Chris (00:01.075)
What’s up guys? Welcome back to the No BS Dental Growth podcast. I’m your host, Chris Pistorius. Today we’re going to get right into it. We’re going to get into a topic that doesn’t get talked about enough in my opinion anyway. And honestly, it’s costing a lot of dentists way more than they realize. There’s a trend happening right now, I think, where associates are waiting years longer to buy a practice compared to previous generations. And on the surface, it feels like the safe move probably for a lot of people.
But financially, it can be a massive mistake. So we’re going to break that down. So I’ve got Brian Hanks here with me. He is a dental accountant, but he does a ton in practice acquisition, acquisition, whatever. He’s an advisor who helps. He’s helped over 1,400 dentists by practices across the country. So I think he probably knows what he’s doing. He works directly with dental practice or dentists directly.
to try to figure out when they’re actually ready to buy. So it’s not like, you know, he’ll also help you consult to figure out if now is a good time for you. So we’re gonna talk about the no BS side of what’s good, what’s bad and everything in between. So Brian, appreciate you being here. Let’s get right into it.
Brian (01:09.55)
Thanks for, a listener, Chris. It’s an amazing opportunity to be here. Can I put some hard numbers behind your intro? So you talked about dentists waiting longer to buy a practice. I’ve got some interesting facts I know your audience will find fascinating. So ADA published some information. This is a 2023 study. So we’re recording in 2026. This is three year old data, but I think it’s directionally correct that most…
Chris (01:16.765)
Yeah, please.
Chris (01:23.655)
Yeah, yeah, let’s hear it.
Brian (01:36.91)
Dentists end up in the same place they have for generations. So the current numbers are 89 % end up in ownership of some kind. Okay, that could be ownership as a partner as a solo doc partnering with the DSO and some ownership capacity, but most dentists nine out of ten end up as owners. Okay, but you were right the same published American there’s there’s a few data points on this but they all point towards dentists on average waiting about five years longer than the
prior generation to get to ownership. they’re landing in the same place, but they’re taking longer to get there. And we can talk about why, and it has to do with feelings and student loans, but let me put, here’s the hard numbers. So I ran some numbers. I know how much, I’m an accountant, so I get to see tax returns. I get to see how much dentists actually make. And the average owner makes, on average, about $151,000 per year more than the average associate. Now those are two medians, right?
And your results may vary, but on average, owners make more money, right? That’s just kind of intuitive. If you’re gonna take on the risks and the pain of ownership, you’re gonna make more money. Well, $151,000 over five years, adding in the interest and the compounding that would go with that is about $1.1 million on a 7 % interest rate, okay? So if you’re an associate, you’re a student, you’re thinking about ownership,
Chris (02:55.293)
Wow.
Brian (03:04.046)
And you’re telling yourself, which is what Chris said, gosh, I don’t feel ready. My student loans feel overwhelming. Yes, okay, good. That means you have a brain and that means your amygdala is working, all right? I love that. But just be aware, there is a cost to delaying where you’re probably gonna end up anyway. And on average, that cost is over million dollars in earnings in your career.
Chris (03:29.405)
Wow, that kind of slaps you in the face, doesn’t it? So let’s, yeah, I was just, let’s get into it. What are some of the top reasons that you’re seeing now why dentists are waiting a little bit?
Brian (03:31.854)
Yep. So yeah, go ahead.
Brian (03:41.87)
Yeah, it’s student loans number one, top of the list. No question about it. So they’re saying my student loans feel overwhelming. I don’t know, Chris, I know your background is similar with grad school and everything. I graduated from grad school with six figures in debt, not as much as most dentists, but like, I have some empathy for that point of view. Average student loan balance, 386, I think was the last number I’ve heard. Most I ever heard was an orthodontist, 1.08 million who was married to another.
dentist of some kind with crazy numbers. you know, so listen, like that, that’s a real thing. That monthly nut of needing to pay the student loan balance is a big deal. Here’s the problem though, is if you’re only feeling the fear and you’re delaying that ownership, what’s happening is, you know, it’s the opportunity cost we just talked about. So if you wanted to really pay off your student loans, the fastest way to do that is to make a lot of money.
And fastest way to make money in dentistry is to own your practice. Yeah. So that’s number one reason. Yep.
Chris (04:44.839)
Yep. Yeah, that makes sense. Are there any, how are the banks these days? Is it easy for somebody right out of school to get money? I know it used to be. I haven’t really kept in tune with it. What’s changed in the last five or 10 years in terms of getting approved for some of these loans?
Brian (04:51.682)
Mm.
Brian (05:02.67)
Yeah, the main thing that’s changed is this even easier than when you got into ownership. So now it’s not I wouldn’t say easy, but it’d be like, you know, easier in the sense that running a marathon now they can do a lot faster because of the cooler shoes and the nutrition and everything. Running a marathon is still really hard, right? But it’s easier. so banks used to have a ceiling of what they would lend to.
Chris (05:22.461)
Yeah.
Brian (05:32.737)
But the basic requirements haven’t changed. So the ceiling has gone from like 90 percent, 80 percent of last year’s collections to now. The big dental lenders, B of A, Provide, US Bank, Huntington, some of the big ones nationally, they’ll go to 105, 110 percent of last year’s collections with the same requirements that they used to have, which here are the requirements. I’ll give you the five. OK, got to be out of school at least a year.
You gotta have a decent credit score and a decent credit history is number three. You gotta be able to do about 80 % of whatever the doctor was doing production-wise, both in terms of the actual codes and the actual volume. And then the hardest one for most people is you gotta have some cash saved up. So 50 grand cash is kind of the typical rule of thumb depending on the practice you’re buying. But Chris, those five have been the five for the last 20 years.
Chris (06:27.837)
Yeah, yeah, that’s what I thought. What about, what if a kid is crazy enough to want to come out of school and start from scratch?
Brian (06:34.35)
Yeah, I’ve helped by now it’s I think it’s like up to 10 D4s and they call me they’re hot to trot they’re working on boards and they’re they’re calling me at the same time. And we’ve helped all 10 of them they have all bought most of them have been like family connection of some kind but a handful of them were just like hey I networked I don’t want to work for somebody and I’m going to go 10 out of 10 tell me I’m glad I did it I’m glad I get into ownership.
And then 10 out of 10 very quietly and very kind of cautiously get out of the corner of their mouth, say, and there was a lot that I didn’t know. I wish I would have waited just one year, just one year. Yeah. It was just a lot. don’t know some of the skillset, the location stuff, but it can be done, but it is so extremely hard. I recommend most people go work for one year.
Chris (07:20.594)
Yeah.
Chris (07:26.481)
Yeah, yeah, that’s cool. That’s great. All right. So dental school does a great job of producing dentists. They don’t do a whole big great job of producing really good business people, right? Like how do I market? How do I hire? How do I fire? How do I account and you know, all this fun stuff. Do you go through this with them and make sure that they are totally prepared for this venture?
Brian (07:39.982)
True.
Brian (07:45.262)
Thank
Brian (07:52.254)
Yes is the quick answer. So that’s exactly what I do. My job is to help people feel comfortable along the path ownership and feel prepared. But I can do half the job on this podcast right now. Okay. All right. So one of my favorite episodes, in fact, I asked some of my current clients, Hey, do you listen to No BS podcast and dental podcast? And several of them mentioned the episode, stop answering your phone like this, which my favorites.
I’ll tell you a quick story though to answer your question, Chris. I’ll do half the job of helping people feel more ready by just pointing out that good marketing often is just being better than the dentists around you. Okay. So it doesn’t mean that you can’t become a dental marketing expert, which would be a good idea. But, but, you know, it’s this, the old saying in the land of the blind, the one-eyed man is king. Like go, just be the one-eyed marketer.
Chris (08:48.819)
Yeah, yeah.
Brian (08:49.364)
in dentistry. And so here’s my quick story. I live in South Salt Lake, Utah. Utah is very saturated with dentists. And I am for most dentists an ideal customer. I’m a married dad of four, right? Cash pay. And I needed a new GP for me and my family. And the reason, the only reason that I’m not a good patient would just be because I make my kids floss their teeth and we, know, brush because we were with dentists. But
Chris (09:17.267)
All
Brian (09:18.158)
So I have 22 general dental practices within a two mile radius of my house. All right. That’s, it’s a big number. And, and, know, because of what I do, I thought this will be fun. I’m going to be a, I’m going to be a patient pulled up Google maps, just like most patients would do. And I dialed every phone number, all 22 practices and about a, it was about a 90 minute kind of period. Then I started at 10 AM on a Tuesday. Okay.
And I know you know this because of your podcast I mentioned, but Chris, one of the things you didn’t mention that podcast is guess how many practices even picked up the phone.
Chris (09:54.531)
Yeah, I know. was just thinking that actually. Too many, I would say. my gosh.
Brian (09:58.998)
It was 12 out of 22. So 10 didn’t even pick up the phone, let alone some of the tips you have in that episode, know, the price shopper fumble, some of the other things. So then my second question was, it was yes or no. Do you have some kind of membership plan? That’s all I wanted. I didn’t know details. You can tell me price. I can talk to somebody who’s just yes or no. And only two even knew the answer. Right. And so here’s my point is,
Chris (10:07.057)
Holy cow.
Chris (10:16.007)
Yeah.
Brian (10:26.766)
Your point was, hey, most dentists flip flop the way they think about it. They think I’m a dentist who happens to own a business. And I agree with your point, which is no, no, think of yourself as either a current owner or future owner who happens to be a dentist. And my take on that is all you got to do is pick up the phone, start your appointments relatively close to on time and use plain English when the patient is sitting in that chair.
Chris (10:43.09)
Yeah.
Brian (10:55.244)
and you’re already in the top 10 % of any dental practice around you. And then, yes, go be a marketing expert on top of that. anyway, that’s what I think about when I think about marketing for dentists.
Chris (11:06.845)
Yeah, yeah, that’s awesome. Yeah, it’s scary to me. The most remedial things to make your practice successful are just sometimes ignored or there is too busy or whatever. yeah, sometimes it’s the basics, isn’t it?
Brian (11:21.496)
Yeah.
So yeah, so those folks out there listening going, I don’t know that I feel ready to own a practice. Well, good again, good for you. I’m glad your brain’s working. You’re probably not by the way, just like you weren’t ready to get into dental school. You weren’t ready to buy a house or get married or have your first kids. Nobody’s ready for that. You just jump in and do it. That’s, that’s the same, but you know, of your dental class of 80 people or a hundred people, you know, there were like three people that were goofing off barely past boards that you wouldn’t let near your teeth.
Chris (11:29.585)
Yeah.
Yeah.
Brian (11:53.646)
And those three people, they own a practice and they’re making it work. So the fact that you don’t feel ready is good, but it shouldn’t stop you. And one of the things that can help you is to remember that all I gotta do is the basics and I’m in the top 10%.
Chris (12:08.231)
Yeah. Yeah, that’s great. Yeah. I think that’s, that’s definitely really good value right there. So the people that come to you and you tell them, no, you’re not ready. Who are they? What do they look like?
Brian (12:22.03)
Yeah. They are deal hunters. Okay. They’re more interested in one of two things, getting like a crappy practice that they think they can turn around, or they’re so focused on the art of the deal. They’re so focused on negotiating that purchase price or really raking the seller across the coals that
Chris (12:29.779)
Brian (12:50.328)
that I tell them, listen, this isn’t gonna go well for you. I don’t, if someone’s gonna pay me money and help with it, will help to the extent possible, but yeah, Chris, I’ve said no to several clients, I’ve fired several clients because just culturally or approach-wise, they were getting in their own way and I couldn’t help them. But yeah, it’s the mindset of my student loans are X, 400, 500, whatever the number is, big number, right?
Therefore, I’m going to reduce my risk by buying a practice that only collected $300,000 last year is understandable, but it’s not going to work, right? There is a reason that practice is collecting $300,000 a year. And the chance that you new dentist are smarter than old dentists and can turn that practice around is a lot lower than the chances that you go buy a decently collecting practice, 800,000 plus a million plus.
and run that show. That’s where your safety, the margin of safety is. That’s where the good feelings are gonna come from. I love that question. You’re the first person that’s asked me that question.
Chris (13:59.987)
Really? You get the good and the bad sometimes. But I think it’s good that you’ve got that filtering to tell somebody that. They need that honest feedback. All right, so what are you seeing right now in the market that most dentists don’t realize?
Brian (14:15.288)
DSO activity slowed down. Here’s, yeah. Here’s why that matters. A lot of private buyers make a mistake of thinking they’re competing with DSOs and they are to an extent. But in general, less DSO activity means two things. Number one, the DSOs that got themselves in a lot of trouble with too much debt and too high interest rates are offloading practices. Okay. So it’s not a game of
Chris (14:17.363)
I’ve heard that actually, yeah.
Brian (14:42.668)
I’m negotiating with fewer people, but it is a game of supply and demand, meaning there is a higher supply of practices for sale than there were 18 months ago, 24 months ago. That’s number one. And then to an extent, some DSOs were trying to buy in that lower price range where most private buyers play, 800K in collections, 1.2 million in collections, 1.5, something like that. And so to a degree, you’re competing with fewer potential buyers.
And there’s less negotiation around that. that’s, you know, I would say that’s a marginal effect. The overall marketplace, you know, one of the cool things about dentistry, and also one of the, like, lame things about dentistry, if you’re an owner, is the market is pretty steady. Americans still, they still go eat sugar for breakfast, they drink their sodas, and they’re going to need the dentist services year in and year out.
Pretty much no matter what. you don’t see the lows, which is the good thing. You also don’t see the peaks, right? Like huge jumps. My collection’s jumped 80 % last year. That almost never happens, right?
Chris (15:44.625)
Right.
Chris (15:48.334)
Right. Right. Yeah, that’s why banks love them so much, I think. Yeah. Okay. All right. So what happens after somebody buys a practice? Where do you see them struggle the most? Initially?
Brian (15:52.558)
the study.
Brian (15:57.486)
Yeah, their first 30 to 90 days are rough because they’re learning so much. They struggle with a couple things. First is just the sheer volume of tasks. Okay. So they are scared to death. They’re not going to collect enough money to live. So they booked themselves solid or happily the seller was booked out and they took over a busy schedule, which is a good thing.
Chris (16:03.187)
Hmm. Yeah.
Chris (16:13.607)
Yeah.
Brian (16:26.454)
and they’re trying to figure out payroll for the first time. They’re trying to log into the backend of WordPress for the first time. So that’s number one. So the tasks, number one. And then number two would be the basics of management really can be boiled down to create good relationships and don’t be afraid to give feedback. And most dentists, when was their last job? Their last job in the non-dental world
Chris (16:32.051)
Yeah.
Chris (16:53.331)
Yeah.
Brian (16:55.832)
was like high school or college delivering pizzas or something, right? Which again, there’s nothing wrong with that per se. It’s just been a while since you’ve seen a good boss do something, do basic management. And so just learning the people side of the business. So what I would tell listeners in answer to your question is learn the basics of marketing by continuing to listen to podcasts like this, and then go find some kind of leadership management skill type.
Chris (16:59.176)
Right.
Brian (17:24.226)
resource book podcast friend buddy mentor study club whatever it is so you understand the basics of how to lead a group.
Chris (17:32.659)
Yeah, that’s awesome advice. Mentors, especially if you’re young, are so important. I I still have plenty of mentors that have, because what they don’t tell you also about starting your own business is that it’s incredibly lonely at times, right? Because if you’re just by yourself, or even you could be full of a room of people and still be lonely because the room of people are probably your employees. They don’t understand the frustrations and the daily grind of it. I had a mentor tell me once, there’s really two times where you have people there celebrating you.
Brian (17:45.71)
Hmm.
Chris (18:01.991)
It’s when you first open, right? Where you got a group of people like the ribbon cutting open and you’re getting ready to start. Everybody’s just supporting you. And at the end, when you exit, when you sell and everybody’s congratulating you on a successful journey, right? That whole in between is completely lonely, dead zone. But that’s the, the, the middle is what’s the most important. It gets you to that end. That’s everybody’s celebrating. So unless you have somebody or a community or a group of people that you can lean on during that lonely time,
It’s going to be a struggle for sure. So I think that’s a great, great way to put that.
Brian (18:34.99)
I’d be curious, Chris, if you have any specific recommendations here, can I make two for that committee aspect? One would be your local study club. You need a group of dentists around you, other owners, right, that are dealing with, you know, whatever, insurance credentialing or the supply reps and some of the idiosyncrasies of dentistry. I’ll mention one other resource that I wish got talked about more in dental circles, and that is, well, there’s two groups. There’s Entrepreneurs Organization, or EO for short.
Chris (18:38.845)
Yeah.
Chris (18:44.903)
Yes.
Brian (19:02.166)
And there’s another one called YPO, Young Professionals Organizations. They have an age limit that’s harder to hit for lot of dentists, but most dentists would be very well served by joining one of those groups where there’s a bunch of business owners that aren’t dentists and they can go learn from, you know, the local whatever, tire shop owner. I’ve got a guy in my business that’s a lawyer.
Chris (19:17.437)
Yes.
Chris (19:22.023)
Yes.
Brian (19:24.61)
or in my excuse me in my group with the EO that’s a lawyer, one that owns a manufacturing company. And I’m learning all these lessons from other business owners and it makes a lot less lonely. So those are two.
Chris (19:26.461)
Yeah.
Chris (19:35.021)
Absolutely. And there’s Facebook groups now that you can join to make it easier. There’s I think BNI is still an option, Business Networking International or something. And also my other, your local Chamber of Commerce too, can hook you up with leads groups and peer groups. And what happens a lot of the times for a lot of our clients that do these things, they get clients out of it too. They get patients out of it because everybody needs a dentist, right? So it’s more of the, you know, there’s mentorship, there’s guidance, but there’s also
a whole room full of brand new patients as well. cool. All right. Well, I’m going to wrap up here in just a second. But if somebody’s on the fence right now, let’s say about, you know, buying a practice, what would you tell them?
Brian (20:06.488)
Yeah, yeah, that’s good.
Brian (20:16.32)
Okay, I would reiterate the thing I just said about the joker in their dental school class that probably owns a practice. If that dude, and it’s always always a dude, that was the slack. If that dude can run a practice, so can you. That’s number one. Second is when I got started doing this about 15 years ago at another dental CPA firm, I went to look for the book. Where’s the book on how to write a, you know, how to build a…
Chris (20:27.165)
Yep. Yep.
Chris (20:31.549)
Yes.
Brian (20:43.438)
There wasn’t one and so I wrote one. If this is on video, you’re looking at the title of the book is an accountant obviously titled the book. It’s How to Buy a Dental Practice. It’s nice and thick and it’s big and juicy. But yeah, go to Amazon or you can come to my website. How to Buy a Dental Practice lays out the steps. And by the way, Chris, I don’t know if you subscribe, but I think you do based on my listening of your show. But my goal with writing the book was that you could avoid hiring.
Chris (20:51.803)
Nice.
Brian (21:11.916)
Right. I give you everything that you would need to know to buy a practice right in that book. And so if it’s helpful and you’re on the fence and you need some resources or there’s one, you know, it’s 20 bucks on Amazon. I they give me two of that. So it’s not and that’s a big moneymaker for me. Happy if lots of folks went out there and bought.
Chris (21:12.979)
Yeah.
Chris (21:25.811)
Yeah, I know. Yeah. Right.
Yeah, you’re not going to put your kids through college probably, but hey, yeah, that’s right. hear you. All right. Well, cool. What if somebody wants to work with you, man? How should they get a hold of you? What’s the best way to get in touch with you?
Brian (21:33.336)
No.
Brian (21:42.946)
Thanks for asking. Dental buyer advocates.com. So dental three words, dental buyer advocates.com is where to go. You can type in Brian Hanks and Google and I’ll pop up. But yeah, don’t buy advocates, the book, how to buy dental practice. And I have my own podcast. It’s called practice purchased and similar to you, Chris. I try to make, there’s no ads. It’s 20 minutes or less and it’s just, it’s just pure content. Yeah. Yep.
Chris (22:03.495)
Yeah. Yeah.
Good data. Yeah, I like that. All right. Well, man, thanks so much for being on here. I’d to reconnect with you in six months or so if you’re up for it just get an update, see how things are going, any obstacles you’re seeing in the market, things like that, if you’re up for it.
Brian (22:20.526)
It’s a deal and the listeners out there, you guys hold me accountable. Send me a note if I’m not on.
Chris (22:25.425)
Yeah, for sure. All right. Well, cool. This was a great conversation. think for me, the biggest takeaway here is this waiting until you feel ready. The exclamation points might actually be the riskiest move that you can make the longer you wait, more money it’s going to cost you. So even if you’re thinking about it, this is one of those decisions where you got to kind of, you know, get the right information, the right people. And I think Brian is the right people for this. So, you know, if it’s something you’re even starting to think about, I think he would be a great resource for you.
Again, Brian really appreciate you coming on and breaking this down. There’s a ton of value in this one I think this one’s gonna get a whole bunch of viewership. So Appreciate it for everyone listening though. If you did get value from this episode share it with somebody please maybe somebody who’s been on the fence about maybe buying a practice because the chances are they probably do need to hear this and as always If you like what you hear subscribe like share whatever
It helps you’ll get notified when we drop a new episode. We’ll definitely see you on the next episode. Appreciate your patronship.
