Scott Leune (00:00):

Don't think because that's what you're used to, that's what you should strive for. There's so many decisions we have to make that we better know exactly what the vision is of where we're trying to go.

Richard Low (00:10):

Two light bulbs went off for me. This has been a phenomenal conversation. Welcome back to Shared Practices 2.0. This is an amazing opportunity to be refocusing the content that we've brought to you for eight years now on a new direction, a clearer direction, and I'm joined today by my co-host, Dr. Scott Leune. Scott, how's it going man?

Scott Leune (00:45):

Man? It's going great. Weather's good. Kids are good, business is good. So life is good right now.

Richard Low (00:51):

That's awesome. We've gotten a lot of good feedback. I think the first episode just came out yesterday. People are loving it. I'm getting texts, we're seeing Facebook messages. I also got some feedback from Suzanne, our director of coaching, and she's like on the smart solo. We do that for people all the time. We just don't have that label for it of like this is the direction we're going. And so she was like, you were acting so surprised. And I was like, well, no, it's the clarity of the goal that I loved so much and we had not articulated this kind of endpoint of what this practice could be, but I did get a question from one of our audience members about the smart solo avatar that we talked about of the 33% hygiene collections on a $2 million practice with two hygienists. I had a little bit of incredulity from a listener, so I just want to revisit that point and get your thoughts on that.

Scott Leune (01:49):

Yeah, so let me first say that I hate labeling a ratio as something healthy or not healthy sometimes because gosh, should it be 30% hygiene, 70% restorative, or doctors say, whoa, if the doctor does huge cases

And our hygiene's only 10%, is that bad? Does that mean we have poor hygiene? Or what if we've got these rockstar hygienes through doing pretty advanced hygienists that are doing pretty advanced therapies on perial with high case acceptance and we're at 40% hygiene? Does that mean we're battling the restorative side? So let's just make sure we use common sense and put things into context. But in that specific podcast episode, we talked about a 2 million collection practice and at one point we said, okay, well if we're working five days a week, six hour days or so, that's like $8,000 a day in production and that 8,000 might be split 5,500 on the doctor side, 2,500 on the hydro side. How do we do 2,500 a day with two hygienists? I've had plenty of hygienists that did 2,500 a day, which is one, but how could we do it with two? I think a very reasonable production amount for one hygienist and one column would be a thousand a day. Very, very reasonable. That is not outperforming anyone by any means. And if a hygienist has two columns doing 1500 in a day, incredibly reasonable. This is not super hygiene, this is not super speed, not with super hygienists. This is just reasonable modest hygiene. So back to this thing, okay, 2,500 a day in hygiene is two hygienists in three columns, very reasonable, and even with that being six hours.

Richard Low (03:33):

So these are still reasonable numbers on a six hour day compared to an eight hour day.

Scott Leune (03:42):

Absolutely. If someone listening to this has not seen those numbers, I'm not surprised because when I see and work with practices when I'm their coach, it's common to find practices that have fallen into this kind of usual and customary way of having hygiene be at 800 in a day for an eight hour day per hygienist. Don't think though, but because that's what you're used to, that's what you should strive for or that's what's only possible or normal. On the flip side, we see practices where hygienists do more than 2000 a day every single day. So maybe that's a whole nother series of let's get down to the ingredients of high performing hygiene, not fast hygiene, not stressful hygiene, but high performing hygiene. And I'd say high performing hygiene is way more than what we talked about, 2,500 a day across two hygienists in three columns, even if it's a six hour day high performing is way more than that. This is oddest performing.

Richard Low (04:43):

No, this is great, and I think the person who posed this question, they'd heard episode one with Yumi and George, but not the fully articulated version of episode two, but I did want to double down because I think for some people that was like, okay, how is this possible? And it is. It absolutely is. The numbers bear out, but today, thanks for indulging me on that one listener question. Today we are talking about phase three of this journey of another possible way to have a million dollar take home as a dentist, but rather than practicing in the practice, you are stepping back. So tell me about this avatar and what's possible and the anatomy of this third dentist who's taking home a million dollars.

Scott Leune (05:34):

Yeah, we had said phase one or option one was we're going to work full-time in a modest practice. We're going to do it in a very smart way, take home a million dollars as a dentist, not a super dentist, but a dentist, a smart dentist. Phase two or option two said, we're not going to work full-time anymore. We're going to work part-time but still have that million dollar or more take home pay. And we talked about this kind of concept of a virtual specialty practice that the owner does layered into all the seams and nooks and crannies of a GP setup and therefore having this really cool overhead effect. And that was the last episode. So now phase three or option three says, well, I want to take home a million dollars, take home pay or more, but I don't want to pick up a handpiece.

Alright, now we're into kind of the DSO style realm of ratios and financial performance and staff makeup and we could look at a profit and loss statement and say, these are all the exact percentages we strive for and when we do, we hit this specific percentage of EBITDA and we need to cashflow at least a million dollars. That's kind of what this episode, that's the path we're going to go down and boy is it important to know what that looks like so that as we transition to this phase, we're making the right decisions about should we hire more people, should we have another location? Should we invest more in marketing or less or should we transition to cloud-based software or not? There's so many decisions we have to make in the complicated world of associates in multiple locations that we better know exactly what the vision is of where we're trying to go so that we don't get off path, we don't accidentally do something really well that takes us to the wrong direction. Does that make sense?

Richard Low (07:27):

Absolutely. And with that, I would start with this question or my initial curiosity is the debate that we've had on the podcast before and the direction that we've pushed people between large single practice with multiple doctors versus multiple practices, and our hypothesis has been that if you can have three, four plus doctors in one location that the economies of scale, the leadership hierarchy, the ability to influence teams and lead teams and tends to work better and it's easier to hit this level of profitability, then the same thing spread over multiple offices with multiple overheads, but at the same time, sometimes that's not possible. If you're rural enough, it's a small enough town, you can't get that many dentists under one location because the demographics don't make sense. But I just want to start with that question unless you feel like, nah, that's a distraction from where we're trying to go.

Scott Leune (08:33):

I love the question. Unfortunately I agree and disagree. Okay, that's great. I believe that everything you said is correct, but it's not just that. So yes, having one location with a larger team has advantages. If we're short one doctor, we just ask the other doctors that are already at that location to work a little extra to cover the missing doctor. Or we can have staff kind of move around. We've got one patient base we're managing one set of facility issues, one kind of marketing strategy, and all of those things make things easier. We've got one rent and maybe we've outrun that rent with added collections so that that rent percentage is a nice healthy percentage. All of that yes can happen. However, there's also advantages to multiple locations. One huge advantage is that you have multiple patient, you've got multiple demographic areas you're pulling from now instead of just one, and that gives you the opportunity to pull in larger procedures at a much higher volume.

So I would rather market all on X across five different demographic zones than just one because there will be more of those patients across five than one. I would rather market Invisalign and cosmetic dentistry and sleep and facial aesthetics and all those things across different multiple zones as opposed to one also, when you have more locations that are smaller, they fill up, they get full, and that leads you at some point to be dropping plans faster, raising your fees faster, and therefore your margins are much bigger compared to constantly expanding one location and delaying and delaying and delaying yet again, the dropping of some insurance plans, even though you could drop 'em early on, what actually happens in real life is the minute that location starts getting full, that entrepreneur has this vision of multiple doctors. They bring on the next doctor. They don't drop the plants first.

They typically bring on the next doctor verse. And here's the other problem with the thought that says, okay, one big location is better than three or four small. The problem with that is now you got your one location and you are in your mind thinking that must become a multi-doctor location, but you know what? You may not have the strength in that location to do it. You may try to force that. You may start making compromises or moving too early on things. You might start adding risk just because you've told yourself it's got to be multi-location. Maybe you added risk on day one. You went and bought or built 10 ops because you always thought and said to yourself three or four doctors in one location is better than one or two, and that's more risky in many ways than having two small practices. Now we've got two patient bases paying a smaller overhead per location then trying to pay a double overhead with just one demographic zone of a patient base.

So that can all be confusing. The way that helps me unwind this mess a bit and to get clarity on what to do is if I'm building a startup, I'm just going to make today super successful and that probably means it's a smaller facility, smaller overhead, and if I fill that up with one doctor, I can expand the hours, I can get two doctors in a small practice and if that's full and I can't grow any more doctors, I'm okay with that. I'm just going to maximize profit, maximize profit more, better procedures, higher fees, and I'll open another small practice somewhere. That's different than saying let's open a 10 op startup, which we've talked about on the now in the archive.

Richard Low (12:34):

This is why we burned it all down of the guts to open a 10 op or greater potential. I mean, don't equip it all right at the beginning, but leaving yourself the runway when the demographics justify it, the area justifies it and you see the pathway to growth. It takes both capital patients and some risk and a risk tolerance to do something like that. Coming from an acquisition side, we bias towards buying the practice that has one doctor, a latent patient pool and the ability to transition into a two to three doctor office as a way to minimize the risk and accelerate the process. And so that has become that sweet spot of combining the best of both worlds in that I do think the pushback on risk that comes up for me right away on the multi-location is the doctor who is not able to extricate themselves from the first practice and is then opening a second and a third location.

That's where I've seen doctors tend to get burned is that, okay, I did this great. Once their leadership is at that first location, their ownership of the situation is the first location. Maybe their systems aren't as good as they thought they were, but really they just had a well-trained team and their presence drove the profitability of that practice and then they start to try and copy and paste and office two, three and four end up being a source of more stress risk, less profitability than they had predicted. It's like they had one data point and they just drew a line kind of going up of, Hey, let's just copy and paste this over and over and it didn't play out. And so that's the risk that I think we've driven towards that. Acquire get to two to three doctors, four doctors, because if you can do one large location well, it lends itself to pulling yourself out of the practice. It lends itself to having scaled and built systems well built a leadership team well, and then you have the freedom and the leadership to go do more offices rather than expanding too early, getting that second or third location prematurely and being stretched too thin. So that's I think where our position has tended to come from is that scenario.

Scott Leune (15:09):

Yeah, what's interesting is the day after tomorrow, I'm giving my multi-location seminar just coincidentally, and I've got kind of a big chapter of that seminar of going from one to four locations. That's literally the title of that section and what you describe is true when you have not maximized your profit and take home pay to begin with. So let me just explain this a little further. If you've got practice one as an owner and you're in network with PPO plans and you do general dentistry and a few little specialty procedures and you want to have associates in multiple locations, if you then add practice three, practice four, you experience what you just described, you're stretching yourself thin practice two doesn't perform like practice one, and now you're managing two locations, three teams. You got turnover of the doctors, you've got low profit margin, they're all in network with lower fees, and you're not sucking out this massive take home pay from anything.

And so you've got this really difficult, stressful middle kind of phase when you go from one practice to 10 associates this middle, this really tough because you're not big enough to afford the infrastructure you need. You're not big enough to get the take home pay you want without picking up a handpiece, but you're too big to do it all yourself. And so it's a really ugly middle and one strategy is get out of that middle as soon as you can by expanding to multiple doctors in each practice so that you finally have a big enough team and a big enough collection base that you can start pulling yourself out and start putting out the fires and healing from all your wounds from this middle. And that's true. That's one way of doing it. That's one way. If we look at another way, which started with our episode one that says, Hey, instead of just jumping into expansion, why don't we take home a million first when we're the only dentist?

That means we've probably dropped a bunch of plans already. We've probably started doing some specialty procedures. We're not super dentists, but we've got a healthy margin and now we're taking home a million. Then we go to part-time. What does that mean? That means an associate or two, maybe three, not many. One location, I don't know, maybe two, not many. But because we've built our virtual specialty practice and we're only practicing one or two days a week and taking home a million, we have time to already be handling the pressures of scale and we've got the income to already afford things we couldn't have afforded before. But with that time and with that income and going down this road at a decent pace, we don't crash and burn and have to rebuild ourselves and have to upgrade our whole organization super fast. We've actually gone down the path in a very smart way.

And then when we go from that to the title of this episode, no handpiece, well, we've already built this specially practice that's super profitable. We've already grown to a few associates, maybe a couple locations that's already stable and our fees are already high because of how we got there that we don't have this ugly middle. The middle was actually a beautiful middle. The middle was actually not that big, but a whole lot of profit, not that many people. So more predictability. There was a beautiful middle. And when we go from that beautiful middle to now not picking up the handpiece, it's not a huge transition and we can do it with one location. I've done that. We can do it with five locations. I've done that. Lots of people have done that. How many locations you have, it's a factor in the makeup of your practice and the opportunities you have and some of those challenges you have, but it's not a determining factor on being successful or not.

What I've found is maybe it's easier to start with what are the numbers we got to hit because we can hit numbers a lot of different ways. So what I've found is that 18% is what we can pull out of this organization an 18% margin. If we're not picking up a handpiece that is with modest production, that's no super dentist are in there, no super procedures, no super hygiene departments, no crazy new patient flow, no super treatment coordinator, modest. We're looking at 18% margin and if we want to take home a million and a million's, 18%, if I'm doing the math correctly, that brings us to about five and a half million in collections,

five and a half million in collections. Well, what is that? How can we hit five and a half million in collections with regular people, regular offices, regular dentistry, you're probably looking at six associates and six to nine hygienists depending on how you run that department. And if you're assisted or not, six associates worth of dental practices will get us that five and a half million mark of collections and we need to hit a regular 18% margin and we take home a million. And of course I can go into all the percentages outside of that as well. The expense percentages, what does that actually mean? But five and collections, five and a million collections, what we're talking about, you can hit that with one location, you can hit it with five. The important thing is let's not fall into an ugly pit trying to get there.

Let's just always be clean and profitable and stable and mentally healthy and get to that five and a half million in a way that makes sense. It makes sense. If there's a practice for sale that we can fit three or four dentists in and it's already profitable, great, but what if there's a practice for sale that only has five ops? Well, that can work too. We can fit two doctors in that if we expand our hours and what if there's a great startup opportunity? We don't need to build a 10 or 12 ops startup and add that upfront risk. We could build a five op and make it super profitable. I'd rather have two five op startups than one 10 op startup for sure. I'd rather have the two different patient bases than one

Richard Low (21:36):

Be able to hire two dentists from day one, the 10 ops startup, you're going to have to fill up one dentist with the larger overhead first before bringing on that second dentist. It's a much longer journey.

Scott Leune (21:48):

And then before bringing on the third, and then when are you going to drop delta?

Not until the end. Not until the end. That's what's probably going to happen. And so therefore, your associates who aren't necessarily at the peak of their careers, so their production numbers aren't the highest they're ever going to be, they're lower than that. They're depressed, they're also on depressed fees and they use excessive staff typically. And so we have this model that says, oh my God, we've got a suboptimal producer with low fees on top of that using a lot of expenses, and I lose them every year or two or three. And so then I have the cost of turnover and resetting and restarting. Man, that's a really costly way of doing it. That's a really stressful way. If we can correct some of those things a bit, maybe we wait and do this in a way where our fees are not the lowest. Maybe we do it in a way where we have controls over our expenses and we supplement the practice in the beginning maybe with some nice owner specialty procedures, even if it's just one day a week or a half a day a week, until we get healthy financially, we get to step over a bunch of the ugly painful moments of growing a group.

Does that make sense?

Richard Low (23:04):

Absolutely. And it makes me reflect on why we've stayed clear of this topic as a recommended path for us, and it's because our PSS profitable, simple, sustainable. This is more complex. It requires a level of entrepreneurship that is higher, requires a drive and an appetite for larger moving pieces. But also to do this predictably and safely like you're describing, you have to have seen more dentists go on this journey. And we just have not purposefully, this is something we have not specialized in is this process. And we have not seen the reps over and over and over of people going about this the right way, the wrong way. And you've been involved in more of these GP opportunities to scale and opportunities to go to multiple locations because it takes an entrepreneurial dentist time to do that first practice well and then make the decision that I'm going to transition to this next practice and move forward.

And that's why we're really excited to be able to lean on you for the course that you're teaching in two days because this is an area that in my mind, you need to understand why you want this and that you are the type of person that really wants to put the handpiece back and scale. Because the other option is you can put the handpiece down and not scale and be okay with a $600,000 take home with less people, less risk, less overhead with one or two locations or one large location. There are other options and there is a decision point of it is worth it for me to take this next step of getting to five and a half million. So that is something I'd love to hear you address is knowing about yourself that you want this. I think that's the other part is that people think they want this and then they go about it the wrong way, which is probably the biggest problem. But then they realize, oh crap, I've gone a direction that is not as fulfilling for me as owning and running a single practice efficiently was. So can you address that concern of self-identifying? I really do want to put the handpiece down. I really am willing to scale and go to multiple locations and knowing that about yourself before you start that journey.

Scott Leune (25:37):

This is one reason why I feel education, business education is so insanely important because you're not self-aware as much as you wish you were had you been more educated. So the less education you have, the less learning you do, the less of things you don't know yet. There's so much you don't know that you don't know. So the more you learn about this of different models of doing it, of benefits and drawbacks and risks and rewards, the more self-aware you can actually be and make really responsible decisions. And when I kind of think about entrepreneurs, especially in dentistry, I kind of think of the younger entrepreneur, so much excitement and fire and fuel and they've got this big vision, but they're so reckless about it. It doesn't seem to them they're reckless. It seems like they're driven, but it's actually recklessness trying to do something great big.

And then you've got the scarred up entrepreneur that they've been cut up and beat up and bled and they've grown from it. And what they have is a maturity that's been added. Now they still have that same big vision, but instead of being reckless, they're actually, they have discipline. The discipline comes with understanding how to stay true to a vision that's smart and how to build boundaries so that you don't skew off path too hard. And a lot of people associate that with the ability to say no, to say no to things, to not chase the next idea you have because every idea you have, you're so positive that you think every idea is going to be the next best thing you do, right? A disciplined visionary entrepreneur is staying true to that course and a whole lot of business books stop there. They say stay focused.

Do one thing really well passionately it must be your passion. They say, because it's the only way to survive the reckless pain that you've created and make it through there and still keep doing it. If it wasn't your passion, you would've left. And that's what a lot of people communicate. But then there's a whole nother level that says, I was reckless and then I was successful with discipline. Now what I'm going to do is I'm going to 10 x or a hundred x that big vision with the skill of discipline and vision that I've achieved, and I don't even need to know how to operate everything that way I can bring in the team that has operated things like this in the past and they are going to assist me. And that's when you see some of the biggest entrepreneurs say, I don't need to be the smartest one in the room.

I have rock stars and specialists that do this for me and my job is to make sure I'm serving them and that we are going down the same kind of vision and path and I'm going to build the boundaries for it. So you kind of have that in dentistry. Unfortunately, nearly everyone talking is in that kind of reckless phase of entrepreneurship and they make it seem like laws and truths in the best way. And me too, I've done that plenty of times and dentistry has been so good and frothy from the business side, from the consolidation of building groups and DSOs and interest rates are so low and the dental demand grows so fast that being reckless still made money. It still became a success. But what people hid were all the scars they were getting on their back from being beat up from behind from their own organization and they don't let those scars be seen.

I feel fortunate enough that I've had really bad moments in my life moments that a lot of the people I know have never experienced things like that. And I feel like that has given me perspective that I used to not have. And so I really notice the things we give up, the things we lose, the compromises, we make those scars we're getting on our back and I've really sought out to figure out ways to still achieve this big vision with discipline so that we avoid those midlife crises moments, those relationship deteriorations, the health, the loss of health, and we lose all of those kind of bad tasting ingredients that are part of most people's story. I don't know if I'm making sense here, but I think that part of my vision is coming from this angle of control, of discipline,

Richard Low (30:16):

And I just smile because I identify myself as someone who really thinks they don't like scaling dental groups. And I've done it twice and I've been involved in it twice and upfront was hesitant the first time I was a little more excited and the second time came into this process of scaling knowing that at a certain point I was less and less interested in scaling for the sake of scale and experienced a lot of the things that you just mentioned and talked about. And so part of me going back to the question I asked, which is how do you know ahead of time if this is for you?

Ideally you have someone to guide you who has learned the hard way and can help you scale this without the same level of pain and scars on your back. But also I think no matter what you do, there are going to be some scars and there is going to be some pain and your appetite to continue to scale and grow despite that, in my opinion, is one of the biggest indicators and it's okay. My favorite part about pivoting within dentistry and within entrepreneurship of dentistry is that if you are making intelligent moves along the way, you are always in control of profitable businesses and therefore you always have options. You can scale back, you can sell, you can decide this is not the direction that you want to go, and that's okay. So my thought is you have to be driven enough and have the vision to want to scale and survive some scars and know that you still want it. Is that a fair assessment?

Scott Leune (32:15):

Yeah. Yeah, it is. Vision is insanely important. You have to be lured in enough to that vision that you don't lose sight of it. But you know what? If you can make the journey to get there enjoyable, meaning there's money freedom and there's time freedom so that as life blows you left and right outside of your business, you have the ability to withstand that, then suddenly scaling is a whole different kind of game. The problem is when growing the multiple locations and building large organization is at the cost of financial freedom, at the cost of time, freedom at the cost of health and relationships, then you can only survive that for so long. And yeah, the more you drive, the stronger you are just putting everything in and white knuckling the crap out of this to get through the farther you'll go as you're getting cut up and beat up. But what if you just solve the cut up and beat up problem first?

What if you say, okay, we're going to scale. We have this huge vision. We're really excited about it. We want to build our own little version of an empire, but we're going to do it in a way where we are listening to the stress points and reacting appropriately, so we're going to actually make the journey a successful journey that doesn't kill us. That's another way to scale, and that is a way of being intelligent about it as opposed to reckless. It's having discipline as opposed to reaction. It's having patience as opposed to jumping immediately to the next thing. And it's almost like a graceful way of building wealth. And the people that do it that way, you look at them and their life is full of grace, their life seems to be really strong. You admire them. You can get lost in admiring someone that has just been crazy reckless and loud and broken, all kinds of stuff in the China cabinet, making it to their huge success story that's very entertaining. It's like you're like, wow, I can't believe they, I mean, that's crazy. They accomplished that. But I don't know if that's the path I would choose. For me, I think I would choose the path where the journey is so enjoyable, even with the bad moments, every bad moment. By the way, if it doesn't scar you or beat you up tremendously, it's just a lesson. It's just a validation that you're ready for the next step.

Richard Low (35:02):

Actually,

Scott Leune (35:04):

When you get hit with something, you immediately see where that wall is. You just go around it. You go to the next phase. When the pain crushes you, it pushes you to the floor. It breaks something in your life, that pain, that's the pain that could have been avoided probably. And that's the pain that you hope that you can get up from before the tin count is over. You hope it doesn't knock you out. And that is where if you get knocked down multiple times, that is where you start really kind of breaking internally and people don't know you can convince the world that you're a successful it when you're experiencing that. I don't want to make it sound though that I'm not anti entrepreneurial. I'm all about fast, amazing growth. I am. There's just a lot of ways to do it. So can we grow quickly in a way where we're always wealthy, where we always have time freedom?

Okay. Yes, I think we can. I mean I know we can, but a lot of the rules that we're told by people that are growing quickly don't fit the model. I just set a lot of rules that we're told by them is really adding risk. It's doing things out of order. Maybe it's kind of moving too fast or making assumptions that need to be challenged and life keeps changing. The assumptions of five years ago may not be the assumptions to make today or the assumptions for someone with one type of personality may not be the assumptions we need to make with someone with another personality. And that is why education is so important because your personality will know which one of these models is speaking to you right now in your life. It's so important to get educated.

Richard Low (36:53):

So two light bulbs went off for me for us to wrap up this conversation. One was that checking in with yourself along this journey, we've set it up as a journey of how sustainable is this? How much do I love this? When you are the solo doctor, when you have this pseudo specialty practice, you've got the freedom involved with that and you're transitioning to this other phase. You've got check-in moments where you can decide, do I want to stay here? Does this feel fulfilling and engaging? And do I feel like this is enough for me or not? And then making that decision is part of the beauty of this pathway. The second light bulb moment I had was, it is a bit of a tangent, but in real estate, some of the people I've talked with, they've talked about buying so that you always have options.

You could turn around and flip this and sell it or you could hold onto it and it would make sense as a long-term rental. And if you buy with your end goal having options, then it's hard to get burned. It's hard to get stuck holding the bag if you bought right and you're acting intelligently. So I would say the light bulb for me in the group and enjoying the journey and being profitable and having this time freedom, and this is maybe another episode that we can come back and talk about. I think if people are building with the only intention and end goal of a group being to sell and that they couldn't hold onto this organization and find purpose, fulfillment, enjoyment, freedom, profit by onto it, that creates some of this tremendous pressure. So can you build a group that you could sit with and you could hold or you could sell and then you have options and you are not trapped into a path?

I think is one way to think about the endpoint of this. And it reminds me, I met Tito from Tito's vodka down in Austin and he's got an incredible story of his journey and has refused opportunities to sell all along the way, still has 100% ownership and does all sorts of amazing things with the profits of his business and supports all sorts of causes. And he's like, I love the business I've built. Why would I sell it? Why would I give up control? And having those options I think creates a sense of freedom in this path as you scale, at least for me in my mind. So anything to respond to that before we wrap up this conversation,

Scott Leune (39:36):

And honestly, I think we need some more episodes on multiple occasions, but one thing that stood out to me when you describe Tito's, when you think about selling, what you're doing is you're selling a business for a certain number of future years profit paid today. So we call that a multiple five times ebitda, seven times 10, whatever it might be. And so let's say you sell for seven times, that's just getting seven years of profit today, but then you don't own the business anymore. Well, whatcha going to do after seven years of that profit, you're going to have to now be owning the next company that gives you that profit again. You got seven years to go build the next thing to get to the point where you just were at, right? So in some ways, people that sell find themselves in the situation where they got to start over and rebuild and they think back to like, I wish I would've just kept that and maybe fixed it.

So selling though can make a lot of sense. If that's enough that you're actually done, you don't have to rebuild seven years later to keep that income. That was enough upfront, you're done, you're selling now because the opportunity is there to permanently be done. That's a different situation. But when you think about these doctors, for example, that sell to A DSO like Heartland or name any DS o out there, a lot of those DSOs say things like, okay, I'll give you five times your ebitda, but you have to work for five years. Oh geez, you just gave away your practice for free because you have to work for five years. Why don't you just own it for five years? You'll get your five years EBITDA and you'll still own it after five years,

But instead they're giving you five years upfront, but you still got to work for a salary and then at the end you don't own anything and then whatcha going to do? If that wasn't enough money to retire you, you're going to have to go build it all over again. So to your point, when you run an organization where it is, you do have time freedom, you do have financial freedom so you can enjoy the journey of building it and having it. You can own that thing and your kids can own it for a hundred years of ebitda. You don't have to sell it. You're not peeling pressure to sell it. And if it's got enough profitability, any sort of pressure points you feel you can correct it with money. You don't want to manage the hr, no problem. You don't want you have a nicer facility, fine, go get a nicer facility.

You don't want to have to talk to doctors. No issue. You can solve all of that with profit if you wanted to. So it's about can we build a company that we don't mind holding onto forever and passing on to our family if we want to. So we have a hundred years of ebitda, can we own one where we can actually stomach that? It doesn't hurt us, it doesn't poison our life, but it actually nourishes us. If so, we've got every opportunity in the world to do whatever we want. The minute we build a company that poisons our life, we can only stand that poison for so long and we've got to get rid of it and we're probably going to have to start all over again. So it looks glamorous on the outside getting a big check, but seven years later that money may be gone and we just got to start another one. So let's learn how to build these things that don't poison our lives. Let's build it where it nourishes us. It gives our life meaning and control. We have grace. We have health outside of the business and that thing's worth a lot of money. By the way, whenever you do sell it, whenever you do sell the Tito's of dentistry, that is so nourishing and good to manage that thing's worth a lot.

Richard Low (43:19):

Absolutely. This has been a phenomenal conversation. Thank you, Scott. There are multiple episodes that came to mind and you're giving a whole two day, is it two or three days for the multi-location?

Scott Leune (43:31):

Yeah, it's two days, like 16 hours of lecturing over two days that I start the day after tomorrow through my Scott Leune seminars here in San Antonio. It's actually a cool venue. We had this cooled warehouse that has exotic cars, triple stacked, we're lecturing surrounded by these cars. There's a kitchen there, a bar, a lounge and all that. It's a really cool experience. It's not at some convention center or hotel or anything like that. And this specific seminar I only do a few times a year, no one's talking about this stuff. You hear a lot about having one location. You hear a lot about the stories of a hundred or more, but man, what about going from two to 10 to 10 to 20 in a good way, in a responsible way? So I love giving this seminar because I feel like I'm really serving the people that are in the room with my blood and sweat and tears. What I've spent my career learning is very, to me to have this event, even though I only do it two or three times a year, it's so important to me to feel that way that I give this event. And so I'm excited. It's just day after tomorrow.

Richard Low (44:42):

The venue sounds amazing. I know that my partners, George, I think Alex, I can't remember who else went. It was career changing to go to that event and led to the Birth of Shared Practices Group. So thank you for what you've built and we'll talk to you next time. Thank you, Scott.

Scott Leune (44:57):

Awesome. I can't wait.

Richard Low (44:58):

Take care, and we'll talk to you next time on the Shared Practices Podcast.