Team “Never Sell” Your Practice

Episode #599 with Dr. Craig Spodak

Do you ever feel like selling your practice? Whatever your reason — stop! There is probably a better option. To explain the pressure you're feeling to sell, important things to consider, and different options that are available, Kirk Behrendt brings back Dr. Craig Spodak, co-founder of Bulletproof Dental Practice and author of The Bulletproof Practice. Create a business you never want to sell! To learn how, and to learn more about the upcoming Bulletproof Summit, listen to Episode 599 of The Best Practices Show!

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Links Mentioned in This Episode:

Learn more about Bulletproof Dental Practice

Register for Bulletproof Summit (August 11-12, 2023)

Read or listen to The Bulletproof Practice by Dr. Peter Boulden and Dr. Craig Spodak

Listen to Bulletproof Dental Practice podcast on Apple Podcasts, Spotify, Stitcher

Watch Bulletproof Dental Practice videos on YouTube

Main Takeaways:

Dentistry is whatever you want it to be.

Never forget the “why” behind your dentistry.

Ignore the FOMO you feel about selling your practice.

Identify exactly what you want in your life and your practice.

Don't make long-term decisions based on temporary emotions.

Quotes:

“Right now, we're all aware of this pervasive narrative of, ‘This DSO bubble is going to burst. Money is flooding in, but it's going to dry up. You don't want to be the last guy standing, not cashing in on the value of your practice.’ So, there's a lot of dental FOMO out there. I think that the narrative is strong and widely held by different parties. Whether those be different portions of the industry, there's a force to push us to consolidate. And I think it's fine if that's what you want to do because you want to exit your career, you want to exit dentistry. But I think there are a lot of people that are caught in the crosshairs of this narrative that just need to work on their businesses a little bit and make the business work for them, and they don't know how to do that, so they pull the F-it card and wind up selling.” (7:52—8:44)

“I am a big proponent of the team “never sell” concept where you learn how to make your business work for you, that you're not a prisoner of your business, that it can actually run like a business if you want that to be the case, and that you would then never want to sell.” (8:44—8:58)

“When you sell your business, you have to take that money and invest in another business. So, you never really exit business — you just exit yours and then go put the money somewhere else. And one thing that we as dentists that are operators know, we know our dental businesses. So, when you sell and you take that money and dump it in a mutual fund, I guarantee you don't know as much about that mutual fund as you do your own practice. So, the team “never sell” approach is to get the business working, and then make sure it provides the cash flow that a business of that character deserves, and then ride off with it.” (9:27—10:01)

“Everybody's situation is unique, and there are people that at the right time and the right place, it might not be a bad idea to transact their business. What I'm fearful of is that the message is so pervasive, and the net is cast so broadly, it's catching everybody. So, whether 10% of the population needs to hear that, ‘Hey, sell now,’ or 20%, or 5% — it's not 99%, is all I'm saying.” (11:13—11:40)

“You don't become a dentist because you're ready to be an entrepreneur. I've had portions of my life that are entrepreneurial, as you have as well. It's literally scary as shit. It's like, ‘Am I going to make it?’ And I think part of the reason why we all became dentists, number one, we want to help people. Number two, we're like, it's pretty recession-proof. It's pretty risk-averse. So, by nature, the act of becoming a dentist puts you in a small category of people who don't like to take chances. So, that's why it's a powerful narrative between like, ‘Hey, Dr. Jones, it's going to dry up. You're going to be totally high and dry.’ So, it catches us in a very opportunistic way.” (11:46—12:25)

“There's a lot of what you should do in dentistry. There are a million coaches. They all tell you that you should, ‘Do these four easy steps.’ Dentistry is beautiful in that it can provide exactly what you want. Each practice I ever visit is like a complete snowflake. They're totally, totally different. The way they maximize for either profitability, experience, legacy, charity — they all have their own vibe, or at least they should have something they stand for beyond fixing the teeth. So, the first thing I'd say to the 31-year-old is, what do you really want from your life? Because dentistry can provide that for you. You might just want to be a softball coach and do the dentistry three days a week for 5 hours. Or you may be an entrepreneur, ‘I want to scale a business.’ Or you may practice in a rural area and want to take care of the farmers, and two of your days are philanthropic and three of the days are for-profit. But you have to build what suits you.” (12:56—13:47)

“You have to do this if you're going to be fulfilled and successful in your life. You have to sit down and get intentional on what your future life is going to look like. So, 31-year-old dentist, he or she, sit down, describe exactly what your future practice looks like. It's not like this hopian bullshit thing where you try to come up with all this crazy stuff. Start the writing exercise. And as you write it, you'll have an authenticity filter. As you write something that doesn't resonate, you'll erase it. It'll be a cathartic and constructive process where you can describe your future life. Three ops, five ops, $500,000 production, $1.5 million production — get it all out. And then, from there, that's when I would start advising you. Because anything less than that, or without that step, I'm telling you what I would do.” (13:52—14:39)

“You're successful in life when you know what you want, and you get what you want, but you decided what you wanted, and you put some time into it. The worst thing is to get what you want and realize you never really wanted it. That's where you have no fulfillment and you're really miserable.” (14:59—15:15)

“We are our own worst enemies. It's the dialog that we have, the constant dialog, what we whisper to ourselves — it’s the most destructive force in our lives.” (15:55—16:04)

“If you believe that your area is not going to support the practice, and you tell yourself — and more importantly, you tell your team that — you will never be able to do it because you are the leader, and the psychology and skill set of the leader makes everything impossible or possible.” (16:52—17:08)

“We all create greater leverage for people that we care about than for our own selves. We all want to take care of other people sometimes more than we take care of ourselves. So, as you, the leader of the business, the doctor in the practice, if not for you, give your team the power to believe that is possible. Because if the psychology of a leader is not a fit for growth, you will never grow.” (17:14—17:40)

“There are people who are artists. There are people who are manager-leaders. There are people who are entrepreneurs. There are distinctions that people need to figure out who they really are.” (18:39—18:49)

“I don't have to be in the office today. There's no other reason that I need to be in my office today. I could handle everything from outside my office, but I chose to be here because I love it. I built something that I love. I'm an extrovert. I'm talking to different people. I'm engaging with them. But if you're an introvert and you want to build something like this, and if you don't put some really good operators in place, it's going to be really hard on you. So, I think it's like the first quote of the Stoics, ‘Know thyself.’ And I think the second quote, ‘Don't bullshit yourself.’” (20:52—21:24)

“People sell a business that is either not performing or they don't like. And then, when you have a business that you like and is not performing, you don't want to sell it, and everybody wants to buy it. So, if you are this person, you're listening to this and saying, ‘I pretty much decided I want to sell,’ but you're probably thinking, ‘I've got to get my business fit to sell. I want to get it better. I want to refine the process to then sell it,’ my suggestion is, go through the training to get it to work for you, and then reevaluate it. Because once you turn it passive — and I think all businesses, if left long enough with proper care and stewardship, should turn into a passive investment. That's the natural progression.” (23:00—23:45)

“I don't believe in this FOMO, ‘You're going to be left high and dry and never have any options.’ But let's face it. If you have a solo practice and you are the business, a DSO or a company that's going to be buying you is going to be buying you and paying you with your own money. So, you don't get to be Dr. Kirk and show up one day, get a big fat check, and walk out a year from now. If you do, they're going to have a replacement strategy, and there are going to be claw-backs. If you don't produce adequately, you could get the money clawed back. So, for those guys, it might even be compelling for them to work for four or five years, and then just throw the damn thing away. Because when you look at the money that they're going to give you, and then the taxable portion of it, and all the other components of it, it might not be as sexy as the letter of intent that slides across the table looks.” (25:34—26:27)

“If you're a team “never sell” person and your business is passive and you enjoy it, that's the most important thing. I think people work so hard in dentistry for so long that they can't bear the thought of another day, another month, or another year of doing it. If you get to that point — if you're at that point right now — I would suggest you take off a couple weeks. Your practice will survive. Never make a long-term decision on a momentary emotional feeling. I see a lot of people do that. So, what I would recommend is, get some clarity. Take some time off. I know you think you can't, but it will be okay. I'd rather you do that than flick the switch and sell when you didn't really want to.” (26:28—27:12)

“For those that have a business that exists, and it gives them some purpose and fulfillment, I don't see the need to ever sell it so long as the return on your investment of owning the business is as good as what it would be in the market. And what do I mean by that? If your business is worth $1 million and you're making at least, whatever you want to call it, five, six, eight, 10% on that money, then why sell it? Because if you sold it as a $1 million business, you're going to get hit with taxes. You're going to put it on the market and be lucky to get five percent. So, you've got to think about your assets.” (27:13—27:46)

“There have been enough DSO transactions where they've seen the pitfalls, where people get all their money and be like, ‘Okay, I'm not going to show up the next day.’ So, there is a hold-back. There's typically 60% to 80% up front, and the rest is in a hold-back. And the problem with the hold-back is some DSOs may actually tell you, ‘We're going to fire Sally because we have a Sally in our main office in Washington, D.C.’ ‘Well, I'm in Florida.’ ‘Yeah, but we have a Sally.’ ‘But Sally has a lot of brand equity and relationship with the patients. You fire Sally, the hygienist is upset.’ And, ‘By the way, it's no longer this composite. It’s this composite. No longer this lab. It's no longer this clear aligner, it's that.’ So, in many ways, you're handcuffed to be able to do the clinical dentistry and have the team around you that you always had. So, if they trim costs to benefit their P&L, they may affect your ability to produce. And guess what? You'll be responsible for that. So, there's a claw-back. What does that mean? It literally means that the money that they were given, the provisions, that they can claw it back and ask for it back. Very normal, usual, and customary. Something for you to know about. And that's usually not in the LOI.” (29:44— 30:55)

“Dentistry is a beautiful profession. It can be exactly what you want it to be. You're not stuck. If you hate your practice right now and you hate everything, what you've chosen, you listened to some people and you got in a place you don't like, don't worry. There are options for you. You can completely pivot your practice. You could be doing patchwork dentistry, and go to Kois or Spear, any of those great organizations, and start doing FMRs and comprehensive dentistry. You could be doing comprehensive dentistry, but it hurts your back, and you want to just do clear aligners. You can get an associate and give that to them. There are so many choices. When I talk to burnt-out dentists — and I talk to them all the time — they're so stuck with those blinders on. I was that guy too. And as soon as you start talking about this, like, ‘You're right. You're right,’ you see this weight lifting off of them like, ‘Oh my God, it's not that hard.’” (33:28—34:18)

“Dentistry is golden. It's a beautiful profession. You can pivot, you can reinvest — you can reinvent, rather — or you can actually take your practice and sell it, move to wherever you want. Anywhere you want in the United States that you love, you can go there and be okay. If you're a restaurateur and you fail, you're in deep doo-doo. As a dentist, if you have a license in good standing and a good skill set, pick any spot in the country that you want to live, and you can get a job as an associate. Maybe the pressure of owning a practice is not for you, and you realize that as well, and you're like, ‘Screw it. I just want to show up and do the dentistry.’ There are a lot of guys like me out there that would love to hire a seasoned dentist that's a good person and does good dentistry. There's so much optionality and we fail to recognize it. That's the big problem. That's why we're leading in divorce, and drug abuse, and all this stuff. We're leading in those kinds of categories because we don't understand what's really available to us.” (34:38— 35:38)

“We don't get burned out because of what we do. We get burned out because we forgot the why behind it. Dentistry is really beautiful. You get to be paid to help people. Never forget the privilege to be able to serve other people. When you make it about yourself and you start over-obsessing about yourself, you lose fulfillment and purpose. So, if you're in a burn-out stage, focus on everything around you. If you feel less appreciated, give appreciation. Whatever you want more of in life, give it away first.” (36:16—36:47)

“If you work with a team of dedicated people — or even if they're mildly dedicated but they've been there a long time — find new ways to appreciate them. If you're listening to this podcast on the way to work, go to work and tell everybody how much you appreciate them. ‘Sally, you're my hygienist. You've been here for four years. I'm not good at this stuff, but I want to let you know how much I appreciate the fact that you come here every day and help me with our patients.’ Diane, Johnny — do the same thing with all of them. Figure out a way, like a hack, to go out and appreciate everybody.” (36:47— 37:16)

“Realize that everyone suffers. In the Mastermind at Bulletproof, one of the great things that happens is they see people like me and Pete who are “successful”, got everything, they want it all, and they start realizing, ‘Oh, shit. They have major drama. They have huge troubles. They have upset team members. They have marital problems. They have problems with their kids.’ So, there's a realization that everybody is suffering, and everybody is coping. No one has it all figured out. Anybody who tells you everything is going perfectly is bullshitting.” (37:21—37:52)

Snippets:

0:00 Introduction.

2:06 Dr. Spodak’s background.

3:31 How he started Savin Ranch.

5:44 Failing forward.

7:40 Team “never sell”, explained.

10:02 Why dentists respond most to fear.

12:30 Create a vision for your future.

15:15 Get rid of self-limiting beliefs.

17:43 Figure out who you are.

19:52 Bigger isn't always better.

22:49 The “never sell” framework.

24:16 Don't make decisions based on emotions.

28:25 Hold-backs and claw-backs, explained.

32:14 Recognize the options and choices you have.

35:39 Why dentists get burn-out.

38:26 About Bulletproof Summit 2023.

Dr. Craig Spodak Bio:

Excellence in the practice of Dental Medicine is a proud tradition in the Spodak family. Dr. Craig Spodak is a third-generation dentist who earned his Doctor of Dental Medicine degree from the acclaimed Tufts University, graduating with highest honors. He joined his father, Dr. Myles Spodak, in his practice in Delray Beach, Florida, in 1998 with a dream to change the way patients experience dental care.

He inherited the practice in 2006, and immediately began to develop a new vision for the modern dental practice with a goal to deliver comprehensive dental care from a team of general and specialty dentists in one, convenient, 13,000-square-foot, state-of-the-art, LEED Gold Certified facility. His dream was to change the way patients experience dental care, and he worked tirelessly to...