Listen on iTunes
Watch Video here
VIDEO - DUwHF #783 - Waqas Jilani
Stream Audio here
AUDIO - DUwHF #783 - Waqas Jilani
Mr. Waqas Jilani is a healthcare consultant based out of Ann Arbor, Michigan. He has a Bachelor’s degree in Biology and Society (BioEthics) from Cornell University, and a Master’s Degree in Health Care Administration from Clark University & The University of Massachusetts Medical School. He is a Diplomate of the American College of Healthcare Executives and is the Vice President of the Cornell Alumni Association of Michigan. He is a frequent speaker, writer, and activist for male survivors of domestic violence and has spoken about male survivors at many forums including local universities, media outlets, and local and national domestic violence groups.
Mr. Jilani has been studying martial arts for over 20 years. He also enjoys volleyball, yoga, and spending lots of quality time with his two children, Aleena and Aydaan (pronounced Ay-don).
Howard: It is just a huge honor for me today to be podcast interviewing Waqas Jilani, all the way from ... Where you at Ann Arbor, Michigan right now?
Waqas Jilani: Yes.
Howard: Right, and how far are you from Grand Rapids?
Waqas Jilani: About an hour.
Howard: An hour? Well, that's the sacred center of dentistry. That was the first city to adjust their fluoride in their water to one part per million January 20, 1945. That should be the All Saints' Day of dentistry. You are a healthcare consultant.
Waqas Jilani: Yeah.
Howard: He has a Bachelor's Degree in Biology and Society, Bioethics, from Cornell University, and a Master's Degree in Healthcare Administration from Clark University and the University of Massachusetts Medical School. He's a diplomat of the American College of Healthcare Executives, and he's the Vice President of the Cornell Alumni Association of Michigan.
He's a frequent speaker, writer, and activist for male survivors of domestic violence and has spoken about male survivors at many forums including local universities, media outlets, local and domestic violence groups. Ryan, please don't tell him any of your stories. Mr. Jilani has been studying martial arts for over 20 years. He also enjoys volleyball, yoga, and spending lots of quality time with his 2 children, Aleena and Aydaan.
Your bio is just incredible. I actually like your ... I should've put on your LinkedIn profile. You really have an outstanding career. Keep your bio going. Tell my homies what you've done in dentistry.
Waqas Jilani: Well, I wound up actually here because I got recruited from the Washington, D.C. area because I was doing really well out there to run a chain. I didn't know this at the time, but they were going to try me for six months and then they were going to shut down the whole region.
So, I was there for three years. It grew tremendously and from there, what happened is all these other dentists started calling me saying, "Can you help us? We see all these amazing things going on. Everyone hated going there and now they want to work for you guys. So, what's going on? Can you help us?" Initially, I couldn't and then eventually I said, "Why not?" And I started my own consulting company. I've been doing that now for about eight, nine years and it's going-
Howard: You have two websites. So if my homies need help running their practice, should they go to www.DocPMA.com or BrightSideDental.com?
Waqas Jilani: Yeah. They should go to DocPMA.com. Bright Side Dental is actually my partner's website. They have 14 offices and they've done about $100 million in dentistry in the last five years. So, they're very, very productive as well.
Howard: Well, let's start there because Socrates said, 500 BC, that humans only have two emotions, greed and fear. And right now corporate dentistry taking over the lifestyle of the independent practitioner, that's the biggest fear in dentistry. When I got out of school 30 years ago, the biggest fear was going to be capitation. There's always the fear of the moment. What is your view of corporate dentistry? How big is it today? How big will it be in 20 years? Will we all be working at MCDental's in 30 years?
Waqas Jilani: Well, hopefully not. There has been a growth definitely in the last 5 or 10 years of corporate dentistry. I used to work for a corporate dentistry. I had job offers to run large sections of dental management companies.
Howard: Which one did you work for?
Waqas Jilani: I was working for, now it's called DentalOne Partners but it was DentalCare Partners, Sears Dental. They've had different names through different [crosstalk 00:03:43].
Howard: So, what did DentalOne start as? Did DentalOne start as Sears?
Waqas Jilani: They originally started as Sears Dental. Yeah.
Howard: Sears Dental, and then they turned into what?
Waqas Jilani: Then they merged with DentalWorks. They merged with DentalOne Partners in Texas and now it's over 100 offices.
Howard: And you know what, I had my office manager, Sandy, retired after 20 years. She left me just because her daughter wanted her to babysit her new only grandchild. How rude is that? Can you believe she traded me in for her granddaughter? I mean, some people, some people. I can't believe it.
But what I did is I specifically ... My office manager used to run 90 offices at DentalOne. It's like, why would I want ... I mean, that's the most fertile ground for head-on. Most dentists can't run their own office, and when you bring in someone who used to run 4, 5, 10, 50, 90, their systems are ... It's like hiring a Mercedes Benz. So, yeah.
When people say they don't like corporate, well all companies have staff turnover, employee turnover. I think one of the smartest things is the headhunt people that understand all those systems. Imagine if you're in Arizona and you were able to hire the Arizona Director for Heartland Dental. I mean, holy moly! So anyway ... But sorry. So, you were with DentalOne for how long?
Waqas Jilani: Actually, three years.
Howard: Three years, and you did a complete turnaround of that area?
Waqas Jilani: Yeah. I had to fire three office managers in my first week, and they had an office losing $40,000 a month. So, I turned all those things around. Their EBITDA, I think, 7Xed from where it was, and they started making money in every single office. It started doing so well that everybody else wanted to work there, whereas before everybody was leaving, and it grew from there.
Howard: So, you had offices losing $40,000 a month. Most dentists are only paying their X $10,000 a month. So, that was a very stressful situation. That'd be like having four ex-wives at the same time. So, why were they losing $40,000? Why did you fire the office manager? What is the low hanging fruit lessons? Or well first, answer your first question.
How big do you think corporate's getting because humans have a tendency to think linear? When the stock market doubles, they think it's going to triple, quadruple. They don't realize housing prices go up, then they come down. So, corporate's been on a fast growth, but that doesn't mean anything. They could turn out and reverse.
Waqas Jilani: Right. One thing is people don't understand the corporate entities are not there to even make money necessarily in each office. What they're doing is they're doing a stock play where they just want to the offices to be even a little bit profitable, and then the value of the company grows. So, in a few years when they recapitalize, the owners all get millions and tens of millions of dollars. That's all they're doing.
So, for them, it's just a vehicle for them to increase their equity. So, they're not invested in the patient care and that's the problem. I think at some point, there's going to be a backlash and they're going to hit a certain plateau where they can't expand.
Howard: But you said that they're all doing a stock play, which I believe that's what they're all doing. I talk to these people, that's what they think, but there's zero evidence. Wall Street, 30 years ago, Orthodontic Centers of America, a bunch of them was on NYSE, a bunch were on NASDAQ. They all imploded, and Wall Street boys are 10 times smarter than anybody I know and I don't think ... I mean, nobody, not one of those chains could go public today.
So, they think they're going to cash out with IPO and that's not what they're doing. They're sitting there with a small venture capital fund that maybe has five million, and they want to flip it to somebody else 50 million, and then flip it to somebody else 100 million. It's a Ponzi scheme because at the end of the day, you've got to do an IPO and none of them could go public because they basically grow their revenue with debt. I mean, they couldn't pass Shark Tank.
Waqas Jilani: No, absolutely. But, at the end of the day, the owner still has $100 million in the bank. So, that's enough to walk away from anything. Even if that company implodes, they don't care because they've already gotten their money. They've more than gotten their money. They're set for life and that's what I see. That's why I had a number of job offers from these chains and I ended up just turning them all down because I didn't want to be part of that. My undergrad was ethic. I studied a lot about philosophy, religion, and all that stuff and-
Howard: Your undergrad was what?
Waqas Jilani: Actually, it was a triple major. I don't know why I did it to myself but-
Howard: Biology, Society, and Bioethics?
Waqas Jilani: Yeah. It was how to use ethics. I studied different religions. I studied ethics and philosophy, and all the Socrates and everybody, and how do you apply those to issues in health care. It really made me very aware of how technology impacts health care or how different things impact healthcare. So, when I saw these chains coming in, I said, "You know what, I don't want to be part of this," because I could see the long term impact was not good for the patient and that was really what I was interested in.
Also, I was interested in health policy, and I didn't go the medical or dental route after college just because I wanted to be involved in the larger policy issues. I didn't want to be another cog just making some money and whatever, living in my big fancy house. Not that there's anything wrong with that, but I wanted to make a larger-
Howard: But there is a lesson there reading the emails. I mean, every dentist who owns 5, 10, to 1,500 offices hasn't seen a patient in 20 years, and when you do patient care 40 hours a week, you never work on your business. That's why so many of these businesses have failed because it's so addicting and fulfilling to treat patients all day. And then at the end of the day, you're tired and go home and you never ever did work on your business.
Waqas Jilani: Yeah, and that's where they bring me in because I'll go in, and I'm not saying this to brag, but typically, my clients will double within a year.
Howard: Okay, now you're bragging. Now you're bragging.
Waqas Jilani: Yeah.
Howard: I thought you took and had a ethics major. You had a ethics major and you're bragging.
Waqas Jilani: Ethically stating-
Howard: So, most of your clients do what? They double in the first year?
Waqas Jilani: They typically double in the first year. Yeah.
Howard: Yeah, but double in what? Double in what? Double in revenue or double in EBITDA, double in net income?
Waqas Jilani: Their EBITDA will more than double. Sometimes, it'll at least 50% EBITDA increase. Their revenue will increase. It just depends. Some of them are set up differently and there's different ways that I know how to make those happen, but I printed out some graphs just in case-
Howard: Well, explain EBITDA though to the dental students. There's a lot of kids in the dental school listening to this stuff.
Waqas Jilani: So basically, what happens is when someone comes in and you bill out $100, if you're using a PPO, you're only going to get $70. Then you've got to pay your assistant, your manager, your lights, your rent, your everything. So, EBITDA is your earnings before interest, taxes, depreciation, and amortization. That's what you have left in the bank after you pay everybody and as a business owner, unfortunately, that's what you have left.
Howard: But you've got to slow down. It's 30 and under who listen to this show.
Waqas Jilani: Okay.
Howard: You said earnings before interest, taxes, depreciation, amortization. Why is that? Explain to them the balance sheet number what those line items are.
Waqas Jilani: Okay, sure. So, basically what happens is on a balance sheet or actually on a profit and loss statement, you'll have money that comes in. So, say for a month, you made $100,000. That would be a really good month for some people. Of that, you're going to have some write offs. You're going to have some other things you have to pay taxes. There's some accounting things you have to do with your equipment in terms of depreciating it over time. That's just how the government accounts for stuff.
So, you're paying also interest. Maybe you have a bank loan on your business, so you have to pay those. It's basically a lot of all of your other expenses also flow through there. So, anything else that's a business expense all gets taken away. Then what you have left, you then have to use that money and then you have to pay taxes on that money. If there's interest payments, that gets off of there.
The depreciation is on your equipment. It's basically an accounting thing. Amortization is the same thing is if you buy a large piece of equipment like [CEREC 00:12:27], you may not expense it in one year. You may expense it over three or four years. So, it's basically, how much money you have in the bank.
Howard: The only reason I bring this up kids is because that whole EBITDA, at the end of the day, it's because the United States IRS tax code is 74,608 pages long of just crazy insanity bullshit. You'll go get a CPA and your CPA will just help you navigate all that interest, taxes, depreciation, amortization.
It's crazy, but that's not how you run a business with a statement of income, a profit and loss, a P&L. You run it with a statement of cash flow, a balance sheet. What your asset is balances what your liabilities you wanted, the equity you have in on it. When you start to go your number, it's cash in, cash out.
I wish all these dentists would pay attention to their statement of cash flow, and 99% of dentists that I know of they use a CPA that only does three or four dentists. They aren't even giving them a statement of cash flow. But every dentist that I know that goes to a firm that just specializes in just dentists only, they know their numbers. But if you're just using a CPA for the IRS and your taxes, you're getting tax economic accounting advice. You're not getting any managerial accounting advice.
These corporate entities, they know their number because they're not running 50 office on the over-the-counter Dentrix or Eaglesoft. These guys have enough scale to have full-time accountants. So, what are you doing? So who's calling you these days?
Waqas Jilani: Well, I want to go back to that point real fast, Howard, because it's very important. A lot of times, I'll go into an office and I ask them for their P&Ls, their profit and loss statement and they say, "Oh, we have it somewhere." I'll find it on the shelf and it's five months old, so you have to dust it off. A lot of dentists think that if I have a CPA, they'll manage my finances, but that's really not true. They're not managing their finances.
I'll give you an example. I had a meeting two days ago with a CPA. He wanted to meet because I worked with his client only two months now, but their earnings, I think, tripled in three months. So the CPA is like, "What are you doing?" So, I went in and I sat down and then we developed a whole financial plan in terms of how do you do this? What types of things, do you need to put money away for a larger equipment, for another office?
A lot of times, dentists, "I want to buy a CEREC." Well, it's going to be a lot of [inaudible 00:14:55]. So, they don't have that planning in place, "I want to pay off my student loan." I'm sure that's a big issue for a lot of your clients. I've worked with CPAs and bookkeepers and had dentists pay off their student loans, pay off their businesses, and do very well, buy five more offices.
Howard: So your website is DocPMA and the PMA is Practice Management Associates. So, you're Doc D-O-C PMA.com. What do my homies find if they go to DocPMA.com? What are you doing for dentists?
Waqas Jilani: Well, what is right now is we have some general information, but one of the best things that we do is I'll talk to anybody for free. If they have a question, especially the newer dentists, and I was going to mention this on your podcast, a lot of times I get calls from new dentists who just graduated they have a job offer. They call me because they don't know how to evaluate it. They might be getting thrown a $40,000 sign-on bonus. They might be getting these different things, but now they have to move to the middle of Kansas somewhere. I mean, that's true. That's what's going on.
Howard: That's where I was born, Winchester, Kansas.
Waqas Jilani: Okay. Anyway, so I'll talk to them and I just give them advice because I'm also recruiting dentists. So, the hope is that if they get out there and I have enough contacts, that when they're looking for another job, they'll come back and they'll work for one of my clients and do really well.
Howard: So, on your website, there's a button "Yes, I want a complimentary one-on-one strategy." What is that button for?
Waqas Jilani: Okay. What that button is, any existing dentist who's out there and they need some help, a lot of times I come in and they're dentists that have been there for 20 years, 30 years. They're just grinding. Every year, they have to take more PPOs. They're taking Medicaid. Their numbers are going down. I think even you talked too about this in some of your podcasts. The staff want raises every year, and so their margins are just shrinking.
So, I'll go in and I'll sit ... I'll talk to them virtually and we'll figure out what's going on with their practice. What is it that's going on that we can fix? I'll give them some very simple, basic, easily doable steps that they can implement and that's all free. I'm more than happy to help them with that.
If they want more help, obviously, they can come hire us or talk to us some more. We're also getting a mastermind group setup. That's in the process. So, we'll have something available virtually if people want to have discussions with lots of other dentists and on certain topics. Then we're getting that. We're in the process of that along with online courses.
Howard: So, I want to go first to demographics because once there's a change in demographics, the business model is going to change. Every generation thinks the next generation's all different, and a lot of people that are my age, 55 and over, say that the 30 and under millennials, they don't want to own their own business. They just want to be an employee, clock in, clock out. True or false?
Waqas Jilani: I think that is false because I talk to a lot of new dentists and they want to start their own practices. They don't want to work for these chains. A lot of them, unfortunately, are stuck. They have a $400,000 student loan. How're you going to pay for that? How're you going to buy a house? How're you going to-
Howard: But you can't pay off a $400,000 student loan working at McDonald's. If I go be an associate, I'm just a high-paid chef. But if you've got $400,000 student loans, you have to go out and buy a $750,000 practice to generate enough cash flow to pay off that practice and your student loans in 10 years. I mean, don't you think if you use other people's money to get to a third of a million in debt, you've got to use other people's money to get to a million in debt to pay it back in dentistry. True or false?
Waqas Jilani: Right. Yeah. No, I 100% agree. I've got a client right now. We're opening a new office and he's got $700,000 in debt to do that. But we've got plans in place and we've got marketing in place that he should be up and running in no time and then he'll be profitable.
Howard: So, what do you coach? When a kid comes to you and they've got high student loan debt, how long does it take for all the banks to have financed him? What is it in your experience?
Waqas Jilani: Well, I mean typically ... Are you talking about for an office?
Howard: Yeah, to buy a practice.
Waqas Jilani: Yeah, to buy a practice, it's usually seven years. The lending guidelines-
Howard: You mean the loan is seven years long?
Waqas Jilani: The loans is 7 or 10 years sometimes. We have a-
Howard: But how long does a kid have to be out of school before they're getting financing in your neck of the woods?
Waqas Jilani: Well, it depends because we have relationships with local banks and with their VP of lending. In fact, this guy he was only approved for 500,000. We got him an extra 200,000. 10 years ago, banks were doing 100, 110% loans. You just had to graduate with your piece of paper and they would give you a loan to buy your business. But with the whole banking debacle, they've really tightened up.
So, you typically have to come in at 20 or 30% down where we are right now or partner with somebody, which makes it really tough because they don't have any cash. They've just graduated and they have a huge debt.
Howard: Yeah, it really depends on where you're living. United States is too big of a country to even use the term United States of America, I mean, just like no one uses the term EU because nobody compares Germany to Greece. But many, many regions of the United States, two years out of school, you can get a signature loan for 750. It just depends on where you're at.
So, they come in out of school, high student loan debt. Do you think there's a lot of people out there trying to renegotiate the student loan debt, refinance it? Do you see a lot of that? Is that a big return?
Waqas Jilani: I don't see them doing that mostly because they don't know how. I know there's been a lot of changes and there's still a lot of changes going on with student loan debt. I just know that they come out and they're just looking at this huge debt and they're just really worried. That's a huge incentive for them to go with these chains. That's where we try to like get involved and help them.
Howard: When you see these contracts where they give them signing bonuses, what's the catch? I mean, why would a chain give you a 10, 20, 40,000-dollar signing bonus? What are they getting you to try not to think about in the contract?
Waqas Jilani: Well, I've seen that. I mean, you're stuck with them for a minimum two, three, four years. You're also going to a rural area, in the middle of nowhere where they can't recruit any dentists. But the problem is, once you get into that contract, they now own you.
Now, you have to do the dentistry the way they want it and at certain chains, all they want to do is high volume dentures. Everyone gets a denture, everyone gets a $5,000 treatment plan. If you're not ethically okay with that, then it's going to be a challenge and you're going to be upset. I've had conversations with people.
Howard: And a lot of my friends are CEOs at some of these major chains. They're big fans of the show, and bottom line like, you can't kill these kids' morale. They'll say something like, "Everyone has to have a fluoride treatment, afterwards," and it's not going to by any chance, "a $15 copayment."
Okay, that might mean that on eight times a day, some lady loses on you and doesn't want the fluoride. So, for 15 bucks, eight times a day, you have to deal with some upset patient. You know what I mean? Some things are better theories than in reality and some of these great associates have lost some of these big corporate dental offices just for little policy things that they don't believe in.
Waqas Jilani: I have a client right now. He was a partner in a chain. He had three offices. He left and he's starting his own thing. I've had that many times. I've had regional managers dentists of dental chains come to me and say, "We want to start our own office." We get them a million dollars and get them up and running. So, I think at some point, you hit a ethical dilemma and then they leave.
Howard: The other big issue is there's all these old guys selling practices that when they came out of school, there's only 50 kids in the class. Now, the kids coming out of that same dental school, there's 100 in the class. So, there's six more dental schools than there was back in the day. So it's really a seller's market. In some of these towns, especially California and Arizona, if you list your practice for sale, you get four offers today and two of them will be above market price. So, do you see it as a seller's market where you're at too?
Waqas Jilani: That's actually very interesting because I've been out in that area and I've worked with people out there. Over here especially in Toledo, which is about an hour south of here, it's very much ... It's actually really hard to sell one of your practices. Some of the chains will come in and buy them up if they hit certain criteria. So, I've been involved in that.
The greater Detroit area is different. There's a lot more dentists up here, but any of the rural areas, you've got all these dentists that are retiring and there's not enough people to come in and take over those practices. So, that's why I was saying is that's why these chains are setting up in these smaller towns because they know that they can dominate. I have clients who are the only dentists in town, but they do [crosstalk 00:24:10].
Howard: It's the single biggest error these kids do. They borrowed a third of the million dollars of other people's money. Then in supply and demand, they want to go right downtown Chicago, Scottsdale, L.A., where nobody needs them. A lot of them are married with kids, and it's like, why would you want to raise your kid out there in the rural where they can ride a motorcycle and a minibike?
My kids would go to grandma's farm, you could walk out her front door with a .30-06 and shoot it all four directions and you couldn't hit anybody. I mean, they go out there where there's no other dentist and they crush it. They just crush it. Then they come into the big city, buy an expensive house, two expensive cars, stay-home spouse, and when they're 65, they're still paying interest on debt of other people's money and then the rural people are just millionaires.
Waqas Jilani: That's 100% true. I've got a client in Toledo and it's the same thing. I helped him pay off his debt. He had a million dollar office. It's grown, like tripled, more than tripled and he's bought five offices. But he's just killing it because there's nobody in town. There's really no competition.
Howard: And people just don't think. Like right now in Phoenix, they're opening up in Scottsdale because they want to live in Scottsdale. Well, it only take you 45 minutes to drive south, leave Scottsdale-Phoenix metro, and then you get to go to Maricopa and Florence and Eloy where it's booming and everyone down there is getting 100 new patients a month.
Then they're coming back to five years later, 10 years later and those areas out of town are still booming 10, 20, 30 years later, and they're still struggling because they just had to live in Scottsdale. It's like okay, if you want to do that, you have to do that with adopting a minimalist lifestyle.
You have to say, "Well, I want to live here so bad. I don't want a big house. I don't need a new car. I don't need to eat out at restaurants. I don't need this high overhead lifestyle. I want to live on the beach," I've seen dentists do it. "I want to live on the beach in L.A. with a little bungalow practice."
I've seen it there. I've seen it in Florida. I've seen it Clearwater, but they have very, very minimalist lifestyle. Their hobby is like yoga and walking the beach with their dog. It's not driving nice cars, going to restaurants, and traveling, and having ... They just ... So, if you're going to go where you're not needed, you have to be a minimalist. If you just want huge cash, you've got to go rural.
Waqas Jilani: I agree 100%. Like I am 45 minutes from Toledo right now, and if you go there, you want to buy a 3,000 square foot house, it will cost you about 300,000. Whereas you go to New York City, you can't even get a one-bedroom apartment for that much. That's just like amazing, but people don't realize it, and most of the time you're at work. It doesn't matter where you are.
If you really hate the commute, they've got self-driving cars coming. You just sit there. I have a client, a former client, he just says, "I just take a nap and my car drives me home. I just have to hit the steering wheel every few minutes."
Howard: Yeah, I think driverless cars is going to be a game changer because who cares if you have an hour commute out of town to a rural practice. If you're in, basically, a box and you just go crawl in bed or you sit at a desk and do your email, or if there's no stress at driving and changing lanes and all that crap. I think this is going to be a big game changer. I think it's going to really change how people live. I think a lot of people are going to ... Some of them might be two hours because imagine this.
Imagine you're at home with the wife, the kids, everybody's bothering you. You can't get anything done at the computer. But then when you go to work, everybody in the next cubicle is coming over and talking to you and telling you everything, blah blah blah. So, leaving home and getting in like a U-haul box, a driverless car, and sit down at your desk and do all your email where nobody can bother you. Then you get to work, then you have all the meetings and all that stuff.
Then after the meetings, you go back in your box. You have two hours all the way home. Then when you pull up on your driveway, you leave all the stuff in the driverless car box and now you can disengage and go re-engage with your family. I think it's going to be a total complete game changer.
Waqas Jilani: Yeah, until the teleporter gets invented, but for now ...
Howard: The teleporter. So, if someone just said to you, we're on the aging dentist population, what would you say?
Waqas Jilani: Say that again? I'm sorry.
Howard: Well, aging dentist population.
Waqas Jilani: Yeah. I mean, there's a lot of dentists who are aging and in the rural areas, they can't find buyers. So, it is really a buyer's market. If you want to go and get a nice office that's already there, you're going to have to spend some to fix it up or just move next door. You can get thousands of patients. You can be up and running. I tell all new dentists, "Do not start from scratch. Why would you? Why don't you just start an office, take over somebody's office?"
We just had a client who did that. They took over an office that's been there for 40 years and you've got a huge patient base. I've had guys come in and they had 9,000 charts in the basement. So, why would you want to start from a scratch and fight and crawl with all these people when you could have it super easy?
Howard: Okay. Another thing they're asking a lot when they come out of school, obviously, we know you should go rural. Obviously, we know you should go where you're needed. You'll never see 27 Starbucks on the same damn corner. They're all evenly spread out. The next questions they ask is, "Should I start my own from scratch and do a de novo or should I buy?"
Waqas Jilani: I would say definitely buy and the reason why I say it is if you start from scratch, one, there's a learning curve. You just got out. You're still learning clinically how to be faster. You'd have to basically learn all about how to run your practice and it's going to take you a year or more just to get money and start breaking even. So, you're going to be struggling.
If you buy, then a lot of that's already there. You already know the patient flow. You already know the different things and that's where I come in. A lot of times, they'll call me. They'll say, "I just bought ..." I had a guy call me, "I just bought three offices. I don't know what I'm doing. How fast can you get to my house?" So two days later, I'm sitting on his couch and we figured out how to make it work. Yeah.
Howard: Yeah, the fastest way to go under, I think, it's between your second and third office or between your third or fourth. That's about the highest failure rate of anything I see. They grow. That little problem in one office that was a Doberman Pinscher at three offices is a Tyrannosaurus Rex and just takes you out.
You have to perfect your prototype and then turn that into two. Then when that's all smooth, then add a third. The going from one to two is a double. Going from two to three is just a third. Three to four is just 25%, four to five is just 20%. But you've got to get your house in order and get poised for growth, and they just start thinking to expand.
I want to get back to what you opened up with, the shrinking margins. I mean, I got paid more for a root canal 30 years ago then I do today. When you go into these offices and you see 95% take Delta and that's a PPO. I read that 82% take two or more. I think 65% take three or more. Then by the time we're down to 50%, they're taking 12 to 18 plans. Do you go in there and ... What's your thoughts on the PPOs?
When you go in there, are they just flat out losing money on some of these plans and you cancel them? Or there's also a bunch of people on the circuit that they renegotiate your PPOs. They've made entire businesses out of just renegotiating your PPOs. Talk about PPOs. What's your thoughts on PPOs?
Waqas Jilani: Okay. We'll get into Medicaid later, but with PPOs a lot of times, when they start an office, they build a beautiful 4,000 square foot office, they've got a million dollar loan, they've got all of this stuff. Then they said, "We need some people." So they'll just sign up with every PPO, they'll get the patients. They're giving them a 30% discount up front or 40% right there.
There's a lot of people who don't have dental insurance and especially now with the governmental changes and stuff, more people are not going to have any kind of insurance. So, we go after the self-pay patients, and a lot of times, I'll go in and they have Medicaid, which is terrible. They don't even understand. A lot of times, they're losing money. Every single Medicaid patient, they're losing money on them.
Howard: But they'll make it up in volume though?
Waqas Jilani: No.
Howard: I mean, who cares if I lose $20 on every patient? I'll see 100 and then I'll work through lunch, stay late, and come in Saturday and pay my staff over time.
Waqas Jilani: Exactly. I'll lose money even faster. Like how ridiculous, but that's really the mentality of what a lot of people have because all they see is patients. They think, "If I just had more patients, I'll make more money. Let me sign up for Medicaid. Let me sign up for PPOs. Let me just do whatever I can to get more people in here," and that's not correct. You should go for profitability. You can actually see less patients, and make way more money if you are very careful about what you do, who you look at, and your fee schedules.
Before dentistry, I was in charge of insurance contracts for a hospital, and there was $100 million a year that I was in charge of. I was negotiating with BlueCross and Aetna and all those guys. Every month, we were renegotiating fees, we were running utilization reports. So, I do that for my clients. I'll post some of the examples on there, but one client, we had-
Howard: You want to put up some PowerPoints now?
Waqas Jilani: Well, I can just show you because I had it printed out. Like this is one client. I don't know if you can see it, but we had a potential increase of $500,000 in their collections from three offices just by tweaking their fee schedule. That was at a 25% efficiency rate.
Howard: But how do you tweak a fee schedule if the PPO is setting a fee?
Waqas Jilani: No, but you can negotiate with PPOs. A lot of them don't know that. You can renegotiate and negotiate all day long.
Howard: So, you called the PPO yourself?
Waqas Jilani: Well, I will train their staff or have someone from my staff. We call the PPOs and every year or every other year you can renegotiate fees. Usually, I get help from one of the local supply company like Schein. They'll help me with some of the numbers. But they get me numbers and we can renegotiate. We'll figure out ...
A lot of times, also dentists, they'll come in and they say, "I want more patients. So I'll set my fees 20%, at the 20th percentile for my area," and if you don't have a percentile, that's your range. You want to be at the 60th or 70th percentile or at least 50th percentile, but it's the same mentality, "Oh, I'm going to just get more patients. I'll make it up on volume." Well, if your fees are so low you're the 20th percentile, you're losing money on some of your procedures.
So, we go through and analyze those. We see what their actual revenue is per procedure overall and we'll look out at it for each insurance company. I know there's companies out there that do some of this too. Then what we do is we'll say, "You need to come back at this amount," and it takes a year. But by doing that, we can actually get more money out of the insurance companies and a lot of doctors don't know that. They haven't raised fees because they're scared to. They don't want to lose patients. It's all that stuff and the reality is the opposite.
Howard: Well, most of the dentists are at least 60 to 90% of their patients are [inaudible 00:35:41] by the PPO they're signed up with.
Waqas Jilani: Yeah, but you can negotiate that. You can-
Howard: So, where would the doctor get a list of the fees in those areas and know what the 60, 70th percentile was in this area?
Waqas Jilani: I mean, there is a database. Normally, you can call like Henry Schein or somebody and they'll do it for free for you. I have a good relation with the regional manager. So, any my clients, they'll sign up a-
Howard: Can you have him email me? Maybe he'll want to come on and talk about it. Maybe that's a new feature for Henry Schein.
Waqas Jilani: Yeah, actually, they would love to do that. So, I'll call him because they want to do that nationally because I can do it too, but I have to pay money for it. So, they've paid for the whole country, so that way it's just easy.
Howard: Yeah. Email me Howard@Dentaltown.com and CC him at HenrySchein.com. That would be an interesting deal.
Waqas Jilani: Yeah.
Howard: I've heard also from many PPO experts that when the doctor calls the PPO, they're just so much more likely to change the fee as opposed to your office manager consulting. Do you agree with that or disagree with that?
Waqas Jilani: See the problem with the doctors, and this also applies in management, the doctor, it's like do no harm. You're taking care of patients. You're trying to get patients out of pain. You're not trying to cause pain. And when you're negotiating with insurance companies and you're trying to manage staff, you have to do the opposite. You have to inflict pain on the insurance companies and you have to be tough with them. You have to be tough on your staff.
So, the doctor usually is not a good negotiator because he's always trying to minimize conflict and not create pain. So, really you need a tough office manager who can call them and do that. We train them how to negotiate with them. Like we're negotiating equipment cost too for new offices and we'll save them $100,000 on new equipment just by negotiating hard-core with all the different suppliers.
Howard: Well, the number one cost in dentistry, it didn't even show up on a balance sheet 30 years ago, and that's the adjusted production. The labor. What do you think labor, lab, and supply should be in your opinion right now?
Waqas Jilani: If you can keep it ... A lot of times I'll go in and they'll be higher than 50% on the labor and-
Howard: 50% including the doctors?
Waqas Jilani: Well, not even the doctor.
Howard: Just the staff?
Waqas Jilani: I've seen really bad-
Howard: You've seen staff labor at 50%?
Waqas Jilani: Yeah. They've got receptionist making 22, like for here, which is a lot an hour. They've got all kinds of stuff. The assistants are all up in their 20s, and there's no money left for the doctor. It was ridiculous. It was really bad.
Howard: Well, I know a lot of CEOs of corporate that they used to go in and buy all kinds of practices, but they're switching to de novo because when they go into old man practice, the first thing they have to do is tell stuff, "Okay, you're making $25 an hour. We're going to place you for 18. So, we're going to move you to 18. If you want to quit, we understand, but you're the guys that signed up for all these PPOs.
The whole market changed, and being a dental office receptionist and assistant isn't like it was 30% years ago. So we're going to ..." So what would like to say? So, you've seen labor is high 40%. What do you think it should be at?
Waqas Jilani: If we can get it under 40, 30%, now I have to look at the specific balance sheet because it depends on a lot of things like if they're a specialist, if there are certain things that they're doing in certain business lines. I know on the supplies cost, we try to keep it between like 5 or 8%. I know with labs we're trying to do 2 to 3%. Over-
Howard: 2 to 3%?
Waqas Jilani: Yeah. Depending on what ... Again if it's orthodontist, if there are certain specialties, prosthodontist they work with and they have like higher cost. Again, it just depends, but ultimately, I try to get my client's net. At least if they can get to 30 or 40%, that's what we're looking for, but I've come in and they've been at 10%. Which means out of every dollar, they're keeping 10 cents and that's-
Howard: But the problem with that number is you're mixing the labor cost of the dentist with the profit dollars from having capital employed in a dental office. Like a doctor will say, "Well, my overhead is at 60%, so I make 45." It's like, "Okay buddy. Well, why don't you quit going to work and hire an associate and you're going to have to pay them 25%. So, now you're 40. You pay that guy 25%, now you're down to 15." So, basically your profit margin from having capital employed in a dental office is 15%. You just have a nice paying job, but you're a dentist.
The IRS ceases the CEOs because a lot of CEOs for tax advantages, they might really overpay themselves or underpay themselves and the IRS goes in there and says, "Okay, you own a small business in rural Ohio and your company takes in three million, and your overhead is two million. This is what a CEO is worth and this is what profit dollars are worth." You know what I mean?
Waqas Jilani: Yeah.
Howard: So, if your associates in your area get paid 25% of adjusted production, then that's your opportunity cost of being a dentist and then the other 15%. So, there is a lot of peanut-butter-and-jelly accounting.
Waqas Jilani: Yeah.
Howard: That's why I also want to tell you, when you go to your study club and you're feeling all bad because the guy across the table from you is saying what his numbers are and you're like, "Oh, mine are horrible." Trust me, there is not a 1% chance that any number that came out of that guy's mouth is correct. Like a lot of them, they paid off their land and building. So they say, "Oh, I have 50% overhead."
Well, do you have a land and building and their cost in that? I mean if we took you out of there and rented out that building, what would the market value of that rent be? It'd be $5,000 a month. So you don't have 50% overhead because you're your living in some fantasy bubble that the building was made by the tooth fairy and you'd have to charge yourself rent. So, do you like any of these specialized accounting firms?
Waqas Jilani: Say that again. Do I use them or do I like them?
Howard: Do you recommend to your clients any of these specialized accounting firms that only do dentists?
Waqas Jilani: Yeah. We have some local ones and they work with a lot of dentists. They're better. They're more familiar with the different expense items, but again, if the dentist doesn't understand a profit and loss statement and doesn't understand the CPA is not going to make their financial plan, then there's limitations. You'd have to-
Howard: That's why I recommend that all people that in dentistry, they just buy like one share of every publicly traded company dentistry like Patterson, Schein, Danaher, Dentsply, Sirona because then by law, they have to send you their quarterly, well what is it, 1040 and then their annual 10-K, and then you get to read a statement of income, a statement of cash flow, a balance sheet. You get to see their notes and even if ... Warren Buffett reads the 10-K of every publicly traded company every year.
When you start reading those, because you'll be interested, you'll see it's your sector and you'll start learning the numbers like just having a little hobby. It's a fun thing to do with your kids too. You know what I do with my kids? I bought them a share of like Disney. I just bought them shares of companies that they use, things they love, and that was pretty good.
Waqas Jilani: Yeah. That's a great idea. Absolutely.
Howard: How old are your two kids?
Waqas Jilani: They're 10 and 11, almost 12. A boy and a girl.
Howard: Yeah. Just find out when they're really excited in something. Like your daughter, I'm sure she'll love an iPhone. So, buy her a share of Apple stock. So, when she wants an iPad, say, "Well, first, instead of buying an iPad, let's buy a share of Apple stock and let's learn about this side of business."
It's a neat deal because humans only learn if they're interested, and that's why they don't know any of their numbers because what they're truly interested in is bone grafting and [inaudible 00:43:55]. That's what they're truly interested in. They just really don't have any interest in everything we're talking about. In fact, right now there's probably no one listening to us right now. It's probably just me and you. No one.
In fact, if you heard me say that email me Howard@Dentaltown.com and just say, "I was actually listening." Look, see no email. I just-
Waqas Jilani: You got no email.
Howard: No email. No one even replied to that. But who is the typical dentist going to DocPMA.com? What is your bread-and-butter client? Who do you best serve? What prompts it? Is it because their overhead tie? Is it because their staff is dysfunctional? Is it because they're trying to sell or who is your average typical client?
Waqas Jilani: I have some of the new guys, the new dentists who are getting out and they don't know much. They want to buy an office. They want to start an office. They feel like they should get a consultant, which is really good, because a lot of the older guys just say, "Well, I can do this. I'm a doctor. I know what I'm doing."
Also, I have a lot of people who've been at it for 20, 30, 40 years and their margins are just decreasing. Every year there's more stress. Their staff are all fighting with each other. They don't understand a lot of things that are going on in their practice. They might have some toxic personalities in their practice, which a lot of times I'll find one or two. I can do things just by firing people and by correcting staff.
Like I want to show you this graph. This is a correction graph. Over here, you can see the numbers going up. That actually happened. We cut a staff member. That was one of the reasons what caused that. It's really amazing what some of these toxic people will do in the office. So, that's why I do a-
Howard: Okay, but toxic is a term. Explain what a toxic person is and right now, all these kids are driving, they're commuting to work, and they think things like, "Well, she's going through a divorce" or "Her daughter is sick." What is a toxic personality, and try not to use me as an example?
Waqas Jilani: No. Definitely not. Well, situationally, we all get upset. There's things. Someone cuts you off. You get mad. You yell at them. Hey, that happens to everybody. We're all human. We have emotions.
However, a toxic person is somebody who is like systematically and constantly doing things to maintain control of the office or control of certain people, and certain things and they will not let expansion happen, and I can go in and spot them instantly. I've gone in and I've said, "Look, you need to fire this person." They said, "Well, we've had-"
Howard: What did you spot? How did you spot it instantly? What is this person doing?
Waqas Jilani: Again, I'm not tooting my own horn, but a lot of times they'll be very negative towards change because they have things the way that they want. So, if you go in and you're like, "Oh, here's consultant and he came to talk," there's subtle cues and there's nonverbal things that they do where you know okay, this person is just not on board and they're being very passive-aggressive. Like that's a lot of it too is they're being passive-aggressive and if you're not-
Howard: Explain an example of a passive-aggressive behavior you've seen in a dental office.
Waqas Jilani: Okay. I'll tell you, and I have spouses, like their husband or the wife of the doctor. You go in and you say, "Okay, we want to do this," and then they say, "Oh well, we can't get it done," and it's something very basic and simple. I've gone in and I've, like all kinds of stuff, an office manager who said, "Oh, we can't even blend it." Then they like mess up your meetings and then they don't talk, pass your messages along. I went in and said, "Look, you need to fire this person. They're toxic." That was my first impression in the office.
They said, "Well, we've had a consultant from another company. We paid him $60,000 a year for two years. They're the one who hired them." I'm like, "Okay. See you later. Fine. It's not going to work." Six months later they call me super embarrassed, "You were right." They embezzled at least 25 grand on their credit card and some other stuff they were doing and we didn't catch it. I fired them. I got the new person in and their co-pay collection rate went up by 90%. Why, because now they weren't embezzling.
Howard: I just want to add a couple of things. Another thing I see in the dysfunction is when someone starts cliquing. Like their office has got nine girls, but these three always go and none of the other six are invited in. Number two, is the biology of the brain. The moody person, when she's all up, she's great. But when she's down, it's too much scar tissue.
The best employee is every time you see them, the same person shows up. But if you ever get to the point where like, "Oh, I wonder who's showing up today, check or hide, and it's not even their fault. It's just biology, but it's just distracting.
Waqas Jilani: Yeah. It's very distracting to practices and sometimes you can't fix it. I have had to terminate clients because the husband or the wife is the manager and they're running the dentist and-
Howard: I want to switch gears completely. It seems like the dentist, even when they're going downhill, even though they'll say, "It was better 20 years ago, and it was actually even better 10 years ago, but the practice's going downhill." Their number one solution is, "I always got it advertising. I spent more advertising. I need to get more patients." It's like, "Dude."
It'd be like a drug addict saying, "This heroine has got to stop. I'm going to use twice as much tomorrow." Then a week later, "This horrible. I'm just going to leave the IEV and all-day ..." It's like dude, why are you trying to get more [noop 00:49:47]. It's like the Titanics going down and they're trying to add people on board.
Waqas Jilani: Right. Like they'll just sign up for a Medicaid. Oh, we'll just get more Medicaid people in here. No, you're losing money even faster and driving out all your good patients and getting left with these patients. They're not getting paid.
Howard: What do you think about the new patient? Is that the cure-all drug for your clients?
Waqas Jilani: What's really, Howard, is every single doctor says, "We're hiring you because we want new patients in our practice because we need to make more money." Every single time, I've told them, "I'm not even going to touch your marketing for six months because I can probably double your office without spending an extra penny on marketing. Maybe a few 100 bucks here and there but nothing spectacular." In fact, I want to show you this graph. This guy hired me right here. I cut their marketing budget by over $3,000 right here and their new patient count more than doubled.
You're thinking how is that possible? Well, because the front desk wasn't trained. When the patients were calling in, the potential new patients, they were screwing up. They weren't answering them properly. They weren't scheduling them at all. He was spending all kinds of money on useless advertising that was pointless. So, we fixed all that and it more than doubled. It went from a low of a 75 to about 140, 150 patients a month.
Howard: If I ask a doctor, I say, "Just tell me your numbers." He always says, "Well, I'm bonding my composites at 28 megapascals. I'm submitting my crowns at 28 megapascals and my implants are screwed in at 10-newton centimeters. What accounting numbers should a dentist be aware of, and what should they know off the top of their head?
Waqas Jilani: The metrics that I look at and they're very simple, there's maybe five or six, I look at your production, your gross production, everything you're charging out. I then look at your adjusted production because then your adjustments could be 30 or 40% and that can be reduced by renegotiating your insurance contracts.
Then I look at your collection. What is it you're actually putting in the bank every month. I look at your hygiene production, which is what is hygiene generating? I have some doctors, I go in and they're doing their own hygiene. It's all a big huge mess. Also, I look at something called claims lag, which is how long it takes you to get paid and it's a calculation I do but it's a feature of your accounts receivable.
I've gone in and it's taking them like 100 days to get paid or 200 days to get paid. That's ridiculous. When this other guy that I was meeting their accountant, he had over $680,000 in accounts receivable, which is ridiculous.
Howard: If you ever find like a 50-year-old single female dentist and she has like a million dollars in her account receivables, will you meet the lady?
Waqas Jilani: Yes, I will guarantee that. I will have-
Howard: I'll call her and ask her on a date.
Waqas Jilani: I'll hand all her information over to you.
Howard: So, production, you like gross production, you like adjusted production, you like collection, hygiene production claims lag, what else?
Waqas Jilani: The new patient count. Obviously, that's very important. Then I look at some other numbers. The doctors don't necessarily have to track all that, but we'll track it for them and we'll put it on ... We usually use Google documents and we can all look at the same thing. But there's certain metrics and ratios that I use. One is the collection ratio, which means of every dollar that you build out, how much did you should collect? Is there a Medicaid practice? They'll be at 30 or 40 [inaudible 00:53:30]. It's like, what are you doing?
Howard: What I don't understand is that they'll sign up for Medicaid. The first thing they'll say is my overhead's too high and the ADA says the average is 65%, two-thirds. And they'll say, "Well, my overhead is high. It's 70." Then they'll sign up for a Medicaid, which is 30% of their usual customary fee. I'm like, "Dude, you got an A in Calculus. Where did that come from? I mean, how did that just happen?"
Waqas Jilani: It's they have that-
Howard: Or then they'll sign up for a PPO. They'll say, "Well, I have 65% overhead." So, then they'll sign up for a PPO, which is 35% less. So I said, "Okay, so now you know you're doing free dentistry." Then I'll say, "Okay. If you're going to lower the fee," and that's another thing to use with the staff. You sit there and say, "Well, you know Megan, we started taking that PPO because your mom's sister is a teacher and then the school[inaudible 00:54:24] get it. So, you asked me to sign up that PPO and the fee was a third less.
Then you ask me, this hygienist, to take this one because this is what the policeman or the fireman. So, you keep ... And then every time you send in a friend, you say, "Howard, can you do me a favor? This is my roommate's nephew, the cousin who went to jail together. Can you do her root canal crown for just like half offer? Can you do her a crown just for that fee?" It's like, "Okay, okay."
If we're going to do all this stuff, what is this? We've got to lower our fees. Can we switch from composites to amalgam? They say, "No." Well, can we switch from hour long cleanings to 50 minutes cleanings? Or can we do cleanings where the hygienist works two rooms with an assistant? So, instead of a $240-hour hygienist, we have a $40-hour hygienist and an $18 assistant. And they don't want to lower any costs, but they want to lower ...
I mean it'd be like, what if United said, "We're going to beat all the Southwest Airlines fees. We're just going to lower fees low Southwest." Well, they'd be insolvent in 30 days, but so crazy.
Waqas Jilani: Because they get back to the mentality of, "I just need more patients. Somehow getting more patients is going to make me more money," and that's just not true. That's just not true.
Howard: Well, it's kind of like a fireman. I mean, at the end of the day, all he wants is another house on fire. A policeman just wants to catch a bad guy. I mean, they do. I can't think of anything that gets me more excited than when someone walks through the door without an appointment, holding their face in severe pain. And then when they get in your chair, they're like fetal position. You're just like, "Yes!" I mean, that's what you live for. So, they just want to do it. I also want to ask, which practice managers softwares do you like better than the other ones?
Waqas Jilani: Well, I mean, there is-
Howard: Do you think they're all the same or do you think some it's easier to run a business than others?
Waqas Jilani: I mean, they all have pluses and minuses. The Eaglesoft is much easier to use and implement for the staff because it's very icon-based. It's very visual. Dentrix can give you better reports. I love reports and numbers and metrics, so I get better stuff out of there. There are still a couple of others floating around. It just depends on whatever they have or whatever they have used in the past.
Howard: But if some kid listening to you saying, "I'm leaving my associate position. I'm going to start my own office from scratch. Just tell me, which one would you pick." If you had to narrow it down to one, what would you open with?
Waqas Jilani: Honestly, I would tell them to use Dentrix because you can get a lot of reports out of there and you can get a lot more stuff done.
Howard: What about dashboards? When there's all that stuff in all those softwares, but now there's a lot of companies that just make a dashboard. Do you like any of those dashboards?
Waqas Jilani: I mean, there's different ways to configure it. I don't like looking at numbers ... I mean, I do look at them on a daily basis. We do a morning huddle and we'll track all the numbers on daily basis with targets, but I look at it on a weekly or monthly basis because I'm looking at the overall growth of the practice. So, did we do better this month versus last month? You can an off day in there. So, that's kind of what I use. Then I like you said, we make it easy for them because a lot of these managers used to be receptionists 20 years ago and now they're office managers with zero training on how to be an office manager. So, we can.
Howard: Another thing that bothers me is some kid starts a de novo from scratch and he goes out on the corner and he's right by the grocery store and he opens up his office. I mean, he's closed like three days a week because he's working part-time somewhere else.
It's like dude, one person walked in with a broken tooth, it's a crown. One person with a toothache, it's a root canal and a crown. What do you think about when I'm starting my own practice, but I'm still hanging on to mom and I'm still nursing three days a week across town with a pacifier and a binky. What do you think about that?
Waqas Jilani: I've hired a lot of doctors for their second job when I was at Sears. Like we were their choice for, "I have my own practice, but I just need to work two days a week," and we'd hire all of them. I've never ever seen it work out for the dentist. Like you've got to commit.
Howard: I know! That's like I'm going to marry you. We're getting married, but I'm not going to drop my girlfriend. I'm going to keep my girlfriend just in case it doesn't work out.
Waqas Jilani: Exactly. They're like, "I'm going to work two days a week just to pay the bills," and I've never ever seen it work out, ever. I wish, I always wish it could work, but it's never-
Howard: Get married, start going there and he's kind of overworking. When I opened up my office, my hours for the first year was 7:00 to 7:00 Monday-Saturday. I was 24 years old. What else was I going to do? I mean, what else do I do? Go home to my apartment? A lot of dentists, here's another pet peeve in mind, they have a dental office that's completely dysfunctional and under managed and all that stuff and they think the solution is to open up another office.
So, they'll be in downtown Sioux Falls. They'll say, "Well, you know how I should fix up my messed up practice on the south side? I should open up one on the north, east, and west side because obviously, if I got a second practice, all the problems in my first prototype franchise would be solved." What do you think of that strategy?
Waqas Jilani: That doesn't work out either and it comes back to basic finances because if you're making 30%, say you're making 20% on one office. If you stayed in that office and you built up that revenue, that would be great. You could earn $10,000 a month, which would give you $10,000 additional take-home, which would be a 33% increase.
If you start another office, you got to go out and generate an additional 40 or $50,000 of revenue before you get a penny. So, what's easier? Adding $10,000 of revenue to your existing office or going out and adding $50,000 of revenue to a new office in a new location that now you have to commute back and forth? And you may not have a self-driving car, so that's going to be tough.
Howard: I also think there, they think it's their metric. They want to grow offices and they should want to grow earnings. This kid at [inaudible 01:00:50] wanted to come over and talk to me. I said, "I come over to my house." I said, "What are you going to do?" He goes, "I graduate next year, but I want to open up one office a year for 10 years. My goal is 10 offices at 10 years."
It's like, "Dude, your goal should be to grow earnings. You should have said, 'I want to make $1 in my first year and I want to grow earnings at 15%.' I mean, you're going units at dental offices. That's not a currency. That's not liquidity. That's wrong metric."
So, this is Dentistry Uncensored. I can't believe we've been talking for an hour, but this is Dentistry Uncensored. We're on overtime. Cut to the chase, what does it cost to hire Waqas Jilani?
Waqas Jilani: Well, it depends on the office. It depends on the layout. Sometimes we'll do a percentage deal. But typically, the clients will pay anywhere from 30 to 60,000 for the year. It may take more than a year. Typically, it will take a year, a year and a half, but most of my clients will make that money back within the first three to six months. So. I've-
Howard: So, you're $30 to $60,000 a year.
Waqas Jilani: Yeah.
Howard: Is that a lump sum? Is that your $30 to $60,000 a year. Is that a lump sum? Is that monthly? Is that a contract? Is that we just date each month?
Waqas Jilani: It is a contract. We do have a deal through finance companies where they can pay them, and then we'll get them approved for financing. Then they pay monthly to them and then we get paid.
Howard: Who do you finance that through?
Waqas Jilani: There is ... Shoot. What is their name? I'm trying to think of their name right now, but I'll put that on my website.
Howard: So, it's 30 to 60,000 for a year?
Waqas Jilani: Correct.
Howard: But you said most of your clients take 18 months, so a year and a half?
Waqas Jilani: Yeah, and I've had clients for eight years. Like my first client is still with me, but we're kind of doing more strategic things and-
Howard: And here's why I get so mad at my doctors. They'll say, "$60,000! Hell no!" And the next thing, "What did you do last weekend?" "Oh, I went bought a $90,000 Biolase." Oh, I bought $140,000 CAD/CAM." Oh, I bought $100,000 CBCT." "Oh, I'm signed up to go to Dominican Republic with a [inaudible 01:03:09] by a bunch ..." It's like, "Dude, why is it ..."
Waqas Jilani: For $100,000.
Howard: The same thing with student loan debt. $350,000 student loan debt, that's the end of the world. Then 4.5 hours after they graduate, they go buy a $400,000 house and that's awesome. So, with $400,000 on a house, oh you're so lucky you have access other people's money. But $350,000 to become a doctor of dental surgery in the richest country in the world, now they're a victim, they're playing the violin. Just it's the humans and when it comes to money, it's so emotional. So, what's the percent chance if someone gave you $30 to $60,000 that in the first year, their increased earnings would pay back at $30 to $60,000?
Waqas Jilani: Pretty much everybody I've worked with for a year or more has done it within three to six months. I've never-
Howard: And how much of them have reduced stress since finance is such a huge part of personal and interpersonal stress with your spouse?
Waqas Jilani: The stress level goes down immensely, immensely. I've had people start taking family vacations.
Howard: Why do you think the dentist can't do the painful stuff, talk to the staff, show them the numbers, this and that? Why do you walk in there and do it effortlessly? Is it because you're a sociopath and you don't have feelings? Why or do you think you're ...
I mean, dentists will always get on Dentaltown and they'll be bitching about one their staff members. I always see this as misdirected communication, like why are you posting on Dentaltown? You should be walking over to your assistant right now and having a conversation. But you know when they're posting on Dentaltown, they're not talking to their sister.
That's what's wrong with gossip. The problem with gossip is simply the fact that you're going to tell me and you're going to feel better, but you didn't solve the problem. You should have used all that energy to go tell your sister and then you'd feel better and you guys would communicate. It's just misdirected. Why do you think can go in there and have these uncomfortable conversations with staff, overhead suppliers, everything and they can't?
Waqas Jilani: Well, the doctors are, again, they're trying to take people out of pain, they're trying to make lives easier. And then it takes a lot to have to fight with your staff, to have to do all these things. They just want to do it and they don't have the skills, like some of them do, but they don't have the training to do it. Then they look to their $15 an hour of front desk/now an office manager and that's just not true.
I manage 150. I've fired dentists. Like I've fired dentists all the way down to the receptionist. So, for me, I can go in there and do whatever it needs to happen. I told 22 doctors in a staff meeting one time that if they didn't stop talking to patients about money, that we're going to it out of their paychecks, and they all stopped. I made them sign a form that says, "I'm going to stop doing that."
So, I can go in and do that, plus I have degrees, I have training, and this is all that I do. If I had to look at a x-ray and try to do a root canal, it just never would happen. I'd kill the patient. But if I need to go fix an office, boom. I can do that in five seconds.
Howard: Okay. This is the last question and I'm asking at the end so that if you don't like the question, Ryan, could edit this out and clean it up. Why do you have such an interest in anti-bullying, physical abuse, verbal abuse, getting rid of ... that you've had to fire clients because their spouse was a bully. You've fired ... Why does this interest you so much?
Waqas Jilani: Well, I've suffered it myself and I think-
Howard: That's what I was going for. You have a crazy father?
Waqas Jilani: No. Not there but-
Howard: Was it school or?
Waqas Jilani: No. Well, I was in a very abusive relationship and I learned a lot of things about myself and about how those things happen. Luckily, now I'm out and I'm very, very good at spotting those types of people and a lot of people aren't. It's a very, very technical. It's a very specific topic and most people can't spot these people because they're very good at hiding in plain sight. So, I can go-
Howard: Hiding what in plain sight?
Waqas Jilani: They're hiding the fact that they're passive-aggressive and that their ultimate goal is whatever benefits them instead of the practice. I've had huge fights with spouses or other people of clients because they're really restricting their practice and a lot of people don't realize that that is going on. So, I think that I have actually a very unique perspective that most people haven't had.
So, that's why I've lectured about it like Wayne State University's School of Social Work. I've lectured at other places and I work with other local and national organizations speaking in general about it. But also specifically with my clients, I'm able to bring a perspective that can identify certain key toxic people and get them out of the office.