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How to Build an 8-Location Practice Group with Dr. Eli Friedman · Dental Mentors

• Dr. Eli Friedman MP3: When I realized that I was the best prosthetic I could be, I also realized how tired I was daily grinding. And at some point the entrepreneurial aspect kicked in and said, hey, there's only so much we're gonna be able to do with our own two hands, you know, what's the next level? And a lot of dentists obviously, I'll put money in the stock market or I'll go into real estate or all these other side hustles, you know, and I said, no, I really want to focus within dentistry. You have to plan that you're gonna have a drop in revenue, but you're building an equity based practice model. I think that you have to basically make that decision. And for me, it's always been about making sure that the health of the practice, you know, from a financial perspective makes sense. I've done some consulting and some dentists, I want to do this and that. And I'm like, Yeah, but it doesn't make financial sense for you to do it unless there's an a planned way of making that occur. If doing an analysis of your practice with associates in place, it has to yield a certain EBITDA, right? So you need to grow the practice certain level where it makes sense to now bring in an associate or have an associate run practice. If the associate run practice cash flows properly and makes sense, there's no reason that you s can't easily have that become an associate run practice, move on to your next venture. Hey there, and welcome to another episode of Dental Mentors Building Wealth in Dentistry. I'm your host today, Matt Ornstein. I have a wonderful guest, Dr. Ellie Friedman, out of Florida. He is a very, very accomplished dentist. He owns multiple practices. one of the smartest people I've ever spoken with. I've I've actually known Ellie for about a year and a half. A phenomenal human being and a lot of wisdom to share. So welcome to the podcast. Yeah, Matt, thank you so much for having me here today. And likewise I'd share the same acumen about your you and your accomplishments and your and your overall business here. That's kind of I think where the magic kind of happens. So yes, thank you for having me here. Yeah, it's a pleasure. well, I'd love to just start out. If you could take, you know, take as much time as you want and tell people what you do, what your what your group looks like. And first question related to that is, you know, how did you get into dentistry and then you know. What is your what does your group look like now? Yeah. I mean, I got into dentistry basically because I I loved you know, medicine growing up and you know, when I started figuring trying to figure out where where my path was gonna be, dentistry was just a perfect fit between the all the things that would that I was built for, so to speak, and whether that, you know, that was surgery or doing dentistry with my hands, which I always had, you know, great hands. and then that l also brought in the the combination of entrepreneurialism and owning your own business. And, you know, at the time with decision between medicine and dentistry basically led me to dentistry because, you know, medicine was a different vibe at the time and it still continues to be obviously. And that's how how I went into dentistry. And I, you know, I love dentistry, practiced for many years as a f well fell four or five years as a general dentist, went back and did prostodonics. So I could specialize in doing implants and reconstruction reconstructive dentistry and aesthetics. I really had a passion for that, found myself working in at that capacity with high-level dentists around me and associating in their practices, and then made the decision to go into implants, surgery and prosthetic dentistry. And so spent a few years in residency. and subsequent to that, went in in practiced for several years on my own, just trying to be the best, you know, prosthetonist that I could be. And when I realized that I was the best prosthetic I could be, I also realized how tired I was daily grinding. And at some point the entrepreneurial aspect kicked in and said, Hey, there's only so much we're gonna be able to do with our own two hands. You know, what's the next level? And you know, a lot of dentists obviously, I'll put money in the stock market or I'll go into real estate or you know, all these other side hustles, you know. And I said, no, I really want to focus within dentistry. and it was around the same time where, you know, DSOs were becoming popular, owning multiple practices was a thing that could be a business entity within dentistry. And I said, Hey, let's, you know, continue growing. and you know kind of establishing other offices within our group, bringing in other doctors, et cetera, et cetera. And that was kind of like the transition point, I guess, where I started realizing at some point that it was time to maybe, you know, slow down on the on on practicing and I had a lot more responsibility managing and running the group. And so, you know, that transition happened you know, a number of years ago. And you know, here we are today, so to speak. And we can get, you know, more granular on different aspects of that, you know, where we're at, how that all occurred, so to speak. But that's kind of the high level of my specific journey. Yeah, that that's awesome. can you share with the audience how many practices you own? Yeah. So we currently have eight locations in South Florida. you know, it's it's funny, we people we always talk about Dentist talk, but number of locations. We love that, right? And you know, I think that it's a it's a it's an interesting thing to talk about. But I think what's really more interesting is, you know, revenue on so the eight locations, you know, some of them are surgical implants, surgical centers. So the the revenue is higher than let's say perceived eight locations, let's say to be, but obviously it depends on the kind of practices that you're running and owning, so to speak. So yeah, so we have eight locations. We have our own in-house laboratory. And what's interesting about our group is it's a specialty-driven group. So we have I don't know, five or six prostodontists in our group. We have an oral surgeon, two periodontists. we have a few general dentists in the group as well, but the vast majority of what we do is specialty surgery, prosthetics, and full arch implantology and reconstructive dentistry is the vast majority of what we do. through our locations. and it's also supported by our laboratory. We have our own in house lab that supports our offices and an and a a talented back office team that is managing the group from all the different perspectives of, you know, accounting, HR, marketing, call center, and all the things that we need to help our group stay competitive and support all the d individual practices within the group. Yeah. That's amazing. how old were you when you finished all of your dental schooling? And then how old were you when you opened up your first practice as an owner? Yeah. So, I was I was kind of a bit lost in the beginning, so to speak. You know, I was very young when I went to dental school. I was twenty four. I was like the Doogie Hauser of my class. I I really graduated and I was clueless. really probably had no business going to dental school. I was 20 years old ultimately. And but I was I knew that I wanted to go into dentistry and I wanted to get out of dentistry as fast as possible so I could start practicing. so I was 24 when I when I graduated and then kind of associated for a few years. And when at the time it was like, well, am I going to own my own practice or start buying our pro my first practice or I felt Personally unfulfilled, if that makes any sense on a personal level. So for me, it was I needed to fulfill myself personally first. And so I was doing great as an associate. we're talking, you know, a number of years back, but let's say the equivalent of today's dollars as an associate, a few years out making, you know, $800,000 a year as a as a as a young associate. And I gave it all up, went back and into prosp because I felt like I just wanted to gain more knowledge clinically, be a better dentist. and that was a personal fulfillment, but it's also a professional decision and a business decision for me, because I wanted to gain deeper insight into advanced patient care and treatment. And so there was nothing that would walk into my practice that I was not able to handle, so to speak. So that was really rewarding in hindsight and very important for me in my journey to accomplish that. So and you know, when I started practicing, it was then just shortly thereafter that it was 2009 when we acquired our when I acquired our my first practice, just a couple of years or just when I finished residency, like a year after that I acquired our first practice in South Florida here. And what age were you when you acquired that practice? yeah, I gotta I gotta do some math here. so two thousand and nine, w I was ten, sixty seven. So I was thirty Thirty four? Thirty-four years old? That makes sense? Yeah, that's about right. Ten years after you finished dental school. Yeah, about that. And you bought the practice? I bought the practice, correct. Yeah. were you a lot a lot of dentists that I talk to really dream of doing what you've done. And they always they I hear the same thing, like I'm really scared to do that. I'm scared to go off on my own. I'm scared to buy a practice, maybe take on some debt, take on all that responsibility. How did you how did you cross that bridge of I'm sure there was I'm sure everybody had to be, you know, you had to be a little bit nervous. Yeah. A little bit worried. So how did you how did you cross that bridge and take that? This is a gr this is great. I think what it came down to for me personally was clinical proficiency. I think a lot of dentists are scared because they're not sure they either have the the clinical proficiency or the business the or the business skills. And so for me, I wanted to I I needed to feel that comfort level that that I was comfortable clinically and I was being I was ethically able to deliver the best care possible to my patients. so that that was kind of like my specific situation. and and I I guess that was kind of important to me, so to speak. So once I got that out of my residency, I was just guns blazing at that point, ready to, you know, do whatever I needed to do at that point in time. So you know, I I think it just varies from person to person, you know, in reference to what, you know, what their specific journey looks like, how they feel. Were you nervous though going into business? Yeah, of course. Yeah. Of course. I was I was scared. That was you know, I I didn't know what I was doing on the house. But but at the end of the day, what you know, we gotta look at the data and the statistics. At the end of the day, you know, most dentists, as you know, better than anybody, most dental practices succeed. most dental practices with proper, you know, care and guidance are are gonna be fine if you're just being ethical and doing the right things for patients and managing them correctly. There's nothing, there's really little risk in that regard. for anybody, you know. you know, we all we all have our those skills and training at various levels, but you know, I think at the end of the day, you will you force, you know, owning a practice also forces you to be better in many ways and not so to speak, maybe being an associate at some point can be a bit of a crutch and not have that push and you know fight or flight, you know, I gotta get this right in order to make it work because now it's my name on the door and now it's now it's you know there's there's real you know real risk involved here. It's not just, you know, I get a new job, so to speak, you know. so I think that's kind of an important step for most dentists. I think that whether it's being an owner specifically or partner, you know, our business model today is all partnership based and and it's very deliberate. you know, and the reason is because it's all about alignment, you know, and making sure that we're all aligned with what we're trying to accomplish and and achieve, so to speak. So that that I I mean, ultimately going back to your question, yeah, I was scared and you know, we got through it and you know, you learn how to live with being s with with that with that feeling, so to speak. How long did it take you to get profitable when after you bought that office and opened? No, we're profitable on day one. I mean, it wasn't like a a long time to be profitable. We took over I took over an existing small practice. you know, and that practice, I'll I'm I'll tell you a story. The practice was went I mean, we have some pretty cool stories, but that particular practice went from like three hundred thousand dollars to a million dollars in less than a year. So You know, we were you got went in there, you know, you know, started treatment planning patients and building relationships and yeah, so it w it was a pretty pretty quick, fast thing in that particular practice situation. Were you that's a great, great story. Were you married to your wife, Doctor Katia, when you opened up your first practice? Yes, yes, we were and we've all we've been on this journey together. so she's always been involved. we've you know, we have a special partnership, both in in life and in our practices. and so she's definitely part of that, you know, and that particular practice, first practice, which we still own today, by the way. it's practice been around for over forty years and we own it for about seventeen years. but that particular practice, she was doing general dentistry and I came into the office. I was doing implants and added value through specialty services in that particular location. That's how we were able to grow the practice as well and keep a lot of some of those in-house you know, referrals that were going out in-house from prior setup and doctor and et cetera, that we were able to add value to that situation. So she's been with us. We've been together for, you know, this this amount of time. professionally in our in our practices together. She's our my partner as well. That's fantastic. I know a lot of people are curious about this. How is it how has it been working as a you know with your wife as your business partner? Is that smooth sailing or some, you know, I think it's a like you know, we me you know, we actually, you know, I think that's a personality relationships based thing. You know, some some People say that's that's crazy, you know, to do that. for us, in the beginning I thought, do I really want to do that? Like practice together and and own practices together. But she's an incredibly talented person and a tremendous asset to you know, our organization. And so it's been a blessing for us. And you know, it's not always perfect, obviously. there are challenges along the way. but you know, we obviously you know it's all it's it's it's definitely something that we enjoy and it's worked out well for us in that respect. That's great. Yeah. I I know a couple other dentists that are in practice with their spouses. all of the ones that I know have a great working relationship and it's it's been it's been smooth. Well you you obviously are you know a like unicorn success story, which is amazing. I know a lot of the doctors that are listening to this would be very curious. Can you talk about how and when you decided to open up your second practice? And was that a was that de novo or did you were you are you buying practices to grow to eight or were some of them de novo? And how did you make that decision in your mind? All right, we have one, let's open up another one. Right. And then and then et cetera, et cetera. How did that process unfold for you? Yeah, I think that, you know, our business philosophy obviously is by it stabilize something, make sure it's moving in the right direction, obviously, make sure that we have enough resources. at that point in time, you know, we were we were doing well in in the in our first location. And you know, we decided at that point, let's look at a second location. And actually, second location, third location, it it all kind of happened very, very quickly in that respect. But our our second location was based on the fact that our first location was doing well. I think that, you know, obviously that's a a a the question mark is what does doing well look like, right? I certainly, you know, we were together in that you know, practicing in that first location. So We had the resources to go, you know, and put me in another location. Right. So if you're, you know, a solo practitioner, right, you would obviously need to make sure that your first practice is stabilized. You have an associate there. and if you're moving to an associate run, you know, practice, I think also it has to do with the culture of the office. Not every time in the staff are gonna be, you know, welcoming of that. And and I think one of the things is alignment, making sure that everybody's aligned with the vision of what you're trying to accomplish and and why you're trying to accomplish it and make sure that everybody's on board because I heard a lot of stories of of doctors that, you know, open a second location. but you know, it depends on the DNA of the first low, you know, what the what that's like, you know, and and whether the staff is aligned, do they understand what the doctor's doing. So, you know, I think it was just, you know, we shared our vision with our team very early on that we wanted to continue to grow. And I think that was just everybody understood that's the direction we were headed in. And so as long as we were doing well in our first office, we took on a a a second location. And and the same thing goes in our in each location that we were in. So it was, you know, acquire, stabilize, you know, make sure that we're meeting certain KPIs, profitability, and then move on to the next location ultimately. That's kind of how we did that. And and and also had to do with obviously being in the the right right place at the right time, make sure, you if you're s if you're actively, you know, what your business model is, is it de novo? Are you looking for new s new locations regularly? are you seeking new practices to acquire or purchase on a regular basis? I was kind of very early on very entrepreneurial in that regard and always had my eyes open on different opportunities. So it was kind of opportunity based for me in that regard. And so once opportunity came up that it made sense for us. and the timing was right, then we moved on to the next location in that regard. That's a very, very smart methodology for for growing a practice group. Really, really smart. And I, you know, I tell people don't try to scale in chaos. If you don't have whether you have one location or two or five, you need just like you said, they need to be stabilized, they need to be optimized, you need to have your systems in place before you kick before you grow. Because you're either gonna grow smoothly or as smoothly as you can, or you're gonna grow in absolute chaos, which is very challenging. Yeah, I mean, you know some of our stories in reference to some of the deals that we were in involved in certain even DSOs that, you know, wanna buy practices and and and you know, wanna keep buying and then at the end of the day, internally they're a mess. And then, you know, things are you know unfortunately don't turn out well. I I I think that, you know, I'm a bit of a stickler for trying to make sure that we're not doing that, right? Being in control on a regular basis. In fact, some people might call it like micromanagement. I I call it just proper management, right? I I don't think that I think there's obviously a fine line in that regard, but you know, I think that there's a time, you know, that makes sense. And I think that you just feel it, you know. I think at the end of the day, you you can feel when the practices are when when when things are are stable, right? You know, if you have a ton of turnover of staff, obviously that's not a good time to do things, right? but if you have staff that understands, I think a lot of that has to come with your staff and your resources. You know, if your staff is stable and, you know, supporting you in in and you're supporting them, obviously. And we all have this thing kind of like, working on this together because everybody, you know, you're gonna have to delegate a lot more as you get into, you know, more and more office locations. You're gonna have to build more infrastructure, back office management teams, make sure you have the right people that are able to carry the load, obviously. And so a lot of that is part of that, you know, dynamic system of growth that that that that we've, you know, learned along the way. Yeah. Great advice. I know that neither you nor Katya practice chairside anymore. And I'd love you to just share, you know, what that was like transitioning from being chairside to a true non-practicing owner. And like at ha at at what point you know did that happen? Did you stop chairside was at how many practices did you have open and How did you make that decision in your mind? Like I just need to be an owner operator. Yeah, I think that I had, you know, as we were growing, maybe we were at three or four locations. I ha I still was practicing to a degree. I still, you know, love clinical dentistry. I mean, I'm a prostodontist trained surgically. I I, you know, enjoy what I I enjoy that aspect of dental care. But I also enjoy entrepreneurial. the the entrepreneurial side of dentistry. You know, I love the the challenge of growing a business, an organization. And so that's kind of like on a personal level where I felt like I needed to challenge myself. And I think it comes down to a personal thing. you know I've done a lot of business management programs. certain people like, you know, Dan Sullivan or even Tony Robbins and and you know things like that is, you know, you know delegate you know, do what you love and then delegate what you don't love doing ultimately. So that keeps your energy up. I mean, those are cliche things that we all, you know, know in business, obviously. but oftentimes I think they're overlooked. And so I I think that, you know, I I stepped away from from clinical dentistry when I made the decision for myself that I really wanted to challenge the entrepreneurial side of our group and try to grow our revenue base and try to really grow a a more robust organization that had equity and value. and so it I think a lot of it comes down to, you know, what one thing of the beautiful things about dentistry, and being a clinician by by training, is that you have that luxury, right? You can decide when it's time for you to do something different. obviously if you're coming into dentistry as just a a an owner. Right. Whether you're like a a a DSO or or whatnot, you know, your your whole, you know, MO and making money has to do with, you know, scaling and growing growing the the the number of locations or the business side and the revenue, you know, from as as a clinical dentist, you have that you can make that decision. You can take, you know, do it immediately, or you can do it after a number of years. You know, at the end of the day, if you're successful and you're profitable and you're and you're making money and you're happy. in your b in your per personal life. I mean the decision of when to do that is a is a personal thing ultimately. and that's the beauty that being a clinically trained dentist offers you. well I appreciate that. Great perspective. I know this is kind of it depends question, but if you had to give this advice to a dentist that is growing and has multiple practices, at what point would you recommend stepping away from the chair side and clinical and just focusing on the business? Is it two practices, three, four? I mean, is there a is there a break point where you would advise somebody If you're planning on continuing to grow, once you get to this many practices, you probably should stop practicing and be focused on running and owning the business. I think it really depends on what you just said right there, which is what are what are your plans, what are the business plans, right? If your plans are to continue to grow and you want to build a multi practice, multi location practice. I I think you need to decide what at what point where it makes sense. And I think part of that has to do and and from my perspective, always had to do with the profitability of the overall business. You know, and you know, as you know, when you when you are practicing, you're doing the dentistry, there's a big expense to hiring associates. And so if you're basically ready to give up that revenue. Right. And there will be a a drop, obviously, when you make that transition clinically, but know that you have to work on that next phase, right? So you so you have to plan that you're gonna have a drop in revenue, but you're building an equity-based practice model. I think that you have to basically make that decision. And for me, it's always been about you know, making sure that the health of the practice you know, from a financial perspective make sense. you know, I I've done some, you know, do some consulting and some dentists say, I want to do this and that. And I'm like, yeah, but it doesn't make financial sense for you to do it unless there's a a planned way of making that occur. You know, if your practice, you know, is is in a if doing an analysis of your practice with an associate's with associates in place, it has to yield a certain, you know, EBITDA, right? So you need to grow the practice certain level where it makes sense. To now bring in an associate, right? or have an associate run practice. If the associate run practice cash flows properly and makes sense, there's no reason that you s can't easily, you know, have that become an associate run practice, move on to your next venture, right? and and then you have to also weigh, obviously, does that throw off enough financial you know, capital and cash flow for you on a personal level? So I I think I'm trying to kind of shed some perspective on that, but I think it you know the timing depends on, you know, analysis and in my opinion of you know how the financial element of these practices are doing. Do we need to spend more time growing those offices independently or do we have enough there that's going to allow us to move on to to another location? But don't forget, moving on to other locations still have to make sure the revenues are are staying healthy. And and as as you know, as you're growing, It's a it's a juggling and balancing act, you know, of what's going on in the locations. you know, if associates are are coming and going, it's gonna be more challenging. If staff is coming and going, it's gonna be more challenging. and so there have to be mechanisms in place to make sure there's stability in those offices. ultimately that's kind of one of the key things. Yeah. Wise advice. I you know, I know this from other conversations you and I have had, but you have a separate corporate office. at what point did you make the decision to have a separate corporate office, not run your operations out of one of your practices? Yeah. So I ran operations out of out of a closet, basically, in one of my offices for a long time. I I'm all about maximizing it, maximizing space. so you know, we're very tight. when it came to spending money in that regard. So again, it came down to cash flow and we were utilizing and maximizing our space. So for example, I had an office, you know, that that we had that we're like, we're building a lab. Where are we going to build this lab? You know, we'll we'll go look for a location. I I said, no, we're not going to do that. We're going to take half of one of our practices, split the rent, give it to the laboratory. We have a lab in one of we we split half of that office into a laboratory. So we're always learning looking to maximize our space. You know, that's one of the key things that I believe in is a lot of dentist dental offices sometimes are underutilized. And if you look at you know PLs and and and what people are paying, rents and carrying costs for those spaces, they are underutilized in many cases. So we decided to utilize our space. And so our back office team, it was only until we were about maybe at about forty employees or something like that, that we decided that we were gonna have a separate back office team. And then at the same time we were also building out a call center. So it's like it wasn't gonna fly within the space. We had no more physical space. So we at the I guess the answer was we had no physical space left that we could utilize. So we went and sourced a separate location for our for our back office team in C suite. Yeah. Makes sense. I will tell you this, you know, I've and I've talked to you a lot on the phone for a pretty long period of time. you're a very, very, very smart businessman. And I know that, you know, dental schools don't provide any meaningful business training. Yeah. so I was curious where did you get your business training? Because you you're very high level when it comes to finance and business math and Operations. Where'd you get that training from? I mean, I I appreciate the compliment for sure. Thank you. I I I I guess I don't consider myself in that regard. I mean, I am at the end of the day, I get it, we don't learn that in dental school. I think you have to learn on the fly and you're learning as you're going through different things. I mean, like for example, when it came to doing dental deals. I mean, I learned that as I was doing dental deals. You I I learned the legal aspect. I learned certain things that were important in certain deals. learned how to analyze PLs. I I I always had a I guess a a thirst or for the business n aspect. and so it it it came down to just asking a lot of questions. Lo reviewing PLs on what does a healthy practice look like? What does an unhealthy practice look like? operationally, you know, where can we make improvements? marketing. I got very involved in marketing about, you know, 15 years ago when, you know, I I I I you know, I started started doing direct to public marketing and, you know, made that a big part of my of our, you know, all on X practice. so I I think you learn as you go. obviously. like a lot of times there, you know, I I I've taken business training courses like I've mentioned here, but I I think one of the thing is things is that you're you're never gonna learn everything. You're always gonna get that execution and and when it looks perfect. And one of the mistakes that I made is early on trying to be too risk averse. So I was like very risk averse. I was like, you know what, this deal doesn't look good. That deal doesn't look good. This practice has it, I was looking at everything, everything was wrong with everything I was looking at, right? Instead of looking at the at the you know, at the positive of w what what we can do with a specific opportunity, I was looking at the negative. And I think that you know, over time you learn, okay, what what makes sense, what doesn't make sense, and operationally, I mean you learn as you go, in a lot of ways and you make mistakes and mistakes are gonna happen, right? perceived mistakes and mistakes are going to happen regardless of that are out of your control regardless anyways. And so, you know, I I I think that's kind of like in a in a nutshell, you know, how I gain the knowledge. and thank you for the compliment again. But you know, I think it's a lot of it has to do with, you know, your desire to to learn. Yeah. Well you've certainly done a great job. I hosted a small gathering for twelve dentists. That own their own practices here in Florida. And there were only 12. 12 of them showed showed up. And I asked them, who in the room has heard the term ebida? And about half raised their hand, which was a a bit shocking in itself. And then I I said, who knows what it means, what it really means? And no one raised their hands. Right. And you know, if you if if if you're a a a de a a dentist and you own a one practice or you own a group and you're ever thinking about selling, you have to understand what EBITDA is. I mean you knew the first time I talked to you you you actually laughed at me when I asked you, do you know what EBITD I don't you probably don't remember that, but you laughed and you were like, dude, I'm way ahead of you on that. But you know I just gave I just gave a talk about a month ago to a dental implant group group in Miami And one of the things that and and and we have a lot of conversations obviously based on, you know, where I'm at and always looking at things on a on a business level and talking to different people. But we always talk about EBITDA and we talk about profitability and a one of the things that a lot of dentists we always focus on is revenue and office units and how many offices, you know, exist in in the group. And one of the things I was brought in to speak about was EBITDA actually and how to maintain a healthy dental practice and always look at your practices from the perspective of EBITDA, because that's the true metric of whether your practice is healthy or not, right? So to speak. I mean, we c it depends what your how you look at things, right? If you if you are if you were there to buy yourself a job, right, and have zero EBITDA, but you're making a living, great. I mean, at least you know where you stand, right? Like that's okay. But if you wanna if you wanna understand how the real world looks at business, right, or practices, whether you're in dentistry, medicine, veterinarian, I mean radio stations, car dealership, doesn't matter, right? At the end of the day, it's it's the it's the kind of metric that makes that that people understand in the business world. So I learned that, you know, very early on. But But I always my whole talk was all about that. Like, let's, you know, pay yourself an appropriate salary, do your math properly in accounting so you can really see what your practice is really doing. Because that's really how I run my my vision on a daily basis, is looking through the optics of financials, PL, so I can kind of understand, you know, numbers, what's going on. It numbers Tell the story of the practice, as you know. And at the end of the day, that's really what helps me on a daily basis to understand where we stand. And it's not always going to be perfect. And we understand that, but at least you'll know, like, hey, you know, my staff salaries are 34%. Something's wrong. You know what mean? but at least you know, and that's why what's affecting my EBITDA. My staff is sucking. all the profit out of my practice. Maybe I'm overstaffed, but at least it tells you the story of where you stand and and try to maintain an in industry normal EBITDA. Like you know, what's an industry normal EBITDA that you feel would be considered a healthy practice that that that someone would say, hey, that's a great opportunity for us. after any corporate or operating expenses, 20% EBITDA margins off of Collection. So, you know, for those that aren't great, you know, if you're collecting a million dollars after all your operating, and if you have a corporate office, your EBITDA sh should be $200,000 to be considered a a a good idea. And that's that 20%, Matt, is the exact benchmark that I want to teach my team. Like that should be every dentist's goal, right? In that regard, because that's just a benchmark, obviously. And it can be less, it can be more. But if you're operating a five, you I had I I was talking to somebody the other day, they're like, we have 10 offices, they have 10 offices or something like that. I don't know exactly. I don't want to get into all the details, but they're operating a five percent EBITDA. And I'm like, well, okay, but that's not good. You know what I mean? If you're looking at a 10 office practice with a five, you gotta do some fixing there, you know, because that's you know, the wind blows the wrong way and you can be in trouble. Right. And so the the reason you have that twenty percent benchmark is if the wind blows the wrong way one day, right, then that should be safe, you know, so to speak. Right. Yeah. There's some breathing room in there for sure. Yeah. A lot of also in the medical industry, but a lot of doctors, dentists or med medical doctors, you know, they talk about revenue, revenue, you know, and I've actually talked to a lot of people in business and they're like, well, we're doing five million in revenue. I say, well you know, what's what's your net income? What's your EBITDA? we're breaking even. Like we lost some money. Like so revenues you obviously need to keep track of it, but at the end of the day, I mean, I'd rather have a company that's doing five million in revenue and a million in net profit than ten million in revenue and a hundred thousand in in net profit. And you've got to monitor both of them, obviously. Yeah. Unless you're unless you're in the in the tech space where you can be losing your shirt. Right. And you can have a thirty, thirty multiple, because you have some incredible technology that is gonna blow the world out of the water and everybody believes in it. You know, like that's the only place that I'm learning that I've learned that you can be losing money, obviously, on a daily basis, and you can still have a a very high valuation. So but you're right, in dentistry we don't have that luxury because we're providing service to patients. There's no secret, you know, Patented formula that we're developing that's gonna, you know, be sold to, you know, some huge tech company that's gonna, you know, exit us for a massive exit. So yeah, I get it. Agreed. I know you speak a lot and you you do a lot of like webinars, podcasts, things like that. What's your favorite topic that you like to talk about related to the business of dentistry? I I think the the The favorite thing I like to talk about is keeping it real. You know, I think that that that oftentimes there's there's a lot of talk about, you know, a lot of fluff out there that isn't real. you know, whether it comes to things that we're talking about right here, and and just being just having good real conversations about what's real. Like let's talk about, like you said, let's talk about profitability. Let's talk about, you know, the different kind of of practices, but let's understand like the like what's real versus something that's that's has a lot of fluff or smoke and mirrors around it. and so, you know, that's kind of like something I feel passionate about. Like if you can have a like you you can have like a huge XYZ organization, but it's not doing I hear a lot of stuff I hear enough stories like that. So I think that's kind of like Something that I've always felt strongly about as much as w we can obviously is trying to keep it real and make sure that we're being honest with ourselves about, you know, what good business looks like, what a healthy practice looks like, you know, how to run good healthy practi provide good patient care to people. at the end of the day, like a lot of times like you have people doing things in dentistry that shouldn't be doing things and maybe dentistry, you know, like certain types of things because, you know, That's kinda like I think a little bit about what I'm passionate about. what and this is crazy, but there is a very high percentage of dentists that own their pract own practices that do not even monitor KPIs. I know that's I'm telling you, it's like how could that be? But it but it's true. What are the main KPIs that you really keep your eyes on? it depends on what kind of so we have different kinds of practices. We have full arch centers, as you know. We have two. and a half, call it full arch centers. and then we have some general dentistry offices, we have a periopractice, and we have a pros practice. So we have different types of practices. I think that when we're looking at like for example in my full our full arch practice or KPIs are our arch count. We use arch count as a as a as a KPI of how we're doing on a on a monthly basis. So that's important to us. It just gives us a dine a breakdown of, you know, our per unit cost of of what an arch you know, what we generally do on for an arch on average, you know, cost wise, and then ultimately what that looks like. For our other practices, I typically I'm very strict with like just like the financials. I mean, I want to see I want to look at hygiene. For example, as a as a direct relationship to the practice. And I'm not sure the hygiene is run efficiently and that the practice is run efficiently. in that regard, you know, a lot of times it's mainly financials that we're looking at on a monthly basis. I'm not overly particular in in general dentistry about like, you know, number of crowns or anything like that per se. It it really depends on the type of practice, so to speak, you know. So for example, in our periopractice, it's a referral-based practice. So it's important to us to understand, you know, how many referrals are we getting every single month? so there's just different KPIs for different locations and what we do personally. Okay, make that makes sense. this is a question I've been wanting to ask you this whole time. What advice would you give dentists that currently own one practice? And they do want to grow. They maybe it's two, maybe it's five, maybe ultimately ten practices, but they're at one right now. What advice would you give them knowing that they they want to grow and open up more locations? just do it. You know, I don't think that I I don't know, I I sense that a lot of people you talk to, there's like some maybe anxiety or fear about it. I think the main thing is when you want to t When you want to get a second location, the main thing is ultimately, can you get the second location and can you basically do it? what are you what is that location giving you ultimately? If you're buying an existing practice, is there proper cash flow in the existing practice that you're buying? Right. is there an opp if you're doing a de novo, you know, great. You're doing a de novo. Is your first location succeeding to a g allow you to do your de novo in your second location? What's that projection look like for your second location? How fast do you expect to ramp up and make money in that second location? you know, I I I I I just really believe that, you know, whatever you're currently doing should be succeeding, but you also can't be scared to pivot. Pivoting is a is another big thing, you know, for me. And you know, I talk of this a lot of a lot of friends of mine who have multiple practices as well. Like, you know, when you have multiple pri you can't you you know, the the concept of pivoting has to be very real and your team has to be able to pivot if something's not working, right? Something's not working, pivoting could be as simple as ramping up marketing, you know, getting rid of someone who's not producing, making an office change, or maybe even selling the location if it's not doing well, right? You can't be scared of any of those things. You have to be open minded in order to make sure that you're you're you know, you can't That you're doing the right thing ultimately. Yeah. I like what you said. Just do it. Just do it. Yeah. I mean, I don't you know, you you know, what's that old saying? You know, you you you hold your nose and down and you just sign on the dotted line. I mean, a lot of times it's a like cliche thing to say, but look again, dentists are most dentists are trained to do dentistry, right? They're not when they get when they get into the business side of things, it's it's tricky. And so I think that I I always said, here's here's why I sort of looked at it. It's maybe a bad way of looking at it. If other people can do it, so can I, right? I mean, there is a massively growing segment of dentistry in the DSO space over the last decade, right? Of of dentists that own multiple practices, DSOs and whatnot. and a lot of those people just did it, right? they did it because most of the time. It works and you will learn how to manage it and you will learn where to plug in the holes, right? it's no different than owning your first home. You know, you might be scared, you don't know how it was like to for own your first home and you buy that home, you're like, my God, I went through all this and and and you just learn how to become a a multi-practice owner and you learn to bring in the right resources or find the right people to help you through the process. I think ultimately is what it is. Yeah. And if you're not sure, there are some really good consultants out there that can guide you through the process. So, you know, that's another thing, obviously, like you said, utilizing the right resources in dentistry. I think one of the problems again, there's a lot of there's a lot of smoke and mirrors around. and I mean that, you know, there's a ton of consultants, there's a ton of people that profess they can do X, Y, Z. You gotta do your diligence. You got to hook up. You need the right attorneys, the right accountants, and the right consultants, right? and like you said, that's a great piece of advice. there's for example, I've been in and out of consultants my entire career. and I remember one of the things we were struggling with was we were we weren't here. about how to manage our PLs. I remember that very clearly. So I, you know, without getting into details, you know, called a friend of mine and said, hey, can you help me with this and you know engage in a consulting? And they brought in a ton of knowledge on managing our numbers and our PLs and getting things moving in the right direction. So we just still implement today and that was done, you know, years ago. So I think like, you know, you're you're absolutely correct. You know, utilizing outside consultants in in resources and you have some great ones in dentistry to help navigate that process is gonna be very valuable until you maybe learn certain things and internalize it and then you basically take that aspect over. Great advice. Great advice. This is we're we're almost at the end, but I wanted to ask you if you're willing to share, what were some mistakes that you made while you were, you know, going from one practice to eight that you might be able to share with the the viewers on maybe some things that they could avoid, the mistakes that they could be aware of or avoid. Yeah. I it's funny. You asked me that, you know, to kind of share that in I I I gave that some some thought. I think that the main thing that I really have always felt being an issue is alignment, right? A I use that word personally. today, Tom, I use it every single day practically, but alignment and what your vision is for your business or for your practices and for yourself. And that could be anything from what do you feel is the right business model. Right. I think a lot of times your story is like, well, you know, I bought this practice, and then, you know, I I I we've been through three associates already, and you know, that's not good for the practice, right? As an example. So, you know, here's a perfect example. You're you're looking at a practice to purchase, and you are a multi-practice owner, and the dentist wants to leave in 90 days or less. Okay. So I've I've I've heard this all the you I hear this all the time. Well, the dentist wants so to me that's not a an ideal scenario for a multi practice owner. That's just a doctor to doctor owner. And even then, doctor to doctor owners be careful about buying something that let's say the dentist wants to leave in 90 days. because what what's the dynamic of that practice? Is it a fee for service practice? Are the patients all coming for that specific dentist? And now that dentist is gone and everybody's gonna be like, Where where's my dentist? And so I think alignment is is is a big key of of of the biggest mistakes that you know that I made in in that regard, where where we we believe in certain types of things. What do we want for this? We want stability. I want a partner. If you want a partner and you believe that's what's going to give you stability, then get a partner. You know what I mean? And don't settle for anything other than the partnership, right? and you know. That's kinda like the way I I feel about that, you know, today in in regards to pitfalls that that are easy to w to to happen where where you have potential issues there because you're overseeing certain things or you're or not you're not foreseeing certain things that could be an issue and you're not solving for them up front. and so Alignment for me is everything ultimately. And if it doesn't feel right in the alignment, don't do it because you might find yourself in a bad situation. Yeah, that's great advice. Thank you. I I always like to end end with with this particular topic. is there like a really crazy story you have that you can you can share with the audience? Like with a patient or something. I I had a dentist on here and He said he had a patient that their crown popped off and the crown was made of gold. And the patient swallowed it and did not he fished it out? He fished it out. you know, a day or two later. I've had that happen. Yeah, I've had that. You have any any fun funny stories? I have a funny s I have a a funny story about. about a guy, I don't even I don't know if I can even talk, but I'll tell. So a guy comes to interview for an associate position in my in our group. And, you know, he starts telling us this story about how he was in this other location. And you know, we're listening to this story and is telling a story about him, this patient. And that the the story basically ends with that he had to get into a physical altercation with the patient. And and literally like there was there was like a brawl of some kind. And I'm sitting there going, and and he's telling me this story, you know, and I'm sitting there going like, wow, like that's quite a story. And I'm like, you're trying to apply for a job here. And I'm like, you did what? And I'm like, it was just like that was like kind of like I I I like I can't even imagine, you know, but that's kind of a weird one for me. I was like, wow, then it's getting into a fist fight. you know, altercation with a patient. I was like, that was kinda like an interesting day for me for sure. Yeah. You were probably like, Hey, th thanks for your time. We'll get back to Yeah, thanks, man. Hey, we're gonna circle back around with you real soon. Yeah. Exactly. Well, this has been great, man. You definitely shared some phenomenal information, a lot of a lot of gold nuggets and fantastic wisdom for for our audience. I really, really appreciate it. Congratulations on all of your success. I mean, your your unicorn success story is is a beautiful thing. And and thanks so much for having me. I really enjoy this conversation, it has obviously been fun for me, but also congratulations on your success and everything going on with with your organizations and your businesses. And you know, I I I for me, what did I just talk about is alignment. Right. I want to be aligned with people like you, Matt, at the end of the day. that kind of wisdom shrubs off on me. at the end of the day, it's just sh having, you know, shared, you know, business concepts with people that are like-minded. And in that, you know, that was one of my wisdom align with people like Matt out there. There's many people out there, obviously, but that have the same level of of ethics and the same business acumen to navigate you through the process. There are a lot of people, good people out there that can help help all that. And and get getting things from different people is also super, super helpful, right? Whether it's, you know, you know, podcasts or reading books or getting getting through courses or consulting, you get you grab things from different people in the journey. And that's kind of like the way I've kind of helped develop my body of knowledge and Thank you for for your time and all this stuff. And I it's been it's been nothing but a blast here today. Thank you. Well, thank you. I learned a lot today. So thank you very much to you and Dr. Ellie Friedman was our awesome guest today on Dental Mentors Podcast. And we'll see you next time. Appreciate it. Thanks, Matt. Talk soon. Thank so much. If you enjoyed today's video, we'd love to invite you to join the Dental Mentors Facebook group. The group is completely free, but it is private at invite only. The group is for practice owners, dentists, specialists, and dental CEOs. If that's you, we'd love to see you inside. As part of Dental Mentors, you're going have direct access to the brightest minds in dentistry and the brightest mentors and some of the greatest CEOs that have ever worked in the dental space. You're going to learn all the best practices that you're going to need to optimize the profitability of your practices, to properly scale your practices, and to achieve a high value exit. 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