Episode 3 – Deeper Dive: Building Your Buyer Persona

Who are you building your practice for?

In my interview with Vincent Cardillo, I was blown away with how clearly Vinny articulated how you craft your core values and measure those core values in your practice. As we continue to build an Investment Grade Practice, these core values really come down to building your buyers persona. In other words, as you’re building you practice today, who is going to want to buy it in the future? Today, I’m diving further into determining the future value of your Investment Grade Practice as we examine the questions:

• Who am I and who do I want to be?
• Who am I building my practice for?
• What big mistakes can I avoid in partnerships?

EPISODE TRANSCRIPT

In my interview with Vincent Cardillo the founder of Maven Advisory, I was blown away by how clearly Vinny articulated the need to identify your core values, and how you measure the core values showing up in your practice. And that’s what I want to highlight today as we continue to build an Investment Grade Practice. 

And the topic really comes down to building a buyer persona. So as I’m building my practice today, there were two pitfalls that Vinny pointed out. Number one is becoming highly productive, which, Oh, my gosh, our consultants help you become productive all day long, and you want to be productive. And there is a tipping point where you start decreasing the value of your future value, because you’re so productive, and so highly specialized, that it would be difficult for a young buyer looking. 

I call that a lifestyle buyer, it would be out of the reach of a lifestyle buyer who’s looking to perhaps exit their associateship and come in and purchase a practice. It would be a great opportunity to bring in a young doctor that you want to begin partnership with, and get them to come in and buy out over time as they build their productivity. So that’s one strategy in it. 

Beyond that, though, solo practices who are in the 3 million plus range, maybe even the 2 million plus range, and they’re getting too big for that young buyer who has half a million dollars in student debt riding on their shoulders as well. And you become scary to the institutional buyers. So if you are within five years of your exit strategy, these are the types of things you should start thinking about now. Even 10 years out is not too early. 

So buyer persona, we spend some time and you hear called Avatar or Ideal. We spend time most familiar in that area with developing patient personas like this is my ideal patient. Sometimes doctors will say I’d love to work on train wrecks, meaning patients who have delayed care, and they have a lot of care. And perhaps they want to do it all in one day or with sedation, things like that. That’s a buyer persona. And in terms of attracting the right patient to your practice. 

What we’re looking at in value here is future value of Who am I building my practice for? Going back to one of the first things Vinnie said was focused on core values. Who are you? And who do you want to be? So on this theme of live for today, build for tomorrow: Who are you today? 

And trust me, looking back on my career, I thought, you know, there, there were times I should have taken more time off. I should have gone snowboarding with the kids a little more often. I should have gone bicycling in the park. I should have been there on Wednesday afternoon soccer games, things like that. Don’t miss who you are today, structure your practice, structure your business so that you don’t miss those important life events. You get 18 seasons with your kids, make them count. They’re gonna go by fast. So who are you today? And let’s structure your production per hour. Let’s structure your practice. 

The second part of your core value though is Who do you want to be tomorrow? So at what point do you stop working for money and money starts working for you? And you are building to a new buyer? What will it mean to that new buyer? Vincent pointed out a couple of different buyer personas, he pointed out the partnership model. So whether you’re thinking of joining a larger group, and there are some highly respectable groups out there. I want to say that when DSOs first came in the market, there was a huge pushback on that rightfully so. There’s always pushback when something new comes in. And corporate had this reputation of being very fast, high turnover, not culturally centered. I’m seeing that start to change. I’m seeing a change to the point that the American Dental Association has banned the word corporate from their nomenclature, they no longer even use it. So there are some terrific larger groups that do partner well with doctors that do give you a lot of autonomy. And you know who they are. And we can talk offline about that.

That’s one option: is your buyer persona? Are you building something so that you merge them with something larger? If so, what were the clues on how to build that buyer persona, high periodontal percentage? Specialty referrals for implants and sedation? Are there things that you don’t do that they could come in and augment? Are your patient reviews really five star? You know? If not, how are you addressing the ones that weren’t so great? And volume, looking at the attrition rate, this is a terrific place to go in and operationally tighten up the practice of bit. It’s not only about how many patients are coming through the front door through marketing and referrals, it’s how many are going on the back door, and are they being ignored or just dying on the vine. 

So DSOs today really are looking for quality care, because remakes are expensive, reviews are devastating to the brand, and lawsuits kill everybody. So partnerships, you really want to tighten up the operational side of the practice, the Clinical Standards side of the practice and make sure that your values have metrics that are clear and can be articulated to the team. 

The next one was building a larger solo practice. So maybe your runway is 15 years, 20 years. You’re not wanting to roll into a larger entity just yet. And you want to start thinking about the value of the long-term value of your practice. This is where I think the dental entrepreneur organization is doing a terrific job educating doctors on how to bring in associates, how to bring in partners. We do a lot of this work as well. But you really want to make sure that you can at some point decrease the risk to the buyer. 

So if you’re if you’re starting to get larger, you’re hitting that 1.8 million solo type practice. 1.5 million is also not too small to start considering if I’m onboarding associates, what is the plan for that associate? Are you having conversations about where do you want to be? Two years, three years, five years? Are you nurturing that relationship? Are you starting to nurture relationships with banks and financial lenders that say “This is my plan, this is my strategy, will you fund the person that I back?” 

So you’re you may need to go a little outside your comfort zone, and be a little more creative. And get those contracts in place up front. Find sources, multiple sources for financing so that you could be creative, and perhaps even think about seller financing. As you’re building your buyer personas, these are all areas of consideration. 

And I’ll tell you one of the biggest mistakes I see in partnerships today is that we know how to get in them, but we don’t know how to get out of them. It’s kind of like marriage or relationships: easy to fall into, tough to get out of. And the biggest mistake I see it’s huge. It is emotionally and financially devastating when you build partnership agreements, and you don’t know how the second half or third of the partnership will be executed. 

And I’m going to invite everyone if you’re in a partnership today, please pull out your partnership agreements, don’t wait five years, 10 years, 20 years. And then when you’re ready to retire, you get surprised by the language that’s in it. These agreements, they start where they start, and they can be updated over time and having clarity about how they will be updated. Specifically, you want to look for the valuation formulary for your exit plan. So there’s always a valuation on how you sell part of your practice. Initially how you bring in a partner, I see very little language around how you will be bought out when and how.

Gosh, I’m just going to be pretty straight up about it. If you are the senior doctor, go ahead and start planning more on the live today equation. Start having fun. Start dreaming. You can start getting out of the PTSD of ownership early and take some time off. Learn fly fishing. Go traveling. Learn how to make olive oil or wine or whatever it is you want to do. Retirement is hard because we love what we do. Right? We love what we do it, our identity is wrapped up into it. So go ahead and start thinking about how I want to live as a human being as a person where I want to contribute, it’ll give you something to move towards. 

Because the worst thing you can do is stay an extra five years or nine years or 20 years beyond the health of the partnership. That’s why I love what Vinnie was saying, he said, understand your core values and understand that the value of the business, the value of the practice should be beyond you. So that’s, that’s the great point I want to leave with you today is that value is a multi dimensional conversation. There’s your personal core values. There’s the core value and philosophy of care, how you extend clinical care to your patients. That’s what your team buys into. That’s what you want them to emulate. 

And then there’s How do I build value that goes beyond me? How do I start building my legacy and invite others into that legacy? Whether that is a partnership strategy, or an acquisition strategy. I hope this has been helpful to you today. 

Once again, I’m Victoria Peterson. If you’ve got any questions, comments or things that you’re struggling with, as you learn how to make money work for you, instead of you working for money. If you’re ready to start focusing more on the Four P’s of an Investment Grade Practice, people profit, passion, and purpose, please drop me a note drop me a line happy to answer your questions individually.