's called the progress interest rate. So let's say they need to make a $10,000 down payment on some equipment and so they draw that $10,000. That $10,000 then it starts accruing interest at the progress rate, which is generally speaking going to be higher than the normal rate of the loan, the 10-year term rate of the loan. And it varies from bank to bank what that could be.
29:43
and from loan to loan what that could be, but it's generally speaking higher. And so the whole loan isn't accruing interest at that rate, just what you've drawn, right? And so let's say you draw another 50,000 to pay the contractor, then that 50,000 starts accruing interest at that rate as well. Once the project's completed, then the bank adds up everything that the borrower's used and the progress interest that's accrued, and then the 10-year term starts. So during that progress phase, typically there's no payments due.
30:12
I guess I can't speak for every bank but I can speak for Wells Fargo. During that phase, there's no payments due. Once the project is completed, then the payments are due after that based on the amount used. And the great part about funding a loan this way is let's say they're approved for $500,000 but they're able to kind of work their budget down to $475,000. Well, your loan would end up being based on what you used, which is $475,000, not on the $500,000. So there's some benefit there as well that you're not
30:42
taking money you don't need. one more thing I add to the rate component is, aside from the whole relationship as well, just when you're comparing rates, make sure you're comparing apples to apples, right? Because you may be looking at, let's say, a 4 % versus a 3.9. You think, the 3.9 is better, but what are the other terms of the loan, right? Is the bank charging fees? Are they charging points? What's the prepayment penalty?
31:07
Do you have to provide information financially from your CPA, which is going to cost you money? You know, if you have to provide, you know, semi-annual reports and whatnot and your time, right? So I think just, you know, like I said, rate is important. I get it. But making sure that you're comparing apples to apples, right? Look at all the terms and conditions of the loan and make sure that, you know, that great rate is really a great rate and not stuck with a bunch of things that, you know, the other loan might not have.
31:37
I want to touch on this a little bit more because it's something that I coach my clients every single day of the week. It's interesting, every startup thinks their first year is going to be the hardest, right? But the truth is that's not the case. So listeners listen up. So the first year is actually one of the easiest, mainly because of what Jason just lined up with the lower payments, right?
32:05
but you also have working capital. So you have a boat, you have a Brinks truck worth of cash sitting in your checking account. You got discounted loan payments. If you got a good real estate firm and we're going to interview a bunch of them, they're going to get you free rent. You're going to have your associate position money coming in. You got all of these. You are loaded. And then your working capital's gone.
32:34
the discounted payment went up a little bit, your associate position's gone, Zell, because you finally quit, and some people quit too early, shake your head, right, Jason? They quit too early, and so it's gone, and so all of a sudden the cash flow goes boom, and the second year is that doozy. Do you guys see the same thing, Jason? Does that sound accurate? it's pretty accurate, you know.
33:03
It's key what you said about the associating, right? And not stopping that too early because it's really your lifeline in some sense. I think a better idea than just stopping it is maybe scale it back if you're associating two days a week, maybe move to one day a week and see how that works before you just cut ties with it. But typically on a startup loan, the payments aren't going to start out right at a high 10-year payment, right? They're going to start out lower. So there's actually four tiers.
33:31
Usually the first three payments are something like $100 and then the next nine payments might be interest only. And then there's another step for the following 12 months. And then after that, you know, then you go into that fully advertised 10 year payment. the benefit is, you know, when you're first opening up your practice, you're not going to have a full schedule. You know, you're not going to have the money coming in. Hopefully you're associating, right? Which is a requirement that we have that
33:56
a smaller bank might not have that requirement, right? And I think you're doing the disservice to the borrower if you're not making sure that they associate and have that outside income, because it's very important. But yeah, so you have the two-year ramp-up period, which is going to help ease the burden of having payments right on the front end when you're trying to focus on building your practice. Yeah, second year, for all the reasons you said, can be very difficult. Well, and to that point, some people have big months.
34:26
they go and take an implant class and suddenly they did two implants that month or three implants and they have two more on the schedule for the next month and they project forward saying, I'm doing implants all day long now. suddenly, so listeners, please, let's, you know. Settle it down, just settle it down, slow growth, slow growth. Don't scorch the earth, just keep the relationship intact.
34:52
And how hard is that for them, though, right? Like we talked to Dr. Kroll and he even said, like, you know, he learned so many lessons at his corporate gig that he didn't want to do. He didn't want to be there anymore. so for him, for all associates, they don't want to be there anymore. So it's really easy to just scorch the earth and burn the bridges. But you can't. You need some of that cash flow. Yeah, exactly.
35:21
So let's jump back to budgeting real quick. How frustrating is it in the market when and I don't know too much about the Bay Area or the politics there or whatever, every every area is different. But how frustrating is it when when the team as a whole doesn't work with the banker on the budget?
35:50
and all of a sudden the project gets over because whatever reason, change orders or crazy equipment orders or whatever, decisions are being made and then you find out about it three weeks too late and the next thing you know the budget's completely whacked out. Does that happen? It used to happen to me all the time. Does it happen to you? And what would be the best practices there because in general,
36:20
I think the banker should be brought up to speed quite often. And then I also want the next question, because I want this to be at the forefront of people's mind, who oftentimes are the ones to make sure to be aware of that do crush the budget? Yeah. I construction is always the budget crusher, right? That's the one that always comes back with change orders.
36:47
user, know, they dug this up and found something and now they need 50,000 more to complete the project. That's the one that always comes with surprises. You've never had an equipment guy come in on a 300 a three hundo? Yeah. On a startup? On a startup for two operatories? This never happened? Okay, that's happened too.
37:14
If you get a quote for 300 run. Actually, frankly, these days, anything above two for a startup is almost crippling these days. So anyway, do a lot of due diligence upfront to make sure that we avoid this, right? So that's why before we start funding, we want to make sure we have an equipment budget and
37:40
a contractor's quote, right? So we have quotes on both. So we know this is how much equipment we need and it's written down. And this is the construction budget from the contractor written down. Now, of course, there could be change orders as things go along with the construction, but the equipment should be the same, hopefully, right? So I think that helps mitigate a lot of overage stuff, but it certainly still happens. It's still a problem and something that you need to...
38:07
be mindful of, think using a contractor that specializes in dental, from my experience, tend to have less change orders and tend to stick to the budget a little bit better. But I don't want to generalize, but I have noticed that. you know, working with someone who's built dental offices before, Not just one or two, but, you know, hundreds. You're going to get somebody who's going to, you know,
38:34
have a higher likelihood of coming in not only on time, but on budget as well. Good, that's good information. Well, I'm gonna step in a little bit here and just say thank you. This is exactly what I wanted to hear. This is exactly what our listeners need to hear and our viewers need to hear. So thank you for being frank. I know there were some softballs handed to you, but we also,
39:04
uh, answered, you know, gave you some questions that, uh, that we, we really wanted to know. And I think, um, I think you handled it well and you, you, gave us the straight shooter type of, uh, answers that we needed and that are a part of this show. Um, can I say show gram show gram show gram part of the show gram? Um, but I'm canceling that producer cancel that out. That's out.
39:34
But this is, banking is such a key piece. We thank Wells Fargo, we thank you Jason for being a part of this. you know, this is what we want. We want you guys to be able to reach out to Jason and banking partners and, you know, to answer the right questions and be prepared for the projects. Yeah, thank you for having me. It's been great to be on here.
40:02
I think it's a great experience and I'm happy to do it. Yeah. One thing that's bothering me about this episode, by the way, is the is the fact that I called startups risky. I want it to be known on the banking episode that startups are successful. Period. End of story. Can you echo that and finish on that, Jason? And thanks again for being on the show. Yeah, definitely. I mean, that's why we do them, right? And we're still doing them.
40:32
is because they're successful, right? We believe in them and they're successful and yeah. Get to your bedazzling, Jason. Thanks again for being on the show. we look forward to hearing from everyone. Any questions, you can reach out to any one of us and we're happy to answer them for you. That's right. Yeah, thanks again, buddy. Great, thank you. Thank you both. Thanks.
41:08
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