Dentistry Uncensored with Howard Farran
Dentistry Uncensored with Howard Farran
How to perform dentistry faster, easier, higher in quality and lower in cost.
Blog By:
howard
howard

1021 A Model for Success with Brady Frank, DDS : Dentistry Uncensored with Howard Farran

1021 A Model for Success with Brady Frank, DDS : Dentistry Uncensored with Howard Farran

5/17/2018 9:45:23 AM   |   Comments: 3   |   Views: 524

1021 A Model for Success with Brady Frank, DDS : Dentistry Uncensored with Howard Farran

Dr. Frank is an international clinical and business lecturer, inventor, and founder of multiple companies in the dental space.  He has owned multiple private dentist-owned groups (DDSOs) since 2001 when he graduated from Marquette Dental School.  He is a founding member of the DDSO Alliance.




VIDEO - DUwHF #1021 - Brady Frank




AUDIO - DUwHF #1021 - Brady Frank



Listen on iTunes

1021 A Model for Success with Brady Frank, DDS : Dentistry Uncensored with Howard Farran

Howard: It’s just a huge, huge honor for me today to be bringing back Dr. Brady Frank. He was on episode 315, and I hardly ever bring anyone back because if I did it would take me three years to bring the last one thousand people back, but you just busted a big move and I wanted to get you back on the show. Dr. Frank is an international clinical and business lecturer, inventor and founder of multiple companies in the dental space. He has owned multiple private dentist owned groups, DDSO’s since 2001 when he graduated from Marquette Dental School, which is also the school that Rick Kirschner went to, right?


Brady: That’s right.


Howard: And he donated what, a million dollars to Marquette?


Brady: I think it was, I think it was. Not too long ago, but yes.


Howard: I can’t believe he donated to Marquette Dental School a million dollars and didn't give me one. I mean, shouldn’t he just split that between me and you; give us each a half million?


Brady: Maybe you should elbow him, I know you’re buddies.


Howard: And now you’re the founding member of the DDSO Alliance. Talk about your new move, you’re always such an entrepreneur, you’re so exciting, what is your new DDSO Alliance and the website is ddsoblueprint.com, the DDS, that’s you, and O means Owned. So, DDS Owned Blueprint for basically starting your own DSO, correct, am I right?


Brady: No, you’re absolutely right. I think the buzzword has been DSO’s, right, for awhile. DSO this, DSO that, the DSO’s are taking over. You’ve got to be more like a DSO, and so a DDSO is simply a dentist owned DSO, so taking all the good things that the DSO’s have done, so I am not anti-DSO, they’ve done great. They’ve crushed it. What a DDSO does is brings all the goodies, all the business guts that the DSO’s have, and brings it over to their group. Taking the best strategies that the DSO’s have, and really using those for your dentist owned group. Whether a dentist owned group, I classify as either multiple doctors in one location, or multiple locations. All of those I consider DDSOs, and so yes, this organization is all about really taking the best stuff from the DSO’s, bringing it over into private dental practices, and taking advantage of the new tax laws that are there, and taking advantages of really allowing dentists to own. 


I really, really think that over time, some dentists want to be an associate, that’s great, but some dentists want to be owners, and I think there's a place for both associates and owners in these groups, not just associates. So, I really talk about co-ownership models, and where you can have thriving associates, thriving co-owners, so that’s what the DDSO Alliance is; a bunch of groups around the US getting together to share their secrets, to share the secrets of the top one percent. 


Howard: When I got out of school thirty years ago, what percent of dental offices had more than one dentist in it, and what do you think it is today, and what do you think it’ll be in ten, twenty years?


Brady: Right now, I would say we have five hundred percent more offices with more than one doctor than when you got out of school. I don’t know the exact statistic, but I do quote it actually in this book I wrote recently, and it goes over some of those numbers with some ADA stats. But, I will say that I think the propensity to multiple doctors has been due to a variety of factors, but certainly because of the reduction in overhead which allows dentists, private dentists to actually compete with some of these more well-funded groups.


The solo-doc overhead right now, per the ADA is sixty-nine percent to seventy percent, right? And every doctor that goes into practice, it goes incrementally down; a two doctor practice has less overhead than a one doctor practice. A three doctor practice has less overhead that that. Someone, a guy named Dr. Joe in Florida has two twenty-operatory practices in Florida and he said, “Brady, I map it out.” This guy is a magician with numbers, I mapped it out. As I built these twenty operatory locations, every doctor that gets added, the overhead goes down by a percentage, creating a higher EBITDA, and of course as you know, all the DSO’s revolve around the EBITDA number; the higher the EBITDA, the more the group is worth and they can sell for twelve or fourteen X. So, that’s why right now a lot of the DSO’s are really focused on adding multiple doctors per location because of that percentage overhead.


Howard: And what do you think is that today in 2018; what do you think, what percent of the market do you think is DSO’s?


Brady: Oh goodness, I would have to say...I won’t quote the number because I’d probably be attacked if I was off, but it’s a lot. It’s increasing every year, and so my goal is to really get the information that the DSO’s are using, because I used to sit around the table with a lot of the heads of the DSO’s and really apply those strategies to the guy who has two locations, to the guy who has four locations or ten locations so that he can really act like and manage his practice like a practice that has fifty or a hundred locations.


Howard: You know, you quote Tony Robbins, “If you want to achieve success, all you need to do is find a way to model those who have already succeeded,” which is so true and I tell these young dentists, some of them have bad attitudes because they’re working in this large DSO and they want their own place. And then when they get their own place they’re going to realize that ninety-nine percent of dentists, their biggest problem is running their business, not doing a filling or a crown or a root canal. And I’ll say, “Dude, you worked at Heartland for two years, and Rick Workman and Pat Bower are managing eight hundred offices. Tell me everything you learned from a dentist named Rick Workman about how to manage eight hundred offices, because now you’re into a struggle with your own damn office.” I tell these kids, while you’re working there, if you really want to have your own practice, at least learn from the people who can run eight hundred practices. I mean, Steve Thorn can run five hundred Pacific Dentals, and you’re just sitting in there pouting because you want your own place? Gosh, there’s so much they could learn from that. 


Brady: Yeah, I think you’re right, and one of the resources that I put together recently, and it took a long time to put together, but basically you know, over time, I’ve been teaching on the multi-doctor, multi-location concept for about fifteen years, and so I’ve gotten to meet a lot of the owners of a lot of the private groups in the US. Now, the problem is; a lot of the folks listening today that don’t own a practice yet, they’re dental students, or they’re just out of school, or they’re an associate for a DSO, they can’t get in contact with these guys, so I created something called DDSO Direct, and this is a no middleman resource, ddsodirect.com, a no middleman resource for young dentists to get in touch with the top one percent private practitioners, not the DSO owners, but the DDSO owners, those guys that have two locations, five locations, ten locations, that are crushing it, and you go onto there, you’ll see the guys’ picture, you click on it, you answer a few questions and that shoots right to that guys’ inbox, that dentists’ inbox, so that you can have a mentor if you’re someone who's just gotten out of school. So, pretty neat and it’s the first kind of resource, and that launch is actually next week Howard, which means by the time people listen to this podcast, they can probably go online and check it out.


Howard: As soon as they’re online, e-mail Ryan and we’ll put it out the next show, because our queue is about a month long, but as soon as it’s live. Tell me what your thoughts are of this, my observation; that is, one-layer management versus two. When I go into a town, let’s say it’s just any Sioux Falls, South Dakota, whatever, and there’s a dentist there and he’s on the south side, and he decides to go set up one on the north, east and west. He wants to go from one to four, well that affords a layer of management where you can have someone, a professional HR, legal, marketing, accounting, payables, receivables, and those offices to me are just crushing it. Because they get a layer of professional management versus the solo doctor who’s got to wear every single hat. Those ones that are doing it, wearing every single hat, I see patterns of success where say their spouse is massively involved, like she’s the dentist and her husband says, “Well, I used to make sixty grand a year at this company, but if I can build this dental office in that two, three, four hundred a year, now he’s making three times as much. But, if they don’t have a significant other, if they don’t have the office manager that can take a lot of those hats off, they’re overwhelmed with too many hats. But, that first layer, my gosh, that’s a competitive advantage. 


What I don’t see is when there’s a second layer; so now you’ve got a headquarters who’s overseeing groups in ten different states, and they’re taking fourteen percent off the top; I don’t see the efficiencies they’re giving to justify that fourteen percent on top. That second layer of management to me, and I think that second layer of management is why they’re not profitable enough to do an IPO on the Nasdaq, why they just keep venturing from private equity smaller, to a larger private equity, it’s kind of like a hot potato, they’re just running around, musical chairs, no one wants to own the potato, whereas when you go public, the stockholders want to own the potato. I think that having a single layer of management at the local level is the sweet spot. Do you agree with that rant or disagree?

Brady: You know, our rant is on the same page. Right here Howard is that single layer of management diagramed out. You said Sioux Falls, let’s say they have two locations, one, two, three, right? Then they have a central entity, just a simple LLC that has administrative services agreement with each of them, right? Now HR is at this level, bookkeeping is at this level, marketing is at this level, one layer of management. And you don’t have multiple layers, right? So you get that pure overhead savings, and you get that pure, basically economy of scale. So you’re right, now here’s the neat thing with DDSO’s, at this location could have a different ownership structure than this one, which could have a different ownership structure than this one. This one might have a couple fifty-fifty owners in it. He might have added an owner. This one might have two young docs because it’s more mature practice and the founder owns a third. This one right here, he might have just bought for a really killer deal in North Sioux Falls, and he wants to grow that up before he adds equity players to it. But all of them are managed by this, and the neat thing is; the more revenue we run through this DDSO entity now, because of the new tax law changes, we get a twenty percent tax deduction. Not only does it make it a more efficient management structure, but we saved twenty percent. They used to make fun of Bit Romney for being in a fifteen percent tax bracket, now us dentists can, when we equity harvest or add partners, be at the lowest tax bracket, long-term capital gains, and get the twenty percent tax deduction through that. 


So you’re absolutely right Howard, I agree with that, but the fun part about this is is this right here; when you’ve got friends who have done this, and what happens is, these DSO’s, they start to form these other vertical organizations. Your buddy that you were talking about earlier, I won’t mention him, but he formed a lab. He formed all different components right here on the vertical organizations, so the natural evolution of that small group in Sioux Falls is that as they develop that management structure internally, that one layer like you talked about Howard, now they add a lab, they add their own patient financing company, they add a dental savings plan that’s branded to their practice. They add a software company, and now when they want to go from Sioux Falls to Fargo, instead of adding another layer of management and doing another region, now they can take all those goodies that they developed in region one, and they can do a very simple licensing arrangement or cash flow arrangement without two layers. They open up and they clone a new region, and so those are some of the strategies I think, like you had mentioned Howard, that are going to pull private practice dentistry into a new realm. ANd say to say Howard, I love DSO’s, Aspen, Heartland, they’re great, but here's the deal; a lot of those organizations are funded by public money or large institutional money and that money follows the EBITDA and when enough dentists become owners in practices over time, not that they have to, because there’s many dentists that should be associates, but when that happens and the EBITDA goes down just a little bit in the DSO’s, that big money is going to pull out, and the DDSO’s are going to be the ones that can go in and buy practices at pennies on the dollar. Just did one last week, a three doctor practice, basically fifty bucks a record after they paid two hundred dollars for an exam, cleaning and x-rays. So right now we’re seeing it, where DDSO’s are taking over some of the extreme growth rate that the DSO’s have had using strategies that have been morphed from the DSO environment to the DDSO environment. 


Howard: A question I got the other day through e-mail--by the way, if you have questions, send me an e-mail, howard@dentaltown.com, and don’t forget to subscribe on the YouTube channel so you can see how handsome Brady Frank is. You don’t want to be listening to him on iTunes, he is a handsome devil. But, I got a really great questions; what would be the difference between what you’re doing, versus a franchise? How come you never use the term, “Franchise?” What is the difference between a licensing agreement and a franchise?


Brady: Yeah, that’s a great question. So, a franchise rolls up the residual income to the franchisor, right? The franchisor is the big boy, and the franchisee, he pays the money to papa, which is fine. So it’s that franchisor that adds the value. In this model, it ends up being a situation where all the dentists that become owners in the group get to in essence share in that residual or passive income that occurs through the centralized management company. But, instead of it being more of a passive thing, the dentists actually take part in the management and the growth. Some of these millennial dentists, they get the tech stuff, they get social media, they get all that stuff which is imperative to growth, and the founders of the groups might be a sixty year old guy, a fifty five year old guy, seventy two year old guy, unfortunately they don’t get the tech stuff oftentimes, like others do. By incorporating a multi-owned structure at the DDSO level, not just the founder guy, which it oftentimes is with a franchise model, you’re able to get a lot of dentists working on behalf of the group, and I’ve found the group can have a much higher growth rate when it’s not just the franchisor trying to grow it, but you’ve got a lot of dentists who owned parts of different practices or are partners in different practices that are helping expand that group.


Howard: So, hold up your book. You came out with a new book? 


Brady: Yes! Yes, yes, yes; Transition Time, it’s kind of on one’s transition to freedom, basically converting their assets into cash and cash flow. ANd so, Howard, you and I have chatted in the past, I’ve been investing in real estate since 2001, bought a bunch of houses outside Phoenix, sold those, most unfortunately at the height of the market, put it into commercial real estate, now I’m into--you know how Amazon Prime has caused the buying habits of America to change, isn’t that right? People aren’t going to the strip malls to buy their jeans anymore, so what I’ve been doing is buying strip malls that are defunct or have a partial vacancy rate. I don't’ know if you’ve seen all these for lease signs, but commercial real estate is dirt cheap when it’s partially vacant, and I’m converting them to medical dental. So, the last building I did was a nine thousand square footer that used to have Blockbuster in it, right? Did Blockbuster go away with this tech move? Absolutely, got replaced by Netflix, so I’m going in buying a strip center for less than thirty dollars a square foot, converting it to medical dental. This one I put a dental office in, a chiropractic office, and a blood lab; it happened to be next to the hospital, next to an Applebees, a Burger King and I’ll tell you what, by taking a retail building that is partially vacant, converting it to medical dental usually can increase the building value by two hundred percent, three hundred percent, four hundred. So this book goes over all of these different verticals to build around your dental practice or group. It goes over the commercial real estate vertical, it goes over building your own lab, the three ways to build your own lab, some ways to build your own dental savings plan in your practice and brand it to your practice. 


So a bunch of those, but it also goes over the dentist-owned model and the hybrid. The hybrid model is where you might have three associates and two owners. Over time, a lot of dentists feel like they want to harvest equity from their practice, not be just sitting on a bunch of associates which is fine, but harvest equity. This book goes over how to break up your practice into a bunch of parts, allow dentists to be owners in that, and those dentists may or may not have an equity piece on the management company in the middle, they might just own a third of this location, or a larger practice, I work with a lot of twenty-op practices, larger ones, you might break the practice into five, twenty percent chunks. You sell four twenty percent chunks and you hold onto the managing piece and still have control of that practice. 


So, that’s what the book is all about; all the creative ownership and expansion strategies for DDSO’s. It’s called Transition Time, which is basically your transition to freedom; converting your working income into more passive residual cash flow on a monthly basis.


Howard: Where can they buy it?


Brady: If you want, anyone that’s watching the podcast right now that went through the pain and agony of listening to me and you, Howard, even though I think they could listen to you all day, this is where they can get it. It’s just text: freebook to 31996. Text the word, all one word: freebook to 31996. All you have to pay is the shipping and handling, which is less than ten bucks. We’ll then get you a book, and some other resources if you like, read the book, and if you want to come to one of the meetings, we got a bunch of meetings, and hopefully folks will listen to this podcast before June 22/23rd, if you are, Howard is speaking at our DDSO Alliance Meeting right in your backyard Howard, so it’s great to have you. We just talked about that before the podcast, so that will be killer. 


Howard: I can’t wait! So, they text freebook to 31996, and then you text them back?


Brady: No, what it is is just like everything today it’s automated, so it says, “Glad you’re looking for the book, email back the address that you want it sent to.” And we will actually send that book to you. It just goes through it, it gets your name, your address, and boom, goes to our fulfillment people and we get you this book. 


Howard: You’ve studied so many DSO’s, how many DSO’s have you worked with in your life?


Brady: I would say probably about two hundred and sixty two location to one hundred and fifty location groups.


Howard: Two hundred and sixty two location to how many location?


Brady: To a hundred and fifty location groups.


Howard: Wow. That’s why I’m so glad to get you on the show because what have you learned from that, that somebody listening to you right now that just owns his own practice in Parsons, Kansas, what are the DSO’s doing, what are the takeaways from the DSO in HR and marketing and legal and all that stuff that they could apply to their own solo practice?


Brady: Here’s the things I’ve learned in working with the DDSOs over time; working with the ones that are owned by non-dentist equity, these institutional investors, what I’ve found is they buy-here’s an important point--they buy retail, they buy their practices retail, meaning they’re going to pay for a four million dollar practice about eight million bucks for that practice, right? DDSO’s, dentist owned groups, they get smart; their practices like in Sioux Falls I was talking about ,they’re going to buy their practices wholesale. The first five practices that I bought, the first one I bought for eight thousand, bought one for twenty thousand, bought one for a hundred and three thousand, bought one for a hundred and sixty-five thousand, I mean, I am buying practices. The last one last week was free, right? I am buying practices dirt cheap. The dentist, the DDSO, he seeks to buy here, so find value and create value. That’s where the equity increase comes from, finding value and creating value, and then that dentist with what he reaps from equity sales and so on and so forth, he forms his own private equity company. Why get money from private equity company, which is a trend today, when you can buy wholesale, allow owners to increase with you, and then go ahead, I’m not against DSO’s; sell retail to them. Make the big return on them. 


What I have learned is that private groups are nimble and they’re buying really inexpensively and they’re buying practices that are on the regression phase, so they’re not buying a practice in it’s peak; they’re buying a practice where that retirement aged doc is going from four days a week to two days a week, and he wants to get out of that deal and the dentist knows, “Well, if we go in there we could go like this. I’ve got Bill and Jimmy who just graduated, I’ll mentor them. These guys are doing mentorship programs, teaching them the ropes, allowing them to grow, and now the dentists are doing really well on the equity side, so that’s one of the big differences that I’ve found is, in working with dentist owned groups is they’re buying what I call ESP’s; Entrepreneurial Satellite Practices, and finding them. 


So, I bought a seminar company in 2006 called Phasing Out Seminars, and I did thirty-six seminars to retirement aged dentists, three years in a row, thirty-six seminars, did four hundred and eighty-five transitions, and I’m starting that company again Howard in three months just to find deals for all these DDSO’s around the nation I work with . I can do a seminar, and then boom! We’ve got all the buyers there, because I right now have about fifty groups in the DDSO alliance, and then they go in and gobble up and take over these practices and do what we want to do in dentistry; increase them. 


Anyway, that’s the biggest difference we’re doing, DSOs and DDSOs, as far as DSOs, what do they do right? I really think they manage capitol correctly. I really think they manage capitol correctly. Right now we have a gentleman named Ryan who is the chief investment officer for a group of families in the US. Every family has greater than about a ten million dollar net worth, and he is funding our DDSO’s right now, a total of eighty-two million dollars he has access to, and so these DDSO’s are still not using their own money; they’re using other money, not from the private equity companies but using private money to acquire the practices, grow the practices, and then allow equity ownership. I think they manage capitol better than us, and so I’m trying to change that, I’m trying to help dentists form their own private equity company, help dentists form their own real estate portfolios, have dentists form their own companies in dentistry, and as many of you know, I’ve done that in physical product companies in dentistry and educational companies. So really, it’s about having entrepreneurship go back to dentistry.


Howard, when you got out, and you started your own practice or bought your own practice, we were entrepreneurs decades ago, we had to be entrepreneurs to start our practice. It’s gone the other way; they’re saying, “Take the 401K package, take your loan repayment package, let the business go to us,” we have to become entrepreneurs again in dentistry or we’re going to lose it to institutional money.


Howard: Yeah, and I want the dentist to own the dental offices at some level. Once every MD physician and dentist works for a publicly traded company, where are my grandchildren going to go when they need a doctor?


Brady: Yes, yes, for sure.


Howard: I want my little Megan to go to a dental office and have her treated like I would want her to be treated. I live in Arizona, one of the few states where you don’t have to be a dentist to own a dental office, and I think that’s a dangerous trend. 


Brady: I think so too, and not that there’s anything wrong with that, but really what I would like to do is help with other leaders, like yourself, leading dentistry back to not just it’s clinical roots but it’s business roots and get dentists back understanding all the principles that the DSO’s already understand, but even take it to a better level, finding and adding value through practice ownership, and doing it with multiple locations. Just like you said Howard, hey, one level of management can do incredible things, and that private dentist can do great things, even in Sioux Falls; one leg up that our dentists have is DSO’s don’t go into rural markets really. A dentist-owned practice, they can flourish in the rural market, so that’s one advantage. If you're a rural right now, if you're thinking of going rural, if you don’t own a practice yet, if you go rural, you’re eliminating a lot of competition. The DSO’s have to stay in bigger markets to employ associates. So, if you’re thinking, “I can’t go big in a rural area, I have to stay away from the rural areas,” that’s hogwash! Go to a rural area where the DSO’s can’t create this system of replacing associates and you can do really well in rural nowadays.


Howard: Every time a dentist opens up and they’re two hours away from an airport that Southwest Airlines will take off of, two hours away from one of those regional airports, they’re crushing it! I mean, they’re just crushing it! And once you can see the airplanes taking off from the airport out your dental window, it’s just massively competitive, I mean it’s just one of the biggest variables. Why do you think kids won’t go rural?


Brady: Well, I think kids don’t go rural--like I used to think, I used to think the money is in the big cities, there’s a lot of marketing dollars to be spent there. Like, no, that’s why one of the chapters, the module eleven, there’s fourteen modules, they’re coming online to a mastership class I’m putting on, but investing in the rural practice right here, I didn’t realize it until probably ten years out of school that it’s these rural guys that can crush it quickly and then they can go ahead and build other locations in other rural communities and just like you said Howard, have that one level of management. This might be a rural community thirty miles away, fifty miles away, ten miles away, with centralized management, those are the guys that are crushing it right now. One guy in South Dakota is doing that and just going nuts, because you go into a community and your advertising budget is nil compared to going into Phoenix and Seattle, and so that’s why I actually have a whole module on that. If you're a young guy wanting to do that, I mean, read that module right there. I do go over all these modules in quick form on Dentaltown CE, I am submitting that to Howard, so this whole book, if you get it, watch the Dentaltown CE with the book. If you get this free book, do not go through the book without going to Dentaltown and watching every module on them, walking through the whole book and that will help some of these concepts come to life.


Howard: Ryan, can you push that out on social media about that text; freebook? Just take a picture of me and him doing the podcast?


Brady: Make sure Ryan that you say, “Check out Dentaltown CE because it walks through the book and the modules too.”


Howard: Another thing about that rural, I think all these young millenials they’re afraid that there’s nothing to do in the rural, but you're raising three boys right now, I raised four boys, I mean my gosh, in the rural they go out in and shoot a 410 and a 12-gauge and ride a minibike and a motorcycle and you don’t worry where they’re at, they can walk down dirt roads, I mean it’s just--and, everybody in the rural just doesn't mind the fact that it’s an hour drive into town, big deal, it’s an hour. You can listen to a podcast, you can listen to music, you can have the whole family in the F250 truck, it’s no big deal. And, I’m in ground zero for driverless cars; I’m in Phoenix, Arizona where Google is rolling out their driverless cars. It’s not even going to be five years where that hour to town you won’t even be driving; you’ll be sitting in a box at a desk on your computer or laying on a couch watching a movie, and you’re just going to go get in your car and tell your iPhone where you want to go and then watch your movie, do your internet, social media, whatever you’d be doing at home you’ll be doing in a box.


Brady: I totally, totally agree. For you guys that are listening right now that are in a big city and you’re like, “Man, I’m missing the boat.” Remember, a lot of the strategies nowadays that have to do with DDSO’s involve, maybe your practice is in the heart of Houston, right, and you’re like, “Man, I’ve noticed that, I’m marketing like crazy and getting the results, half the results I used to five years ago.” I really strongly encourage you guys that have a practice; form a mentorship program. I’ve created a framework for a mentorship program where young docs to get in with these docs, and these docs will actually fund, co-fund with the young guy a new location that can be rural, and the two of them do it together. It’s an investment for the co-founder, and the young guy works it full-time, so it’s really an investment practice, the guy who’s been there, done that, has all the experience, has a big financial safety net. Mentorship programs have been huge Howard as a secondary growth plan for the DDSO’s I work with. The DDSO’s I work with usually have like two, three, four practices, but then outside that bubble, they actually create a mentorship program and they’ll invest in practices within a three state area of their group. They go fifty-fifty in on it, the young guy gets the first hundred and fifty grand, then they split profits after that. Really simple; the mentors are, “Hey, let’s go in it together, fifty-fifty, I don’t win until you win. You get the first hundred and fifty grand, we split profits after that,” and then usually at about thirty-six months the young guy can buy out the mentor dentists for a discount, and boom! That’s I think how to do it right getting into private practice the first time if you’re a little unsure of yourself and you want to do it with someone who’s a top one percent dude and cut ten years off your learning curve. 


Howard: When you’re dealing with two hundred and sixty DSO’s that are anywhere from DOSO’s?


Brady: Yeah, so DDS, think of DDS like dentist, DDSO like dentist. Yeah, there we go Ryan, he's got it.


Howard: So Dentist DSO. When you’re dealing with these two locations to a hundred and fifty locations, what technologies are they using that you’re excited about, that you’re passionate about?


Brady: Yeah, let me go over that. I didn’t think we’d have time to go over this, but have you heard of the word “funnel?” You’ve heard it recently right? Funnel has become a word in the last two years, right? One of the chapters in my book is all about funnels. Let me just go over what a funnel is. A funnel, let me pull it up right here. A funnel is actually like websites 2.0, so funnels are multiple page websites with two or three softwares, with email automation. So, in the DDSO’s that I help build and grow and work with, I’ve got what’s called a sixteen funnel system, so I’ve actually got sixteen funnels. Some of them are for new patient flow, some of them are for automating processes. We talked about this before the podcast Howard, we’re in the age today where we talked about a gentleman who’s going around speaking instead of getting on tech platforms and he could be getting on tech platforms and multiplying his time, right? One thing he does in his living room could be as effective as him travelling around the country to six different places. So funnels are what do that; a funnel allows us to automate our group, so Heartland Dental, they have a ton of recruiters, like real people that are recruiters, there’s actually a recruiting funnel now that will drive leads into the top, have a video of the founding dentist saying, “Hey, so glad you’re here, would love for you to be a part of our group, apply now right below.” Using technology, and so one of the funnels is actually a recruiting funnel and that’s DDSO Direct., it helps young docs come right to these dentist-owned groups, recruit forum. There’s a funnel if you go to ddsofunnels.com, I created this for folks to use with the Dentaltown CE, and they can go on there and learn about every single funnel that there is out there for dentistry. 


Some of you have heard of Russell Bronson, he’s kind of a funnel master dude and has created dozens, actually hundreds of businesses around funnels and so I really believe we’re behind the times with these automated, really the websites 3.0. Again, sixteen funnels that I recommend and that can be cloned to help automate your group, so instead of having a big gaggle of staff at your DDSO level, the funnels replace more than seventy percent of the staff needed in expanding DSO. I’m going to say that one more time because it’s been so profound for me; funnels, automated systems, just like you and I talked about Howard, replace seventy percent of the management staff that you would normally need as a DDSO or DSO that is expanding. So once one understands funnels, we are basically replicating. Same thing with driving a car, Howard. They’re now driving themselves, instead of having recruiters on the phone and all that, it’s digitized because here’s the deal; new dentists are millennials and what do millennials do a good job at? Using technology! Funnels are the highest form of technology which is why there’s such a powerful part of expanding media DSO’s.


Howard: On these DSO’s you work with from two to a hundred and fifty locations, what do you think is the best practice management software to run this?


Brady: Wow. I recommend a number of them, they’re all cloud based, they’re all cloud based. I’m just going to give a list so I don’t upset different software companies, because I speak at different events that have certain softwares, but I will say, not in a given order, because I don’t want to do that, I will say Open Dental; fabulous. Denticon; very good. Cloud-based Dentrix; very good, without the high-ticket price of buying the Dentrix software. They might not be pleased that I said that, but their cloud-based is very good and you just pay a monthly subscription fee. The cool thing with cloud-based is just like you said Howard, that one level of management, if you’re managing three practices with one centralized entity that does HR and everything, you’ve got to have a cloud-based software so that this regional manager can see into each practice, they can conglomerate analytics and data, and do that. Now, here’s the other cool thing Howard, a couple of companies will white-label and will take the practice management component, and will meld it in with Quickbooks to create incredible--


Howard: Who will do that? 


Brady: Dental Intel and Sika Practice Optimizer. What they’ll do is they’ll pull off of your dental practice management software, and they’ll pull out of Quickbooks and so you get reports like you’ve never had in any practice management and what the importance of that is for the owners is it’ll show the overhead ratios as it relates to the analytics. So, the dollars spent per new patient, which you normally don’t get because it doesn't flow with Quickbooks. It’ll say how many new patients, or production per new patient, but the number that counts is the dollar amount spent to acquire a new patient.


Howard: But you're in Oregon, you’re in Medford, Oregon right now right?


Brady: Yes, sir.


Howard: And you travel straight up interstate five from the southern border, you’re almost at California, right?


Brady: That’s correct.


Howard: And you drive straight up to Salem, that’s where Open Dental is.


Brady: That’s correct. 


Howard: Have you gone up there and talked to Nathan Sparks and his brother, who’s the dentist, Jordan Sparks?


Brady: You know, I haven’t but I should because I recommend them all the time.


Howard: So do I. I was on [inaudible - 00:40:20] which when I got out of school thirty years ago it was owned by Kodak, it was the bomb. That was before there even was a Dentrix, Dentrix didn’t come out until Windows 95 came out. But, anyway, he is the most--the owner is a dentist, Jordan Sparks, he is the most open-minded owner available, accessible. I flew up to [inaudible - 00:40:48] several times to talk to Dentrix and it was like talking to a wall. I flew to Effingham to talk to Eagle Soft, and these people who’ve never been in a dental office except as a patient were telling me, “I don’t know, I don’t know, I don’t understand.” I begged Stan Bergman who owns- Henry, the CEO, Henry Schein to please--so anyway, no one will listen. Nathan Sparks of Open Dental says, “I hear you, that’s obvious, that makes sense,” and his software is open. You can actually program the links to that, but I think you and I should go sit down with Nathan, you and I should go up there and we should meet and I wonder, is Salem, would that have non-stop flights to Phoenix? 


Brady: It’s a thirty-eight minute Uber ride from PDX to Salem.


Howard: What’s PDX?


Brady: The Portland Airport.


Howard: Okay, so I fly into Portland.


Brady: It’s a thirty-eight minute Uber ride from the airport.

Howard: Is Salem south of Portland?


Brady: It is, yes, it’s south. It’s the capital of the south.


Howard: Okay, I see it. Yeah, I want to do that. You tell me the time and day, I will fly for things because, I shouldn’t repeat myself but when I was ten years old my dad had Sonic Drive-Ins. And the cash register was owned by, remember NCR; National Cash Register?


Brady: Yes, yes.


Howard: And he had a hundred times more data to run his business and I was ten years old than any dentist does today. And these dentists always think they’re a bad businessman and I don’t, and I tell them, “You’re not a bad businessman, you got A’s in chemistry and physics and algebra, you don’t have a franchisee. You don’t have a franchisor. Your franchisor is a non-profit American Dental Association.” When your mothership is a non-profit, you know your host. I tell kids when they sit there and they say, “Should I go to dental school, I’m going to graduate four hundred thousand dollars in student loans,” and I’m like, “Dude, the average Chick Fil A is doing four million dollars a year.” If you bought a Chick Fil A franchise you would be pretty much guaranteed to do four million. I tell them, if you’re just looking for return on investment, and by the way, that’s something that you and I saw flip in our lifetime; McDonald’s was the queen bee, and Burger King was number two and Wendy’s was number three, and now the founder of Wendy’s died, so now the daughter took it over and listened to everybody that her old man didn’t do, so she passed Burger King, but while she was passing Burger King, Chick Fil A almost doubled McDonalds. McDonalds were doing about two million a store, Chick Fil A is doing four million a year, and they’re not even open on Sunday because their management team things all their franchisees need to take Sunday off, have a family day, go to church, whatever. But those Chick Fil A franchisors, their practice management software, and now those companies are adding machine learning, artificial intelligence, so they’ll be able to tell you, “Hey, Brady, it’s Wednesday night at nine and we close at twelve. Every Wednesday from nine to twelve we only do three hundred bucks, we want an eighteen percent crew labor. You’ve got six people still clocked in, let’s send home Amy and Sam, and that should be fine. That way we’ll run at eighteen percent crew labor and thirty-one percent food cost.” 


It’s just going places, and the only person who’s listening and hires two new programmers every month is Open Dental, so I switched. I absolutely switched.


Brady: You know what I’d like to do Howard? I think it would resonate with the groups I work with and everybody, every dentist in the nation, your single level of management. What I’d like to do on the 23rd when you speak there in Scottdale, let’s do it on Facebook Live too. I’ve got a great videographer there, I want to put your thing on Facebook, and I’ll get Open Dental engaged in it because I’ll tell you what; open dental kind of dovetails with your philosophy about working.


Howard: Let’s get Nathan and Jason to come to it. 


Brady: Let’s do it! We’ll run it on Facebook. What do you think, Ryan, can we run it Facebook Live, I’ll get my Facebook post…


Howard: Whenever I go on Facebook Live their porn blocker shuts it down, when they see me, they just assume it’s a porno, that’s how hot I am. But yeah, let’s get Nathan and Jordan to come down there and meet all these DSO people and let’s. You’re in Medford, I’m sure there’s an Oregon dental mafia, aren’t you part of the Oregon dental mafia?


Brady: I am part of the Oregon dental mafia.


Howard: Because, I mean, I tell dentists all the time, they’re so frustrated and it leads to stress, it leads to marriage problems, drinking, all these things like that and I always try to tell them, “Dude, it’s not you. YOu have no idea how much easier your life would have been if you would have bought a Dairy Queen which is owned by Warren Buffet. And if you would’ve owned a Dairy Queen, you could have a high school education and your practice management software would carry you through the day. 


Brady: Unbelievable.


Howard: I’ve been trying to get dentistry to that state my entire career. I’ve been trying for thirty years in dentistry to get dentistry today where my old man was on a cash register when I was ten in 1972. And NCR was swallowed up by IBM because it was that good. I remember when IBM bought and swallowed National Cash Registers. What other technology? A lot of people wonder, like these DSO’s, your big ones that have got a hundred and fifty locations, do they think technology is sexy to attracting consumers, do they all have cav cams, cerux, lazers and scanning impression material or is that not statistically lined up with success or failure?


Brady: It’s interesting, most of them do have some form of technology. Most of them have a CBCT. If they’re in the same town, some of them used to share a CBCT, but now CBCT’s are getting down to seventy thousand bucks for a full view, and just some really incredible deals out there. If anyone wants to just email me. I went to Germany twice, met with the top CBCT owners, and man, I’ll tell you what, the company that makes the actual digital plate for most of the CBCTs in the world, they started making CBCTs now, they’re putting everybody out of business. Seventy grand for the whole enchilada. Just email me if you want their contact info. 


Howard: Can you tell us the company?


Brady: Yeah, it’s Genoray.


Howard: What’s the website? How do you spell it?


Brady: G-E-N-O-R-A-Y and I’ll give you Chris. So, I’ve got a group rate with them. If you mention Chris Yoon, to Chris Yoon Brady’s name, they’ll knock like ten grand off of it.


Howard: That’s genorayamerica.com?


Brady: Yes, it is. Yep, genorayamerica.com


Howard: Genoray is G-E-N-O, RAY, America, dot com.


Brady: And then I’ll give you the email address, and Chris is the guy. They have a headquarters in California, and all four of my locations have the Papaya Unit, and I’ve had all the other units and this one does twice as much with twice as easy of software for half the cost.


Howard: It’s the Papaya Plus.


Brady: Yeah, exactly, are you seeing it right there?


Howard: Yeah, I’m seeing it at genorayamerica.com. By the way, I have to laugh when I go to these conventions, like you look at all these companies selling x-ray sensors, and the guy at the booth will be telling you, I’ll be listen to him saying, “Well, Brady, my sensor is twice as clear as the one across the booth there.” Dude, there’s only one VCR factory on earth, and it’s in Japan, and it costs several billion dollars. Every VCR in the world is made in one building in Japan, and these x-ray sensors are billion dollar companies to build this stuff, and then they re-package them and re-label them in all these companies.


Brady: That’s these guys, these guys just got smart and said, “People are marking thiers up four hundred percent,” they said, “Let’s just start doing it.” Nobody has heard of them, and it’s Chris at genorayamerica.com. But just incredible stuff, you're absolutely right, same concept as the VCR.


Howard: And if you really think that that little company there with fifty employees really build an x-ray sensor, you are out of your flipping mind. You couldn't even build that sensor with fifty programmers. I mean, the capital outlay for that is completely insane. Okay, but CBCT, that’s a diagnostic thing that’s pretty much rapidly moving to standard of care. But what about cad cam and lazers?


Brady: A lot of lab fees have come down so much, down to the fifty to sixty dollars a unit for a nice zirconia unit that a lot of folks have not been doing the scanners as much I’m finding in the groups, like the Cirux and [inaudible - 00:50:53]. Even though those are great, but I found that trend, because the lab fees have gotten low over time, Wholesale Dental Lab is a conglomerate of dental labs that are just like the VCR company, right? 


Howard: Wholesaledentallab.com?

Brady: Wholesale Dental Lab is a conglomerate of labs, these are normally the labs that don’t sell retail, they just sell wholesale to other labs to other labs, and they only sell to the big groups and I worked with another gentleman to put this group together as a resource for DDSOs so they could get lab work for about half the price, and you know, try to keep their overhead reasonable for all the owners, the dentist owners of the group. So Wholesale Dental Lab, that’s been a biggie.


Howard: WholesaleDentalSupply.com?


Brady: It’s actually wholesaledentallab.com and it’s being unveiled two weeks before you lecture in June.


Howard: So the site is not up now?


Brady: The site is not up. When you’re speaking in June is the Inaugural DDS Alliance Meeting, and so a bunch of these things, sixteen things at once are going to be launched. About two weeks before you speak, in about a week it’ll be up there, wholesaledentallab.com.


Howard: Nice. The other big one is supplies, and by the way, when we got out...the one thing dentistry needs more than anything is a chart of accounts. I mean, you have all these people, they’ll be sitting in the study club and they’ll say, “My overhead is only fifty percent.” But he hasn’t factored in the fact that he paid off his land and building, and that that’s not an accounting that you would have. Like, my name backwards, Faran backwards; Naraf, Naraf is a real estate company that holds my land of billing and my dental office, and I have to charge rent. So, you can’t say your overhead is lower if you don’t pay rent because you paid it off, so what’s the cost of capital? If I took your land and building and sold that, and bought stocks or equities or bonds, it’s got capital. Same thing with labor though, so my labor is twenty percent, and the kids next to me are like, “Oh my God, mine’s higher,” it’s like, “Well this guy is not counting uniforms, FICA matching, health insurance,” so we need a chart of accounts. But I noticed on the chart of accounts, and I got out of school thirty years ago, lab and supplies were totally different, but now I see all the big boys combining lab and supplies because let’s say you do get cad cam, so your lab bill goes down, but now in your supplies you’re buying all these blocks.


Brady: Exactly.


Howard: So lab and supplies, any advice on supply cost?


Brady: A lot of the groups, especially a lot of the groups in the DDSO Alliance have banded together to work with the big companies and become a buying force, and that’s been a big trend. So our group has one with Henry Schein, Patterson does the same thing, so a lot of those companies have developed tiered schedules on supplies. A lot of them, a lot of folks are figuring it out because we’ve not got global trade, so they can go directly to the manufacturers of the stuff that Henry Schein and all the companies buy. So, dental burs, the most used instrument for the dentist, dental burrs, you can get the top ones, even 24 karat gold plated ones for $1.98 now instead of eight bucks a burr for those. So, I’ve seen a lot of that with the groups going direct, that’s why I’ve mentioned DDSO Direct a couple times now. Folks are trying to get around the middle man because they can, just like with the CBCT, with technology you can find, you can go around the middleman direct. Before, the middleman would knock on your door and be a sales guy, right? Nowadays we have access to everything online so people are finding a way to go around the middleman and go directly to these companies. 


Howard: When I talk to DSOs, when I talk to their CEO’s, burrs is the number one insanity in their mind, they can usually go get the dentist to maybe agree on a bonding agent or maybe some type of gloves or things like that, but the burrs are out of control, and I feel most sorry for the dental assistants because if you’re in a group practice with three different dentists and you all use different burrs...I’ve been telling everybody that some of the greatest advances in a product has been packaging, like milk. Milk was always in a carton for two decades of my life driving a car when the cup holder was round in the car. So, if you went into 7-11 you couldn’t buy a carton of milk because it wouldn’t fit in the round hole. It only took them about twenty years to figure that out, and when they changed packaging...burrs need to come in a new package where the assistant is freed from that, the dentist is in charge of getting it out. The assistant will set up for a filling, crown, or root canal, but the dentist needs to go in central sterilization and dispense a single burr of what he needs because some of them are insane. Like, there’s a lot of really well-rounded dentists that can do a crown prep or a filling prep with three burrs. And then there’s other ones that need nine, and then it’s a different nine every single time. Because when you’re in an operatory, the assistant can never leave. And if you sit there and say, “Well, you go get me that round thing,” she’s got to take off her glove, that’s supply, she’s gotta leave the room. So what does she do? She cheats. She takes her dirty glove, opens the drawer, reaches in with her dirty glove, grabs the burr and touches five other burrs and that’s a really dangerous thing because when I got out of school, all these little hepatitis A, B, C, all these little outbreaks in dental offices, the CDC kind of had a hunch that they were coming from certain areas, but not enough to go stick your butt in jail and fine you. But now, with DNA sequencing, dentists are really losing everything when they sit there and say, “God, man, nine people showed up and they got hepatitis, and it’s all linked, the only thing they had in common was your office, and Henry needs a liver transplant.”


So, infection control is getting more serious every single day as the CDC detectives are getting so much better, and I think the burrs is the biggest break of the infection control because the dentist is an artist, and he’s sitting there with his little pallet of paint, “Well give me the football, no give me the flame, no not flame carbide, give me the flame diamond.” Oh, shut up! Shut up! You have to talk to the burr box yourself, and when you walk in that room you can’t leave the room, so if you walk in there and say, “Oh, I didn’t want a flame carbite, I wanted a flame diamond.” Well, there’s worse things that happen to people, just go do it with a flame carbide, you know what i mean?


Brady: I totally agree with you a hundred percent.


Howard: Yeah, I just think that would be the simplest way to do it, just a burr box vending machine whatever, and put the dentist in charge because it really drives assistants and owners crazy. That’s another thing where dentists could lower their supply costs. When you talk to any sales rep that calls on my office, the problem is the hygienist uses different gloves than the dentists, there’s three dentists in there that all use different bonding agents, I mean, come on, you’ve got to agree. And if you say, “Well, I have to use the [inaudible - 00:58:25] clear bonding agent,” and the other says, “Well I have to use the 3M,” well they both sell one billion a year on it, so flip a coin. You can’t sell a billion dollars worth of stuff to doctors who have eight years of college and it be some type of conspiracy, farce, it really doesn’t work. I mean, when you sell a billion dollars worth of shit in dentistry, it works, trust me. You know what I mean? What else are you passionate about? Anything else I wasn’t smart enough to ask?


Brady: No I think we’re at an interesting time in dentistry where dentists are figuring out how to invest in different asset classes within dentistry, they’re getting passionate in figuring out how to buy practices and add value. It’s a neat time in dentistry and I’m writing an article on this stuff in Dentaltown coming up here. July issue of Dentaltown. So if you can get this book read before the article in Dentaltown, we’ve got a pretty cool thing at the end of the article that you can be involved in, and once again I guess I should give that again, this information, just the freebook to 31996. If you can make it to Howard in Scottsdale, that would be awesome, we’ll put it on Facebook Live, and then if you have trouble with this, if it doesn't work, I’ve seen technology not work before, it should work, you can just email me at one of my emails; brady@bradyfrankconsulting.com, you can email me there if you like, but Howard we are so excited to have your message, which will be well-received to our folks who are down in Scottsdale. I think you’ve got a lifetime of dentistry experience to really talk about and simplify for these guys that own one practice, or two practices, five practices, ten practices. Just a lot of these components that we talked about, like it would be killer to have Open Dental there as well.


Howard: Do you have his contact information and all that?


Brady: I don’t have his contact info, but if you want to shoot us an email that would be awesome.


Howard: I just sent you an email that says, “Brady please call Nathan.” I just sent that to you, so you should have the email, and if you don’t get the email, all you need to do is go get in your car, do you know where interstate five is?


Brady: Yes, I do.


Howard: Just get on that interstate and head north, and if you get to Portland you’ve gone too far. Is that about right?


Brady: That is about right.


Howard: So interstate five will go through Medford?


Brady: Yep.


Howard: And through Salem?


Brady: Yep, it’ll go right up to Salem, I-5 goes right to Salem, and I’ll head up there. Tell me if you’re going to go up there, we’ll hit it up together.


Howard: You and I, I’d fly up there and meet you, or if he’s going to come here, I mean, either way; if he’s going to come to your seminar next month.


Brady: That’s right, yeah, if he comes to Scottsdale, so I’ll shoot a little Facebook thing about it out there, I’ll get with him, and that would be great, it’s at the Venetian and you’re going to be Saturday morning Howard, which will be great, whatever time you can make it we’ll just rearrange our schedule. We’d love to have you and I’m excited to have you. We’ve got another guy there which his name is Ryan, he’s the chief investment officer representing families around America, they’re investing into dentists, so instead of you getting institutional money and instead of going to the banks, there’s no red tape, it’s one week, you get your money and you buy these entrepreneurial satellite practices that are under your regressive stage, increase them through your DDSO framework, fund stuff. For those of you, like you said Howard, a lot of guys that are in dental school listening, if you don’t own a practice yet, and you’re looking to do that, that’s what our alliance is all about, and so just if you get the free book, you’ll be on our text thing, we’ll text you all the database of these guys. We want to get you in touch with guys that own groups, we want dentists who own, so if you text and you go to DDSO Direct, you’re going to get directly in touch; no middleman, no brokers, directly with groups around the US where you can take part in their growth and be a part of it.


Howard: Now that guy manages money for a bunch of wealthy families?


Brady: Yes, yeah.


Howard: So I want to end on this piece of advice; remember you can marry more money in a minute than you can earn in a lifetime. Senator Kerry married the daughter of the Heinz fortune, Senator McCain in my backyard married Cindy McCain whose father owned the Budweiser distributor for Arizona, so remember, if you don’t really want to do all this business stuff and everything Brady is talking about, just marry well, that’s all I can say. Just marry well. That’s what you need to tell your boys, because when my boys were your boys ages, yours are thirteen, eleven and ten, when mine were that age, I’d say, “You don’t have to go to school, you don’t have to get a good job, all you gotta do is marry a girl with a lot of money.” And they’d say, “Oh my God, that was just so vile,” the thought. I said, you’re going to grow up and be some little rich girls’ boy toy. And they would immediately start studying and working, that was like the last thing. Men want to be all manly, last thing they want to be is some rich little girls’ boy toy. But that reverse psychology worked so well. I used to also do it with bike helmets, they’d say, “Well dad, do I have to wear my bicycle helmet?” I’d say, “No. I always wanted three boys. But I had four just in case one didn’t wear the bike helmet.” So, I always wondered which boy wouldn’t wear the bike helmet and bust his head open on the street, but reverse psychology I think works well for them. 


But hey, Brady, thanks for always being an entrepreneur, thanks for always being on the bleeding edge to the leading edge. You’ve done so many exciting things, thanks for coming back on my show for a second time, and I cannot wait to see you June 19th?


Brady: It’s June 22nd, 23rd, the Phoenician in Scottsdale and you'll be speaking on the 23rd in the morning on Saturday.


Howard: And do you know why everybody should want to go to the Phoenician? Because your tax dollars paid for it, remember that was Charles Keating, so when he went bankrupt, your great tax dollars built out the Phoenician, so since you’ve already paid for the Phoenician through your IRS contributions, you should come and enjoy it. On that note, thank you so much for coming on the show, I hope you have a rockin’ hot day.


Brady: You too Howard, thanks again, you’re the best!


Howard: So are you buddy.





Category: business
More Like This

Total Blog Activity

133
Total Bloggers
2,724
Total Blog Posts
1,495
Total Podcasts
1,216
Total Videos

Sponsors

Site Help

Sally Gross, Member Services
Phone: +1-480-445-9710
Email: sally@farranmedia.com

Follow Hygienetown

Mobile App

WITH HYGEINETOWN . . . NO HYGIENIST WILL EVER HAVE TO PRACTICE SOLO AGAIN

WWW.HYGIENETOWN.COM - WHERE THE HYGIENE COMMUNITY LIVES

9633 S. 48th Street Suite 200 • Phoenix, AZ 85044 · Phone: +1-480-598-0001 · Fax: +1-480-598-3450
©1999-2019 Hygienetown, L.L.C., a division of Farran Media, L.L.C. · All Rights Reserved