489: The Sinking Ship with Dr. Mark Costes
In the dental per Noor podcast. Okay. Doctor. It's time to put down that hand piece. You're listening to the show dedicated to helping dentists get their lives back. It's time to decrease your stress increase your ability and regain your passion. Now. Introducing your host, Dr Mark Kostas. Hello everyone. Welcome to another episode of the dente podcast. I'm your host to Marcus obey resumed great out there today who man can you tell my voices shot. I am back in town after an incredible three days in Scott still with my favorite people in the world, the elite practice mastermind group kicks him, but got some systems ation accomplished for a lot of our mastermind members got a lot of stuff done. Just my favorite time of the year. Every every January is a great time. But our January mastermind meetings. We have them quarterly, but are January mastermind meetings are always my favorite because people come with their benchmarks that they want to try to accomplish for the year. We put a plan in place, we reverse engineer. We figure it out. We assign accountably count ability partners, and count ability groups is just awesome. Awesome stuff over one hundred people in the room there at the dental success is to toot headquarters in Scottsdale, the dental success network campus, it was just an incredible time special. Thank you to our black belt coaches. Dr Aaron nNcholas Dr Brian Stemmler, Dr Addison Killeen. Alastair macdonald. Carey dent, Tiffany trader. And of course, the whole yes, I staff for making it happen. Thank you guys enough. I want you to know I care for you guys very very much our team and our master members. We are the closest thing I have to a large extended family, and you guys are all very very special to me. So thank you. Thank you for your dedication to the cause. And for being a part of our incredible community and supporting the other members of the community. This episode is being brought to you by the dental success summit, which is scheduled for March twenty eighth and twenty ninth two thousand nineteen. They're still the opportunity to get forty percents off your education, just go to dental success summit dot com. The best speakers lineup of all time. We expect a sell out. We are on track to sell this thing out again for the fourth year in a row this'll be the fifth year for the fifth year in a row. The one thing that you guys wanna. Sydor is that the hotel rooms will sell out, and it is a lot more fun. And it is a great experience. If you're at the dental success summit in March to be staying at the facility, the j w Marriott is a huge hotel. But last year we were completely sold out of our hotel room block and people had to stay off campus. And it was not as much fun for them because they had to get Uber's in and out of there. They had to wait for rides. And they didn't get to network to the extent that the other attendees that signed up earlier got the opportunity to do. So guys. This is going to be the event of the year. I'm really excited for this year's speakers lineup and the size of the actual event is going to be fantastic. We have a lot of surprises. It is the anti conference. It is more fun than any other dental conference that I can think of besides maybe VOD because that one's great too. But make sure you guys are signing up Donald success dot com, March twenty eighth and twenty ninth Scottsdale, Arizona and still get forty percent off make sure you sign up soon. So you can get your hotel room and realize that forty percent discount. Okay. In today's. Meet of the podcast. I'm going to repeal replaying. A portion of a keynote presentation that I did recently, and it is all about well. I start talking about the elite practice mastermind blueprint. So the blueprint is the five pillars that I believe that you have to master in order to have an elite level dental practice. But also this blueprint helps you to audit where you are in the five different areas that the five different primary areas of practice growth and practice systems ation. So hopefully, you guys get a lot out of this. We talk about KPI's we talk about. Getting that practice system is to the level where you are no longer the bottleneck in your dental practice. So I hope you guys enjoy this. It is about twenty minutes long. And it some of the great stuff. From a recent keynote presentation that I recently gave onstage to about five six hundred people. So I hope you guys enjoy. We'll talk to you very soon. Have a great day. What we like to do? This is called the elite practice blueprint. I'll read through with you. I know you can't read it what we like to do is take a ten thousand foot view of things in the very beginning. So right now from Dr Glenn essay, we know that there's a lot of things going on. We know that more than anything else. Cash flow is an issue. So we have to prioritize and figure out what we can do to right the ship as quickly as possible. Obviously, there's many many issues happening in this practice. There's issues of leadership. There's issues of cash flow. There's issues of. What he calls a chaotic practice and lack lack of systems ation. There's lots of issues there's lots of issues, and this is not an eight trait. Nobody is born on the first day that they're on this earth knowing how to do this stuff. And if you've never had any formal training in it. It's okay. Not to know. But you can't have a successful dental practice unless you somehow get educated. That's the bottom line. So this is the elite practice blueprint. This is our ten thousand foot view. And this also gives us an idea of where you are. So we do an audit. We ask you about each of these areas. There's only it's far as I can see five main areas to being able to turn a practice around. If you can get a good handle and master these five areas, you're on your way. Okay. The first one is foundation. You have to have a good solid mission vision and core values Dr Glenn on a scale of one to five how are you doing with defined mission vision core values operational systems -ation and operations manual. We wanna have a foundational principles protocol shoots accountability agreements. Organizational chart the list goes on and on and on for your operations manual that is something that starts on day one and goes throughout the life of our relationship together that never is done. It's a fluid document divall. Cbs with new staff devolves as you grow as a clinician evolves with the complexity of your business, but that is something that you have to have in place. Dr Glenn where would you rank yourself on a scale of one to five as far as system of your office? So far we have two zero lifetime patient experience. Lifetime Haitian experience. What does the patient experience as they travel through the eight touch points in your practice? How are we on the telephone? How are we in the hand offs and transitions? How are we as far as handling post clinical follow up? How are we about recognizing and staying in touch with our patients in between visits? Dr Glenn skill zero or one to five where do you fall for lifetime patient experience? This is the one that we really hang our hat on. This is the one that we really excel in overhead and cash flow control. We have this down to a science. We've partnered up with divergent dental, and we can track so many things we have such a high level of sophistication when it comes to data capture and analysis that we can really steer the ship. Now, very very well with Jake's reporting and overhead tracking and the custom analytics divergent, we really really excel in this area now, so we're talking about KPI analysis profitability analysis. Historical analysis debt analysis benchmarking and growth metrics, Dr Glenn how are you on a scale of one to five in overhead and cash flow control. And then new patient acquisition. Everybody. He wants to talk about wrapping up production. In fact, when I was talking to Dr Glenn he says what I really think we need to get more new patients and ramp up production on thinking about taking an implant course. Dr Glenn right now your ship is sinking at a rapid rate. And you're talking about rearranging the chairs on the deck. We do not want to dump more cargo into this boat right now we need to keep this boat from sinking. Prioritizing, so many dentists won a focus on what they're good at. We are comfortable being physicians of the oral cavity. And providing clinical care and producing more the way to produce more is to get more patients to pay more money in marketing, I have a different strategy. The strategy is fixed the business I keep it from leaking keep the ship from sinking. And then we can talk about in face to go over that in a second ramping up production getting more new patients and the right way to do that Dr Glenn where are you as far as new patient acquisition? Are you tracking? Do you have a good reliable system? For tracking your marketing efforts internal external recall reactivation, that's the ten thousand foot view. That's where we start with every single client. Okay. The AP framework is the framework through which we analyze the practice at a higher level. Eight standing for audit. Identify prioritize plan and execute. So the first a you're going to audit an analyze we kind of did that just together here with Dr Glenn all five these main categories where are you? Dr Glenn just a quick audit from one to five where yet identify your biggest area of opportunity or your biggest challenge for Dr Glenn obviously, his biggest challenges he's about to go out of business because overhead is really really high, and he doesn't have enough money to pay himself specially after debt service, and I'll show you that in a second prioritize. So what are the priorities right now would your first priority in Dr Glenn case? And I'll tell you more in a second would your first priority in Dr Glenn case be to get new patients. I would say no would your first priority. Be any of these other things. Maybe maybe have to have a good foundation. And a good culture. I before. We can implement the new systems in order to fix the leaks in the bucket could be but there needs to be some thought about prioritization. Then once we audit identify prioritize, then we put the plan together. And we help all of our clients with that we have a tangible plan that goes week by week month by month quarter-by-quarter year by year, and then execute that's our secret sauce at our secret sauce is that we have built in accountability we create a community, and we check in on each other. That's what a typical consultancy can't do with a single person calling every couple of weeks. Execute. So I'm not trying to turn this into a commercial. If you guys. Are out there. And you're feeling like an island. Make sure that you meet somebody here today that will become your accountability partner better to have a group of people that'll be an accountability partner. The reason that I've paid so many coaches over the years, and you'll meet one of them today is because they help keep me accountable. They help keep me accountable. The hey help pushing me to the next level to help. Keep me help keep me from being complacent. Accountability is huge. Okay. So overhead and task flow control. That is what we deemed to be the number one priority for Dr Glenn I deal expense ratios. Okay. So we're gonna talk numbers for a bit. If you're not numbers and clients, maybe a little boring. But if you're anything like me, and Jake this is like super sexy stuff. Okay. Phase one thirty percent goes to payroll. Thirty percent goes to expenses. Thirty percent goes the doctor compensation. Ten percent goes to profitability. Okay. The first thirty percent right now you experienced clinicians and multiple practice owners or sophisticated. Practice owners are scratching your head saying why marked you allot thirty percent to payroll payroll should never be anything more than twenty to thirty twenty to twenty five percent of your total revenue that seems to be the standard. Response that I get when I put this first number up thirty thirty thirty ten thirty percent going to payroll. Let me tell you this. And I'm not just playing to the staff in the room to the awesome team members in the room. I honestly believe this. And this is the real metric that we use in all ten of our alternate my personal dental practices. I lot thirty percent to payroll because I wanna have the best staff in the world. Human capital is the number one most valuable asset when it comes to owning dental practice. Even more. So than you, Dr I allow thirty percent because I know through my relationships, and because I know how to run a business that I could pick up that extra five percent that I'm paying the payroll somewhere else in variable inexp- infix expenses. That's where knowing how to run a business comes in really handy. So I will tell you that I would rather have a generic brand of two by twos. And I would rather have generic brand of patient napkins and be able to pay my girls and extra two to three dollars per hour that level of sophistication and knowing how to shave off points and fixed and variable expenses allow you to pay that thirty percent to your team and have the best team in your area. I truly believe them phase one thirty thirty thirty ten that sixty percent overhead because we're going to be taking these two numbers payroll and fixed and variable expenses, adding them together that equal sixty percent overhead doctors compensation does not count in overhead. Okay. According to the way that we define it. Face to after we get your practice stabilized after you have the basic business knowledge to run a sophisticated business. Then we go to face to dropping your overhead from sixty to fifty five percent, we're finding more areas here. Finding more here. Still paying our staff. Thirty percent fixed and variable expenses, we're getting more sophisticated. We're negotiating with our labs with our vendors. We drop that another five percent also and face to were starting to ramp up production or starting to increase our clinical sweet K, but not until we stabilize things phase one half of this room three quarters of this room might already be in face to or even face three which I haven't talked about yet. Those are what we call. Our black belts are black belts have a place to go as well. Because we start talking about multiple practice ownership about increasing capacity in about. Further reducing the overhead to make your practice. Even more. Predictable and more profitable. So you can step away and live off the practice. Even if you don't pick up the hand piece anymore. That's what we're talking about in face to face three. They three twenty five percent goes to payroll. Twenty-five percent goes to expenses. Thirty percent goes to st- two doctors Dr pay twenty five percent goes to profitability. Okay. What just happened Mark? How come now? Twenty five percent is acceptable for the staff. What's happening in phase three as we have a very very tangible and focused approach to ramping up production. How'd you decrease variable expenses by paying attention and the Goshi eating with your vendors? How do you decrease thick fixed expenses payroll being one of them? How? You have to increase revenue. That's right. So after face to during face to an interface three we're focusing really really hard on increasing revenue now because the business is running like a top. We're running very very clean business now. Now, we can dump in as much stuff into the top of that as much revenue until the top of that. And we know we're going to have a fair amount of profitability coming out of that. Okay. So we're talking about. Now, we're not decreasing the payroll that we're paying to each individual person. We're ramping up the revenue, and that's by nature. Decreasing the fixed expenses like payroll like rent that percentage of rent is going to go down. That's a fixed expense other fixed expenses are going to drop as we ramp up that revenue. All right phase one overview that phase one is the thirty thirty thirty ten focus is business awareness system is Asian overhead control. We are tweaking are variable expenses nothing happens to fix expenses here. Just non payroll related expenses. Expenses and overhead targets thirty thirty thirty ten payroll expenses, Dr pay and profit sixty percent overhead face to overview, focus is increased revenue and patient flow. Now, we're working about on new patients and increasing our clinical sweet further emphasis on increasing hygiene production, hygienes, a huge element here. I don't mean it to be an afterthought we're gonna talk more about that team incentives increase data analysis cost per procedure, internal and external marketing the ROI on that expenses and overhead targets twenty five. Thirty thirty fifteen. Up. That's wrong. That should have been thirty thirty. Sorry. Guys, got that from the previous slide. Okay. Face three. Now further focus is further revenue increase an overhead decrease revenue increase overhead decrease. Now, we've already in phase one taking care of the variable expenses. Now, we're going to focus on decreasing the fixed expenses to get the overall overhead to fifty percent or less. Now. Let's keep this in perspective a practice that's doing one point two million dollars. It's one hundred thousand dollars per year revenue practice. Okay. If you have a fifty percent overhead you're compensating your providers, which is a mix of your hygienists, and your doctors thirty percents. Fifty percent overhead thirty percent to providers. What's that leave? That's fifty plus thirty is he minus one hundred is he hasn't paying attention twenty percent overhead. Okay. You have a one point two million dollar practice. You've squeezed down the overhead you have a business that you control. It's sophisticated business. You know, how to run a sophisticated business? Now fifty percent overhead hundred thousand dollars the providers are thirty percents. What's that leave for the owner? If he doesn't pick up a a hand piece. Twenty thousand dollars fifty thousand in overhead thirty thousand two providers. Twenty percent goes back to the house. Yes. If you do that once or twice or thrice or ten times, do you need to pick up a hand peace ever again if you don't want to. No, I'm not telling anybody that they have to stop practicing dentistry. I'm just telling you the dentistry is a lot more fun. When you don't have to do it. Up sodas is being brought to you by the third annual voices of dentistry dental podcasters summit scheduled for January twenty fifth and twenty six two thousand nineteen in beautiful Scottsdale. Arizona come meet mix and mingle with all of your favorite dental podcasters in one place, your hosts are none other than the dental hacks. Doctor Allen Mead and Dr Jason lives go as well. As my buddy, Dr justed moody from the dentists, implants and worms podcast and myself. Dr Mark Costas from the dental podcast. So if you guys have never been to this event, it is so much fun. There will be karaoke. There will be a DJ. There will be cocktails. There will be great food. But more importantly, there's a huge amount of interaction. Imagine an event where you have one hundred percent access to all of the speakers to all the podcasters. You get to be interviewed by your favorite podcast, or you can watch as they interview. Spurts from the profession. It is just a ton of fun. So let me go over just a partial list of our awesome. Speakers lineup. We have Dr Corey, Glenn, Dr Barron Grutter, Dr Steffi's Eller, Dr Bruce Baird Vicky McManus, Dr Paul etchison, Dr sully Sullivan, Dr payment, e c Dr Paul Goodman. Dr Russell Kirk Dr Aaron Elliott, Dr Taran Agarwal t-boned himself. Dr Mike Freeman we have Reese Harper. We have Mr Brian Kalaheo from the dykema law firm. We have Dr Jason Spencer. We have Dr August day. Only. Vera, we have Dr Danny Dominguez. We have sandy Pardieu. We have Rachel wall. We have Dr Josh Austin, Dr Lance Timmerman, we have Gary tack, and we have Dr Dave Maloney. Now, I may have left somebody off. But just think about a guys this is a stacked lineup. There's going to be. So many great presenters. And like I said the best part about this whole thing is the interaction and access to all the speakers. So don't miss this one guys if you want to attend the tickets are going fast, all you have to do is go to voices of dentistry dot com to register guys. Look forward to seeing you is sunny, Scottsdale. Arizona January twenty fifth and twenty six two thousand nineteen. And that wraps it up for another episode of the dental podcast. I thank you so much for joining us this week. And we'll talk to you next week take care Bye-bye. Thank you so much for joining us today on the dental preneurs podcast. Check out true dental success dot com for full recaps of every show a schedule of our live events free. Video tutorials and a whole host of practice building resources.