Episode 208 – Crafting Your Vision for Prosperity

“These practices aren’t just reserved for the top 1% of dentists. Everyday dentists are doing these things and building incredibly valuable businesses.” -Dr. Victoria Peterson

Welcome to Everyday Practices Dental Podcast!

Before we say anything else, we want to extend a massive thank you to you, our wonderful listeners, who have supported us since we started this podcast. Thank you for coming along for the ride and for inviting us into your lives. We are here for you. We are rooting for you and we are here to support you.

We love your entrepreneurial spirit. So we are bringing you this very special extended episode. Everyday Practices founding co-host, Dr. Victoria Peterson, joins us today for a powerful masterclass – and her top 3 business tips – on dental business ownership and crafting a practice that grows and holds value.

You don’t have to be extraordinary to build an extraordinary practice. You just have to have the discipline to create the plan and see it through.

We love to make your lives easier. We are dedicated to bringing independent dentists like you practical insights, actionable advice, and a healthy dose of encouragement to help make running your practice a little easier every day.

Tune in now for this special episode where we roundtable:

• Victoria’s top 3 business tips
• Why it’s important to pay attention to page 16 news
• The best question you can ask your team that will make your life easier

EPISODE TRANSCRIPT

Dr. Chad Johnson
Well, Regan, we have a special co-host and guest with us today. Victoria Peterson, how are you?

Victoria Peterson
I’m doing great.

Dr. Chad Johnson
Thank you for coming and bringing your fun energy and livelihood and soul to this. We love having you in our lives and so it’s fun to share you and cross-pollinate onto this be-happy podcast.

Victoria Peterson
So be-happy podcast. I know I may have started it but the two of you took it to number one.

Victoria Peterson
So proud. Well, thank you. Before we started, Chad and I were talking with Kashmere, the producers saying there are like the godfather of dentistry. I think I’m the grandmother of coaching. Wait a second.

Dr. Chad Johnson
Godmother, not grandma’s mother. Definitely.

Dr. Chad Johnson
For the listeners, the joke was going Victoria was self-effacing saying she was the great-great-grandmother and stuff like this. It’s like, Oh, come on.

Dr. Chad Johnson
Well, thank you for letting me like when you first invited me onto the podcast doing this with you. It was such a cool concept because I mean, I didn’t do anything like this. It’s not like you are borrowing me from the podcast world, you’re borrowing me from the dentist world saying let’s get some, you know, young, well, whatever mid-career but you know, like, some younger five into it with a dentist’s perspective and, and I had lived the stuff that you guys, you know, we’re talking about, and not that I’ve arrived, but you know, I was closer to having brought someone alongside me, as opposed to you know, Bruce is, is very relatable for sure but he’s also perfect, you know, and it’s tough to be like, “Man, how do I become perfect?” Like, Bruce, when it’s like, “Oh, yeah, I can, I can be like Chad,” you know, it allows for people to come alongside the growth, you know,

Regan
I think perfect occurs after many, many years of, trial and error and failure, and wins. Victoria, I’m so excited that you’re joining us for the 150 episode, because you have been a hallmark for being very open, transparent and vulnerable with your successes and your failures, the beautiful broken mess and all of that, that, you know, you kind of get squeezed through and you pop out on the other side and people see that success and you hear people saying, “I want to be just like you,” and you and I know there’s a lot that goes into being just like you. So I’m grateful, extremely grateful that you’ve given me the opportunity to come in and co-host with Chad so that you could elevate and really get into your wheelhouse of helping doctors create Investment Grade Practices and much celebration to your own podcast. That is how old now How old is it?

Victoria Peterson
It’s one year this month.

Regan
Oooh Happy birthday.

Victoria Peterson
Thank you.

Regan
So for being one that year, the new kid on the block, as far as the podcast goes, you made it into the top five on dental podcasts, top dental podcasts of the year. So congratulations to you as well.

Victoria Peterson|
Thank you,

Dr. Chad Johnson
Victoria, can you give us a rundown? So like, let’s say, someone who has not heard of Investment Grade Practices, aside from the obvious name, give us the elevator pitch as far as you know what people should be expecting to you know, come across.

Victoria Peterson
Well, what I love about the podcast model is that I interview a compelling guest once a month, and then I take about it honestly it’s somewhere between six and 15 minutes to their monologue and debrief about that. So I have interviewed, what I’d love to do with Investment Grade Practices is go find the hidden truth and in all industries, there is almost like a Mario game, you don’t know what you don’t know until you get to the next level. So being a business owner who has played at many, many levels from startup and concept to I don’t know if this is going to make it to successfully selling companies, you know, buying and creating a group of dental practices and leveraging those out, it blows my mind. It’s like, “Oh, my God, everybody at level one needs to understand the information here at level five because they would make better choices,” and that’s what I hope to help doctors with, with building an Investment Grade Practice is to get beyond the day to day cash flow roller coaster and those stressful decisions that we make on the battlefield, to really look longer view of how do I look at my business as one of the primary assets that I’m building and how do I build other assets like real estate and patient finance portfolios? I was able to create multiple streams of revenue while having a lot of fun doing it. So an Investment Grade Practice should feel great, should support your lifestyle today, with an eye to creating financial freedom. It’s your number one vehicle as an entrepreneur for creating financial freedom.

Regan
When I hear that I’m not a dentist, I want to sign up immediately. I’m not kidding, it really applies to any business owner Victoria, I know that our vertical is strictly dentist and you’ve been enormously successful with your own multiple practices and going through that process, as well. When I hear that that applies to anyone, anyone with an entrepreneurial spirit, anyone who wants to enjoy life and have that financial freedom. It’s disappointing when you get to the end of the line, and you think you have what you what you’re going to have and you find out that might not be the case.

Victoria Peterson
Well, I think I think it’s even sadder that we never get to the end of the line because we burn out before we get there.

Dr. Chad Johnson
Yeah, hey, trifecta here. How do we go about sharing with our listeners, listeners, here’s the good news. We have three tips each and I’m just wondering, you know, do we go around and roundhouse? Or do we kind of, you know, let you know have section one, section two, section three. How do you guys want to do this?

Regan
I have opinions on this. I definitely want to hear from the top I want to hear the three business tips that Victoria could share with our listeners because their absolute gold this is you guys this is free. This is free advice that people pay 1000s for no joke and, and I do have a little hint she kind of gave me a little hint on what those three tips might be and they are phenomenal. So I would love to start off with Victoria and then Chad, I’d love to hear your take as the business owner in the practice how you know, what your thoughts are about those three and what your tips are around that and I can always weave a magical marketing dance around all of it and tie it all together.

Dr. Chad Johnson
Good. I’ve got a pen and post-it note ready. Victoria? Let’s hear number one first.

Victoria Peterson
You know maybe what I could do is give you my 1, 2, 3 and a little bit deeper if that’s okay because when you think about the theme of building an Investment Grade Business and Investment Grade Practice it’s different than business as usual and I think you’ll see why when you see my top three tips. So number one is to know your financial freedom number and how much money will it take for you to live at a choice, where you can maintain the lifestyle that you deserve for the next 30 years. So and we have a formula for that but number one you’ve got to know your financial freedom number two this has been a controversial rule of business but I say business should be boring that’s my number two tip business should be boring your life should be exciting, business should be boring I’ll and I’ll share why and then number three the magic that makes it all work is to invest in yourself and your team. So know your financial freedom number business should be boring and invest in your, in yourself and your team.

Regan
Is anything that isn’t that sexy? That’s just that’s a sexy little bundle right there. I want to dive into that bundle. Chad, What do you think about those three?

Dr. Chad Johnson
You know, it was kind of this? This pause because I’m like okay for magic investing. So taking notes, because yes. So, it’s good to know the final outcome from day one, you know, what are you working for other than to help heal patients, right? You know, in a business sense, you know, what, what’s your final goal? And are we working towards the silly like when I’m 90 years old, I’ll retire for one year before I die and that’s just not resonating with our age? Very well, because we saw generation try that and it’s, and it’s just okay for some people.

Victoria Peterson
Yeah. know, your financial freedom number. You know, they say you can’t connect the dots in your life until you look backwards. So you almost have to go through it and then you turn around and look backward and I think that’s what a good guy does is, turns around and says, “Here’s what I discovered and these were the dots that I connected.” So after gosh, I started coaching in 1995. So I don’t know how many years that was a long time, a long time, maybe 20, 30 years, and what I realized is that I got all of my clients to financial freedom within 10 years. So if you were 35, you were there by 45. If you were 40, you were there by 50. If you were 50, you sure got there before you were 60 and even today, I hear those stories of dentists who are 80 years old, who still practice because they just can’t financially quit. So oftentimes, I see doctors setting goals, something like this, I did a million last year, if I do 1,000,001 This year, that’ll feel like an improvement.

So they set goals based on improvement compared to where they’ve been but what if it took 1.2 million to throw off enough profit to really fund your retirement, invest in the practice, and make it grow, you would have been short $100,000 and never knew it. So if you know that you need $7 million in retirement, you know that you have so much in the stock market and so much in commercial real estate where you’ve got income outside your practice? Well, the whole difference comes in, in the value of your business, and the way we value a business has greatly changed because of private equity coming into our markets. It’s totally different than it was five years ago, the pandemic actually accelerated this and I remember being in my 30s, studying financial planning, I was actually studying to be a stockbroker and then I woke up and said, “Oh, my God, I do not want to manage anybody else’s money. I just want to know how to do it.”

You know, for me, it was too much pressure but one of my mentors gave me the most golden piece of advice. He said, pay attention to Page 16 News, and I had no idea what that meant. I was like I smiled. I’m 30. I’m like, “All right.” Now I’m actually picking up you know, the newspaper. I was in Atlanta, the Atlanta Journal-Constitution page 16. What are they saying? And then I started picking up the Wall Street Journal in the New York Times, and I noticed page 16 News was very different than the headlines and this is why your financial freedom number is so important. When you know what it takes for you to be you. You’re not persuaded by the New headlines and the headlines right now say, “Oh my gosh, if you don’t sell your practice, today, private equity is going to move out of this market and you will lose the opportunity.” So many doctors are getting unsolicited offers that say, do it now but I Dr. David port who’s on our team, we’ve created a financial freedom calculator, I swear to God, Chad, you’re gonna love this. I think you saw it previewed in February, we can easily put in your collections, and your projected growth, based on 18 years of historical data, we can show you over the next five years, what would happen if you sold today, versus what would happen if you work towards your financial freedom number with a plan to optimize your business. Every time we run this for doctors, they come out four to one better on owning their practice rather than selling it. So what I mean is you could sell and get 2.3 million you can hang on to it and the cash flow, the profits, and the value, you’d be at 6.2 million. It’s that dramatic a difference but I’m passionate you can tell because I’m like if you don’t know your freedom number, you will be persuaded by the headline news, you won’t know what your true value is, true value. What’s really happening in the market always shows up on page 16 Not page one.

Dr. Chad Johnson
It’s that simple Reagan, I mean

Regan
It’s that simple.

Dr. Chad Johnson
Well, I mean, like it’s not like it’s like, well, I have questions about that. I mean you could go deeper into it nonetheless but it’s that succinct, I guess Is what I’m saying, You know what, what you just spelled out Victoria has a lot more details to it. But at the same time the concept is there it is. I just I,

Victoria Peterson
I gotta tell you, Chad, when you and I were podcasting together or when I started neighborhood smiles, I didn’t know this, I was working on cash flow. I’m setting aside some good money. I’m pretty sure I could live on a couple million, you know, but I didn’t know. I didn’t know until I started writing the book, building an Investment Grade Practice and I had to go deeper and deeper and deeper and the compelling question is if dentists see a million dollars a year flowing through their practice, and they practice 30 years, you’ve got access to $30 million and yet 95% of dentists cannot retire and that has been a question that has boggled my mind since I got into dentistry and 80. I’m like, “Dude like you’re really cashflow in some serious coin but you can’t figure out a way to grab 120 grand a year to live, you know, into nonworking time.” So I don’t know what’s my compelling why I personally experienced bankruptcy within my family. I have personally helped doctors overcome bankruptcy and it’s good people who just weren’t given access to the right information. They were great business people, great community people, they just didn’t have one or two simple things and knowing your financial freedom number, that’s step number one.

Regan
You know, from a marketing standpoint, this is it’s layered and I think it’s complex. Victoria the way you say it, you say it simply, and it makes sense from a personal standpoint, it’s one thing to get your financial freedom number for your own personal element. It’s another thing entirely, and we’re not running restaurants here. So it’s not like the overhead is massive in a dental practice, compared to there is profit to be had if you know what you’re looking for and how to position it. The bigger element is, what could I be leaving on the table that I’m not aware of and that is the part that kind of stops my heart in its tracks. I think I get to that point, and I’m attracted, you know, to a DSO or a DSO is attracted to me, or it’s down that time to transition, I assume I will get what I’m worth, I assume that I will maybe fight for that value, but I’m not going to be hosed, I will be taken care of and on one of your recent episodes Victoria with Dr. Nikki Green, on Investment Grade Practices podcast , I was, you know, really lovingly shocked by taking another look and being a little pragmatic about how you approach the value of your business, how much value she would have been leaving on the table had she sold just a few years prior to that. So that can you know, put your financial freedom number on rocket boosters.

Victoria Peterson
You know, I could go down a bunny trail, where does it go? Go listen to the podcast, because that’s, what we talk about that all day long and every day doctors are doing this, this isn’t some grand scheme reserved just for the top 1% of clinicians or you know, top of your class. This is like, you could have been at the bottom of your class and dental school has average skills and great communication skills, and you can be an Investment Grade Practice. If you’re being

Dr. Chad Johnson
Oh, you’re saying this is for everyday dentists every day.

Victoria Peterson
For everyday, that’s my hero. That’s so I mean, I don’t live in a mansion. You know, I literally just went back to my parents and saw my family for an Easter reunion and took my kids to see where I was born and where I grew up the dirt road is still a dirt farm, the cuff gnocchi.

Dr. Chad Johnson
These times I’m gonna get it

Victoria Peterson
and I get it.

Regan
From the marketing standpoint, I can wrap a really beautiful bow around my interpretation, Victoria from listening to you over the last many years now over 12 years, 13, 14 years, we won’t say how long. You know, it makes me think about marketing in an entirely new way. So when we think of marketing for dentists, we think of going out to attract patients and that’s kind of where it stops. You know, I want X patients I will do this tactic. I’ve never thought about hadn’t thought about marketing, to potential buyers, marketing and packaging the practice in a way that would be attractive for a new entity to come in and transition and that is a whole other strategy in and of itself and I think you have to get real with yourself. You have to be honest about what your financial freedom number is, and not have any mental baggage around that stake your claim and I think you have to be the exact same way when it comes to the dentistry you want to practice and how clear you are on your philosophy of care and how to great you are at being able to package that and market that out to your community. It’s going to matter when it’s time to transition. Those steps have to be in lockstep, in my opinion.

Victoria Peterson
I think it matters now and you brought out what is required. That’s actually the third tip, I’ll go there real quick is invest in yourself, you know, yes, you market to your patients and chants did a beautiful job, your branding on Veranda Dentistry, it allows you to bring your associates in and come into partnership, there are great equity strategies there for you and the longer you think about this, the sooner you get started, the more tax-advantaged it is, if you say I’m putting my practice on the market and selling next year, there’s very little your CPA can do to help you shelter taxes or defer capital gains or avoid them altogether. If you start eight to 10 years ahead of time, then we get state planners involved, you may not have to pay capital gains at all. So that’s why in marketing matters, knowing where you’re going matters because it’s not enough to market to patients anymore.

That’s step one step two layer is marketing as an employer. You know, there’s such a competition for talent, and this was going before the pandemic, it’s just accelerating. So you must be the one that has a waiting list of people who want to come to work for you, you must know how to expand your team using outsourcing and virtual team members and different things like that and then number three is positioning it for the buyer. So taking those testimonials reels and community reels, having the page that says you know that is prepared and ready to go. If you’re interested in joining our team, as a partner, here are the benefits, it’s just taking the same message you’d have for the patient and saying, this is the benefit of you’re working here as a team member, here’s the benefit if you were to become an owner, but as you know, with marketing, it’s all about the packaging. It’s all about the branding around it and Chad, you’ve got beautiful, but I want to go to work for you and I don’t even want to be a hygienist anymore but there are days that I go. I could rock it with Shonda, you know, Shonda just

Dr. Chad Johnson
you’re hired you start Monday,

Victoria Peterson
I think I can get my license expired, but I don’t.

Dr. Chad Johnson
I don’t need you to have a license.

Victoria Peterson
I can be a treatment coordinator. I couldn’t be a hygienist anymore. Absolutely.

Dr. Chad Johnson
Yeah. Yeah, just everything. Yeah, this will be Yeah. So but you know, extracting value out of the practice is more than just the sale and just the DSO purchase and whatnot. I’ve heard even, you know, occasionally the crazy talk but I don’t think it’s actually that crazy if you maximize your profitability, the all the while for the next 30 years or 20 years, 10 years, whatever you have left, it could be worth more in cashflow and along the way than if you sold it at a certain value that you think is impressive but it’s not necessarily that you could do that in the audacious statement is that you could just close the doors and not sell the practice and still have more value because you built that.

Victoria Peterson
That’s that’s a statement that is a state?

Dr. Chad Johnson
Well it comes across to Dennis as audacious because the goal is, you know, some guy, you got to show up for a lot of money and it’s just like, what if you just plain old did it? What if you just you know, said here’s the keys, see you later and you know, and it seems audacious to a lot of desks? How could you do that? That’s, that’s your retirement. It’s like, no, if you played it right on your, on your, you know, budgets and everything like that, and, and the value that you have the whole while as opposed to the last six to 12 months that you own it, that you could have a lot of cash flow and build up, you know, along those 10, 20, 30 years.

Victoria Peterson
You know, I don’t know why this was coming up but as you were saying, all I pictured was, yeah, that sounds great. Yeah, but I’m gonna have to live on biscuits for the rest of my life, right? Like, it sounds like if I impoverished myself along the way, then I could do it but it’s actually the opposite and that’s my third trip. The reason doctors don’t get I call it it’s when you build a self-governed practice, meaning people there really buy into your vision and they’re there to support in support of it. business should be boring. So I think doctors really fantasize about the day they’re going to sell because it does several things. Number one, it helps with that financial freedom. I leverage my asset, but number two, thank God I never have to do an employee review again, because those are grueling and, you know, I was an owner, I really gained a lot of compassion for doctors who were practicing in the practice and running the practice. It’s got to be the hardest business model there is and I chat. I always wanted to ask you this, do you dread it when somebody comes up behind you and tugs your lap code or taps your shoulder and says, “Hey, Doc, can I get a few minutes with you at the end of the day?”

Dr. Chad Johnson
Oh, oh, yeah. I mean, you know, that’s that it might as well be your, your, your someone that you’re dating or whatever, I’d hate to say your spouse, you know, but like someone that you’re dating back in the day is going to talk. It’s just like, oh, just don’t say that.

Victoria Peterson
Yeah, it’s the drama. It’s the drama and the unexpected, managing team issues, managing patient complaints, managing new regulations, you know, what is this no surprise act? And what about the red flag rules? And what about all the PPE and the OSHA and all of this, it just, I think owners become exhausted from the day-to-day management not and it just, it just sucks the life out of your clinical joy and, and you know, you’re gonna wake up and like, oh,

Dr. Chad Johnson
to make light of that, to make light of that when it happens. You know, when someone says, “Hey, can we talk you guys listening?” Only I’ll have to explain this, but I go like this. I go and I just kind of a step behind a wall. They can’t see me.

Regan
Let’s chat is slowly creepily standing up and slinking away from the camera.

Victoria Peterson
Steve Carell.

Dr. Chad Johnson
They see me they’re like, and Shonda, when she says that she’ll say, I see you leaving the room and I’m, and I’ll just be like, “You don’t see me.”

Victoria Peterson
You don’t? You know, I can’t wait for my book to come out because there’s actually a chapter in there about investing in your communication skills and I take doctors through this journey of the unexpected conversations you get and it’s that unexpected, “Can we talk with the team?” I’ll give you a preview of the book chat because I teach you how to stop, drop and roll. It’s almost what you do, like, you just stop and you look at his head on and you drop your breathing, you drop your tone just a little bit and you roll into this script, which says, “Absolutely, I would love to meet with you right now I have about a minute or two, can you share with me what we’re going to be meeting about? I want to make sure this is the best use of our time, and that I’m in the right place.”

So then they did two minutes and then you’re still in control of the conversation, you could say, “Wow, you know what, that is a bigger conversation and I scheduled those on Wednesdays, let’s get together with the office manager get you on my calendar, and I can sit down.” So they have certainty, you’re gonna have the meeting, you’re not boxed into a corner of gotta do it right now in the hallway. So I can’t wait for the book to come out because it’s got some it’s got that it’s got the trade show assault when there is good, some fun communication tips for doctors.

Dr. Chad Johnson
Oh, when you’re walking down the row of yeah, you what you need is a badge that says lab technician instead of dentists on it. So that way you don’t get bothered, holy moly, that’s wrong.

Victoria Peterson
But I think that’s what I mean by the business should be boring when you’ve got the right systems in place and people know these conversations happen in this way when you can reduce the drama when you can move from the mental anguish of managing uncommitted people who are taking care of uncommitted patients. That’s exhausting. So every business you go from viable, that’s when it’s just like really chaotic, and do this and do that and the doctors micromanaging everything because there are no managers and then you get kind of predictable with these moments of sheer panic and then you can get into durable. Once your systems are durable that means they run with or without you, Chad, if you leave the office, no one knows that you’re not there in terms of business predictability, except that your winning smile and sense of humor are gone like that always be missed.

Dr. Chad Johnson
Do you know that this year we committed to a moratorium of change? So 2022 is no change, I had some of the sleep apnea people, you know, they called and they said, “Hey, we’d like to, you know, help you get started on implementing this,” and I said, “I’m sorry, yeah, we can’t we have a moratorium on change this year,” and they’re like, “Aren’t you the decision-maker?” And I said, “Oh, yeah, but if I enact this, my team is going to have a cow because we’ve agreed that this is a year of no change. We are going to take what we have and make it the best, you know, like better and the best that we can and it’s kind of this excuse where that’s the fall guy,” you know, that’s the Hitman and I just go, “Listen, I can’t make a change. You know if I made a change the team was going to have a cow because we had made an agreement to no change this year,” and the salespeople are like, “So can I talk with the team?” I said, “You can try and talk to him, but they are not going to be interested in hearing what you have to say.”

Victoria Peterson
exemplified all three of those rules, right? You know where you’re going, you know what it’s going to take to get you there, you’re slowing things down. So it becomes a little more predictable, which dare I say could be boring and they are investing in your team you’re giving them time to catch up and perfect the systems they already have.

Dr. Chad Johnson
I think I’m proud of myself, Victoria, I’m extending up taller in my chair with pride

Victoria Peterson
Chad, this is awesome and good. You are you’re the quintessential entrepreneur like Oh, yeah. Patient third location while we’re shut down. Why not? This is awesome. you’re well on your way to maybe never having to sell and if you do, you got one hell of a practice one

Dr. Chad Johnson
or resolute that that’s the case because as you know, you know, I’ve kind of roller coaster from that one extreme COVID hitting, selling a practice and then just being like, you know what, I think I’m gonna shrink down and rock this out and I tell you, it’s paid off so far. It really has been going well for me in that regard. So

Victoria Peterson
I think you’re building the kind of business they the other myth on page one news is that young doctors do not want to own their own practice. Yeah, and it’s the same page one news that says Millennials don’t want to be homeowners. They prefer the freedom and rent and the people who are saying that are like Zillow and Redfin, who were buying you, Victoria. So not true. Page 16 says Zillow just expanded its portfolio of starter homes. So who puts out the word that millennials don’t want to buy? Why Zillow does this whole BS that young doctors don’t want to be owners? I don’t buy it. I think they do and I think they’re looking at like practices for like you to partner with.

I think this is, this is a worthy message to get out. Because I don’t, I don’t I am agnostic against private equity and DSOs I think they play a certain role in our organization, they’re going to consolidate, it happens but at the peak, it’s only going to be about 60%. Maybe at 70% online, so 30 to 40% of dental practices forever, will be owned by private practitioners like you, why not be the best, most profitable loving giving place you can be for your patients, or

Dr. Chad Johnson
let’s even take it further, let’s say 99% of all offices where private equity slash non-solo owner years if still being the 1% is the best option, it doesn’t matter that the other 99 are doing it the dumb way. I mean, you know,

Victoria Peterson
yeah, and there are platforms to make it competitive you can get five cents off cotton rolls just like all the big guys, you know, there are ways to get that stuff done.

Dr. Chad Johnson
Well, I mean, listen, not every mob ha shop can go up against Walmart, we know that but at the same time, not every shop has closed just because Walmart exists. Meaning if you know how to be a good businessman, you can still have a bakery that beats Walmart’s bakery.

Victoria Peterson
Oh, like easily.

Dr. Chad Johnson
Well, right. Right that’s the crux of the matter is you can be like yeah, right Chaka, you know, as you can be like, you know, Walmart knows how to make the same across the nation of average, we make a better than average, we make a great plank, you know, whatever apple turnover.

Regan
So the dentists that listen to our podcasts, we know our entrepreneur, entrepreneurial-minded in spirit and that so when you say Victoria and Chad, especially since you’re having the moratorium, and choosing to stay the course that can feel boring, that can feel very boring,

Dr. Chad Johnson
I want it to

Regan
Good I’m so I’m very, very pleased that you chose to do that, just like Victoria is I think it’s a very smart decision to make. In the skincare world. When you go to get a facial, if you’ve ever had a facial, they dump lots of different products on it. So they’re steaming your face, they’re washing your face, they’re scrubbing your face, they’re putting masks on and as you are trained in how to give a facial or receive a facial, you have to let the product go on and sink in. You can’t just keep slapping more and more products on or you’re not going to get the desired effect and I think for entrepreneurs in particular it’s so easy to get addicted to what is new, what is the latest and greatest, and constantly chasing that carrot that we forget that we have to let some things sink in.

We have to let our team know to catch up, we have to let ourselves catch up. So it can, while it feels boring, I know within even PDA, that’s the time when we experience great growth, we’re allowing it to sink in, and then we’re being very pragmatic about how we’re introducing new innovations and new change. So I, I am team boring all the way and I think the same goes for marketing, it can be very addicting to try the latest and greatest and newest marketing technique for your dental practice and we can also have the tendency to say, well, we’ve done this forever. So we’re just going to change it because we are bored of it. I have seen this ad. Well, Doctor, you’ve seen this ad on social media you’ve been running because the algorithm has you keyed in it is your dental practice, look over at the data, is the data showing that the ad is no longer performing for you? Is it dropping off or is it still going strong? If it’s still going strong, keep it in the running, don’t stop it. That might feel boring to us but it’s actually getting us great results. So I think marrying that data and really looking at what the actual result is, along with the emotions of wanting to try something new, be it in marketing, or be it in the business. That’s how I make my decisions for certain and I know our practices do as well, it’s been a nice marriage. So I love your second tip Victoria, your business should be boring.

Victoria Peterson
That’s straight from Warren Buffett, right, of course, want to dive deeper into it, you can look up value stocks. So there’s a whole strategy for investment around value stocks and that’s what Warren Buffett does he goes there are there is a certain type of business that predictably plays dividends, that always grows within any economy, in fact, recessions are probably more recession proof than others and dentistry, if you set it up correctly, really falls along that line, you know, you can get off the cash flow roller coaster, you can make your productivity more predictable, you can make your EBITA more predictable and it might fluctuate, you know, a percentage point this way or that way but you’ve got the cash reserves to come in and invest in. So when you get these templates set up the boring basics, as Tony Robbins would call it is what really is the hallmark of value, because it’s predictable, and it’s durable and that’s what Warren Buffett invest in and so when I was looking up investment grade, I thought what does it really mean? You know, how does a stock or a bond become investment grade and you have organizations that say this is a triple A-rated bond or a double B-rated bond, it tells you the amount of risk that is inherent in the business.

So that’s what I mean by it should be boring as you really want to filter out the extremes of risk and then your cash ready. So yeah, the marketing program that’s working, run it, run it, run it, run it, and you want to introduce something new, take a smaller bucket of money and say we’re going to use this for research and development. So Chad, you’ll come out of this moratorium of change where your team feels like, “Alright, now we’re solid, we’ve gotten back to our core, our systems are ticking,” and then they’re going to want to do more. So that’s the next phase for you. How do I introduce innovation back into a steady stream? And so now’s the time for you to talk to the people and say, “Hey, you talked to me, I want to know more about this. Tell me how it went let me go read the journal articles. Let me talk to my buddies,” and then you decide as a leader, is sleep apnea, you brought that up? Is that something that fulfills the passion and mission of my company? Is it something that aligns with the demographic of this area? Is it something that I feel our team could get behind? If you say yes, and you go, was it the investment?  Was it the training? What’s the timeframe that I have to invest in this to get them up to speed? When and how would I get the team ready for that so that they have the choice in the timing of it and now we’re ready for that next piece of innovation? So boring doesn’t mean non-innovative. It means being strong at your core and having a plan for innovating. You know, even the innovation becomes somewhat boring because it’s planned and vetted.

Dr. Chad Johnson
Well, it reminds me of fasting just because you’re fasting doesn’t mean that you aren’t thinking more and more about your next meal.

Victoria Peterson
Right but if you don’t want to come on to have a fat burger the minute that you write, you don’t want that to feel deprived. So you want to plan the goal do this when I come when I break the fast Yeah,

Dr. Chad Johnson
yeah, the idea of fasting isn’t that you will never eat again. It’s no I’m fast. Asking for it right now. Yeah, isn’t

Regan
Victoria, you kind of touched on your third trip, what is your third business tip?

Victoria Peterson
Well, that was investing in yourself and your team. So know where you’re going your financial freedom number, you know, what this business needs to do for you, and the context of your life. Make your business so predictable that it feels somewhat boring and smile every time you feel that way and go live your life, go climb a mountain, get on a bike, go by the glacial mountain. Live aloha and then invest in yourself and your team. They’re really head for head, there is no greater return on investment for your money. So people always ask me if I had an extra $10,000, what would I do with it? I would reinvest it back into PDA, I’d reinvest it into my dental practices, far before I put it into Wall Street. If I knew there was room to grow, you know, so I may take that money and automate something, I may hire a new person, I may retool a product or design something like that always with the intention of how do I make this better for the customer? How do we make it better for the patient?

So if I had $10,000, I’d look at how I make the service better, so that it would drive even more business here, which decreases all my fixed overhead and increases my profit. So a $10,000 investment in your business could yield 100,000 or $200,000 profit. It’s hard to get that 10x in Wall Street, you know, we, I, you and I Regan, we were just looking at our ROI. On consulting recently. Minimum, it’s seven to one. You know, so if you spend 30,000, you’re getting 250,000 back, a lot of our doctors are getting 21 to one, it’s hard to get to earn 10% return in Wall Street. Now, there was a great run-up. I mean, I did I promise you I benefit I pulled money out of the market. I sat there and then it dropped to 23,000 when the Dow was at 23,000. I poured money back into it, and it’s up at 35,000 Now 34. So every day Pete’s like freaking out. Oh my god, the stock market drops unless the stock market drops back down to 23. I’m okay. Yeah. Yeah, once about how that works, as well as how the company works and where we’re investing.

Regan
What are some of the key investments, like specific investments you made as a dental practice owner that you think got you great ROI?

Victoria Peterson
The first was technology. I bought practices that still had dip tanks.

Regan
Oh, wow. Really? The dip tanks?

Victoria Peterson
Yeah, they still had like, analog panoramic machines and things like that and they had soft debt. Oh, my gosh, they’re soft. It was like 12 versions out of date. So

Regan
smell a dip tank, I can smell it.

Victoria Peterson
So yeah, we transitioned the dark rooms into patient education areas where we had microscopes and could talk about bacteria. That was something that was a big passion was to get all the offices up to the level of oral systemic health and once we started showing patients, the bacteria in their mouth, like perio, boom through the roof. Once perio was through the roof, and people were getting healthy, then they got more conscious of it, but why are my teeth yellow and can’t and this is Wisconsin, right? They don’t mind. You know, teas look like cheese. It’s okay. They all now want cosmetics they wanted bigger things. So I think it was technology that made our team’s lives easier. So the handoffs were smoother, and it enhanced diagnostics. That was step one is how do we get better diagnostics?

Regan
Nothing can beat that visual of seeing that little spiral key or whatever it’s called the little critter. You know, you’re I mean, I had it done a few years ago and I tell you what, I waited, I was like, right there by the screen, “Like do I have those little buggers?” And when they pulled it up the relief I had, I was so proud that I didn’t but then you know, there are smiles that look physically wonderful and yet you have it so it’s an extremely powerful visual tool that makes sense to me that you would invest in that for

Victoria Peterson
sure. That wasn’t a day one investment. That was probably like year three when we got to that point, but just the fundamentals. What are we tracking? What are we reporting? How do we make it easier for the team? And who’s the guy that started FedEx? Who started Kinkos Paul? Anyway, they call him kinco. His motto was always kiss the knuckles.

Regan
There you go. Paul. Always kiss the knuckles.

Victoria Peterson
Always kiss the knuckles of the fingers that touch the cash register. Oh sure. All that means is to survey your team and ask this question, what would make it easier for you to do your job? What is it that stresses you out today, and then go about fixing those things? Because it really is about how your team can, the better they feel about the job, the better they’re going to promote you in the marketplace. So what holds you back from asking for a referral, what holds you back from recommending our treatment? I know so many doctors, who’ve never performed any dentistry on their team and that’s a great marketing opportunity. Once they know you’re a good guy who can give you an injection, then it’s easy to say, “I trust my doctor.” So that’s what I mean by investing in your team, make sure their dentistry is great, make sure they know you’re a great clinician. There are 1000 tips. Regan is probably a whole podcast on what’s your tips, I’d love to maybe come back to some of your popular guests and say, What are your tips for investing in your team? How do you elevate them and their leadership and their skills,

Regan
The investment that I would definitely recommend is anything centered around communication, I think communication is the easiest thing to overlook because we’re all speaking to each other. So we all automatically assume that we know what each other is saying and that really transfers out to the market, for better or for worse. So making sure that that messaging is consistent from what’s being shouted out through marketing internal there, I mean, I have seen that I’ve seen PDA you know, build a business on that and how we communicate together and how we communicate with them, with the patient. So I would definitely make the recommendation of investing in their own skillset so they can rise to the level of subject matter expert in their specific field, and then how we communicate with each other to accomplish the mission. Chad, what about you?

Dr. Chad Johnson
So, um, it’s interesting, because like, some of those ideas tied in with one of mine that I will share, you know, down the road and stuff, but learn then execute, it’s, you know, so many doctors spend a lot of time learning, but then when you actually ask them, it’s like, “Are you doing anything about it?” Even people that might go to the workshop? And it’s just like, are you scheduling to production? Well, you know, and it’s just like, “Okay, well, then, I mean, I don’t know, if it was a waste of money, then waste of time, or if you just had a good time,” versus you know, just doing something like kind of stumbling and just getting going, you know, like, get it executed, get started, just start and then you can recalibrate, you know, if it’s like, if you’re trying to go straight, and you kind of veer off to one o’clock or two o’clock, it’s like, well, at least start making a smidge of progress. I mean, I don’t, I’m not encouraging shooting from the hip, per se but at times, it’s just like, listen, you’ve been pointing downrange, it’s time to pull the trigger, you know, it’s like, it’s okay, you know, miss the bullseye, and then figure out how to, you know, hit it next time better.

So these were all great stuff, Victoria, and I appreciate you sharing your heart on the investment grade practices and I thought it was neat to tie in my story about how business should be boring and how one of the jokes we have at my office, I’ve told you before is that the only constant that we have is a change and we’re always changing, some offices probably do need to change, you know that. So this isn’t a panacea for everyone that you know, like, well, Chad said, a moratorium and we’ve never changed anything in 10 years. So we’re gonna do a moratorium for 20 years. That’s not my point but for the doctors that are the type that are listening to this, they could, they could have a fast for six months and just say, “You know, you shouldn’t see that a sigh of relief on my team,” I was like, “You don’t have to look so happy that I did that I’m giving it a rest for 12 months.” They’re just like, these 12 months are gonna go too fast. So, but nonetheless, thank you for joining us today and kind of sharing these ideas and they’re not just ideas to be like, Oh, well, isn’t that neat? But it’s the life or death of whether our legacy will play out well or not. If we’re implementing that, I mean, the gravity of this is actually very deep. This isn’t just oh, well, that’s a neat thought. Well, you look at that. It’s like it’s not a Will you look at that.

Regan
So thank you for control of your story, or somebody else will.

Dr. Chad Johnson
There’s the marketing side. So Victoria, on behalf of all the listeners of Everyday Practices. Thank you for joining us.

Victoria Peterson
Thank you very much. I’m so proud of this one. cast, I’m so proud of what the two of you have done and all the stories that you showcase. Every day people are doing extraordinary things in this industry and your podcast helps to highlight that you don’t have to be extraordinary to build an Investment Grade Practice you just need to have the discipline, to create the plan and see it through. Right.

Dr. Chad Johnson
Just go, Regan, what are your thoughts?

Regan
I’m grateful for this episode. It’s gonna be amazing. As I say, for all of us, it’s it. Thank you for sharing your heart, Victoria, and your knowledge with everyone you know, you’re making a great impact and you’re supported by a team who is happy to be on that mission as well. So thank you for being our guest and founding member of the Everyday Practices podcast. Until next time, Chad.