Episode 4 – Your Dental Practice as an Asset

“You’re not just building a high-paid job. You’re crafting a business that will have value in the future, so learn from people who are successful.”

When you go into something, you need to have a plan for getting out. So many dentists go into their practice wanting to pay off debt and have a good salary. Building your Investment Grade Practice means you look at your practice differently: you are creating a business that will become your greatest financial asset so your future is secure.

Rani Ben-David, founder and CEO of Sleep Group Solutions, joins Victoria Peterson today to share his advice on how dental practice owners can build a solid asset and avoid common business pitfalls by:

• Taking advice from these types of people
• Avoiding these big mistakes many owners make
• Knowing what investors are looking for

ABOUT RANI BEN-DAVID

Mr. Rani Ben-David, Chairman and Board Member: A serial entrepreneur and former Israeli Lieutenant Commander; Mr. Ben-David has been involved in the dental sleep industry for over 15 years. As the current CEO and Founder of Sleep Group Solutions, Mr. Ben-David has helped over 17,000 dentists start sleep medicine practices over the past decade and continues to promote the treatments. Mr. Ben-David has also been involved in real estate and other ventures and has served on past Boards in several security and technology companies including non-profits.

EPISODE TRANSCRIPT

VICTORIA: Good day everyone and welcome to another episode of Investment Grade Practices podcast where we work together to build a business that you love today, and is sellable tomorrow. Today, I have my really good friend, Dr. Rani Ben-David. Rani, so great to see you today.

RANI: Thank you, thank you. I’m your friend, the only thing is I’m not as a doctor.

VICTORIA: Which is terrific, because most of the guests on the show are not doctors, their true business people. You and I are getting to know each other through participation in the Dental Tank. Do you want to tell people what that’s all about?

RANI: Yes. So you know, Elijah Desmond called me one day in and asked me, he was so excited. I could hear on his voice and he said, Hey, I have this idea. Dental Tank like Shark Tank, but finding young companies? What do you think about that? Elijah, that is one of the best ideas I’ve heard. Because, you know, somebody comes up with a great idea. You know, once in a while I have a dental assistant, hygenist, the dentist, will call me and say, hey, I’ve got this idea, I want to do it. I’m looking for investors, I’m looking for different stuff. 

And Elijah just decided to do it live and make it happen. I think it’s awesome. I was in his shoes. I was in all these guys shoes 16 years ago, when I wanted to open the, you know, the sleep apnea company. And I didn’t need the money, but I was looking for dentists to invest. So they’re partners. 

And today I’m happy you know, if the dentist that was one of them that didn’t want to invest here is this, I’m sure he’s gonna be sad, he then invests. Because every time he tells me but it was really I wanted dentists to invest. So so they’re partners and something that they know a lot and it’ll help me. So I think Dental Tank will be good for these younger companies want to find a little bit of seed money investment. But also if they can get all the you know, and I probably the smallest dental tank there, but if they can get you, Lou Graham and other guys to be part of their board and invest a little bit money. It takes the company five years forward, you know, and all the mistakes that I did, if I had, you know, eight people like it’s nine, but I’m taking me aside eight people on my board, we will do everything way faster, way smarter, and not have to do a mistake, learn how to fix it. So I think Elijah did something huge. I’m excited to be there, it’s gonna be fun. 

VICTORIA: I’m excited as well, I’m so excited for that. And you brought up a couple of great points. Success requires support, and having the right support around you can accelerate your growth. And that’s what I really want to talk to you about today. You first became aware of Productive Dentist Academy through my partner, Dr. Bruce Baird, through sleep solutions. 

And we’ve watched your growth over the years, it’s been phenomenal. And from where you sit as an investor, as a business owner, as an entrepreneur, you know, the topic that I love to talk to Dennis about is, you know, you’re not just building a high paid job. I think that’s what a lot of dentists do as they get into this career. Their first goal is to pay off their debt, and then get a high salary. And that’s about it. From your perspective, how can doctors really build an asset with their dental practice?

RANI: Right, so so when you go into something, you usually want to know how you’re getting out. And that you learn that in the army actually, and in business schools, but, you know, it’s something you got to learn if I’m, if I’m, if I’m going into something, how do I get out and doesn’t matter. But what results do you want out and a lot of, you know, dentist go in, they learned, you know, it’s probably one of the hardest jobs out there. 

First of all, physically standing all day, you know, being in people’s mouth, and you’ve got to learn so much to be a dentist and spend so much money. So I salute all these dentists out there, my clients, my friends that you know, went through that round, but one thing they don’t learn is the business side. And you know, there’s a few very successful on the business side, you know, look at Heartland and look at other people, but me too, you know, there’s a lot of great ones that have that business mind. But most don’t so they do you know, open a great practice take care of the patients. 

I tell most of the dentists that I know, if you take care of your patients, you’re going to make money. If you’re not thinking about just the money you’ll make money, but none of them plan that step. Okay. When I want to retire, what do I want to do? You know, they take a good business advisor and they say, Oh, you know, put $2,000 a month and all kinds of Vanguards and stuff and this is not financial advice. Guys do that and you retire at 65, you’ll have a million dollars that you saved or something like that. But what about selling your practice? 

You know, what about COVID? Right now happened. And I’ve heard sad stories, a friend of mine is a commercial Real Estate owner. And he called me and say, Hey, do you want a dental office? And I said, Why? He said, Well, the dentist just left, I’ve got a brand new office, you know, do I take everything out and just rent it as his office? Or what do I do? Somebody from New York called me and told me a story how he bought a dental practice for 30 or $40,000. Because just, it’s from a dentist that worked 30 years, and just everything went went away. 

So how do buyers look, you know, venture capitals, private equity DSOs, when they want to buy a practice, and I won’t get into it, but they’re looking at EBITA. And right now, when I’m opening this, this new venture of the sleep group DSO or partnership, whatever, and I talked to a lot of dentists, and I say, hey, you’ll, you’ll get from us they don’t know what it is. And I gotta say, Wait,, hold on, you know, when they talk to you about implants and other stuff, you don’t understand anything. So I guess it’s the same way. 

So I think planning that for a dentist figuring out I want to, you know, in 10 years sell I want to partner, what do I do, either, I’m sure there’s good coaches out there, good advisors in the dental field that do it. I don’t know who it is. But that can come and walk you through, you know, a few years before of how to plan your exit. You know, how to know, you know, it’s not just, I spoke to a dentist a few days ago, and you know, he said, I know what he does. I know that this year, I took $400,000. Last year, I took $500,000 and this year, I’ll take you know and know it’s what’s your salary, what’s your distribution? You know, how do you plan it? And having a probably your CPA, you want a CPA from the dental world that knows dentistry and you know, and hire a part time CFO to look at it how to grow. So there’s tons of stuff.

VICTORIA: Wow, so much to unpack in that. So let’s see if we can break this down a little bit. In almost every episode, I define EBITDA, because you’re right. It’s like saying that’s a titanium implant to a CPA. So it’s earnings before interest, taxes, depreciation, and amortization, all those things on your balance sheet. And what drives me nuts about I’m gonna say 99.9999999 p&l that I look for on dentists are all alphabetized so that we automobile expense amortization, then it goes on, and it’s all mixed up. 

And you can’t tell so we actually teach a system in our Business Impact coaching intensive on how do you use your P&L as a management tool, not just simply something that you’re waiting on your CPA to give you every month? I mean, these are the things you’re highlighting a lot of things that doctors are, it’s easy to understand when it’s organized. And you’ve got a bit of vocabulary. You also pointed out in that example of the commercial real estate, that a guy that calls I’ve got a totally empty office, the guy just walked out, after 25 years or selling for $30,000, after 25 years.

Think about that. If the average dentist, you know, in that career did half a million or a million someone there’s somewhere between 15 and $30 million passed through that business owner’s hands. And they didn’t keep enough. Or maybe he was, you know, just totally wealthy and the practice was just a side gig. I don’t know. But for most doctors that is their biggest asset. And when you’ve got $30 million coming through your hands, and you don’t have an exit plan, that’s a problem. You know, you don’t have a plan for capturing some of that profit along the way. I see that as a real problem.

RANI: It reminds me You know, I’ve been in different industries you asked me but we had a pro player, a program with our dentists where we used to bring NFL players, former NFL players to dentist to do events, and I was in the music industry. And you see some people, you know, they make so much money and they think they can spend it right away. We got a $10 million contract so they bought a $20 million house. They forget that one day that money is gonna disappear. 

You still have to pay taxes on the house. And nobody’s helping them and your CPA usually is not your business advisor. Your CPA is great at figuring out taxes, unless you have a CPA that does other stuff, but a good CPA knows how to manage your taxes. A good you know you guys teach and stuff. That’s where you want to learn how to plan your future. 

VICTORIA: I’ve heard that only 5% of dentists can retire and maintain their lifestyle. I’ve heard that only 6% of CPAs can retire and maintain. So they’re only 1% better than the clients are advising. So I’m so glad you highlighted that, what a huge point. So what are some mistakes that you see entrepreneurs making along the way where they kind of inadvertently devalued their company in some way, or they just didn’t build it in a way that could maximize the value. 

RANI: You know, it’s, so many of us did so many mistakes, you know, I hate you know, when I have advisors, they better be rich and successful. You know, if I have if I have an advisor that comes to advise and, and, you know, and he’s not very successful in his life, but he says, he’s a very good advisor, you know, I wish him all the best, but he’s not going to be the advisor I’m bringing in you know, get advice. 

If you’re an entrepreneur, you’re a startup person, you’re going to do mistakes, you know, be ready for the mistakes, you know, don’t want that nice car before you can buy 10 of them you know, don’t spend don’t spend the money right away. My daughter just just went with this crypto money that’s going on now just made a lot of money and I told her don’t go spend it right away, because life is up and down. So I say when you start get these advisors get Victoria get Lou Gramm get these guys to be on your board.

You know, it’s funny, I would pay all these tanks to be on the board of my company. Like Actually, I would do the opposite. Yeah, I used to look at Shark Tank. And it drives me crazy when somebody comes with a great idea. And he’s arguing if to give Mark Cuban 6% like, give him half of your company now. Interest to make it successful. And you’ll do good. No, they’re arguing? No, I want 70,000 and not 60,000.

VICTORIA: I think that’s really what you’re gonna have so much fun on the table because I literally watch Shark Tank. I watch all those shows I have for all the years and, I think I need your help. I need a female entrepreneur in the tank, I realized I don’t have one. Can you think of anybody? And then all of a sudden you know, Elijah’s pretty add he circles around. He does Wait a minute, I don’t need a woman, I need the woman Jesus, how many hygienists build a network of dental offices and leverage them out and build a fortune 5000 company? Can you be on the tank? And I thought, yes, but will I be Barbara? Or will I be Laurie?

You know, beat them. But I like both of them in a different way. You know, who I really like, I like to see Marcus the Prophet. I just, you know, he’s First of all, he’s Miami. Like to me? Yeah, just way more successful, but that’s okay. But the way he looks at businesses, the way he looks at people, you know, it’s all it’s all about people. And it’s all about putting the people in the right chairs, you know, like, having great people and have them in the right place. is a key. You know, actually one of my

RANI: No. So So, you know, one of the companies that is going to be in Dental Tank is a company that I invested in. And, and, and the CEO over there has been my partner, 10 years ago, we sold the company. And and now we open it again. It’s just he’s a person that whatever he does, I’ll invest in him. It’s because of him. If tomorrow he says, a you know, and this is dental, but if he tells me tomorrow, Rani, I’m going to open a construction company. I’ll invest in him. Yeah, because it’s, it’s him.

VICTORIA: That’s a part of a class that I teach for young doctors. We’re talking about banking, and getting financing and things like that. I said, you have to understand the bankers don’t bank, the business, they bank the person. And you’re going to come in there with a believable vision and be strong and support that with the numbers and the business plan. But if you’re all over the board, and you don’t know where you’re going, you’re not clear, you’re going to get turned down or your interest rates going to be triple because they don’t have confidence in what you’re doing. It’s, uh it’s really hard to convey how important the people side of the profit equation really is.

And be focused, you know, be focused, you can’t you know, I always see the younger kids. Yeah, I call them younger kids, but it’s it’s kids that grew up in my house, you know, with my son or my daughter, and now they’re older and that you know, what do you want to do? So I want to do this and this and this and this and this and it. Don’t focus on one thing be successful move to the other thing you can’t do you know. We’re, we’re so small that we can only do one or two things, unless we have the right partners, but you can’t do you know, you can’t want to be a manager and and a business owner and a photographer and a videographer, and this and on to business, you know, you just can’t do everything. Do one be successful. Move to the next one.

RANI: So and Bruce and you said Bruce Baird, you know, I hope Bruce listens to your show. At least he’s got to do that. Why did he hide you? Victoria will do something and leave me alone.

VICTORIA: I talked to him yesterday. He wants to know why we didn’t get together. You know, 10 years ago when when you were doing DOS and Dodson Sleep and all that. And he goes, Oh, man, you know where I was in my life right then. And I was in transition personally. And we were just getting PDA up and going and so maybe now’s the time because Productive Dentist Academy I mean, I would say that at least 60% of our doctors are doing sleep I’m sure almost all Magna Dassani, and all of them, I see him on her wall. They’re they’re all are getting into sleep. 

And here’s another thing I’d like to maybe you could shed some light insight into for dentists, I see a lot of dentists chasing shiny objects and chasing trends. So I’m going to get a I’m gonna get a CEREC because people tell me I’ll make money and then I’ll get a laser, and then I’ll do implants. And then I’ll do Invisalign, but I don’t like Invisalign. I’ll be clear aligners and clear aligners sucks. I’ll do Six Month Smiles, and they’ll do all this education, not implement it. 

And when you ask them why they’re doing it, they’re like, well, because I needed to make more money. And I think that if you come first, this is my personal belief, if you come from that core value of this is what I’m here to contribute. This is what I’m here to give, this is what I’m designed to benefit the world and my patients, then you go line up the technology, it seems to work, what’s your take on all of that.

RANI: So some some dental companies might hate me now but but, you know, one, if you’re a doctor and you do good for your patients, you’re gonna make money. Number two, it’s not, you don’t have to be ashamed to make money, you’re not stealing it. You know, it’s not, it’s not you’re working for it. But there’s some procedures that you want to do, you know, you want to do you want your patients to stay with you, or you want to send them to somebody you work with, you know, refer them to somebody you trust. If you’re a general practitioner, you don’t want to do you know, ortho, you send them to an ortho you trust and you know, that they’re going to take care of them.

If you want to, if you want to add something like Invisalign, or any aligner, learn it really good, don’t just add it to and that’s it. And get a champion. Getting a champion in your office, you’re adding CEREC have a champion that knows CEREC. If you’re adding Invisalign, or or aligners have that champion in your office. We teach sleep so have your sleep coordinator, you need to have that champion sleep coordinator. No one in dental Sleep Medicine is successful, if they don’t have that sleep champion, the sleep coordinator, you know. It’s just that’s how it is, you know, the dentist is busy. And you got to pick up it’s like a company. You can’t have Customer Care without a customer care manager. You can’t have production without a production manager, you know, any company that you have. So same here, you want to add something at it, you know, and sleep. Everybody’s talking about sleep now. And it’s it’s true. 

VICTORIA: You know, we’ve got practices that in COVID year actually did more revenue than the year before. It’s totally possible. That wasn’t the story for everybody, but it was a story for those who were focused.

RANI: Yeah, yeah.

VICTORIA: Now, Rani, thank you so much for being with me today. These are always a short bites of 15 minutes, I know that we could go for two hours and our listeners would be on the edge of the chair you’ve provided so much. I’m going to recap here a little bit of what I heard advice for those who are growing an Investment Grade Practice. 

Number one, be focused, do one thing at a time master that then move on to the second number two build e but don’t I love this line. Don’t go buy that expensive car until you can afford 10 of them. And that’s my favorite takeaway of this whole thing. Surround yourself with great advisors like really check them out. I have this whole class called who works for whom and like you know your CPA works for you. You know, you know your supply rep works for you like know my CPA was so mad at me last week. I’m scared of them. I’m like, why you pay them? Right so get great advisors around you love this, because it’s so true. Grow the team by building and delegating to champions, what a winning formula that is so simple, but not always easy.

RANI: So, anything else your dental Academy, you know, you didn’t know, but you know how many doctors I referred to you guys. It’s learned learn the good stuff, you know, really learn, you know, when you go to learn dentists learn. You want to know, productive that go to the right place, figure out where it is you want to go, you know, I’ll promote my company that I’m like really shifting out because I brought a good CEO and a good manager. But go to learn sleep from somebody that’s actually doing it.

We’ve got clients that are doing sleep only and they’re doing over two, 3 million in revenue. You want to learn from somebody that’s doing two cases a month. That’s okay. But that’s where you’re going to be so saying, you know, Bruce is successful, I want to learn from people that are successful. 

RANI: Thank you for having me. We’ll meet next week.

VICTORIA: If anyone wants more information, they can connect with you at sleep group solutions.com

RANI:  I don’t have a lot to do now because I’ve got a great team. So I’m on Facebook all day. And I’m going to go ride my bike soon. So we’re gonna get off I’m gonna run home and go have fun.

VICTORIA: I love it. And that’s what that’s what building Investment Grade Practice do that give you the time and the freedom to live the life of your dreams. Thank you again. I’ve been great clients, you know, it’s all because of them.

Thank you again for being with us. And if you want more information on Rani’s company, it is Sleep Group Solutions. We’re here at Investment Grade Practices podcast and productive dentist Academy. So have your drinks today and an asset for tomorrow.