Episode 86 – Requested Replay: 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 Peterson
I am so thrilled to have my business partner of 17 years the one and only Dr. Bruce B Baird in the house. How are you doing, Bruce?

Dr. Bruce Baird
I am doing great, Victoria. How are you doing?

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

Dr. Bruce Baird
Oh, that’s for certain that, that would be an interesting thought we might want to do that just for the heck of it. We may

Victoria Peterson
we may do that and I know we’re gonna dip into that day because I’ve got you in the hot seat about building value in the dental practice and 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.

Dr. Bruce Baird
Well, I’m looking forward to sharing I’m just I just like, I tell it by just tell him what, you know, I can’t make up stuff. I’m not good at that. Yeah.

Victoria Peterson
I have to do an extended version so we can get into X partners leaving in two trailers in different roles.

Dr. Bruce Baird
That would be awesome. That would be

Victoria Peterson
That’s gonna be it. Let’s do an outtake on what not to do as owners. Oh, absolutely.

Dr. Bruce Baird
Absolutely. Oh, my gosh, yeah, there have been, I’ve, you know, I’ve had, well, 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 braided, picking people. You know, and I’ve been really fortunate but you have to have, I guess the word is you have to be comfortable having crucial conversations when it comes down to business and, and that’s the one thing that I think has helped me more than anything, is the ability to be able to do that.

Victoria Peterson
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 email? 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 about your ability to not just your business, but your life. Oh,

Dr. Bruce Baird
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 is, 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 Peterson
I love that. You know, we haven’t talked about this. I heard a definition the other day, I’m honest. It’s a truth with compassion. It the perfect I love that and that is great. Honest.

Dr. Bruce Baird
Yeah, you know, I mean, you can get you can really, really piss people off just being honest but that kind of like reminds me of an old movie. What was that, that anyway, was it?

Victoria Peterson
Well, 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 a 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 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 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 really have to be there so that there’s value and the business can Tell us after you write because the buyer, the buyers not buying something to fail, they want to buy something that they can grow, so how do you prepare that piece?

Dr. Bruce Baird
You know, I mean, I have to go back to two difficult times where when I sold, I sold half buy, I sold half the practice, or I owned half the practice, this is back 30 years ago and I sold it through to a group that came in that said, you know, I’m not going to use names, but their 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, yes, and work to China and I had been through, you know, Dawson and through all these courses, and I really wanted to use the top-notch labs, and I wanted to charge a little more because of it. So I didn’t have that conversation but anyway, finally I just said, “You know what, it’s time for me to leave the practice,” and so I sold it with and I thought I had full disclosure, you know, I said, “Hey, this is my practice, this is what I produced and these are the people that work with me.” This, this person came in and bought it but then because he didn’t get along with my old partner, then you had a lawsuit started.

Fortunately, I wasn’t involved but it was with the brokerage firm and everything else like, “This isn’t what you sold me, this isn’t what you told me.” So I just think having a practice that is solid financially with good solid numbers that have good new patient flow, well-trained team, I mean, these are the things that keep you out of that type 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. Brewski, after he became my partner, his production jumped by 500 errors 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 his, you know, you know, has his money on the line now and his 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 conversation, which Jeff always did. So I mean, those are the things that I look at.

Victoria Peterson
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 its cash flow is good, you got to have cash flow, but what’s supporting that cash flow 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,

Dr. Bruce Baird
Oh, 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 a 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 a relationship with them. It’s important, I wasn’t the best at the first 10 years, but I had to learn to get into relationships 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 him. Yeah, it was, it was deeply honest, just go ahead and charge for it. No, that’s integrity. So it’s kinda like the value integrity relationship. 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 an agreement. That’s okay. That’s okay. As long as you haven’t, 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 were going to be or where you want to be.

Victoria Peterson
No, no, that’s, that gets you in trouble really fast and, gosh, 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, their 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? No, our expectations because continuity, and consistency, are things that build trust, and trust, is what you’re really selling.

Dr. Bruce Baird
Yeah. Yeah. I call it trust

Victoria Peterson
You call it goodwill, but it’s like, do your patients trust that this is a place they want to continue coming to?

Dr. Bruce Baird
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 is being accepted? What, how does a team work and how do they interface within the practice? Obviously, facility, you know, you want to have, you know, you don’t have to have the latest and greatest of everything, but you want, you want it to be aligned 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 kind of got a little bit of a disconnect there and, you know, I had the decision to make, do I want a PPO practice or do I want 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 there are a lot of PPO practices MC VCTs 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 when I bought things just for the heck of it because the salesperson was really pretty or whatever, and I 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 an Investment Grade Practice is one that has great a great feeling when you walk in you before I bought anything, I would watch the doctor in play. Now there are certain times when you can’t get to do that but come in and observe how the flow in the practice goes. Are our people, are people positive? Are they you know, that doesn’t mean you don’t buy the practice, it just means that you may have to blow up a few things.

Victoria Peterson
That is, that is a reality. Yeah, 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 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.

Dr. Bruce Baird
And that shag carpet and those ceiling fans. Oh yeah.

Victoria Peterson
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 costs because of the construction and the team training.

Dr. Bruce Baird
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 suggestion would be, to become very good at leadership become very good and read everything you can get your hands on about leadership, read everything you can 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 mean? All these things being able to communicate better because you know, you’re gonna go into a situation that every situation is different and you have to have the skills to be able to you know, turn on a dime and say, 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 in my experience man, if people aren’t happy in a place, they need to find a happy place and they’re not going to be happy with you as the leader then it’s you have to be comfortable to say, “But I know all the patients know this person, I know that that’s okay.” They gotta go. They’re a negative influence on your business and it is now your business if you’re buying,

Victoria Peterson
I love that. How long do you think it really takes 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 value there. Can you do it in three months?

Dr. Bruce Baird
You know, I would say it’s, 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 is torn up and within three months, I could definitely have productivity increase, 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 to me, the 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 a kind of Crown prep Monday and check the hygiene patient today, it was kind of fun. In my retirement, yeah but I went in just to see a physician, a buddy of mine but what was really funny is I trained my three team members, my three chairside treatment coordinators, I trained him and 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. Do you know why we didn’t crater? Because the three team members are so good? They went and he hired all three of them. I mean, Luton didn’t hire him, they were already hired but he moved them working with him getting rid of all his assistants, and guess what his production went from? Probably 1200 to 1300 an hour, which is great, to 2500 an hour. So he grew by 1200 an hour, just by changing assistants now. Okay. 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 could make it so much more appealable to someone wanting to buy, and it’s a simple conversation is simple things you have to do, but you have to do them all.

Victoria Peterson
It’s so well put, I just did the math on that. Your three assistants improved the productivity of that doctor 1.6 million a year.

Dr. Bruce Baird
Oh, yeah, he’s killing it right now.

They got a bonus.

Dr. Bruce Baird
Oh, yeah. Yeah, he’s he is absolutely killing it. Now he is, 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 they are yeah, they’re, I mean, it’s good for them, they know, you were the real deal.

Victoria Peterson
Well, one of the principles of building an Investment Grade Practice is to know how to build value that gives you a great living, right, I’m here I’m productive, and I got a great value but then the investment grade business piece is learning 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 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 with the assistants that help you build the life.

Dr. Bruce Baird
Yeah, 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 somebody that is there just busting it all day and worried about the business and everything else and we’ve always talked about this is is understand your business, you know, learn about business, understand your business. It’s not hard. Dentistry 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 learning how to do molar endo and find MB two, but are you going to spend that much time to learn how to run your business?

Victoria Peterson
Bruce, once again, thank you for joining me on this very special topic of value. I learned a lot today expository and you really surface that value is created by living your values I appreciate you as a partner and I really just appreciate you and Cynthia as human beings.

Dr. Bruce Baird
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 Peterson
I’d like to be around for that. I would do

Dr. Bruce Baird
I would do you got to deal.

Unknown Speaker
I will look you will,

Dr. Bruce Baird
i will if the good Lord willing and there you

Victoria Peterson
go. Thanks so much, Bruce.

Dr. Bruce Baird
Thank you, Victoria.

Victoria Peterson
It’s always a pleasure spending time with my partner, Dr. Baird and if you haven’t met him, yet, you probably are already getting a sense that he’s just a really great guy and in dentistry, I think he’s a unicorn. He is a diplomat in the ICOY. He is one of the top educators in the nation clinically but he’s also a very savvy business person and balancing both business and clinical effort is an art form that I think Bruce has elevated to the highest levels. Here’s what I took away from that conversation. Everywhere you go, you hear people say, “Get out, get outside of your comfort zone, outside of your comfort zone.” That’s where the growth is. That’s where the excitement in life is and I don’t disagree with that. However, today, I want to invite you to get in your comfort zone. Get comfortable, you heard Bruce, say that word a lot. Get comfortable having Crucial Conversations stop comparing yourself to other people get comfortable, I guess in your own skin. Get comfortable about who you are, and what your values are, and then align everything in your world around that he gave some really great examples. So for example, if your value is high tech, high touch, I really value having the latest innovations available for my patients. What Bruce is really saying and that value of high tech, high touch is I value learning, I value progress. I value, staying up-to-date and current so I can deliver the most current technology and techniques to my patients. So he’s really valuing progress that informs you on what technologies am I going to purchase, He purchases technology at a higher rate than someone that doesn’t have that as part of their value thread and he’s comfortable with that he’s comfortable spending money on that and he’s developed a way of valuing is this piece of technology Correct. For my practice, you probably heard that as well. I had a lot of equipment that ended up in the boneyard in the attic. So that’s the next thing. I’d love for you to get comfortable and get comfortable saying, “no, no, this is not the right technology for my practice today. No, I will not implement this until I know I have team support I can and I can train them to use it. No, I will not let this sit in the corner team we are going to be trained on this.” So knowing your core values and getting comfortable. Being in your comfort zone is different than being afraid and not trying anything new. Can you hear the difference there? The more you understand and clarify your value, the more value you can bring. Because you’re very comfortable having that crucial conversation.

This fits this, does it? This is correct for me in my practice today. This is not correct for me in my practice today. It’s not a right or wrong conversation. Everyone gets to have their values. Most of the time. We’re not living in our values. So we’re running out of fear. We’re running out of panic. The world around us, the digital age that we’re in, the pace that we’re in, has really turned on our splenic center so it is turned on our amygdala our fight or flight panic, anxiety, and freeze states. So get comfortable, be relaxed, and get comfortable working from a place of ease. I have had the pleasure of being surrounded by world leaders since my early 20s. I can remember the president of Coca-Cola back in 1984 came to my house and Robert Keogh, just a gracious gentleman and I thought here is a gentleman who is in charge of Coca-Cola globally, every franchise, every bottler, all the marketing, all that advertising, all the storms, that was back when New Coke was coming out, and Boyle boy was that just a colossal mess and this gentleman was so poised, so polished, so at ease in his own skin and in my mind, in my early 20s, a paradigm locked in, the higher you go on the leadership ladder, the less stress you are.

Now I know that’s not true but I know that great leaders demonstrate ease. When they walk into the room, people feel better, because they walked in the room. Having these oh-shit moments when the doctor walks in the room is not good for your team. If you can be clear about who you are, you can be clear about the roles and the expectations and you can bring ease to the situation, what you’re actually doing as a leader is down-regulating that fight or flight. Since its downward regulates the adrenaline it’s down-regulating the cortisol within your teammates. Here’s a big benefit, it Downregulates the drama, less drama, less resistance, the faster the easier, the smoother your day goes and Bruce was really pointing to that, you know, his advice was learn everything you can about leadership, building relationships, body language, communication, neurolinguistics, everything that you can get your hand on because at the heart of leadership is communication. That communication starts with your core beliefs, your values, and what you tell yourself, about other people and if you’ve been around PDA for very long, you’ve heard a lot of Bruce’s stories and he tells the story. So frowny face smiley face frowny face and he said, “What is this?” And they said, “Oh, well, you’re gonna have to go talk to Emily.” So it goes to the office manager. “Emily, what’s this smiling face frowny face I see?” and she goes, “Oh, are you just seeing that?” And he goes, “Yeah, how long? Has it been there?” “Oh, three years?” “Oh, what is it?” She was, “Well, every day when you walk in, we judge what kind of mood you’re in. So I put up a frowny face or a smiley face and the team knows whether it’s going to be a good day, or if they should duck and run,” and he’s like, “Really? That’s me?” You see, as a leader, we don’t often see or feel the impact we have on others and it really is a gift when your team can reflect back to you. Yeah, you’re kind of a butthead today. That’s bringing people down. So what an interesting concept to build an Investment Grade Practice, you got to get in your comfort zone. You have to get clarity within yourself about who I am, what you’re building, and where you’re going, then you’re not pulled off the track and you can give permission for others to get comfortable. Hear me well, I’m not saying lazy. I’m not saying unaccountable. I’m not saying uncreative or unimaginable imaginative or innovative.

Those are different words don’t confuse being comfortable in your own skin, with being locked in your comfort zone and never changing two very different things. I want to thank Dr. Baird for being my partner for 17 years of leading the way in dentistry on what an Investment Grade Practice looks like and for this incredible interview, I learned a lot.

Narrator
Thank you for tuning in to this episode of the Investment Grade Practices Podcast. If you find value in this episode, help us spread the word by passing it along to a dental friend, subscribe, and give us a Like on iTunes or Spotify. Learn more about building your Investment Grade Practice at productivedentist.com today.