Navigating Your Orthodontic Practice in Today’s Economy - Just Jill

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Welcome to the Hey Docs podcast. I'm your host, Jill Allen.
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It's time for another Just Jill episode with me behind
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the mic. Yes, just me. Once a month, I've decided
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that we're going to take a break from our usual
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guest interviews and dig into the questions and challenges and
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conversations I'm having with doctors every single day. And lately,
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there's been one topic, that keeps finding its way into
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those conversations, the economy. There's a lot of noise out
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there right now, and I know it can be hard
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to separate what you're hearing in the headlines from what
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actually is happening inside your practices. Do I need to
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change my payment options? Should I still be investing in technology?
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Should I be offering more discounts? What numbers should I
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be watching? So today I've pulled together some of the
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questions I'm hearing most often from our doctors, and we're
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going to talk through them one by one. I'm going
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to cover everything from third-party financing and payment structures to
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technology investments, discounts, and the KPIs that can help you
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understand how your practice is really doing. Because the goal
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isn't to react to everything happening around us, but it's
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to know your practice well enough to make smart decisions
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about what's happening inside it. So let's get started. And
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now a word from the sponsors who make this podcast possible.
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to 25% off your ADEC orthodontic equipment and furniture. You
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also get complimentary services to help you run and grow
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your business. And my favorite part, access to the Smart
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Start pricing for two whole years after you open your doors.
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That gives you flexibility to add more chairs as your
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cash flow grows. It's pretty smart. As an orthodontist, you
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care about getting all the little details right. And ADEC
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really got it right with this program. So if starting
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off with a big savings on ADEC equipment sounds good
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to you, the ADEC Smart Start is definitely worth a
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closer look. Just follow the link in the show notes
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to learn more. Want a cleaner workflow for orthodontic cases?
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Meet Clarity Solutions from Solventum, formerly 3M Healthcare. The Clarity
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streamlined platform. One workflow, fewer handoffs, and more control for
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planning through retention. Simplify your next case. Reach out to
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your local Solventum sales rep today or visit us at go.solventum.com
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forward slash clarity. Again, that is go.solventum.com forward slash clarity
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to learn more. So the first thing that I want
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to talk about today is I feel like we have
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been spending a lot of time talking about making orthodontic
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treatment accessible. We hear it all over the Facebook groups.
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We hear it up on stage at lectures. But I
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think that right now, affordability is becoming an even bigger
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part of our conversation when we are looking at the
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ins and outs of our daily practices. And I think
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Families right now, 2026, are really watching their budgets. They
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are trying to make decisions on, is now the right
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time to get started? Do I make a decision between
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going on a vacation versus doing a down payment for
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an orthodontic treatment for myself, for my child? And I
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think that families are really trying to protect their cash flow.
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And there is more evidence financing options available, I think,
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more than ever. And so what I want to do
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is just talk a little bit about how third-party financing
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may fit into our orthodontic practices right now. And again,
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when I talk about what I hear from practices and
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doctors that I'm working with, whether it's a startup practice
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or whether it's an established practice, is I keep hearing
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doctors bringing up Jill. Should I be considering third-party financing
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right now? And how does it make sense for my
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practice and my patients? And I really want to break
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this down because I think that this is such an
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interesting concept. Now, me having been in the industry for
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over 30 years now and been a consultant through working
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in a practice and then starting my own business during
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the recession back in 2006, 2007, 2008... I can tell
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you that right now, in my Jill opinion, our economy
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is so running parallel to what we saw back in 2006, 2007, 2008.
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And I do think that we really need to be
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thinking about other options for our patients today. to say
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yes to treatment. I do feel like over the years,
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especially for any younger doctors that are out there, we
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have gotten into this comfortable spot where we've kind of
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need to only offer or maybe have only ever thought
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about offering two different options for patients to say yes
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to treatment. Either some type of a pay in full discount,
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get a little discount, take care of things in full,
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or do some type of an in-office finance plan with
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the practice no interest. I think for so many years
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when the economy has been so well, we have really
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not had to think about a third option. Or if
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we have thought about it, it's kind of been a
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fringe idea because why would somebody need a way to
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say yes to treatment and have to take on the
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debt of some type of a credit card or whatnot
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to get started in treatment? But I think that as
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I've been working with practices and I counsel and talk
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with doctors, I think that this is something that we
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really need to be considering. And I think there are
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seasons in our practice life where we may lean into
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strategies a little bit more than others. And I do
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think that right now we should be really considering a
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third option for our patients to say yes to treatment.
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And that is some type of a third-party financing. My
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rule of thumb or what I tell doctors when they're
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asking about this is, first and foremost, find out what
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your general dentist or your pediatric dentist are doing in
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the area. Almost all dental practices are offering some type
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of a finance plan that allows a patient to get
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started A lot of times that can be a care
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credit or a cherry or whatever that is. But the
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reason I like for docs to kind of lean into
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that and find out what their referring docs are doing
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is because if a patient is already used to using
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a third-party company in their dental office, in their veterinarian office,
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in their specialty office, it's going to be very easy
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for them to say, hey, I think I might want
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to use that system that I've already got set up
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for me saying yes to orthodontic care. So when I
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look at these third-party companies and what is the impact
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on an orthodontic practice, I think the biggest thing that
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we need to think about as orthodontic practices, as treatment coordinators,
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as doctors is first, What's our first goal? Our first
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goal is to take away the obstacles of a patient
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and get them to yes. So is the obstacle the down?
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Is the obstacle the monthly payment? Is the obstacle, should
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I pay you in full? Am I going to make
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more money leaving my money in my high yield savings account?
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Or is your pay in full discount big enough to
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offset that I'm actually going to do better to pay
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my treatment in full? Or when we look at the
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third party financing, when we're looking at how do we
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get them to yes, is there an obstacle of no
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matter how much we're trying to make that down work
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and that monthly payment with no interest work, it's just
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not going to work for a patient. And we need
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to move them into, is there a way that they
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can say yes, maybe with no down payment. and longer
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payments over a longer period of time, but keep you
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safe as a practice owner. So when we look at
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this third-party financing, I'm always coaching my docs on, you know,
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there's kind of two sides that you need to be
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looking at. The first one is, is a patient able
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to maneuver their way through the options that you're putting
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in front of them? And I always say, I want
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you and your team, if you are going to lean
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into this, every option is the best option for a patient.
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If they want to pay them full, fabulous. That's a
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great option. If they want to do a down payment
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and monthly payments over a set period of time, great.
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That's the best. If they want to get started with
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no money down and payments over a longer period of
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time through a third-party company, that's great. We just want
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to lean into and not put our own biases in
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front of having a patient say yes to treatment. The
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second part that I think we have to think about
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in a practice, and I get this all the time
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from docs, is, well, what is the impact on me
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going to be as the business? owner? Because we've got
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that unsexy side of the business that we always have
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to be talking about. And that is, how does this
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affect me on the business side? So if I... choose
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to work with one of these third-party companies, there's usually
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always going to be a percentage of your income that
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is going to be taking away in some type of
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a transaction fee. So depending upon the company, you may
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have anywhere between 3% and 5%, 7% of that that
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is going to go into some type of a transaction fee.
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So you may be getting $ 5, 000 for the treatment, but
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on the back end, you're paying 5% of that to
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that third-party company. And the way I look at that
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is it's kind of like us using credit cards in
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an office. I can remember a time way back in
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the day where nobody paid with a credit card and
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everybody paid with cash or check and coupon books. And
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the thought of letting a patient pay and the impact
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of merchant service fees was so crazy back in the day,
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but now that's just commonplace. And I think that we
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just have to think about this and kind of shift
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our mindset a little bit as a business owner when
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we're thinking about this from our P & L side
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or the business side of the practice and think about okay,
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if I can have a patient use one of these
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third-party companies that I've invested, gated, and decided that this
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is going to be the one that works best for me,
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and there's a reasonable finance fee that I know I'm
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going to have to pay, but it allows my patient,
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and it's going to be a small portion that want
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to do this, but it allows maybe an extra 3%
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of patients to say, or 5% of patients to say
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yes to treatment that allows me to possibly, with most
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of these companies, get paid in full. And now I
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just get to focus on treating the patient, and the
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patient gets to deal with their finances with that third-party company.
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In my opinion, it becomes a win-win. So to wrap
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up my thought on should practices... be thinking about using
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third party. I absolutely think we should. I think especially
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with where the economy is at right now, I think
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that it is a lever that we can pull when
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we're putting on our business ownership hats and saying, Is
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there something else that I can do besides just extending
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payments over a longer period of time or besides just
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taking super low downs? Is there one other lever that
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we can pull that will help us help our patients
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say yes to treatment? And I do. I think there is.
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And I think that is investigating using third-party financing methods.
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at least for this season and our practices where the
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economy is a little tight, where patients are really thinking
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about cash flow. This could be a lever that we
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turn off and change when the economy is doing really well.
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But I think it's something that as business owners, we
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should be thinking about and doing. Another thing I think
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a lot about is when we think about these third-party
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companies and do we pull this lever? Do we bring
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them into our practice and start utilizing them? The first
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thing you have to think about as a doctor is
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you have to understand that not all third-party companies are
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the same. Everybody's going to have some different ways that
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they pay out, some different ways that they mitigate risk
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for you, or that you mitigate risk in looking at
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the way they handle the patient account and delinquencies. And
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I think that as doctors, what you need to be
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thinking about if you are thinking that you might go
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about maybe using a third party company is I think
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first and foremost, as a consultant, the thing that I'm
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looking at for you, and I think you need to
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be thinking about is ultimately how do we mitigate delinquency risk?
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And what I mean by that is if with most
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of the companies, now, again, they all are not the same.
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If we are able to have somebody else take on,
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a third-party company take on the risk of that debt
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load and the risk of that possible delinquency in the
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event that a patient does not uphold their side of
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the bargain and paying back that, and yet you are
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still able to be paid in full upfront, less whatever
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those transaction charges are. I think that that's a really
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important thing to think about because it's allowing you to
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just be in the driver's seat of a clinician and
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helping a patient get from point A to point B
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on their treatment journey. But yet you aren't having to
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deal with the risk of delinquency like you would if
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a patient were in your practice. on some type of
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a payment plan. And so when we think about this
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with a third party company, I want you to think
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about how does this company help me mitigate that delinquency
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risk and just keep in mind that not all companies
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are the same. And so there are some that are
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out there kind of new on the scene that may
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pay you a portion in the beginning. And if the
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patient is keeping up with their payment plans, you will
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get another portion along the way until eventually you're paid out.
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That may be a good option for you. But it
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may not. And again, what does that do to your
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risk tolerance there where you may say, hey, it may
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be worthwhile to investigate other ones out there that are
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just going to pay me up front. I get to
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be the doctor. I know I'm going to take a
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little hit in the merchant service fee or whatnot or
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the transaction fee. But yet now I don't have to worry.
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I don't have to worry about any of that delinquency risk.
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So there's some thoughts there. Now what I want to
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do is I want to get into something that I
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am constantly talking about with practices. And I think that
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there is, again, with the economy where it's at, I'm
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constantly having discussions about down payments and monthly payments. And again,
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when patients are feeling that financial pressure, I think it
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can be really tempting for practices to immediately jump to
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discounts or immediately jump to lowering that barrier to entry
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with our down payments or whatnot. And I think that
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we have to really think about as practice owners, you know,
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we really need to think about cash flow in your practice,
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which are those receivables that we're getting in. And what
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does that do to the long-term health of your practice?
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And the answer you're going to be kind of surprised
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by this isn't necessarily one size fits all. Because again,
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when I'm coaching with a startup practice, it's going to
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be a very different answer and strategy that we're going
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to be going after than maybe an acquisition or an
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established practice. So again, I have a lot of doctors
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that come to me and all three of the different
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stages that I'm working with. And probably their biggest question is, hey, Jill,
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How should I be doing my down payments and my
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monthly payments right now, especially when the economy is tough
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right now? And do you think that that strategy should
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change as I grow my practice or I'm looking ahead
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at the future? And so I'm going to break this
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down into what I'm seeing right now as a consultant,
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how I coach in those three different areas. First and foremost,
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the biggest thing that we have to think about, and
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I want you thinking about as business owners, is I
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think sometimes we have this scarcity mindset that we have
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to get everybody in the door that comes through our door,
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especially in a startup. But I think as our economy
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gets tighter, even my established practices start to feel that
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crunch of, oh my gosh, my start numbers are down.
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We're not converting the way we used to. People aren't
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just saying yes to treatment so easily. And so when
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we think about the down payments and the monthly payments,
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when I'm thinking about a startup, first and foremost... I
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think about the hardest thing about doing a startup is
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the fact that you have, you know, zero money. You're
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starting with nothing. You've got maybe 75 to 100,000 in
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working capital. And that's got to be what you have
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to work off of. You know, when you've got your
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expenses and you've got your income, it takes a long
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time to have your receivables build up to to offset
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the expenses that you have on a monthly basis. And
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so we really start at this really big deficit and
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we have to bring that to level to hopefully then
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bring that to a point of excess where we are
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receiving more than our expenses going out. And so when
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I'm talking to a startup practice, the biggest thing that
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we really work on is setting really good boundaries for
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for how do you pay your monthly expenses until our
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receivables start to build up. And so when I'm coaching
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with startup practices, we've got some very specific boundaries that
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we set in place on how much we'll take for
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downs with certain more analog cases, fixed bracket cases, versus
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if we are using some and leaning into some of
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our digital technologies, aligner treatments, custom brackets, where we may
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be adjusting our downs to be, you know, a lot
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of times I coach on, you know, within about $ 300
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of wherever our lab fee is going to be. Because
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what I need you to hear as startup practices and
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as startup doctors is if you accept a very low down,
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you're going to do one of two things. You're either
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going to pay for that lab fee on a credit
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card where you're putting off the inevitable that you're just
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kind of building debt, or you're going to pay that
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00:20:26.019 --> 00:20:28.660
out of your working capital and just continuing to draw
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down on your working capital. So, you know, if we
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can keep startups, you know, as I'm coaching, if we
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can keep you safe in where your downs are and
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negate to make sure that we're coming close to any
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expense in that start that we're covering that you are
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going to be a healthier practice long term where you
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are not just running yourself into the ground. Now, I
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will tell you, not a lot of people like hearing
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me say this, and I'm putting this out there for
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anybody to hear, but that isn't always what some of
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the third-party companies want us to do, or that isn't common.
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I hear a lot about the Facebook groups out there,
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and people will coach on $ 100 down, $ 100 a month.
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And we got to just always be mindful about it's
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not one size fits all. And I think depending upon
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the age of a practice, you have to be very,
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very careful. A solution like $ 100 down, $ 100 a month
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sounds great if you've got somebody else funding your practice.
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Sounds great if you've got receivables that are already covering
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your expenses. But if you don't, that's not a good move.
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So when we think about these finances and how does
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it change, my coaching changes as we move along. Because again,
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if we're an established practice that already has receivables, we
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are already covering our expenses. Hopefully, we're already covering doctor's income.
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An acquisition is a perfect one where we may be
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covering expenses and receivables are coming in, but we haven't
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quite covered what a doctor is looking for for their income.
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We still have to be careful about how we're doing
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those down payments and those monthly payments. I'm going to
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talk a little bit about the established. I think that
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as our practices go through their practice life cycle from
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startup to kind of midlife to eight years to retirement,
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there are different strategies that we can kind of employ
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to have patients say yes to treatment. So If we've
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got an established practice that's got good receivables, I think
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it makes it much easier for us to maybe take
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a bigger risk on a lower down or a bigger
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risk on extending payments out over a longer period of
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time because we've got that safety net of receivables. But
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The downfall that we can run into when we're taking
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lower downs and taking payments over longer periods of time,
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especially in established practice, is if we don't have a
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strong financial system in place for tracking delinquencies, it can
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come back to really bite us because basically we're allowing
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patients to have brackets now, but pay for that treatment later.
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And although we've got our safeguards in place, get everybody
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set up on ACH payments or some type of a
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credit card payment or whatnot. And I think that most
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of that works most of the time. If you don't
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have a good either third party company that's managing your finances,
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you don't have a good team member in place that's
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keeping your delinquencies where they need to be. I say
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in a healthy practice, we want to have our delinquencies
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no higher than 5% as a whole, ideally at 3%.
384
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So if we aren't paying attention to those things and
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we're just letting our TC start everybody for $ 100 and
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$ 100 a month for eternity, and we don't have somebody
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strong financial position, we will in turn run into problems.
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And I think the biggest financial indicator for a practice
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00:24:18.180 --> 00:24:21.160
when we start to run into problems is when we
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start getting to a point where we're collecting more than
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00:24:24.660 --> 00:24:28.680
what we're producing in a year. That means that our production...
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00:24:28.680 --> 00:24:32.140
is coming down and we are basically not moving in
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00:24:32.180 --> 00:24:35.319
a right direction. And so when we start to see
394
00:24:35.359 --> 00:24:38.190
those delinquencies creeping up and we start to look at,
395
00:24:38.200 --> 00:24:42.849
oh my gosh, we're 90 days past due. Here's the reality, guys.
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00:24:43.339 --> 00:24:46.400
If you have allowed a patient or your practices to
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00:24:46.420 --> 00:24:48.759
get to a point where you've got a significant amount
398
00:24:48.799 --> 00:24:52.140
of money and passed due 90 days, 120 days, the
399
00:24:52.160 --> 00:24:53.980
chances that you're going to collect that are going to
400
00:24:54.000 --> 00:24:56.579
be really low unless you've got somebody on the front
401
00:24:56.640 --> 00:24:58.619
end working that. So we just have to be really
402
00:24:58.680 --> 00:25:01.759
careful that it doesn't mean that we can't think about
403
00:25:02.240 --> 00:25:04.380
if we're going to lower our downs and lower our monthlies,
404
00:25:04.400 --> 00:25:07.109
we have to, especially in an established practice, we have
405
00:25:07.130 --> 00:25:11.220
to have a really strong plan. coordinator in place or
406
00:25:11.279 --> 00:25:15.700
third party company that really understands the importance again of
407
00:25:16.259 --> 00:25:20.230
keeping us safe in our receivables so that we don't
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get ourselves upside down. And now a word from the
409
00:25:24.049 --> 00:25:29.880
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410
00:25:29.940 --> 00:25:33.940
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411
00:25:33.980 --> 00:25:38.880
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412
00:25:38.920 --> 00:25:42.779
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413
00:25:42.839 --> 00:25:47.089
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414
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416
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417
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418
00:26:04.650 --> 00:26:13.170
discount exclusively for my listeners. All right, guys. So here's
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00:26:13.210 --> 00:26:15.410
the next one. I get asked this all the time
420
00:26:15.470 --> 00:26:21.539
in practices. When should I be thinking about discounts in
421
00:26:21.559 --> 00:26:24.980
a practice? And I think that so many times... Again,
422
00:26:25.039 --> 00:26:27.940
going back to this thought as practice owners, we want
423
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to get everybody to start in our practice and we
424
00:26:30.289 --> 00:26:34.529
want to meet each patient where they are at. But
425
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I think that we have to be really thinking about,
426
00:26:37.309 --> 00:26:39.990
are there times, just like we think about with our
427
00:26:40.009 --> 00:26:43.529
downs and our monthly payments or strategies that we take
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00:26:43.630 --> 00:26:47.750
to get patients to say yes, are there times that
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00:26:47.809 --> 00:26:52.259
we should be thinking about when do we lean into that?
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00:26:52.630 --> 00:26:57.109
discounts and when we need to be careful to protect
431
00:26:57.130 --> 00:27:01.390
the value of what we do. So again, I have
432
00:27:01.430 --> 00:27:05.799
a lot of doctors that are constantly asking me, you know, hey, Jill,
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00:27:06.039 --> 00:27:10.799
how can I offer a discount or financial flexibility without
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00:27:11.160 --> 00:27:16.160
discounting the value that I am delivering in my treatment
435
00:27:16.700 --> 00:27:19.390
with my practice and with patients seeing the value in
436
00:27:19.710 --> 00:27:23.940
what we do? And this is a good one because, again,
437
00:27:23.960 --> 00:27:27.000
I think that we have to approach this very differently
438
00:27:27.059 --> 00:27:30.059
when we're thinking about this from a startup practice versus
439
00:27:30.099 --> 00:27:33.809
when we're thinking about this from an acquisition or an
440
00:27:34.089 --> 00:27:38.130
established practice. And for sure, when we're doing a startup practice,
441
00:27:38.289 --> 00:27:40.380
It's about butts in the chair starts in the books
442
00:27:40.579 --> 00:27:42.380
in our first year. And I know that's a really
443
00:27:42.440 --> 00:27:44.380
crude way to say it, but that's what it's about.
444
00:27:44.859 --> 00:27:48.160
And so it will make sense that we are doing
445
00:27:48.259 --> 00:27:52.119
some type of discount, maybe a grand opening discount or this, that,
446
00:27:52.160 --> 00:27:55.890
or the other when we're getting started. And we may
447
00:27:56.170 --> 00:28:00.009
at certain times of the year implore a different discount
448
00:28:00.369 --> 00:28:03.150
because it's a slower time of the month or slower
449
00:28:03.190 --> 00:28:05.359
time of the year. And We're just trying to keep
450
00:28:05.480 --> 00:28:09.200
the momentum going because let's face it, when you're a startup,
451
00:28:09.259 --> 00:28:13.299
it's about brand awareness. We just need people to be
452
00:28:13.359 --> 00:28:16.900
aware of you when you're a startup. And sometimes that
453
00:28:16.960 --> 00:28:20.680
brand awareness and people saying yes to treatment is what
454
00:28:20.720 --> 00:28:23.769
we need. And we needed a discount to help us
455
00:28:23.849 --> 00:28:28.009
with that. So I think that there will always... be
456
00:28:28.250 --> 00:28:31.839
times where we should have discounts in a practice. And
457
00:28:31.859 --> 00:28:34.700
when we look at that from, and I get this
458
00:28:34.779 --> 00:28:38.380
a lot with doctors, especially my startups who are like,
459
00:28:38.420 --> 00:28:42.829
but I don't want to discount my treatment. So I
460
00:28:42.890 --> 00:28:46.549
feel like I'm discounting what I do by offering a discount.
461
00:28:47.029 --> 00:28:48.829
And I think that that's a hard thing to put
462
00:28:48.869 --> 00:28:53.710
your mind around sometimes that we're not discounting the value
463
00:28:53.970 --> 00:28:57.150
of what you're doing. But there may be times where
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00:28:57.170 --> 00:29:02.730
we do need to think about discounting. helping patients say
465
00:29:02.809 --> 00:29:06.230
yes to treatment or get that momentum moving. And it
466
00:29:06.349 --> 00:29:10.329
isn't a long-term strategy. That's what I guess I want
467
00:29:10.369 --> 00:29:13.019
you to hear. Even if we are doing some type
468
00:29:13.039 --> 00:29:16.660
of discounting, it isn't a long-term strategy. It's usually a
469
00:29:17.079 --> 00:29:22.000
strategy that we are leaning into to get volume up
470
00:29:22.259 --> 00:29:25.849
with patients or to get things moving as we are
471
00:29:25.869 --> 00:29:28.769
growing a practice. Now, when we think about this in
472
00:29:28.829 --> 00:29:34.599
regard to Established practices or doctors that have done an acquisition.
473
00:29:34.619 --> 00:29:37.509
I think that that's where we really have to start
474
00:29:37.569 --> 00:29:41.980
thinking about, are there times? where it's more of a
475
00:29:42.440 --> 00:29:46.240
marketing strategy than anything when we think about discounts? And
476
00:29:46.279 --> 00:29:48.500
I'm not talking about the pay in full discount or
477
00:29:48.559 --> 00:29:52.819
the family member discount. I'm talking about Are there times
478
00:29:53.319 --> 00:29:57.829
that we are going to look at our year and say, hey,
479
00:29:58.150 --> 00:30:01.150
I know in general, I'm just going to very generically
480
00:30:01.210 --> 00:30:05.309
say for most states, you know, maybe May and September
481
00:30:05.470 --> 00:30:08.210
are going to be a slower month. I can just
482
00:30:08.250 --> 00:30:10.829
historically see that we're going to have slower months and
483
00:30:10.849 --> 00:30:15.539
busier months. And I know that patient starts kind of
484
00:30:15.630 --> 00:30:18.440
ebb and flow depending upon what month of the year.
485
00:30:19.259 --> 00:30:22.220
So when we think about discounts in that way from
486
00:30:22.279 --> 00:30:26.160
an established practice or an acquisition, I say think about
487
00:30:26.200 --> 00:30:30.720
it more as a marketing strategy. Is there something that
488
00:30:30.819 --> 00:30:35.740
you can do to encourage starts in months that may
489
00:30:35.779 --> 00:30:40.099
be slower months? So may we run a small discount?
490
00:30:40.160 --> 00:30:42.069
I always say if we're going to run some type
491
00:30:42.109 --> 00:30:45.319
of a marketing discount. We're going to have a start
492
00:30:45.400 --> 00:30:47.549
and an end to it. We're going to have some
493
00:30:47.589 --> 00:30:50.200
restrictions apply because you may be an insurance. You may
494
00:30:50.240 --> 00:30:53.089
not be able to discount your fees, but we're looking
495
00:30:53.150 --> 00:30:57.430
at it very strategically and we're not being reactive to, oh,
496
00:30:57.789 --> 00:31:00.190
we're slow. So therefore I want to give everybody that
497
00:31:00.230 --> 00:31:02.809
comes in X amount of dollars off. It's part of
498
00:31:02.890 --> 00:31:07.609
our marketing strategy on when we may run discounts. Another
499
00:31:07.710 --> 00:31:14.039
tool that I think a encouraging those same day starts
500
00:31:14.119 --> 00:31:17.569
or same day scans. And even though we may look
501
00:31:17.680 --> 00:31:20.430
at doing a, hey, if you get started today, if
502
00:31:20.470 --> 00:31:23.369
we get a scan today, depending upon what your verbiage is,
503
00:31:23.390 --> 00:31:25.230
and there's a lot to unpack there, but I'm not
504
00:31:25.250 --> 00:31:27.769
gonna get into that. I have a lot of practices
505
00:31:27.890 --> 00:31:30.490
that will in the moment say, hey, and if you
506
00:31:30.509 --> 00:31:33.369
wanna get started today, we're doing an additional $ 300 off.
507
00:31:33.430 --> 00:31:36.490
If somebody says no, great, no problem. But that can
508
00:31:36.630 --> 00:31:39.690
also be a strategy that is like a discount, but
509
00:31:39.730 --> 00:31:43.329
it's more of an incentive to make a decision to
510
00:31:43.369 --> 00:31:46.829
move forward with your practice. So I think that my
511
00:31:46.869 --> 00:31:50.549
take home message about discounts is that I do think
512
00:31:50.569 --> 00:31:54.130
that there is a time and a season for when
513
00:31:54.190 --> 00:31:56.559
we should be doing them. We may do them a
514
00:31:56.599 --> 00:31:59.920
little bit more in startup practices when we're in growth mode.
515
00:32:00.480 --> 00:32:05.980
We may do them more strategically when we're in an
516
00:32:06.240 --> 00:32:10.910
established practice or an acquisition practice when we're looking at
517
00:32:11.170 --> 00:32:15.269
trying to even out cash flow through the year. And again,
518
00:32:15.289 --> 00:32:19.390
we're looking at that more as a marketing strategy and
519
00:32:19.509 --> 00:32:24.109
less as a we're taking away from the overall profit
520
00:32:24.289 --> 00:32:26.380
of the practice because, of course, it's not a good
521
00:32:26.519 --> 00:32:30.140
long-term strategy. Well, some people may think of it that way.
522
00:32:30.279 --> 00:32:33.160
I don't, to just always have a discount running. I
523
00:32:33.180 --> 00:32:35.460
think that it's more of a lever that we can
524
00:32:35.519 --> 00:32:38.890
pull together in certain months to get movement in cash
525
00:32:38.950 --> 00:32:42.430
flow and maybe pump up slower months when we see
526
00:32:42.490 --> 00:32:46.579
an ebb and flow in our historical data. So here's
527
00:32:46.640 --> 00:32:49.539
another one that I think a lot of doctors are
528
00:32:49.579 --> 00:32:52.940
wrestling with right now. And I think I especially see
529
00:32:52.980 --> 00:32:56.240
this in my startup practices, but it is not exclusive
530
00:32:56.319 --> 00:32:58.740
to startups. I see this with my acquisitions. I see
531
00:32:58.759 --> 00:33:02.519
this with my established practices. And that is when expenses
532
00:33:02.599 --> 00:33:06.400
are up, Our natural reaction a lot of times, I
533
00:33:06.440 --> 00:33:11.730
think as doctors, as consultants, as anybody who's kind of
534
00:33:11.809 --> 00:33:14.390
looking at the back end side of a business, is
535
00:33:14.450 --> 00:33:19.329
to pull back or stop on spending. But at the
536
00:33:19.369 --> 00:33:24.609
same time, technology is moving incredibly fast. And some of
537
00:33:24.650 --> 00:33:28.869
these tools... that we actually need to spend money on
538
00:33:29.589 --> 00:33:32.890
actually help us make more money in the long run
539
00:33:33.079 --> 00:33:37.140
and make us more efficient as we are moving through
540
00:33:37.160 --> 00:33:41.319
our treatment planning and working with patients. And so the
541
00:33:41.380 --> 00:33:45.569
question that I am continuing to get is, hey, Jill,
542
00:33:46.170 --> 00:33:52.369
is this a good time to introduce new digital technology
543
00:33:52.529 --> 00:33:56.089
into my practice? And what should I be looking at
544
00:33:56.490 --> 00:34:00.000
if I decide whether the investment is actually worth it?
545
00:34:00.559 --> 00:34:04.359
And I think this is really something that as doctors,
546
00:34:04.380 --> 00:34:08.380
you really should be wrestling with. Now, I'm going to
547
00:34:08.440 --> 00:34:11.360
tell you, any of you that's listened, that is a
548
00:34:11.480 --> 00:34:14.280
startup practice. I'm going to talk about it for each
549
00:34:14.340 --> 00:34:17.420
of the practice segments that I work with. But when
550
00:34:17.480 --> 00:34:21.380
we're looking at startups, and this is going to probably
551
00:34:21.440 --> 00:34:27.099
sound very maybe counter to popular thought is I feel
552
00:34:27.119 --> 00:34:31.489
like for a startup, there is never a better time
553
00:34:31.590 --> 00:34:37.710
to lean into technology, especially digital workflows, but technology than
554
00:34:37.769 --> 00:34:42.190
in a startup because you will never have more time
555
00:34:42.289 --> 00:34:46.150
to invest into your steps and your processes than when
556
00:34:46.190 --> 00:34:49.090
you're slow. The hardest thing that I see for an
557
00:34:49.179 --> 00:34:53.420
established practice or a practice that's really going and growing
558
00:34:53.860 --> 00:34:57.699
is for them to introduce in a new technology. And
559
00:34:57.739 --> 00:35:00.260
we see this all the time where a doctor tries
560
00:35:00.320 --> 00:35:03.500
to introduce and it just falls flat or it never
561
00:35:03.559 --> 00:35:06.099
goes anywhere. And I think that has to do so
562
00:35:06.179 --> 00:35:09.199
much with there's so much that goes into it when
563
00:35:09.239 --> 00:35:14.250
you're already busy, unless you're very purposeful and really intentional,
564
00:35:14.289 --> 00:35:16.889
I guess is the word I'm looking for. with how
565
00:35:16.949 --> 00:35:19.730
you're going to introduce technology, it's going to be a
566
00:35:19.750 --> 00:35:23.929
very difficult thing. So when I think about digital workflows
567
00:35:24.389 --> 00:35:31.239
and digital technology and customized brackets, I think for a startup, absolutely,
568
00:35:31.460 --> 00:35:35.760
you should be leaning into those and introducing those. The
569
00:35:35.780 --> 00:35:39.510
other thing I think about is that You are setting
570
00:35:39.809 --> 00:35:44.909
up your future practices for how you will treat in
571
00:35:44.929 --> 00:35:48.179
the future. And what I want you to be thinking
572
00:35:48.260 --> 00:35:52.800
about is we are most profitable in a practice when
573
00:35:52.860 --> 00:35:56.840
we can control the amount of visits that a patient
574
00:35:56.940 --> 00:35:59.579
comes into your practice. And what I mean by that
575
00:36:00.019 --> 00:36:03.039
is if we see a patient 20 times or we
576
00:36:03.119 --> 00:36:08.150
see a patient 10 times, if our fee was $ 5, 000,
577
00:36:07.309 --> 00:36:11.570
we're going to have more profit per visit if we're
578
00:36:11.630 --> 00:36:14.429
able to see a patient 10 times and be very
579
00:36:14.510 --> 00:36:17.800
efficient with what we're doing. And we're going to lose
580
00:36:17.920 --> 00:36:21.400
profit if we see them 20 times. So we have
581
00:36:21.440 --> 00:36:24.469
to really think about that. Now, when we think about
582
00:36:24.550 --> 00:36:29.860
this from digital technologies in a established practice, or I
583
00:36:29.900 --> 00:36:31.940
have a lot of docs that we're working with them
584
00:36:32.019 --> 00:36:35.510
in an acquisition where they are a new doc coming in.
585
00:36:35.550 --> 00:36:37.769
And let's talk about the acquisitions first, you know, new
586
00:36:37.809 --> 00:36:41.789
doc coming into a practice and they've got this vision of.
587
00:36:42.710 --> 00:36:47.050
I want to introduce new technology, but the senior doc
588
00:36:47.090 --> 00:36:49.239
and the practice that I just bought into may be
589
00:36:49.300 --> 00:36:53.619
very analog, very old school, works well, but just is
590
00:36:53.699 --> 00:36:57.219
not functioning at the level that the new doc coming
591
00:36:57.300 --> 00:37:00.869
in is. I think that there's this delicate balance there
592
00:37:01.269 --> 00:37:03.210
of we need to be able to step into a
593
00:37:03.289 --> 00:37:07.659
practice and get a hold of how do we understand
594
00:37:07.880 --> 00:37:11.070
how to take over and run a practice, but also
595
00:37:11.150 --> 00:37:14.309
have the vision in mind of where are we moving
596
00:37:14.329 --> 00:37:19.570
that practice into a digital realm. So again, that new
597
00:37:19.630 --> 00:37:22.800
doctor who's purchased the practice is going to be able
598
00:37:23.199 --> 00:37:27.610
to be more efficient and with what they are doing
599
00:37:27.809 --> 00:37:30.800
in the practice. And again, change is hard. Change is
600
00:37:30.880 --> 00:37:32.420
one of the hardest things. It's hard to get team
601
00:37:32.460 --> 00:37:36.079
members behind you. But I think especially in an acquisition,
602
00:37:36.099 --> 00:37:39.719
you know, I usually tell docs, definitely by month six
603
00:37:39.760 --> 00:37:43.860
to nine, if you're thinking that you're wanting to introduce,
604
00:37:43.960 --> 00:37:46.789
if it's not already there, digital into a practice, you
605
00:37:46.809 --> 00:37:49.750
really need to start doing that because we're already changing.
606
00:37:49.769 --> 00:37:54.760
We're changing the dynamics of management. We're changing the dynamics
607
00:37:54.840 --> 00:37:58.300
of leadership. We may be shifting the culture of the practice.
608
00:37:58.340 --> 00:38:02.820
We may have transition. between team members already. So again,
609
00:38:03.119 --> 00:38:05.820
we're doing the hard, why not do the hard and
610
00:38:05.880 --> 00:38:09.179
start introducing the digital in? Because in the long run,
611
00:38:09.199 --> 00:38:13.219
the goal is about you as a doctor being able
612
00:38:13.340 --> 00:38:17.280
to make money, make up that deficit of expense to income.
613
00:38:17.699 --> 00:38:20.300
And when you're a new practice owner, whether it's an
614
00:38:20.360 --> 00:38:23.199
established practice or not, you've got more debt than the
615
00:38:23.239 --> 00:38:26.440
previous doctor and we need to move you into that
616
00:38:26.500 --> 00:38:31.340
digital realm. So again, I am a huge proponent for
617
00:38:31.400 --> 00:38:33.809
moving into that digital. And then I'm going to speak
618
00:38:33.829 --> 00:38:37.429
to my docs that have established practices. I really feel
619
00:38:37.510 --> 00:38:41.210
for any of my established practice doctors, because one of
620
00:38:41.289 --> 00:38:45.639
the hardest things you will do is introducing a new
621
00:38:45.719 --> 00:38:52.380
technology into your practice. And my suggestion with established practices
622
00:38:53.179 --> 00:38:57.219
is pick a new digital system or pick a system
623
00:38:57.800 --> 00:39:01.460
and maybe introduce one thing a year. Know what your
624
00:39:01.619 --> 00:39:05.599
end goal is. Maybe it is to completely switch out
625
00:39:05.619 --> 00:39:10.079
your bracket system and to have completely customizable brackets. Maybe
626
00:39:10.139 --> 00:39:13.519
it is to move from an analog way of placing
627
00:39:13.559 --> 00:39:17.300
brackets to an indirect way of placing brackets. Maybe it
628
00:39:17.539 --> 00:39:22.070
is to really focus on more shared chair work. between
629
00:39:22.389 --> 00:39:27.369
fixed brackets, whether they're custom or not, and aligners in
630
00:39:27.389 --> 00:39:32.900
your practice, but choose one movement a year and have
631
00:39:33.079 --> 00:39:36.920
a group within your team that you're going to work
632
00:39:37.019 --> 00:39:40.280
with to help you move in that direction. So it's
633
00:39:40.320 --> 00:39:43.500
just not sprung on everybody. It's, you know, have your
634
00:39:43.659 --> 00:39:45.679
core team that you're going to work with. Have your
635
00:39:45.760 --> 00:39:47.760
core team members that you're going to, if it's on
636
00:39:47.780 --> 00:39:50.420
the clinical side, that we're going to work with that
637
00:39:50.539 --> 00:39:55.070
are going to be working alongside you to, before you implement,
638
00:39:55.409 --> 00:39:59.130
think about all of the disruptions that it's going to
639
00:39:59.210 --> 00:40:02.210
cause within your practice. So is this going to affect
640
00:40:02.269 --> 00:40:04.889
us in the TC room? Is this going to affect
641
00:40:04.969 --> 00:40:07.269
us in our fees? Is this going to affect the
642
00:40:07.309 --> 00:40:10.150
way we bill insurance possibly? Is this going to affect
643
00:40:10.210 --> 00:40:13.329
the way we do our starts? Is this going to
644
00:40:13.369 --> 00:40:15.570
affect the way we do our same day starts? Are
645
00:40:15.610 --> 00:40:18.909
we going to be doing scans versus placement of brackets?
646
00:40:19.489 --> 00:40:23.349
Whatever it is, think about, have a think tank almost
647
00:40:23.730 --> 00:40:27.199
about what it's going to take to invest into this
648
00:40:27.300 --> 00:40:32.059
new digital strategy or this new technology that you're going
649
00:40:32.179 --> 00:40:36.469
to implement. And then have a strategy for how you
650
00:40:36.510 --> 00:40:39.510
are going to move through that in that next year.
651
00:40:39.530 --> 00:40:43.170
I think one of the biggest obstacles that doctors tend
652
00:40:43.210 --> 00:40:46.150
to do is they come in and they think that
653
00:40:46.289 --> 00:40:48.750
everything is just going to happen overnight and we're going
654
00:40:48.769 --> 00:40:51.940
to quickly move in. And I saw this new technology
655
00:40:52.019 --> 00:40:54.579
and we're implementing it. And I'll tell you, the salespeople
656
00:40:54.619 --> 00:40:57.380
want you to do that. Absolutely. But you need to
657
00:40:57.460 --> 00:41:01.130
be strategic about about what you are doing so that
658
00:41:01.170 --> 00:41:06.079
it can be successful. Strategic equals success. And that's what
659
00:41:06.119 --> 00:41:08.860
I think we need to think about when we are
660
00:41:09.079 --> 00:41:12.059
introducing digital technology. So as kind of a recap, if
661
00:41:12.099 --> 00:41:15.840
you're a startup, 100% lean into it from the beginning.
662
00:41:15.889 --> 00:41:19.599
We want lean, mean orthodontic offices. Even if we've got
663
00:41:19.619 --> 00:41:23.519
a little higher cost on our expense piece of it,
664
00:41:23.880 --> 00:41:26.150
if we're better on our efficiency, we're going to be
665
00:41:26.190 --> 00:41:29.190
lower on our HR. So I think that we need
666
00:41:29.210 --> 00:41:32.329
to just really think about that. If we're an acquisition...
667
00:41:32.269 --> 00:41:35.010
We need to be thinking about where am I going
668
00:41:35.409 --> 00:41:37.670
and at what point do I need to start setting
669
00:41:37.690 --> 00:41:40.840
the steps in place? And if we're an established practice,
670
00:41:40.929 --> 00:41:43.179
we need to be thinking about what is the one
671
00:41:43.239 --> 00:41:46.679
technology I'm going to bring in? Who's my team? How
672
00:41:46.739 --> 00:41:48.780
are we going to vet this? How are we going
673
00:41:48.840 --> 00:41:51.780
to think about all the impacts that it has on
674
00:41:51.800 --> 00:41:53.829
the practice? How are we going to train on it?
675
00:41:54.139 --> 00:41:56.519
And how are we going to start to implement so
676
00:41:56.559 --> 00:42:01.679
that we have success? All right, guys, last thought for
677
00:42:01.840 --> 00:42:05.780
this episode here. And I think that part of being
678
00:42:05.820 --> 00:42:09.440
a consultant is not only am I and my team
679
00:42:09.519 --> 00:42:13.809
constantly coaching on the how and the why of what
680
00:42:13.869 --> 00:42:18.030
we do in our orthodontic industry, but a lot of
681
00:42:18.070 --> 00:42:20.929
my role working with doctors is kind of working on
682
00:42:20.989 --> 00:42:23.789
that behind the scenes. I joke, you guys have heard
683
00:42:23.829 --> 00:42:26.940
me say this before, that unsexy side of the business
684
00:42:26.960 --> 00:42:31.320
is The numbers, the P & L, the things that
685
00:42:31.360 --> 00:42:34.860
we have to be paying attention to as business owners
686
00:42:34.980 --> 00:42:36.719
that a lot of times, you know, a lot of
687
00:42:36.760 --> 00:42:38.909
you as doctors, like you got into this because you
688
00:42:38.949 --> 00:42:42.130
wanted to be really great clinicians. You wanted to be
689
00:42:42.210 --> 00:42:46.570
able to use this very specific skill set. to help
690
00:42:46.610 --> 00:42:49.530
people have a better life and have better smiles and
691
00:42:49.949 --> 00:42:52.570
all the things that get you really excited. A lot
692
00:42:52.590 --> 00:42:55.159
of you didn't get into this because you were like,
693
00:42:55.260 --> 00:42:58.219
I cannot wait to dive into my reports in my
694
00:42:58.320 --> 00:43:03.460
operating system or to slave over percentages in my profit
695
00:43:03.500 --> 00:43:07.360
and loss statements. But these are things that as business owners,
696
00:43:07.480 --> 00:43:11.710
we really have to think a lot about. And I think, again,
697
00:43:11.829 --> 00:43:14.570
going back to just where we are in the economy,
698
00:43:14.690 --> 00:43:18.099
I think that we are just so bombarded with, are
699
00:43:18.139 --> 00:43:20.099
we in a recession? Are we not in a recession?
700
00:43:20.159 --> 00:43:23.639
Are things good? Are things bad? Should you be fearful
701
00:43:23.699 --> 00:43:25.590
that your patients are going to stop coming through the
702
00:43:25.610 --> 00:43:27.949
door because the general dentist down the street is doing
703
00:43:28.010 --> 00:43:32.090
all the Invisalign cases or Whatever it is. And ultimately,
704
00:43:32.110 --> 00:43:35.869
it causes a lot of, I think, struggle and panic
705
00:43:35.969 --> 00:43:39.050
with doctors out there on what should I be paying
706
00:43:39.090 --> 00:43:41.590
attention to? How do I know if I've got a
707
00:43:41.630 --> 00:43:44.269
problem or if I don't or if this is something
708
00:43:44.289 --> 00:43:47.760
that will pass? And so... What I get a lot is, hey, Jill,
709
00:43:47.840 --> 00:43:51.960
what are the KPIs, key performance indicators that I should
710
00:43:52.000 --> 00:43:55.530
be watching in my practices to make sure that we're
711
00:43:55.570 --> 00:43:59.630
healthy and that our numbers are telling us what I
712
00:43:59.670 --> 00:44:01.869
need to know so that as a business owner, as
713
00:44:01.929 --> 00:44:04.929
a leader... If I need to be making adjustments, I
714
00:44:04.969 --> 00:44:08.260
can do that. And again, it's hard for me because
715
00:44:08.300 --> 00:44:12.840
I work with doctors in such different stages of their practice.
716
00:44:12.920 --> 00:44:16.440
And I think what a startup doctor is looking for
717
00:44:16.860 --> 00:44:19.380
in their numbers is going to be very different than
718
00:44:19.420 --> 00:44:23.280
a midlife doctor to that eight years to retirement doctor.
719
00:44:23.300 --> 00:44:25.920
So I'm going to speak more to that startup and
720
00:44:25.960 --> 00:44:29.380
that midlife acquisition slash established, you know, kind of the
721
00:44:29.519 --> 00:44:32.449
eight years to 15 years in. And so for a startup,
722
00:44:32.750 --> 00:44:35.150
I think the biggest thing that we have to understand
723
00:44:35.489 --> 00:44:38.929
is it is about growth in a startup. In my opinion,
724
00:44:39.010 --> 00:44:42.389
when we're working with startup practices, the hardest year you're
725
00:44:42.409 --> 00:44:44.070
going to do is your first year. You have to
726
00:44:44.139 --> 00:44:47.000
put up a certain amount of number in production. You
727
00:44:47.059 --> 00:44:48.920
have to put up a certain amount of number in
728
00:44:49.019 --> 00:44:51.639
collections in order to know that you're going to be
729
00:44:51.800 --> 00:44:55.739
able to keep moving forward with your practice. Year two
730
00:44:55.880 --> 00:44:59.869
is probably the most pinnacle year in a startup because
731
00:45:00.110 --> 00:45:02.389
anything that we do in year one, we have to
732
00:45:02.449 --> 00:45:05.869
double in year two. And that can just feel so
733
00:45:06.570 --> 00:45:09.699
hard in that year two, but it really sets up
734
00:45:10.139 --> 00:45:12.699
where a practice is going for year three and on.
735
00:45:13.300 --> 00:45:15.579
So when we peel that back and look at that
736
00:45:15.739 --> 00:45:19.659
from the financial side, this unsexy side of our business and,
737
00:45:19.679 --> 00:45:22.300
you know, startup doc is looking at their P &
738
00:45:21.780 --> 00:45:24.840
Ls with their CPA and they're like, oh my gosh,
739
00:45:24.860 --> 00:45:29.050
you know, I'm easily over 75% in overhead, probably more
740
00:45:29.090 --> 00:45:32.710
like 80 to 90%. And my expenses are out of control.
741
00:45:33.329 --> 00:45:36.150
The thing that we have to think about is really
742
00:45:36.210 --> 00:45:38.889
with the startup practice, and I would say your first
743
00:45:39.010 --> 00:45:42.550
five years of business, you guys are just coming into
744
00:45:42.590 --> 00:45:46.230
a line with the norms of established practices, kind of
745
00:45:46.250 --> 00:45:49.929
that five years and on. And so you're going to
746
00:45:50.010 --> 00:45:54.469
be very upside down in your expense to income because
747
00:45:54.489 --> 00:45:57.909
you're starting from all expenses and no income and moving
748
00:45:57.989 --> 00:46:00.679
to write that. And so, of course, it's going to
749
00:46:00.719 --> 00:46:04.099
be natural that your overhead is going to be very high.
750
00:46:04.559 --> 00:46:07.599
So all of your percentages that you would look at
751
00:46:07.659 --> 00:46:10.139
if you were trying to compare yourself to industry norms
752
00:46:10.480 --> 00:46:12.760
are just not going to make sense because you just
753
00:46:12.800 --> 00:46:15.389
are not there yet. But as you are moving along,
754
00:46:15.429 --> 00:46:18.010
you're going to be working differently. to shore up those
755
00:46:18.090 --> 00:46:21.630
buckets and to bring yourself into alignment with where we're
756
00:46:21.730 --> 00:46:24.670
at in the industry. And I think that the biggest
757
00:46:24.690 --> 00:46:27.969
thing that you just have to really be paying attention to,
758
00:46:27.989 --> 00:46:32.070
I think in a startup practices, and I said this earlier,
759
00:46:32.730 --> 00:46:36.110
are you producing more than you're collecting each year? You
760
00:46:36.150 --> 00:46:39.590
should be. What we know is that in orthodontic practices,
761
00:46:39.710 --> 00:46:42.289
as we get started and get going and growing, What
762
00:46:42.309 --> 00:46:44.769
you produce in one year, you should collect over two.
763
00:46:45.289 --> 00:46:48.260
After years and years and years of data, I can
764
00:46:48.320 --> 00:46:50.880
see this over and over again, is that if we've
765
00:46:50.900 --> 00:46:53.340
got good healthy boundaries with our downs, if we've got
766
00:46:53.440 --> 00:46:57.449
good healthy boundaries with our monthly payments, when we look
767
00:46:57.510 --> 00:47:00.960
back at a year, In a startup, what we produced
768
00:47:01.019 --> 00:47:03.840
in that year, we should have collected about half of that.
769
00:47:04.260 --> 00:47:07.739
If we're collecting more than half of that, probably had
770
00:47:07.780 --> 00:47:10.500
a lot of pay in fulls. That's okay in our
771
00:47:10.539 --> 00:47:14.050
first year, but that's not a long-term strategy for practices
772
00:47:14.260 --> 00:47:17.849
in the future. If we weigh under collected from what
773
00:47:17.869 --> 00:47:20.409
we produced, that means that we may not have some
774
00:47:20.489 --> 00:47:23.750
safe boundaries in place for our downs and our monthlies.
775
00:47:24.349 --> 00:47:28.070
And as a doctor, you may be backfilling in to
776
00:47:28.150 --> 00:47:31.670
cover those expenses, or you may not be moving in
777
00:47:31.690 --> 00:47:34.630
the direction that you want towards eventually taking a paycheck
778
00:47:34.969 --> 00:47:38.099
because you're allowing the cash flow to be too low
779
00:47:38.119 --> 00:47:40.300
in a practice. So those are some things we need
780
00:47:40.320 --> 00:47:43.780
to be thinking about in startup practices. Now, when we're
781
00:47:43.800 --> 00:47:49.219
looking at established practices, whether it's an acquisition or whether
782
00:47:49.409 --> 00:47:51.570
it is a startup, one of the things that I
783
00:47:51.630 --> 00:47:56.090
always am looking at is historically, when a year ends,
784
00:47:56.409 --> 00:48:00.489
did we produce more than we collected? Because kind of
785
00:48:00.510 --> 00:48:04.159
going back to that startup scenario, over time, what we're
786
00:48:04.219 --> 00:48:08.239
producing and what we're collecting over a two-year span is
787
00:48:08.869 --> 00:48:12.059
is that a lot of times what I see is
788
00:48:12.139 --> 00:48:16.699
when we look historically, especially with acquisitions, is when a
789
00:48:16.760 --> 00:48:20.210
practice or this eight years to retirement, when a practice
790
00:48:20.269 --> 00:48:25.920
starts to slow down, Usually production slows, but we don't
791
00:48:26.239 --> 00:48:29.199
see that initially in the P & Ls when we
792
00:48:29.239 --> 00:48:34.519
look historically because that practice is still collecting off of
793
00:48:34.579 --> 00:48:38.440
a previous year's production and then half of, you know,
794
00:48:38.480 --> 00:48:41.260
if they've got good boundaries in place. half of that
795
00:48:41.360 --> 00:48:44.360
next year's production. So I think that one of the
796
00:48:44.440 --> 00:48:47.559
key indicators, and I think when we had the recession
797
00:48:47.619 --> 00:48:52.039
hit back in 2006, 2007, 2008, one of the things
798
00:48:52.119 --> 00:48:56.110
that caught so many doctors on their back foot, especially
799
00:48:56.219 --> 00:49:00.429
ones that weren't paying attention to the numbers, is that
800
00:49:00.829 --> 00:49:04.210
cash coming into their bank account was still really good.
801
00:49:04.889 --> 00:49:08.130
But what they didn't catch was that production was slowing
802
00:49:08.630 --> 00:49:12.460
and the starts were slowing. and that we weren't producing.
803
00:49:12.880 --> 00:49:16.329
And it took about two years to really hit and go,
804
00:49:16.550 --> 00:49:20.219
oh my gosh, I don't have the collections that I've had.
805
00:49:20.360 --> 00:49:23.519
I feel it now in my bank account. I can't
806
00:49:23.579 --> 00:49:26.590
pay my employees. I need to downsize, you know, all
807
00:49:26.610 --> 00:49:30.750
the things that happened back in the day. because they
808
00:49:30.809 --> 00:49:36.219
weren't paying attention to, am I producing more than I'm collecting? Now,
809
00:49:36.239 --> 00:49:37.820
I just want you to hear me that I look
810
00:49:37.860 --> 00:49:41.219
at this as a year on a year, not necessarily
811
00:49:41.500 --> 00:49:43.949
on a monthly, because there could be months where we
812
00:49:44.010 --> 00:49:48.309
have better collections monthly. Then maybe it could be a May.
813
00:49:48.469 --> 00:49:52.300
I'll use May again. We're just riding on our receivables,
814
00:49:52.389 --> 00:49:54.659
but we aren't doing a lot of starts in May.
815
00:49:55.079 --> 00:49:58.099
So when we look at it on that very micro level,
816
00:49:58.460 --> 00:50:01.360
month to month, we can see a little fluctuation. But
817
00:50:01.400 --> 00:50:03.909
when we look at it quarter to quarter and then
818
00:50:03.949 --> 00:50:06.769
year to year, that's where we start to see trends.
819
00:50:07.230 --> 00:50:10.349
So I think as doctors, whether you're doing an acquisition
820
00:50:10.510 --> 00:50:13.239
and you're coming into a practice and you're saying, oh,
821
00:50:13.260 --> 00:50:16.159
but hey, I bought this practice and I looked at
822
00:50:16.300 --> 00:50:18.420
all of these collections that the doctor had and it
823
00:50:18.440 --> 00:50:21.420
looks good. Then you start getting in and you're looking
824
00:50:21.440 --> 00:50:26.179
at the operating system. I think especially for acquisitions, everything
825
00:50:26.239 --> 00:50:29.500
is based on collections. It's not based on production. And
826
00:50:29.539 --> 00:50:32.679
you have to look at that production piece to have
827
00:50:32.719 --> 00:50:36.230
a good understanding of receivables and what was happening in
828
00:50:36.250 --> 00:50:38.969
the production and the receivable pieces. And then for my
829
00:50:39.010 --> 00:50:43.110
established docs, you just always, this is the part as
830
00:50:43.170 --> 00:50:45.559
a business owner, none of us like to do it,
831
00:50:45.889 --> 00:50:48.650
but we have got to always have our eyes on
832
00:50:48.710 --> 00:50:51.670
those numbers. And I think when we're in that five
833
00:50:51.730 --> 00:50:56.250
years to 15 year stage, that's really where you guys
834
00:50:56.309 --> 00:51:00.900
as business owners should be really dialing it in to,
835
00:51:00.920 --> 00:51:05.699
are my overhead expenses sufficient? to my income? Is that
836
00:51:05.780 --> 00:51:09.739
percentage where I want it? Even if I'm using digital technology,
837
00:51:10.360 --> 00:51:13.570
am I really paying attention to those micro levers that
838
00:51:13.610 --> 00:51:15.590
I can be pulling? And what I mean by that
839
00:51:15.829 --> 00:51:19.949
is you may be leaning into digital technology, but if
840
00:51:20.010 --> 00:51:25.150
you're still running with an oversized team, ideally what we
841
00:51:25.170 --> 00:51:27.900
want is a lean, mean office. So we may be
842
00:51:27.960 --> 00:51:31.739
moving some of that HR expense down into expense and digital.
843
00:51:31.920 --> 00:51:33.760
It doesn't mean that we still don't have an expense,
844
00:51:33.800 --> 00:51:36.179
but it may be changing where we're at. And if
845
00:51:36.199 --> 00:51:39.929
we're not adjusting, maybe we're bringing in this new technology,
846
00:51:39.969 --> 00:51:43.050
but we're still seeing patients back every six or eight weeks,
847
00:51:43.130 --> 00:51:44.969
which in turn makes us have to have more team
848
00:51:45.010 --> 00:51:47.690
members or whatnot. All of those little things are the
849
00:51:47.730 --> 00:51:50.550
things that when we're in that midlife cycle, we're we
850
00:51:50.610 --> 00:51:53.909
need to be paying attention to. And I highly suggest
851
00:51:53.989 --> 00:51:58.969
that doctors are leaning into really experienced CPAs and people
852
00:51:58.989 --> 00:52:02.710
that can really help you understand the data to understand
853
00:52:02.769 --> 00:52:05.369
how do you shore up your practice so you aren't
854
00:52:05.510 --> 00:52:08.789
caught on your back foot, especially now when we've got
855
00:52:08.829 --> 00:52:12.289
things really going on in our economy. You know what
856
00:52:12.309 --> 00:52:14.610
you're looking at and you know what levers you can
857
00:52:14.650 --> 00:52:17.460
be pulling. I do want to just say this. I
858
00:52:17.500 --> 00:52:19.610
don't want anybody to hear what I just said about
859
00:52:19.659 --> 00:52:22.510
team members and think, oh, Jill's against having team members
860
00:52:22.550 --> 00:52:24.869
in the practice. I'm not at all. You can have
861
00:52:24.909 --> 00:52:26.530
the best doctor ever, but if you don't have a
862
00:52:26.550 --> 00:52:29.530
good team surrounding you, you'll never have a successful practice.
863
00:52:29.909 --> 00:52:32.150
Or you can have a really successful practice. I hate
864
00:52:32.170 --> 00:52:34.659
to say this, docs, but maybe have not as great
865
00:52:34.679 --> 00:52:38.139
of a doctor because it runs on our team. But
866
00:52:38.179 --> 00:52:40.500
what I want you to hear is that I do
867
00:52:40.619 --> 00:52:45.559
believe that if we're going to marry technology and efficiency...
868
00:52:45.510 --> 00:52:48.500
We have to make sure that we're being smart with
869
00:52:48.539 --> 00:52:51.219
the team members that we have on our team. And
870
00:52:51.280 --> 00:52:55.159
we aren't just, especially in established practices, we aren't just
871
00:52:55.320 --> 00:52:58.820
holding onto people just to hold onto people. Do we
872
00:52:58.889 --> 00:53:02.849
have very specific roles for everybody in the practice? And
873
00:53:02.989 --> 00:53:06.250
are we being efficient with the team members that we have?
874
00:53:06.449 --> 00:53:08.510
Or are we kind of holding on to old ideas
875
00:53:08.610 --> 00:53:12.550
or old thoughts just because, and that's keeping you from
876
00:53:12.590 --> 00:53:16.590
the goals of where you're wanting to be and running
877
00:53:16.630 --> 00:53:21.519
a very efficient, lean, mean orthodontic practice for the future.
878
00:53:23.280 --> 00:53:25.940
And now a word from the sponsors who make this
879
00:53:26.019 --> 00:53:32.869
podcast possible. Hey docs, let's talk about SmileSuite because it's
880
00:53:32.929 --> 00:53:36.550
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881
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882
00:53:39.699 --> 00:53:43.400
SmileSuite partner, I've witnessed the incredible impact it has on
883
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practices of all sizes. SmileSuite means your new patient calls
884
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and web leads are expertly handled seven days a week,
885
00:53:51.260 --> 00:53:55.599
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886
00:53:55.679 --> 00:54:00.670
presentation software and seamless post-consultation follow-up. It's like having a
887
00:54:00.730 --> 00:54:05.070
secret weapon for your practice's success. Curious? Dive into the
888
00:54:05.130 --> 00:54:10.510
revolution at GetSmileSuite.com. And don't forget to mention HeyDocs to
889
00:54:10.590 --> 00:54:15.610
unlock some extra goodies. Elevate your practice with SmileSuite because
890
00:54:15.809 --> 00:54:20.769
every smile deserves a suite of excellence. So guys, you've
891
00:54:20.789 --> 00:54:23.869
got to listen to me talk for the last 40 minutes.
892
00:54:23.929 --> 00:54:26.250
And I really hope that you've enjoyed just kind of
893
00:54:26.289 --> 00:54:30.260
hearing my thoughts. These just Jill talks. My thought behind
894
00:54:30.300 --> 00:54:32.760
this was that you kind of get to hear some
895
00:54:32.780 --> 00:54:35.380
of these conversations that I have over and over again,
896
00:54:35.440 --> 00:54:37.380
or I may have over a glass of wine at
897
00:54:37.420 --> 00:54:40.099
a business meeting or, you know, on my Zoom calls
898
00:54:40.159 --> 00:54:42.929
with all of my doctors. But here are my closing
899
00:54:42.969 --> 00:54:44.949
thoughts on all of this. And that is that the
900
00:54:45.730 --> 00:54:49.409
economy is always going to be changing. Again, I've been
901
00:54:49.449 --> 00:54:52.750
in this industry for over 35 years now. I have
902
00:54:52.909 --> 00:54:55.730
been through the highs when it was so easy for
903
00:54:55.769 --> 00:54:59.199
a practice to just truly put their name out. and
904
00:54:59.559 --> 00:55:01.539
have more patients than they know what to do with,
905
00:55:01.920 --> 00:55:05.559
to the lows going through COVID and recession back in
906
00:55:05.579 --> 00:55:09.690
the early 2000s, to coming back out of COVID. And
907
00:55:09.789 --> 00:55:12.050
we've got all these patients with all this money and
908
00:55:12.110 --> 00:55:15.570
interest rates lower than we'll ever see them. to where
909
00:55:15.610 --> 00:55:18.630
we're at right now. And I just want you to
910
00:55:18.690 --> 00:55:22.269
hear that this is part of our industry. This is
911
00:55:22.329 --> 00:55:26.860
part of our society. This is something that as business owners,
912
00:55:27.000 --> 00:55:30.239
we will always be dealing with. And it's something that
913
00:55:30.280 --> 00:55:34.639
we can't control. But what we can control and what
914
00:55:34.719 --> 00:55:39.389
you guys can do is you can control how well
915
00:55:39.510 --> 00:55:44.739
you know your business. When we can recognize as business
916
00:55:45.070 --> 00:55:50.139
owners that we can make small pivots to deal with
917
00:55:50.260 --> 00:55:53.019
what is happening in the economy. It doesn't mean that
918
00:55:53.059 --> 00:55:55.980
it's a pick it and stick it decision, but I
919
00:55:56.079 --> 00:56:00.880
love that thought of pivoting for what is happening in
920
00:56:00.980 --> 00:56:05.500
our economy. It really will make you better at weathering
921
00:56:05.739 --> 00:56:08.659
whatever is going through. And I always say, you can
922
00:56:08.719 --> 00:56:11.679
tell something is happening in our economy just by looking
923
00:56:11.820 --> 00:56:15.530
outside of our industry. When we see McDonald's bringing back
924
00:56:15.610 --> 00:56:18.469
the dollar menus and lowering and saying, hey, I'd rather
925
00:56:18.590 --> 00:56:24.670
sell a hamburger for a dollar than no hamburgers for $ 5,
926
00:56:24.349 --> 00:56:26.590
we have to start paying attention to those things. And
927
00:56:26.650 --> 00:56:29.199
I know that's a crude analogy, but I think it's
928
00:56:29.219 --> 00:56:31.460
something that we have to understand. And so what I
929
00:56:31.519 --> 00:56:35.119
want you thinking about as you maybe reflect on this
930
00:56:35.219 --> 00:56:40.619
episode is really looking think about how you can really
931
00:56:40.699 --> 00:56:45.559
try and understand what's happening inside your own four walls
932
00:56:46.099 --> 00:56:49.309
and make the decisions that are right for your practice
933
00:56:49.829 --> 00:56:53.289
based on where you are at in the lifestyle stage
934
00:56:53.329 --> 00:56:58.400
of your practice versus leaning into just, well, on Facebook,
935
00:56:58.440 --> 00:56:59.960
they said that I should take $ 100 down and $ 100
936
00:56:59.920 --> 00:57:04.360
a month or I heard that I should never discount
937
00:57:04.400 --> 00:57:06.900
my fees or I heard that I have to be
938
00:57:06.960 --> 00:57:10.219
running at a 55% overhead or I'm a failure as
939
00:57:10.260 --> 00:57:13.880
a business owner. You really have to take everything that
940
00:57:13.900 --> 00:57:17.000
you hear, even what I say, and really scrutinize it
941
00:57:17.039 --> 00:57:20.050
against your own practice, where you're at, the life cycle
942
00:57:20.139 --> 00:57:22.769
of where your practice is at and make the best
943
00:57:22.869 --> 00:57:25.989
decisions for your practice and know that pivoting is okay.
944
00:57:26.289 --> 00:57:28.869
You're never making decisions that are pick it and stick
945
00:57:28.949 --> 00:57:32.380
it or forever decisions. We're trying to make the best
946
00:57:32.440 --> 00:57:35.420
decisions for our practices, for where we're at. And I
947
00:57:35.460 --> 00:57:38.179
think especially right now in economy, you may need to
948
00:57:38.239 --> 00:57:41.210
be doing some pivoting right now. All right, guys, it
949
00:57:41.250 --> 00:57:44.469
has been great. Thank you for being here just with
950
00:57:44.530 --> 00:57:47.269
me on this episode. And I look forward to talking
951
00:57:47.289 --> 00:57:51.079
to you next week. Are you ready to start a
952
00:57:51.119 --> 00:57:54.079
practice of your own? Need a new fresh set of
953
00:57:54.280 --> 00:57:57.699
eyes or some advice on your existing practice? If so,
954
00:57:57.920 --> 00:58:04.219
reach out to me, Jill Allen, at www.practiceresults.com. If you
955
00:58:04.260 --> 00:58:06.389
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