Scott Leune (00:00):

Let's just start in a very simple way. If we're going to take home a million dollars, what does that look like? We have to make sure we understand how to schedule in a way that we don't get burnout. Let's recognize that there's other ways that may not cost money. Once you've seen it, you

Richard Low (00:13):

Can't unsee it. Welcome back to Shared Practices 2.0, the reboot of the Shared Practices Podcast. If you are confused and wondering what the heck happened to your whole feed, there is an archive of all of our old episodes as well as another show coming out that will be focused on pre ownership and the journey to ownership. But this is the show for growing a dental practice, for finding fulfillment, for finding wealth and opportunity in practice ownership. And I'm joined by my host, Dr. Scott Leune. Scott, welcome to the show.

Scott Leune (00:59):

Thank you. I'm excited. This is actually part two of the conversation. We started on the last recording here and it's like we were just getting going. We're just start to dive into all the details on how to do this stuff. So it begins here. I'm very excited.

The Million Dollar Take Home Practice

Richard Low (01:16):

Yeah, we have set people up to be hungry for the answers of this million dollar practice, a million dollar Take home practice, and we outlined kind of the pace of this, the arc of this journey in the last episode and kind of talked about pros and cons, especially of the first phase. And I think that leaves our listeners hungry for the meat and potatoes of this first phase. And what we mean is we've got an arc of making a million dollars in a dental practice phase one, or could be the final phase for you if you so choose, is that owner producer. But we talk about this now and we're talking about this in a sustainable four to five days a week, but a paced schedule, intelligent way of controlling our relationship to insurance and participation, our fee schedule and optimizing and tweaking and doubling down on this model rather than assuming that we need to go fast, we need to go in a different direction.

And I want to hear the evolution of this and really the beginnings of the how to. We will probably need to spend future episodes, future months and topics talking about the really nitty gritty specifics. And we're all about that on this show is not being afraid to dive into the real content rather than tease on air and then come take our course. It's like, no, we're going to have the conversation in the podcast format and really it's the synthesis and the execution that you're going to get working with us at our courses and being with us in person. So I want to hear a little bit of this journey. You mentioned it in the last one, of realizing the possibility of that million dollar take home pay and how you saw this happen where you saw this successful versus where it fell apart and people got stuck and couldn't get here. I think as often as possible, I like to see not only how do you be successful, but where are the pitfalls, where does this fall apart? And people get hung up because that's, if you miss that piece, then you miss the landmines and the challenges in getting there. So I threw five questions at you. This is typical for shared practices. Take it wherever you want.

Sustainable Practice Models

Scott Leune (03:46):

Yeah, so let's just start in a very simple way. If we're going to take home a million dollars, where does take home pay come from? When we say take home pay, we're talking about a model where the owner's also the dentist. So we're talking like traditional dite, speak, take home pay. We're not talking about cashflow or EBITDA or any of that right now. So take home, pay a million dollars. Where does a million dollars come from? Well, it's what you collect minus your expenses obviously. So if we can choose a model that has high collections, great. If we could choose a model that has low expenses, great. So what does that kind of middle look like? Where our collections are healthy but not unreasonably high, our expenses are low but not unreasonably low. What does that look like? Now I'm going to describe a model, but the fine print here is you can do a million dollars, take home pay on a tiny practice, on a huge practice, on a fee for service on PPO or on specialty or not.

So obviously we can get to the collections and the expenses that we need to get to in multiple ways, but the common way, the easier one to digest is a model where we've got maybe five ops and that five op practice is likely running two columns for a dentist, three columns for hygiene. Those three hygiene columns are likely two hygienists with one assistant. So one of those hygienists might be unassisted, one might be assisted, and there's reasons to or not to do assisted hygiene. Of course we could go down that rabbit hole too, but this is what this might look like. Three columns of hygiene patients, two columns of doctor patients, five out practice, one dentist. We might have two front office people, maybe a little bit outsourcing, and that is at full capacity and at full capacity. This five op practice with seven employees at full capacity would have 2 million in collections.

Alright? $2 million in collections with 50% overhead gets us the take home pay of 1 million. Alright, so how do we get to 2 million in collections if we have three columns of hygiene and two columns with the doctor? Well again, doing the math, let's just assume for teaching purposes here, we're going to work five days a week. They're not going to be eight or nine or 10 hour days. They're going to be something like six hour days, just easy-ish days, five days a week for the math. So if we need 2 million in collections, then we're going to be open whatever, 48 weeks in a year and we're going to be open five days in a week and that brings us to like 8,300 a day. Okay, well what would hygiene produce?

Richard Low (06:46):

Usually a third.

Scott Leune (06:48):

Okay, well let's actually get really specific. What would a hygienist produce unassisted in a day if they're mediocre at production, like normal, average, nothing unusual. I'd say probably doing like 900 in a day one column if they're just decent and we've got a relatively full schedule.

Richard Low (07:10):

Is that a number you'd agree with? Yeah, my ballpark was 800 and 900.

Scott Leune (07:14):

Alright, so let's just say eight 50. Alright, so we have 8,300 that we need and we've got one hygienist that's going to do eight 50. Alright, well what about that assisted hygienist? That assisted hygienist is probably going to do something like 1500 or so. Yeah,

Richard Low (07:31):

Two columns,

Scott Leune (07:32):

1500, so let's just say 1500. So that leaves in this particular teaching example, the doctor's got to do 6,000 in this example. Obviously the better you are at hygiene, the less the doctor has to do. And by the way, the hygiene numbers we quoted are mediocre best, right? Mediocre

Richard Low (07:53):

Best. Not an optimized hygiene department by any means. It's like fluoride. All of that can really get this up. And fee schedules, insurance participation, all of those things influence this number. And we're not being unreasonable here.

The Role of Hygiene and Diagnosis

Scott Leune (08:09):

No, I'd say we're being incredibly, if that was my hygiene department, I'd be hiring a consultant to help me correct it. Those are the numbers. We're using the uncorrected

So that in this example, which is a worse example than our last episode, our last episode we assumed a little more health, but in this example we're at 6,000 a day for the doctor. Alright, so if I've got a doctor in two columns, how does that doctor do 6,000? I think there's a lot of dentists listening to this that have done 6,000 and what I commonly see is your $6,000 days are really easy to do. If you know some specialty procedures, nothing crazy, but you know how to do an Invisalign case, maybe you know how to do some molar indoor, you know how to place an implant or you do sleep apnea, you've learned sleep apnea therapy. The more of those bigger ticket items, you know how to do the easier and quicker it is to get to 6,000 in a day. That's like one Invisalign case in some exams.

So the thoughtful way to do 6,000 a day is to know some of those procedures to market for them well and also convert them well out of the recall base. The more of those skills we develop the lazier a $6,000 day feels. If we don't have any of that, then we've got the bread and butter way to get to 6,000 and that might be four crowns in a day and some fillings and follow-ups, four units, crown and bridge fillings and follow-ups, occasional root canal here, just bread and butter dentistry. How can we do four crowns and some bread and butter dentistry or three crowns and some bread and butter dentistry in a day? We got to do it thoughtfully. We have to make sure we understand how to schedule in a way that we don't get burnout. We got plenty of time to do it.

We've got two assistants helping us in our two columns and we got to cover hygiene. And so that's where operational expertise will make a bread and butter $6,000 day also feel lazy but not as lazy as landing one Invisalign case obviously. So I guess what I'm saying here before I close my mouth for a bit, what I'm saying here is this particular model says we've got a modest size practice with a modest size team and modest hygiene production. What's left over is 6,000 for the doctor and we can get to 6,000 a couple different ways that are smart. That is a lot different vision than building a big practice with a huge team, having to manage a lot of people and trying to get to 6,000 on low fees with bleeding from the knuckles, just trying to squeeze more people in to go fast. And if we aren't thoughtful and deliberate about what we're doing, we end up sometimes reverting to this bleeding from the knuckles model. And then we say weird things like, I don't think I want to hold a handpiece anymore. I want to just focus on the business side and we're saying it because our knuckles are bleeding. We're not saying it because we've actually been passionate about the business side all along. Does

Richard Low (11:28):

That make sense? Absolutely. And I want to talk about this a little bit how this compares to the assumption that we had in our super solo avatar in shared practices. So in my mind, this is really what we should have had as our super solo avatar. The assumption with the super solo was that someone who is motivated to go learn all these procedures also needs to have a little bit higher of a case acceptance and needs to be able to do these procedures efficiently and effectively. And there is a stereotype and we've seen that those types of people who are maybe more aggressive in their CE schedule who have a higher case acceptance also have a higher motor on them and want to be pushing and grinding and doing more and could really push that top line number of collections. And we saw this as the, we described this as the quickest way to make a lot of money in dentistry. I think what we missed was this sense of, I think we came at this from a fairly young perspective in dentistry, meaning a younger dentist who has less years out, who has less CE under their belt can sometimes get into the I'm going to go learn a bunch of procedures and then fails to integrate them effectively in the practice and fails to get fast enough at those additional procedures or good enough at the additional procedures and the ensuing follow-up and all of that.

And they need to be able to, like you said, convert well from the hygiene schedule from marketing for these specific specialty procedures. And from our perspective, this was harder to find and to coach because I can't turn someone's clinical skills knob directly if there's not this clinical confidence or clinical desire to add more. That's something as well that I can't control. And so there was aspects of this where it was like you need to kind of be this kind of dentist if you are going to lean into this, but the part that we missed was this sustainability of it. You don't have to just because you can do 10,000 days, $10,000 days on a consistent basis, if you're good at these extra procedures and you push and you are able to grind, doesn't mean you should. And there is a different version of this that I think comes with maturity in these procedures and maturity in people's clinical practice where all of a sudden it's like, yeah, I've been doing Invisalign, I've been doing implants, I've been doing sleep apnea or limited ortho and I like it and it's easy and it plugs into the schedule and I've got the stuff.

So I am trying to diagnose in retrospect where we missed the nuances of this avatar and those are the things that come to mind. So when you hear that the case acceptance, the clinical expertise, the desire to add procedures, where have you seen that? Okay, this is actually more achievable than maybe we assumed it was for the typical dentist.

Avoiding Common Pitfalls

Scott Leune (15:10):

What you're focused on I believe is you have confused the shortcuts with the model. So doing bigger procedures is a shortcut to get there. Having high case acceptance is a shortcut, but we don't have to do any of that. We don't have to do big cases, we don't have to be masters of case acceptance. We don't have to be diagnosing huge things. We don't have to be super. So we need to start with how can we get to that take home pay level being regular, regular, and you see the lower our expense base is the more regular we can be and still achieve a million dollars take home pay. So regular means a modest sized practice with the modest team and then of course we would like a full hygiene volume and there are just established recipes for that from where it starts with marketing to how you convert on the phone to how you retain them and how you follow up and close up the gaps.

There are recipes for all of those pieces and each gap we close changes the course of what's possible in the practice, but let's have a regular hygiene department of two hygienists be regularly busy and then how do we achieve five or $6,000 of production a day being regular? It is making sure that when we schedule, we're scheduling to that number and if we're having a hard time with that, if we're not achieving that number, that means we got to put our hand on one of these knobs and turn it up. So that means maybe we need to put our hand on the fee knob and turn it drop plants or maybe we put our hand on the diagnosis knob and turn that up. We go learn how to correct anterior crossbites on kids or whatever it might be. A new procedure helps us diagnose more or maybe the diagnosis knob is about hygiene diagnosis on preventative perio or maybe the diagnosis knob is about having a framework to talk about more cosmetic ministry to every single patient, but that's the diagnosis knob.

Or maybe we don't have to mess with diagnosis knob. Maybe we really do need to put our hand on the case acceptance knob and gently turn that up with a better presentation in the OP or better presentation financially. If we're unable to achieve the five to $6,000 production per day, it means we need to start tweaking some of these knobs. That's a lot different mental kind of view on it than saying in order to achieve a million take home pay, you must master these knobs. So we get there first by being regular and tweaking the knobs that are too low to achieve that none of those tweaks mean you're super, they just mean that you were trying to bake an apple pie on your own and it didn't turn out perfect and someone gave you a recipe and now it turns out better. That's what it means.

It doesn't mean replacing your staff, it doesn't mean changing who you are as a leader and putting in this amazing culture and no, it just means we're tweaking the way our machine of a practice operates. We're putting a little bit of grease here and there. Having said that, the more we can turn those knobs, the better. And so it looks from the outside like in order to be wealthy, you must place implants and do all on X and you must do ortho because the people that do those things, jack that knob way over to the right, turned it way up. And it looks like that's required to be successful. It's not required, it's just how they got there. But most people don't have that in 'em. Most people, most dentists don't wake up in the morning and say, I know I'm going to be an all on next dentist doing massively complicated cases and charging people 30, 40 grand an arch or whatever it is. Most dentists aren't there. So if you assume it takes being super to get to a million, most dentists will never make the tweaks they need to get to a million because they know they're not super. Does that make

Richard Low (19:30):

Sense? A hundred percent. And I think one of the keys here, you talked about this, three columns of hygiene, one unassisted, one assisted, it could even be three columns of hygiene with three hygienists. That foundation I think is where many general dentists fail to hit that point and therefore the other knobs with a larger patient base, all these other knobs work really well. And so that's the pitfall that I see and there's a whole nother debate that I think we'll have to get into in a separate episode of the ability to do this from a startup or an acquisition. It seems like either way these are very reasonable goals to get to, but if you don't have the patient base and you don't have the ability to convert excess demand into tweaking the fees or you don't have enough bodies in the chair to be able to find these procedures, diagnose these procedures GI enough, restorative dentistry, it makes all of those other knobs less effective. So I think that is a foundational in this journey is having that retained patient pool. But maybe I'm missing something.

Scott Leune (20:55):

Well, I find that I would call that part of patient flow. I'd call another knob that's big diagnosis and I look at those equally. I'd also call another knob case acceptance and I look at that equally. So in other words, if I see half the patients but I have double the diagnosis, I end up in the same place. And so patient flow times diagnosis times case acceptance equals the dentistry we could potentially do depending on if we allow room for it in the schedule. And you're right, you could have three columns of hygiene with three hygienists, you could have three columns of hygiene with two hygienists, one of those has lower overhead. And so if you go with a higher overhead model, then we've got to have the production to pay for that to still not put added pressure on everything else. You are also correct that the more exams you do, the more patient flow you have, the more exams you do that it puts less pressure.

On the other knobs, you could have a little bit case acceptance, but you've got extra patients and so you still fill that schedule for the doctor to 6,000. And so in this kind of hygiene led philosophy of let's expand hygiene to the greatest point we can because it fuels the doctor that is a correct law. The downside to that is it can result in a domino effective decisions that increase your overhead, but with everything there's too little and too much. And if we can hover in that sweet spot where we've got an appropriate amount of exams for the doctor to fuel the doctor's schedule, maintaining a modest cost base, that's where we want to be. And yes, if we're unwilling to look at turning another knob, then maybe we'd add more risk, add more costs and add even more hygiene to cover. But let's recognize that there's other ways to get to the same result that may not cost money.

The Importance of Expense Management

Richard Low (23:02):

A hundred percent. I love that You just keep challenging assumptions. This is the exciting part of this. And other advantages, I keep going back to this in my mind this fifth day, but the six hours a day is a piece of this that we've not explored as much. So there's even other advantages to this model. I think about for staff. I think retention and when you've got a small team, your systems need to be good, but a lot of times dentists get away with less good systems because they've got this small, highly efficient, cohesive team that does not require scale. There's not constant turnover. And I think even that schedule, I mean assistance hygienists, if you said we're going to work, what would that be? Eight to two or nine to three, we're going to skip lunch, we're going to work six hours a day.

I think it would be easier to retain staff. I think it would be a moderate pace for them as well. They're making good money. They've got five days of work a week. They're home earlier in the day. They like the pace, they like what's going on in that office. You're not pushing on them and creating this pressure for them. I can't keep doing this. I am going to burn out. Not only is the dentist not burned out in this model, but you've got a team who is at a sustainable pace. So I'm just still, my brain just keeps going. Different directions of the advantages of this type of sustainable production for a dental office overall. And there might be still more that I'm missing.

Scott Leune (24:54):

I like to use an analogy when it comes to running our career. It's a long time. We're going to be in dentistry in some way for a long time. And the longer we are picking up a handpiece, even if it's not full time, the longer we do pick up a handpiece, the longer we have more ways to become financially free. And if we think about, okay, how can I have a sustainable career where I am in some part a dentist, it wouldn't be sprinting, it wouldn't be sprint, stop, sprint, stop, sprint. So I would not be high intensity interval training. It would not be high intensity anything. How does someone lose a ton of weight and get in shape by putting a ton of intensity on themselves with high intensity and training, but they can't run like that for 10 miles. If you need to run a long career, you need to run 10, 20 miles, you need to run a half marathon or a marathon, you are going to run at a pace that moves you forward well, but it never puts too much strain on your breathing and there is a sweet spot for that.

So we should never feel on a regular basis like we have to sprint, whether it's mentally sprinting or physically sprinting, stretching, our ability should never be a regular occurrence. Those should only be saved for the very unusual moments that we might every now and then come across. But too many of us have seen successes, sprinting because it's all we know. So to us, if we could only just run faster, we'd make more. If we'd only run faster, we could have more success. We could only just add another race on the end of this one, have another location, try to run that one too. We'd be more successful. But that's not the only way to be more successful. I think that what we need to stop doing is stop thinking. Success comes from doing more of what you do. Success many times comes from doing something that is not what you're doing.

Also stop thinking that success comes from being super. It doesn't. It just comes from being thoughtful and smart. I don't mean mentally smart. I mean you've made smart decisions and not super. That's an unsustainable model. Being super is not for the most of us and it's not for most of us for decades. So we just need to do it in the right way in one of the right ways and that will result in a day that doesn't tire us and it'll result in time that doesn't compromise us and money that gives us freedom. That's goal one. Goal one, freedom, money in time that doesn't compromise us. And in an experience that doesn't burn us out, that might look like what you said. That might be a partial day, five days a week, it might be a million dollars take home pay, it might be doing the dentistry that doesn't have to be super with a team that's not super huge with systems that aren't super perfect, that is incredibly sustainable and no one from the outside looking in would say, whoa, they're super except someone like me that measures, did you get where you needed to get?

You have a million take home pay in a lifestyle type of practice. What a super job you've done. So we need to redefine what success looks like

Richard Low (28:30):

In our avatar framework. We actually flagged the super as our criteria for our avatars and our recommendations are PSS profitable, simple and sustainable. And we said when we would describe a super solo, we're like, this isn't actually simple to be good at everything and it's not necessarily sustainable because we were assuming good at everything at a stretch pace. And really what we need to do is merge our two avatars of productive solo and super solo into smart solo and the other. I think the reason that productive solo is different than this because we've described why super solo is different than this in our framework, smart solo versus productive solo, productive solo was assuming that growth was the next step. And so rather than doubling down and a patience and a further tweaking and optimizing, tweaking and optimizing, there was this hunger for growth that can get us in trouble.

But I have a friend who, and Scott Smith is his name, and Scott, forgive me, I'm always pretty sure it's North Carolina, but I always get the Carolinas mixed up and I think in North Carolina you can only check for two hygienists. And so there was kind of the ceiling for him that forced him to not continue to grow by adding hygienists. He'd have to add a doc. It's really hard to make that leap from one dentist to hygienists to the second dentist and another two hygienists without doing a merger, without doing something weird. And so he ended up in this situation where it was like, I can't really drive somewhere else. And I remember very early on he texted me and he was like, I'm a millionaire because of this, because of shared practices, what you guys have taught, what you guys have done for me. And now I think there's this part of you that relaxes when you've solved this problem for yourself of like, I have my cash cow, I have a way that I can provide.

I know I can do. I'm doing this and I can do this into the future and this is fueling a lifestyle that I never thought was possible. I didn't know that I could do this. And once that part of you relaxes, it opens other doors and other possibilities. So I wanted to go back to that question of where does this fail? Where do people fail to get here? And I think that the distraction of everything else that's possible and not having a clear picture of what it takes to get to this point you've outlined is one of the number ways, number one ways this fails. So what's your perspective on that? Is that the primary way this fails or are there other pitfalls that we're missing that would prevent someone from ending up at this location?

The Benefits of a Sustainable Practice

Scott Leune (31:45):

Yeah, I think the most common way this fails is that people don't have a clear vision of what they're actually trying to accomplish. So they get so focused on the tasks at hand that they find themselves getting really good at doing the wrong thing. And I've said almost my whole career, this kind of quote, don't get caught being really good at playing the wrong game. That's like swimming really fast to the left. You don't end up where you need to end up. And so they lose focus on that. And that is one reason why in the last five years or so coaching, entrepreneurial coaching and dentistry has become more of a thing because parts of your success journey involve having clear focus so that you don't get sucked into poor decision making. It's also having this outside voice that either validates what you're wanting to do so you have the confidence to do it or it's kind of pointing out the thing you're not seeing that completely changes everything.

That's the most common reason why I see people not achieve this is they don't understand how to have that focus, that clarity on getting there. So they will start doing things like once their schedule's full and there's too much of a weight and hygiene, I feel like I need to add a few more ops. I need to move to a larger facility. Or you know what? I think I need to hire an associate because I just can't keep up with the patient demand. And all of those decisions sound like there would be a logical reason to do it until you recognize that they don't follow this vision. This vision says we're not going to get to a million yet with bigger costs, we're going to get to a million with bigger profit. If you're too booked out, if you're too full drop delta for all means drop delta and watch your full schedule, have higher collections without you doing more work might be the next step as just an example. They also fail to understand how to turn the knobs. So if you are not achieving the collection base you need to achieve, then you've got to turn some knobs to get there. That's a failure point. They're listening to so many people in so many groups and looking at so many things and they don't know what to do and they don't make time to do it and they just complain about it and they just wish they had better people.

Richard Low (34:13):

That's my favorite version of online dentistry is the just whine about it and tell people why you're right and they're wrong and that's unachievable. This is just rampant. So anyway, sorry I interrupted you.

Scott Leune (34:24):

Yeah, well we're in the age where we can share information together very, very well. Of course there's no one grading that information. So false stuff looks just as real as real stuff and that is a problem. Another failure point is that they don't understand how to, in an ongoing way, be smart about their expenses in the business because as those expenses go up, it puts more pressure on the knobs to be turned even better. So if we can have this balance that says, I have a way, a budget to make sure I don't spend too much money, then it relieves pressure on performance. And then if we have the focus on where we're going, we're going to make the right decisions to get that performance. Let me kind of walk you through a linear kind of path. I'm a dentist, I have openings in my schedule, I'm not making enough money.

Step one, cut my dumb expenses and I probably need someone coaching me through that because if I knew how to do it and I had the ability to do it, I would've already done it. I need someone to coach so that it's going to happen for sure. That's step one. A dollar saved is immediately a dollar earned. Then step two is, okay, how can I turn some simple knobs so that I am producing and collecting more within the same schedule? I'm not expanding my costs, I'm not expanding my schedule just within the same schedule. How could I do better? And that's a phase where we look at are we marketing properly? Are we converting those leads properly? Are we scheduling properly, are we retaining, are we diagnosing? Are we having case acceptance? Are we managing capacity in our fees properly? That's a process and we don't have to be super, we just have to get enough that we're now at this point where we've got this wonderful take home pay level.

And by the way, I should have mentioned this earlier, when you achieve those levels of take home pay in a simple way by not being super with a relatively modest team, your team members will be paid more than they've ever been paid in their life. And there's also this subconscious appreciation that they have for practice that isn't always on fire. And this culture of accountability is something done thoughtfully by the owner. It's not something that just kind of happens. So we're also as a leader, building a team that is getting paid more than anyone else would pay them in an environment where we are kind of peeling away chaos and we are inserting accountability and that makes the knobs easier to turn, that puts grease on all the knobs. So any effort we put into a particular knob, it's easier to turn that thing.

Real-Life Examples and Success Stories

Richard Low (37:22):

Does that make sense? Absolutely. The knob that I see people not paying attention to that makes this harder and puts more pressure on the system is that expenses knob of once your overhead has creeped up, then all of a sudden there's just more pressure on everything else in the system. And the scenario you described upfront of a $2 million practice with a million dollars of overhead, it boggles the mind that I'm sure we see practices producing $2 million that have more than a million dollars of overhead because that seems like a reasonable target. Where is all that money going? And I would love to hear from you, your experience in that of a practice doing 2 million that is not paying attention to the leanness because there's so much top end and that overhead consumes more than it should and it doesn't have to be a 2 million practice, but a higher producing practice that where do you see the common or the inattention being that might need trimmed on this type of practice?

Scott Leune (38:41):

Yeah. Well typically at 2 million, if you've chosen the right model earlier on with your facility, you're probably looking at 5% or less in facility costs. But whether it's 4% or 6%, it's not a huge difference to you. On the dental supply side, you definitely need to be well below 4% where most practices are double that. So there's definitely some things that need to be corrected. On the lab side, you're probably going to be around four to 5%. And when I say lab, I don't mean the added cost of clear aligners. When I say supplies, I mean all dental and office combined minus implant parts, implant parts and aligner fees. Those are things that happen as you have patients say yes to 'em, they're not budgetable. Realistically, when you look at staff costs, we're looking at an owner driven practice that has 2 million collections is probably going to be around 20% to 25%. I've seen it below 20% plenty of times. But again, that's a model that says we're staying small, so that means less people. And you know what? Let's just do some math. Let's dive into that. I was going to

Richard Low (39:55):

Say we're at like 35% right now.

Scott Leune (39:58):

Yeah, well, and you're associate driven, but you've also got higher fee. No, no, no. I'm saying

Richard Low (40:03):

What you just outlined. 20% staff, 5%, five to 6% facilities, 4% supply, and then another 5%.

Scott Leune (40:15):

So you're going to have another 10% or so of your general admin, your GNA category, it's going to come, it's add up to right below 50% overhead when you put it all together. What

Richard Low (40:27):

Was it? So lab and then general overhead. So now we're at 45% outlining very reasonable percentages to stay within.

Scott Leune (40:36):

That's right. But let's actually call my bluff if you think I'm bluffing. Let's do the math because I said in this five op 2 million practice, we are going to have three assistants, we're going to have two hygienists, we're going to have two front office people. So let's do some quick easy math for that. Let's assume a hygienist makes twice as much as an assistant or front office person, which is very common. So we've got three assistants. Those are three people, two front office, that's two people. So now we're up to five people and then we've got two hygienists that represents four people. Salary wise, we're up to nine people worth of salaries. Granted, hygienists are double. So nine people. So what is an average wage of a person in your area? Let's say a dental assistant or front office person? It's going to vary across the country, but just for this kind of math for easy, let's just say it's something like, would $22 an hour be reasonable? Sure, yep. Okay, so let's just round it up to 25 then. Let's be a little unreasonable. Okay, so I got $25 an hour, I'm doing 30 hours of clinical care plus a few more hours than that. Let's just call it 33 an hour, hour weeks, and I've got nine people worth. And then let's just assume we're going to pay for all 52 weeks of the year. That's a big assumption. That puts my staff costs at 386,000. Let's add some taxes and benefits to that. Now I'm at 4 30, 430, 21

Richard Low (42:14):

0.5,

Scott Leune (42:16):

21.5% and that's paying 'em 52 weeks a year. That's paying them 25 an hour, which means my hydrogen at 50 an hour, that's paying benefits in taxes and I'm still nowhere close to 25% overhead. And that's 21 point a half. Do you see, I could overpay them, I could give them extra benefits, I could have a bonus plan, I could do more and still not surpass that 25% mark. You see, this is not a model about finding employees at reasonably low wages. This is a model about achieving good numbers without hiring more employees. This is a model about having a cost ratio that is healthy to begin with. And the more my fees go up, the more I make with the same people, the more advanced dentistry I do, the more I make with the same people, the better I collect, the more I make with the same people, the more I diagnose, the more I make with the same people.

So so much of diagnosing more doesn't mean more appointments. Doing sealants doesn't add another appointment. Not that we want to go overboard and do sealants on everyone. I also don't mean that, but I'm trying to show you that there's knobs we can turn that increase our collections that have nothing to do with hiring more people. And if we can have a facility and kind of a schedule size that keeps our team at a modest size and just grease those nice little knobs, we end up magically having a lazy feeling day and taking home a million dollars with a team that's overpaid and we're happy to overpay tell you a story real quick, another story and then I'll shut up for a bit. Before COVID hygienists in San Antonio, were getting paid about $35 an hour. Now they're getting paid way more, way more than $35 an hour.

But back before COVID, my hygienists were getting about 70 an hour before COVID. I paid them on a base hourly wage plus a commission. If they produced enough, they earned more pay. And after they were done producing, they ended up getting about 70 an hour. So when COVID happened, we came back from COVID, all the practices nationwide complaining, I can't find hygienists. My hygienists quit for more money here or there. Meanwhile, mine are still making more than everyone else because our model is healthy and it enables them to make that kind of money without me being damaged.

Richard Low (44:51):

It takes the risk out of the appropriate structure to that bonus system and how that compensation works just incentivizes in all the right ways and they can't make this kind of money elsewhere. And you're protected on the downside if they're not producing. And I love it. Yeah,

Scott Leune (45:12):

Problem is though I'm not really protected because my minimum hourly wage that I give 'em has to be at the top level of my area. Otherwise I'll never recruit them. I'll never retain 'em. That's their guaranteed pay, that's their base. That base has to be super competitive. So my downside for a high hourly wage is not protected. But if I had to higher gie, let's just say for like 60 bucks an hour, which is starting to get, we're seeing parts of the country definitely at that level, I'm fine paying 60 bucks an hour if she could produce 1700 a day. And so if I'm going to hire this hygienist, I'm going to tell this hygienist like, okay, 16 hours something. But our expectation is we've got to be at 1700 a day production, otherwise its hourly wage won't make sense for us long term. So that's the expectation.

And we're going to produce 1700 a day or more without doing a single thing wrong for a patient. We are not pressuring going to start going down that path. What we're going to do is the dentistry people need at a high rate of case acceptance, we're not going to shy away from telling 'em what they need. And we're going to say it in a way that is mature, that gets this case success. That's how we're going to do it. And that's just the expectation. And it's amazing when you give team members clear expectations, how many of 'em achieve it?

Conclusion and Future Topics

Richard Low (46:39):

To wrap up this episode, I have to confess that this episode is going to create marital problems for me because listeners to the original shared practices 1.0 will know that I started this podcast when I was still in the army. I was in a two year a GD residency. I had five more years left in the army. I bought three GP practices with some good friends and partners. Ended up walking away from those. I bought a denture implant practice from Ryan McCall or a denture practice, turned it into a denture implant practice all in four, but then merged it into shared practices group where we aggressively grew. And she's going to be pissed, like, why couldn't we have done this all along? Why couldn't we have made a million dollars a year doing sustainable dentistry and having a reasonable schedule and reasonable stress levels? She's going to be pissed.

And so I have you to think for that, Scott. But no, I just think it's so easy to miss the mark here if you've not seen it. And once you've seen it, you can't unsee it. And that's my favorite moments in dental business education is showing people what they didn't know was possible and how to get there in a very reasonable way. And it just changes their focus, their direction, their trajectory. So I'm really grateful for the second episode of SB 2.0 is this eyeopening reasonable way to take home a million dollars of dentistry a year as a dentist and will dive deeper in the future. We'll talk about some of the specific systems that work and don't work and how to dial all these knobs. But Scott, thank you for this. Anything to wrap us up before we close out the episode?

Scott Leune (48:36):

Yeah, a couple things. We've only talked about being a full-time dentist to take home a million and I'd like on the next episode to talk about, well, what if you want to be a part-time dentist? That is actually to me, a really innovative way to do this. My favorite thing to talk about maybe, but I also like to say that you, I didn't do this when I was a dentist. My wife would've loved if I had done this. What I've realized in my life is that when you are an entrepreneur that does the crazy things, whether you want to or you have to, but you're the one that's at the front walking into battle and you don't know what's in front of you, you're the one that gets the most bullets and you've made these mistakes and most of those people don't go talk about it.

Most of those people, they learn and they do more and they hopefully do better and that becomes their journey. But in today's age and with shared practices, what we're doing is we're finding joy in helping other people avoid some of those bullets. And some of 'em are little and some of 'em are massive. And I think you're doing good when you're watching other people achieve more than you did, that's when you know you're doing good because that means you have helped them in a real way, in a raw way. And I see it all the time and it's something I'm very proud of it also, you look back and you're kind of jealous of the life you could have had avoided all this pain and effort and all these problems that come along. But in every bad moment in life, it's my opinion that every bad moment, no matter how bad there can be beauty out of it, even the most horrible things we can think of can put us on a path to deliver beauty out of it to the world. And that is what happens. You look back and you're like, man, had I known, had I done, it would've been different. But had you not done what you did, you wouldn't be here delivering the beauty. That's how I look at this. I try to stay positive about all of the things that I screwed up in the past knowing that it delivers value to everyone moving forward, including myself,

Richard Low (51:11):

A hundred percent. And there's a Chinese proverb that I won't describe the whole thing, but the line, the punchline from this is who knows what is good and what is bad and that every time something bad happens, there can, and often if we're doing it the right way, we should walk away with good things. And people ask me, do you regret having done your two year residency in the army now that you're not clinical? And there's times that my wife was like, why did we do that? We sacrifice and all these things. Do you regret doing? The Army shared practices wouldn't exist if it weren't for five years of angst where I was taking breakaway courses, but I couldn't do anything about it, but podcast about it. So I absolutely love the people that come up and have said, this has changed my life. You've changed the direction of my trajectory. You've given me hope of practice ownership and success, and I've executed on it. And here it is. And I love it. I love when they have that success and that fulfillment and oftentimes that income way before I've even scratched that income, which is hilarious to me. So Scott,

Scott Leune (52:18):

By the way, just to clarify, I am not affiliated with breakaway. I

Richard Low (52:24):

Don't know, I'm sorry. And yeah, we should, our listeners, we should clarify that upfront. And if you want us to refer to it differently like your previous courses, we can do that on episodes moving forward. It's just hard to separate.

Scott Leune (52:37):

Yeah, of course, of course. I mean I've been known that name and my name have kind of been the same to a lot of people, but I just don't want to create confusion. What I do is under Scott Leune education and what they're doing over there, I have no idea. I'm, I'm not involved with it. I don't know what they believe in. I don't see them doing any events or anything like that. And I just want to make sure no one thinks I am that because I'm not.

Richard Low (53:01):

Thank you and thank you for the clarification and ScottLeune.com I believe is where people can go to learn more about you and what you do and if they're like me and assumed they've heard your name out loud, but they haven't seen it spelled, it's L-E-U-N-E. So yeah, just right up front, got to clarify all of the fine print on the podcast. Perfect. Well I'm very excited for this next episode. So we're going to wrap this up and next time tune in, we'll talk about this part-time dentist avatar, taking home a million dollars. If that's of interest to you, stay tuned. We'll talk to you soon on Shared Practices 2.0.