Episode 6 – Building Value in the Dental Practice with Dr. Bruce B. Baird

“Value is at the heart of building an Investment Grade Practice. Top practices must hold their value for new buyers.”

If you’re anything like me, you look at your practice and think, “Man I should be further down the line than this.” Building value in your practice takes time, care, intent, and commitment. And if you’re building an Investment Grade Practice, you are crafting a business that has value that will continue after you. The truth is, its not that difficult, if you know where to focus your attention.

America’s Most Productive Dentist – Dr. Bruce B. Baird – joins me today to share 3 key insights from his 30+ years of buying, building, and selling practices of lasting value. Tune in to learn how to leverage these tips to build value in your Investment Grade Practice:

• The importance of crucial conversations
• The role of integrity and communication
• Key indicators that demonstrate underlying value

EPISODE TRANSCRIPT

VICTORIA: I am so thrilled to have my business partner of 17 years the one and only Dr. Bruce B. Baird in the house. How you doing? Bruce?

BRUCE: I am doing great, Victoria. How are you doing?

VICTORIA: I’m doing great. You know, we could do a whole podcast on on what makes a partnership work?

BRUCE: That’s for certain that’s for certain that that would that would be an interesting, but we might want to do that just for the heck of it.

VICTORIA:We may we may do that. And I know we’re gonna we’re gonna dip into that today because I’ve got you in the hot seat about building value in the dental practice. And I I’ve known you for Gosh, more than 20 years. I’ve watched you buy I’ve watched you sell. I’ve watched you pull money out of thin air. It is magic. I want listeners to kind of tap into that mindset that you have a little bit today.

BRUCE: Well, I’m looking forward to share and I’m just I just just like I tell everybody just tell them what, you know, I can’t make up stuff. I’m not good at that. Yeah. Good.

VICTORIA: We’ll have to do an extended version so we can get into ex partners leaving in two trailers in different Oh, boy.

BRUCE: Oh, my gosh, yeah, there have been, I’ve, you know, I’ve had, I guess eight or nine associates over the years and several partners and just things evolves, things evolve in the dental practice that you may or may not even expect. But I know when you’re trying to build something special, you need to have the right people around you. And you need to have the right partners. And, you know, we’re not all, we’re not all great at picking people. You know, and I’ve been really fortunate but, but you have to have, I guess the word is you have to be comfortable having Crucial Conversations when it comes down to, to business and and that’s the one thing that I think has helped me more than anything, is is the ability to be able to do that.

VICTORIA: You know, I agree with that so much. And if I had to, you know, people say if there’s one book you could read on leadership or business, should I do the emails? Should I do this? Should I do that? I would say start with crucial conversations and read that book once a year, because that informs everything your ability to not just your business, but your life.

BRUCE: Oh, 100% 100% that I mean, and I love the math, and I love all those, you know, read them and, and started putting it into play. But not until I was able to have a conversation. It was uncomfortable. But make it comfortable. And being upfront. It’s and I don’t know if I like the word transparent, it’s not that word. It’s being honest, and just saying, Hey, this is a problem I see and how are we going to solve it? And if you can have those conversations with team members, you can have these conversations with associates, with partners, with spouses with you know, I think if you learn to do that, I just think it makes you better.

VICTORIA: I love that. You know, I we haven’t talked about this I heard a definition the other day of honest it’s a truth with compassion.

BRUCE: The perfect I love that. And that

VICTORIA: Great so honest.

BRUCE: Yeah, you know, I mean, you can get you can really, really piss people off just being honest. But that’s kind of like reminds me of an old movie. What was that? Anyway with?

VICTORIA: So let’s stay on this because at the heart of value at the heart of building value, is being able to separate fact from emotion, being able to see this is short term gain. This is long term value. It does come down to truth and probably compassion with yourself as a practice owner sometimes because I know in my career I’ve woke up and man Oh, man, I should be further down the line than this and I’m comparing myself to others and it’s really hard to keep in your head. head in the game of playing your game. 

And I want to go through with you today because you just have such experience in both buying and selling dental practices. What are the top one or two, three things that that really have to be there so that there’s value and the business continues after you right? Because the buyer, the buyer is not buying something to fail, they want to buy something that they can grow. So how do you prepare that piece?

BRUCE: You know, I mean, I have to go back to two difficult times where when I sold, I sold half, but I sold half the practice around half the practice, this is back 30 years ago. And I sold it through a group that came in that said, you know, I’m not going to use names, but they’re practice brokers. And I was leaving a partnership situation because I wasn’t willing to have Well, I think I had the crucial conversations. But my partner wasn’t willing to make changes. And he was, you know, he wanted to charge what I was charging for a crown yet send work to China. 

And I had been through, you know, Dawson and through all these courses. And I really wanted to use the top top notch labs and I wanted to charge a little more because of it. And so I didn’t have that conversation. But anyway, finally I just said, You know what, it’s time for me to leave that leave the practice. And so I sold it with and I thought I had full disclosure, you know, I said, Hey, this is this is my practice, this is what I produce in the US, these are the people that work with me, these, this person came in and bought it. But then because he didn’t get along with my old partner, then a lawsuit started. Fortunately, I wasn’t involved.

But it was with the brokerage firm and everything else. Like if this isn’t what you sold me, this isn’t what you told me. So I just think having a practice that is that is solid financially with good solid numbers that has good new patient flow, well trained team, I mean, these are the things that keep you out of that type of problem, because it’s even greater now. I mean, if you represent something, hopefully, that is what it is. Because, you know, I laugh because after I, after I brought Dr. Buski, after he became my partner, his production jumped by 500 an hour. And I said, Well, why the hell didn’t you do that before he says, I don’t know. 

You know, it’s just, it’s like when your partner has has his, you know, you know, has his money on the line now, and is borrowed money, they become very much more efficient with their time, they start working harder. As an associate, you know, you work until you make as much as you think you want to make, and then you just kind of keep on going down the road. So, I mean, those are the things that I’ve seen. It’s, there are reasons to bring somebody on as a partner, they have to bring value to the to the conversation, which Jeff always did. So I mean, those are the things that I look at.

VICTORIA:This is perfect. And I’m just gonna keep teasing apart this word value, you said it two or three times, and that is at the heart of building an Investment Grade Practice, it’s it’s cash flow is good, you got to have cash flow, but what’s supporting that cash flow is value. And it really, you know, there’s two sides of that word. There’s my values, my core values, my personal standards, if you will, and then there’s the value. And sometimes we think that the business value is separate from my personal values. And what you’re pointing out to me is that they’re more closely linked than you might think.

BRUCE: Now they’re extremely closely linked. And, you know, it’s kind of like, along with value, I like to use the word integrity. And in relationship, you know, the agreed upon course of action between two parties, it’s the same thing we do when we’re treatment planning patients, we get into relationship with him. It’s important, I wasn’t the best at it the first 10 years. 

And but I had to learn to get into relationship with people, I had to learn that value that these are the things that I value, and I’m not going to compromise those which almost crosses over into, you know, I’m just going to always try to do things the right way. I’m always going to try to do things. You know, when my team member says, should we charge a build up? I said, Well, we didn’t do a build up on that patient. So we’re not going to charge for it. You know, where it would be very easy for Yeah, it was a it was a deep one. Let’s just go ahead and charge for it. No, that that’s integrity. So it’s kind of like the value integrity relationship. 

The the connection between those things is critical. Build relationships with your patients, build relationships with your team, build relationships with partners and Associates, and relationship again. Is that agreed upon course of action? Sometimes you have to have Crucial Conversations to come to agreement. That’s okay. That’s okay. As long as you have them. If you don’t, then that’s when things start getting fuzzy around the edges. And when that happens, you’re probably not going to end up where you thought you’re going to be or where you want to be.

VICTORIA: No, no, that’s, that gets you in trouble really fast. And, gosh, I love I love the stories that you weave into everything. And that that little story really points out that the value of the leader, the value of the owner, the number one value is clarity. Just clarifying, clarifying, clarifying. And back to those values of integrity. Is it true? Is it what we said we would do? Are we honoring our word? Is it what we put down in our philosophy of care, you know, our expectations? Because continuity, consistency, those are things that build trust and trust, is what you’re really selling?

BRUCE: Yeah. Yeah.

VICTORIA: Yeah, call it goodwill, but it’s like, do your patients trust that this is a place they want to continue coming?

BRUCE: You know, and if I was a doctor, looking at a practice to purchase, for instance, or what we call an Investment Grade Practice, something that I’d be willing to invest in, you know, I’m going to look at different things, I’m not just going to look at new patient flow, I’m going to look at, you know, what’s been being treatment plan, what, you know, what’s the average treatment plan that are being accepted? What, how does the team work? 

And how do they interface with in the practice? Obviously, facility, you know, you want to have, you know, you don’t have to have the latest and greatest of everything that you want, you want it to be aligned with, with your values. You know, if you’re high tech, high touch, you want to have at least a few high tech items in there. Otherwise, you’ve kind of got a little bit of a disconnect there. And, you know, I had the decision to make do I want to PPO practice route one a fee for service practice? And what would a fee for service practice look like compared to a PPO practice? And those lines to me, they can be blurred? You know, because a lot of PPO practices that have CBC T’s, but our practice had everything. 

Why? Because I used them all. I didn’t, I didn’t buy him, I didn’t buy him just for the heck of it. But that was early on in my career is when I bought things just for the heck of it, because the salesperson was really pretty or whatever, and I’d buy it and then I’d wonder what the hell am I gonna do with this and it would end up in the boneyard up in the attic. But after a few years of realizing that doesn’t work, and investment, great practices, one that has great a great feel when you walk in you and before I bought anything I would watch the doctor in in play. 

Now there are certain times where you can’t get to do that. But to come in and observe how the flow in the practice goes. Are people are people positive? Are they you know, and that doesn’t mean you don’t buy the practice, it just means that you may have to blow up a few things.

VICTORIA: That is, that is a reality. And a guy, I’ve coached so many doctors and they’re like, well, I got what I got, and I inherited the team and what can I do and and I’m working with a doctor right now, and I understand why he wants to move on and start his own practice. spaces are tight, it’s almost impossible to buy. It’s a really good price. I mean, the opposite of that is you find a practice that kind of gave up and there’s still locked in Naugahyde and shag carpet. And that – 

BRUCE: Shag carpet and no ceiling fans.

VICTORIA: Oh yeah. But you have to know that if you’re buying that kind of practice. There’s the cost of the purchase. But then there’s the demolition and the rebuilding of not only the facility and the team, but also the brand awareness that this is that a different kind of place. Right. So I think people often don’t, don’t look at the true cost because of the construction and the team training. Right.

BRUCE: I mean, I think if someone becomes very skilled, and I’m talking about a dentist that wants to expand wants to go in and buy a practice, leave as an associate, my my suggestion would be, become very good at leadership become very good and read everything you can get your hands on about leadership, read everything and get your hands on about. Again, we talked about crucial conversations about building relationships about neuro linguistic programming. 

What when people look at you a certain way, what does that mean? All these things being able to communicate better, because you know, you’re going to go into a situation, that every situation is different and you have to have the skills to be able to To now, you know, turn on a dime and say this is this is the way I want to do this, this is the way I want to do that. Yeah, you may hurt some feelings. But my experience has been, if people aren’t happy in a place, they need to find a happy place. And if they’re not going to be happy with you as the as the leader, then you have to be comfortable to say, but I know all the patients know this person, I know that that’s okay. They got to go there and negative influence on your business and it is now your business if you’re if you’re buying.

VICTORIA: How long do you think it really takes of vigilance and constantly investing in your practice for it to be at that place where it is sellable at its maximum value? There’s team buy in there’s congruency. There’s, there’s the value there. Can you do it in three months?

BRUCE: You know, I would say it’s a it’s a, it’s a commitment to my entire career to build something that is special, you know, so what would it take? I know that I could walk into any practice, let’s just say one that’s tore up. And within three months, I I could definitely have productivity increased, I could definitely increase value. But I think I also could determine the people that are there are these the people that are that need to stay? 

Are these the people that and and to me, team really reflects revenue, much greater than we’ve ever thought. I have to say, you know, when I put the handpiece up, it’s actually two years ago today. Although I did cut a crown prep Monday and check the hygiene patient today, I was kind of fun. But in my retirement, yeah. But I went in justice see a physician buddy of mine. But what was really funny is I trained my three team members, my three chairside treatment coordinators, I trained him and I trained him for years, and we became just inseparable as far as being productive. 

And our productivity was ridiculous. And Jeff, my partner, you know, he always was, you know, his team wouldn’t show up, or they wouldn’t do this, my team would show up, even if they were sick, I had to send them home. And then all of a sudden, and I thought, as soon as I leave, this place is going to crater. And I was wrong. You know why we didn’t crater because the three team members, they’re so good. They went and he hired all three of them. I mean, move didn’t hire him. They were already here. But he moved them working with him got rid of all his assistance. And guess what his production went from? 

Probably 1200 to 1300 an hour, which is great. 2500 an hour. So he grew by 1200 an hour just by changing assistance now, okay. Is that Is that normal? Well, I think anybody can do that. If you train your team with what you want, I think yes, you can increase your productivity. So the question was, is it take three months, three years, you know, I would say if you’re within five years of a time that you want to have a transition, you could create something, first of all, you could triple the value of your business, right? You can make it so much more appealable to someone wanting to buy it. And it’s a simple conversation. It’s simple things you have to do, but you have to do them all.

VICTORIA: It’s so well put, I just did the math on that. Your three assistants improve productivity for that doctor. 1.6 million a year? Yeah.

BRUCE: Oh, yeah. He’s killing it right now. Yeah, he’s he is absolutely killing it. Now he is it? You know, he is. He’s hitting on all cylinders. And you know what that taught him? He just learned a lot. I mean, it was just great for him to see that. Because now he’s gonna build that with those assistants and with others around him. So you know, that’s exciting. I mean, it’s exciting for him. I love seeing it. But it’s also been good for my team. And I thought, how good they are. Yeah, they’re, I mean, it’s good for them to know. Yep. Where the real deal?

VICTORIA: Well, one of the principles of building an Investment Grade Practice is know how to build value that gives you a great living, right, I’m here I’m productive, I’ve got a great value. But then the Investment Grade Business piece is learn how to expand that value beyond yourself. That’s where you start to really get to live the life that you want. And I watched you on your journey, go from four days to three and a half to three to two and then sustain that at at unprecedented levels for a decade. And so there’s building value which makes a living and then there’s creating value beyond yourself like you were talking about. Your assistance, they help you build the life.

BRUCE: Yeah, I love, I love being able to, I love being able to be so much more productive in fewer hours. because it gave me a life. And I see so many dentists, they’re just busted all day and worried about the business and everything else. And we’ve always talked about this is understand your business, you know, learn about business, understand your business. It’s not hard. dentistry is not is not complicated when it comes down to it. But you got to spend a little bit of time to do that. We’re all going to spend time go learn how to do molar endo and find NB two, but are you going to spend that much time to learn how to run your business? Most don’t.

VICTORIA: Bruce, once again, thank you for joining me on this very special topic of value. I learned a lot today.

BRUCE:  Thanks, Victoria.

VICTORIA: And you really surface that value is created by living your values. And I appreciate you as a partner. And I really just appreciate you and Cynthia as human beings.

BRUCE: Thank you. Well, you and Pete too. We just love it. We’re great partners. And I tell you it’s been a great 17 year run and I hope it runs another 17

VICTORIA: I’d like to be around for that.

BRUCE: Yeah, I would too. Yes. You got a deal.

VICTORIA: There you go. Thanks so much, Bruce.

BRUCE: Thank you, Victoria.