Episode 19: Opportunities in Dentistry with Dr. Bruce B. Baird

“No matter what age you’re at, begin with the end in mind.” ~Dr. Bruce B. Baird

I saw a brokerage ad the other week that made me cringe. It was advertising a dental practice for sale and read: “Don’t pay attention to last year’s revenues, they were down because the dentist chose to have a little more life balance for personal reasons. Instead of working 20 days a month, they worked 17. But we’ve convinced the owner/doctor to work 20 days a month for the next 4 years, therefore the revenues will go up.”

I almost burst a blood vessel. I did the math and they didn’t actually increase the dentist’s productivity. They just added days back into his schedule. This situation is tragic and I really feel for this doctor, because that is not the situation that any of you deserve. 

This is why I am so passionate about sharing what building an Investment Grade PracticeTM is all about: you get to live your lifestyle – you get to choose it – and build a business that supports your lifestyle today and protects your future. 

Every year my business partner Dr. Bruce B. Baird and I set aside a few days to set our goals. I hope you all do this, too. We look at who we are today and where we are heading tomorrow. 

When you get burned out as an owner – and we both have been burned out more than once – what are your options? You’ve invested in yourself and your clinical education, but now it’s time to grow the value in your business, your team, and your associates. 

Well, you’ve come to the right place. I’ve invited Dr. Baird to join me today as we step back and take a look at what the current state of the dental industry is, and what opportunities there are for dentists interested in building their Investment Grade PracticesTM, including:

  • An overview of the current dental market
  • Succession plans: options for dentists hoping to sell their practice
  • Acquisition plans: things for young dentists to know when purchasing a practice

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Victoria Peterson
Welcome back to investment grade practices. I’m your host Victoria Peterson with my incredibly dynamic business partner, Dr. Bruce Barrett. Hey, Bruce.

Dr. Bruce Baird
Hi, how are you Victoria? Good to see you this morning.

Victoria Peterson
It’s great to see you too. This has been a joy to launch our third podcast and you and I have been talking a lot about what is an investment grade practice. What is the IGP model that productive dentist Academy coaches and teachers? How do we optimize practices and things like that? And you said something so profound the other day, it’s so interesting, I wanted to bring you on as a guest to share with our audience, your perspective of dentistry right now and what the opportunities are for not only the sellers, but the buyers, where do you see the marketplace today?

Dr. Bruce Baird
Yeah, in in talking about what’s happened over the past 10 to 15 years, you know, with the DSL and the aggregation of practices in forming larger group practices and that type of thing. You know, that’s got a lot of people scared and, and you know what I’ve come to realize, and I sold to a DSO when I was 55 years old, because I had built this huge practice, and didn’t really myself and Dr. brewski. And we didn’t really know where we would be going next as far as a transition or whatever. And so we ended up selling to it to a DSO. And, yeah, it was fine. I can say, you know, Heartland Dental, the group that I sold to I’ve done a good job with their docks. But when you when you throw buddy in, you know, that means everything else you said before, is irrelevant. And what I’ll tell you as I’ve had the opportunity now, to watch our doctors, senior dogs, I’m going to call senior dogs and young dogs. I’ve watched our senior doctors having the same issues and the same problems and not knowing what to do. Where do I go? When I’m ready to transition? How do I find a dentist? That’s interesting. And you know, so my my job or my thought process has always been I level Doc’s because I’m, I’m an old doc, and how can I help them? How can we help them find the right doctors, I then flip the switch and go to the young Doc’s. Well, I had an opportunity to lecture at my alma mater, University of Texas, San Antonio dental school. This was so maybe eight weeks ago, and what I’ve come, and we had a third of the entire dental school class from freshmen to seniors at that, at that talk, and I probably spoke for about an hour on how great it is to be a dentist. And you know, and you made the right decisions because these guys guys and gals, which more more female than male, but they really have lost some of their entrepreneurial spirit. And when I say that, it wasn’t intentional on their part. The DSO market across the board has gotten access to the dental schools in a big way. And they bring the speakers and they bring people in, and it’s something that is it concerns me I love young dentists, I taught at Bayer, I talked to him in San Antonio, the implant preceptorship and I just loved it. I just love young dentists and, and their thought of having to, you know, be in debt, you know, three, four or $500,000 and to get out, you know, they think the only way that they can practice dentistry is to go into a DSL, and there are some that go in and open their own practice and, and, you know, they’re in a different maybe financial situation, they still want to, but what they’re hearing over and over again is how tough it is. The difficulties of the debt and I’ll be honest, Victoria, I mean, debt is neither good nor bad. It’s the cost of doing business. And what I’d let what I share with these young dentists is there’s great opportunity out there, there’s amazing opportunity for you to go into a high value fee for service practice. And when I say fee per service, I’m not just 100% No BPOS. That’s not that. That’s not the deal. But there are great practices out there that need great new young dentists to come in and, and help fulfill their transition of the senior doc. And so what I what I’ve been working on are those things. So I’ve really been enjoying this whole process with the old and the,

Victoria Peterson
I love it. And I want to put a pin on a couple of the notes that you said there. Number one, you said, when I was 55, my partner and I looked around we grew, I think your business was probably 1 million, 5 million at the time. And, you know, you look around and you’re like, wow, how would we find a third partner who could come in and pay us a million million and a half? You know, how would we sustain that model. And so you really put a spotlight on options for selling dentist a decade ago, were much different than they are today. There’s new financial tools, there’s new estate planning tools, there’s new ways that private practice I call them legacy doctors. So they’re the top shelf clinicians, they really do things in a particular way there, there are a lot like you they’re high tech, high touch. The challenge are threefold that I see. Number one, a young student coming out of school doesn’t have the experience to do lasers and Sirak. And this and that know some of the schools are getting very progressive, and they do. So you’ve got to be able to mentor and bring that up the debt that you spoke of. There’s a big misperception about debt. So I’m glad that you brought that up that it’s neither here nor there. It’s the cost of doing business. But third is you said, I then worked for another 10 years. So I’m 55 years old, I’m looking for my options. What’s my succession plan? You know, it’s probably the question. And so you sold to a DSO and you work for 10 years, I think this is the number one mistake that selling doctors make. I was talking to a doctor. Now I actually was talking to a consultant, I was coaching a coach up in Michigan. And she said, Yeah, I’m gonna, I’m working with this doctor, he was doing a partner bought in 10 years ago, and the senior doctor is going to retire in July. This is January, he’s gonna retire in July. And they haven’t told the team and they haven’t started searching for a candidate. They figured they would go to the school and get a graduate. And I said, well, first of all, he won’t retire in six months, unless he’s walking away and just throw in the keys. There’s it’s just impossible to get someone on boarded, integrated and get through the paperwork in six months. So you made a really big point, you got to start thinking about this 10 years in advance. So if you’re 50, it’s not too early to think about where am I going to be when I’m 6065? Do you think?

Dr. Bruce Baird
Oh, no, I mean, you. I mean, you always begin with the end in mind. And it doesn’t matter what age you are, if you’re setting goals, you know, that like we do and productive Dennison like I’ve done my whole life, you know, I’m setting, you know, one year goals, you know, five year goals, and then longer projections of where do I want to be in 1020 years. And it’s important to have that end in mind, not that you’re ready to and I would start this process very early on, I see a lot of young doctors in there, oh, I’m going to say late 30s, and even into their mid 40s that are selling to DSOs because the offer is more than they ever thought they would get for our practice. Unfortunately, if you look at your revenue that you’re going to receive, it’s very different when you’re in private practice and you’re in control as opposed to in a in a DSO environment you might be making 25% 28% or 30% of what you’ve been doing. But when you were running your own business you were taking home 40% That doesn’t sound like a big difference that 10% But trust me, if you’re a producer and you’re a great dentist and you’re not planning on retiring for 15 years or 20 years, then it’s huge dollars difference and so what you ended up doing is passing the passing the buck to let them run my practice but that really doesn’t happen. You’re still going to be running it but you’re also going to make less revenue. People say yeah, Bruce, but I got a million dollars. Well, you know, a million dollars in 2000 was was pretty well, you know, was was really nice. Today, by the way that’s worth about 510,000 unless you have a really good plan on what to do with that million, and you can turn it into a great return of eight 10%, over, you know, yearly, then you don’t have any business selling your business. And I would much rather see us bring in young dogs into that environment that are trained that are good businessman that also have an entrepreneurial spirit that want to be in their own practice, or in a small group, or even a large group, which we’re going to see more and more. But you’re bringing in these dentists to help. And with the opportunity for them to be able to buy in and the old guys transition away. The money’s available.

Victoria Peterson
There’s a new phrase the other day, Bruce, what’s that? The OG meets the IG.

Dr. Bruce Baird
Og the old guy meets the

Victoria Peterson

Dr. Bruce Baird
Okay, well, that makes sense.

Victoria Peterson
Is he talking then then I think, yeah, I what I love in the conversations, and you and I are going into our and I hope every listener does is Bruce and I go into executive strategy and planning every year. Even though we’re talking every month, every week, we set aside two or three days where we work on the business and we look at who are we today? Where do we need to be tomorrow? What’s happening in our entire company is pivoting because of that into this language of how do we build an investment grade practice. And you’re really putting a great spotlight on the fact that’s when, when when you get burned out as an owner, and trust me, you and I both been burned out more than once. Thank God we got each other because we fire each other up, right? But what are your options? You know, so you’ve invested in yourself, your clinical education, really, that’s where the G and IGP comes in, is it’s time to grow the value beyond yourself into your team into your associates. I saw a transition performer the other day a doctor selling his practice. And I cringed because I know what I know. And I know what you know. And the broker said, basically, don’t pay attention to last year’s revenues, they were down, because the doctor chose to have a little more life balance for personal reasons. He cut back 20 days a week, 20 days a month to 17 days a month. We’ve convinced the owner doctor to work 20 days a month for the next four years, therefore the revenues will go up. And I just like I bursted a blood vessel, because I thought, That’s what building an investment grade practice is all about. I get to live my lifestyle, I get to choose it. And I did the math. All they did was they took a doctor who was producing 510 an hour, added three more days with schedule, and now he’s going to produce for 26 an hour, he’s not going to increase productivity, you just Oh. So thank you for being here today. What would you tell young dentists that are out there? Let’s say that they graduated and they’ve been you know, honing their skills and getting their speed up? How do they find high quality because there’s you know, that end of the equation, two young associates getting burned by going into practices where the doctor doesn’t delegate, they promised partnership and it doesn’t happen. Like what encouragement would you give them?

Dr. Bruce Baird
You know, it’s first of all, what I would tell somebody, a young dentists just getting out of school is the same thing I’ve told myself 41 years ago, 42 years ago, I said I want to learn more. I want to learn everything I can I want to become clinical. Clinically, I want to become a master and I want to know how to do full mouth rehabs. I want to know how to place implants. That was my decision. I would say as a young dentists pick what you love, you may not know what you love, right off the bat, but get involved in education. That may be when you get out picking up speed. I went in the military for four years, it was great for me, I was able to pick up and I’ve never been slow even in dental school, but I I was able to pick up skills that I didn’t have. And when I got out, I was ready for private practice. So if a young dentist is going to go into a DSO, one of my good friends wrote his doctoral thesis on job satisfaction for a dentist in a DSO. And we realized that about 70% Even more, are not really all that happy in that DSO environment. Plus, as young dentists you’re going in, you don’t have any assets, the DSOs can continue to grow and basically you’re going to be end up working for Walmart. So have a game plan. Now how do you find the investment grade practice? Well, there’s a lot of, I would say out of the 70% of the practices that are still left, that aren’t involved in a DSO, I’ll go 8020 80% are not investment grade practices, but 20% on meaning they’re, again, high value, high, high touch, high technology, the place that I would want to go, if I’m getting out of school, you could open up your own practice, that’s at some point, but you have the clinical skills to do it. And the business skills. And so those are the things that we’re working on teaching. Young dentists are the business skills, clinically, we’ve got programs that are put together to help the dentist, increase their skill levels clinically. And then we’re going to the old guys like me, and we’re saying, You don’t have to just sell your practice to a DSO. Could you guess? Absolutely, there are times when it makes sense. But what I’ll say is your legacy, a legacy practice in a town like Granbury, Texas, I don’t really control what goes on in that practice that I built for 35 years, I was fortunate that the group that bought me has done a great job. But there are some that don’t, and you end up with a legacy practice, it’s not so much of a legacy anymore, because you didn’t get to choose the associates the quality that the labs to all of those things. And so we’re putting together a group of I’m going to call map super dentists, but just really high end investment grade practice doctors that are looking for associates and looking not just an associate, but a partner long term. And I think if we can connect the connect the dots, which is what we’re planning on doing this year, we’re going to see amazing, amazing opportunities for younger dentists. And I say younger, younger in their career, not necessarily an age, but younger their career to be able to get in a practice that they can become a legacy, you know, in that practice, as the old guy goes into his grandpa mode, and you’ve saved up into full full production mode, and then you bring in another younger dentists, it, I practice that way my entire career. I love it.

Victoria Peterson
Thank you for joining me today on investment grade practices. Your own podcast, the productive dentist is one of the top 10 In our industry, people love you and I am so blessed to be thinking partners with you. I think we we really, together bring some robust perspective to the marketplace. And I really appreciate your insights and the hope that you’re bringing to both buyers and sellers, independent practices are our strong, alive and well. And on a future podcast, I will bring in some experts that are on DSOs there are some really good reasons to be a part of that. We’re not anti anything, but we are. We are very pro independent thinking for very pro choice and we’re very pro, do your due diligence and discover what’s possible not just making decisions out of fear. So thank you here, Bruce. Oh, it’s

Dr. Bruce Baird
my pleasure. Thank you, Victoria.

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