Helping Healthcare Scale
From Law School to Helping Private Practices, A Journey with Ali Oromchian
Can you imagine the bold leap from law school to launching your own legal firm? Our guest for today, Ali Oromchian, the founding attorney of Dental and Medical Council and CEO of HR for Health, walked this exact path. Sharing his compelling journey, Ali eloquently unpacked how he evolved from a law student to a passionate advocate for young healthcare professionals. Join us as he guides us through the labyrinth of private practice, shedding light on the return on investment it offers, despite the looming cloud of student loans.
Ali and I went deep into the essence of teamwork in growing a private practice and bust the myth that success hangs entirely on one individual's shoulders. We explored the terrain of equity distribution and dove into the pros of maintaining individual companies for multiple practices. The conversation morphed into the challenges of practice expansion and navigating the expectations that come with such decisions. Ali shed light on the importance of comprehending what drives individuals and the potential pressure that comes with taking on new roles.
As the conversation advanced, we ventured into the realm of private equity in healthcare. We discussed the pivotal role of consistent growth, risk minimization, and value maximization. Ali’s insightful perspective on private equity in healthcare was encapsulated in the discussion of unwritten benchmarks for selling a business and ways to maximize value. So, tune in to this enriching exchange brimming with valuable advice and insights from Ali, aimed at empowering you in your professional journey, be it in the world of private practice or private equity in healthcare.
If you need help finding the perfect location or your ready to invest in commercial real estate, email us at podcast@leadersre.com.
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Commercial Real Estate Secrets is ranked in the top 50 podcasts on real estate
Can you imagine the bold leap from law school to launching your own legal firm? Our guest for today, Ali Oromchian, the founding attorney of Dental and Medical Council and CEO of HR for Health, walked this exact path. Sharing his compelling journey, Ali eloquently unpacked how he evolved from a law student to a passionate advocate for young healthcare professionals. Join us as he guides us through the labyrinth of private practice, shedding light on the return on investment it offers, despite the looming cloud of student loans.
Ali and I went deep into the essence of teamwork in growing a private practice and bust the myth that success hangs entirely on one individual's shoulders. We explored the terrain of equity distribution and dove into the pros of maintaining individual companies for multiple practices. The conversation morphed into the challenges of practice expansion and navigating the expectations that come with such decisions. Ali shed light on the importance of comprehending what drives individuals and the potential pressure that comes with taking on new roles.
As the conversation advanced, we ventured into the realm of private equity in healthcare. We discussed the pivotal role of consistent growth, risk minimization, and value maximization. Ali’s insightful perspective on private equity in healthcare was encapsulated in the discussion of unwritten benchmarks for selling a business and ways to maximize value. So, tune in to this enriching exchange brimming with valuable advice and insights from Ali, aimed at empowering you in your professional journey, be it in the world of private practice or private equity in healthcare.
If you need help finding the perfect location or your ready to invest in commercial real estate, email us at podcast@leadersre.com.
Sign up for a FREE vulnerability analysis and lease renewal services
View our library on apple podcasts or REUniversity.org.
Connect on Facebook.
Commercial Real Estate Secrets is ranked in the top 50 podcasts on real estate
It's one of the reasons why I love working with young doctors who are associates right now because I want to get them excited about being their own boss and owning their own practice. Because with the way student loans are Austin and the way dental school and medical school and optometry and vet school, it is getting crazy but it's still. In terms of a return on investment, it's still better for them to do that, yeah, to work for someone else, and they'll never reach by the financial independence working for someone else.
Speaker 2:The goal of this show is to help health care organizations scale by leveraging real estate strategies and interviewing high level health care executives who are actively in the trenches in order to pull out lessons learned along the way. If you'd like a free site selection analysis from our team, or you'd like to learn more about how we're acquiring real estate through our fund on the blockchain, visit us at wwwreuniversityorg and drop us a line that's RE as in real estate universityorg.
Speaker 3:Hello everybody, welcome back to another episode of helping health care scale. I'm Austin here, I'm your host, and our guest today is Ali Rumchean. He is the founding attorney of dental and medical council, whose national reputation is to empower young doctors to open up their own offices. He's also the CEO and founder of HR for health. So, ali, thanks for coming on the show today.
Speaker 1:Oh, thanks for inviting me, Austin. This is a lot of fun and exciting.
Speaker 3:Cool, cool. So again, let's go way back. I always like to get a feel of our guests how they grew up. What early childhood was like? What shaped you as you are today? So what was like your earliest memory that you think maybe got you on the path to being an entrepreneur? Were your parents anything in particular with your parents, or the way they raise you?
Speaker 1:Yeah, no, that's a great question. It's funny. I'm one of those few people, I think, austin that knew from a young age that I wanted to be a lawyer. And the reason was my dad was a physician and he got swindled by his nephew in a really bad business deal and he, just like most doctors, he was very trusting and loving kind of guy and he was a great doctor but maybe not so great on the business side, and he invested a whole bunch of money in with his nephew and the nephew just basically stole the whole thing, just stole the whole thing, and the business had to file bankruptcy. He and my mom had to file bankruptcy because there's all these personal guarantees and all this kind of crazy stuff.
Speaker 1:And so I remember sitting in those lawyer offices Austin, as a young kid right Like 10, 11, 12 years old just seeing them in this in this lawyer office being upset, crying, going through this whole emotional thing, and it really impacted their life and their relationship and all of that and just growing up with that made me just so laser focused in terms of what I wanted to do, because I thought to myself I'm just never going to let this happen to my family, right, and so I always wanted to go into law school, and my sister is a dentist, and so my parents wanted me to become a dentist and I had to disappoint them there because I wanted to go down this road.
Speaker 1:But so it's just funny that I went through undergrad and law school, married my college sweetheart, who happens to be a pediatric dentist, and then, even though I didn't start my career doing healthcare, for the past 20 years I've been doing only healthcare and it's been pretty cool. It's got a full circle. Like you said on your in the intro, I'm helping young doctors start their businesses and protecting them.
Speaker 3:Yeah, you couldn't be it. You don't want to be a dentist yourself, so you did the next best thing, which is marry one.
Speaker 1:Exactly, exactly, exactly. It's funny.
Speaker 3:Yeah, so that's cool, it's interesting, yeah, how it is. So my full circle. And what was the process like? Because there's a lot of different layers there. But even when you first go to law school, like obviously that's a huge challenge, and then, coming out, usually you're an employee at an organization and then you make partner and then after that is a lot of times when people start their own, their own firm, and so can you walk us through what's the story like there, from there to here?
Speaker 1:Yeah, yeah, for me it was very similar.
Speaker 1:I started with a firm in Washington DC because that's where I got my master's in tax after law school and I just totally enjoyed my time there, sharpened my teeth, doing what I needed to do, and then and then, when my wife and I decided to get married and move back to Northern California, it was that's when this transition started happening, where I wasn't with the main office in DC anymore, I was just with a satellite office.
Speaker 1:And when you're a satellite office, it's not the same right, there's not the same people, it's not the same you know, the same atmosphere and whatnot and so. So after that, as we, you know, wanted to have children, I was like I just got to work for myself and jumped into doing it on my own. But it was scary. I mean, we had ample clients. You know the firm had ample clients when you know I was there as an associate. And so to go from that to opening up your own, it was pretty scary because I had one client a week right For the longest time, and they were usually my wife's, like classmates or our friends, so they didn't really count.
Speaker 3:And so you're white? When you were starting your practice, your wife was still in dental school. No, she had graduated at that point and she was just at least you had some sort of an income right In safety net? Exactly yeah.
Speaker 1:So we had some backup, exactly, and so it was nice. It was nice to be able to have that and be able to slowly grow it. But then as it grows you realize you know how how special that is. And it's one of the reasons why I love working with young doctors who are associates right now, because I want to get them excited about being their own boss and owning their own practice. Because with the way student loans are Austin and the way dental school and medical school and optometry and vet school are with low and throw in to the mix rising supplies, rising labor, rising interest rates.
Speaker 3:To build out a location is insane right Like it's just getting crazy.
Speaker 1:It is getting crazy. It is getting crazy, but it's still. In terms of a return on investment, it's still better for them to do that than to work for someone else, and they'll never reach financial independence working for someone else when they have $500,000 of student loans. So it's pretty cool.
Speaker 3:So do you focus mostly, then, on private practices rather than group practices?
Speaker 1:No, yeah, we do a little bit of both In terms of starting their careers, their first practice, whether it's a startup or acquisition. We're working with just the singular doctor, right, but a lot of them end up growing into multi offices and so we end up doing a lot of that. We help a lot of offices grow into becoming larger groups. So if they have two offices, three offices, and they want to create a DSO or grow, then we help them with that.
Speaker 3:What do you help with specifically for that? What's that? What would you help with specifically for that situation?
Speaker 1:Yeah, a big part of growth when you're going from two or three offices to four or five or more is you got to make sure that your systems are in place. So a lot of centralization. So we help them centralize their HR, make sure they have similar packages for their associates, because if they have different compensation packages for every associate they can drive them crazy.
Speaker 3:Making sure they're. And then there's the if they find out there's a jealousy component too, oh, 100%.
Speaker 1:Yeah, and that's the last thing you want right For one associate to be paid more or less than another. And then have them talk Something near and dear to your heart making sure their leases are lined up and done well, and so they know when they're terminating their leases or when their leases expire, maybe help them buy a building, if that's what they're planning on doing. So, just a lot of structural stuff. And then we refer them to some consultants who can help build their upper level management team so that they can keep growing. Okay.
Speaker 3:All right, that makes sense. So yeah, just you said you started out with one class one of your wife's classmates as your first client. So I'm curious, like how did you go about growing the business?
Speaker 1:A lot of it from us we've been blessed has been a word of mouth. A lot of what I do is referrals from other clients. We've got some great partners nationwide that refer us and of course I speak a lot on a national level and so we get a lot of exposure that way, just because of all the speaking that I do and the teaching that I do on these topics. So it's a little mixture of all of that, but I would say the top one is definitely our client referrals.
Speaker 3:Yeah, I think it's a great way. Speaking and teaching is like a great way to get clients earn credibility there's it's funny. Like it seems like there used to be all of this scarcity around what you talk about, like you want to protect your proprietary knowledge, and a lot of that's changing now. Like this podcast is a great example. There's a lot of people are getting on the stage and saying just pretty much everything. So what's your strategy? What kind of stuff do you talk about? What are you? How do you view speaking on stage and like educating people?
Speaker 1:For me it's. It's a way of getting out of the normal day to day stuff that we do. We're looking, me and my team of attorneys, we're looking at contracts every day. We're doing lease negotiations, purchase contract negotiations, we're dealing with all of that. For me, it's a way of just getting out and saying, hey there's, I got to go to, like the ADA is coming right in in Orlando in a couple of weeks. Just getting up and going to Orlando and sitting down and teaching and meeting new doctors and you and I hopefully will get together there and meeting other folks that really help continue this messaging, which is being a practice owner, is where it's at, as opposed to working for someone else in healthcare, and so for that, for me, that is the perk of the business is to be able to just escape for a couple of days from the office and just do, just do the teaching.
Speaker 3:Yeah, it's cool. Yeah, I can't imagine. It's just very taxing to be nose down and paperwork going line by line and all of these contracts all the time.
Speaker 1:Yeah, all the time and I, like I said, I'm really blessed because we've got a lot of really awesome lawyers and so I end up doing a lot of strategy now and less of the day to day reviewing. Yeah, but to your point, yeah, look, we do this all the time, right, so being able to just teach for a while is pretty cool. So, just like you, I'm sure enjoy doing this podcast that takes you out of driving people around and doing tours and all of that kind of stuff. So, yeah, for sure.
Speaker 3:So what's? Do you think there's any commonly held beliefs in your industry that you disagree with?
Speaker 1:I think there's this perception that when you are starting your practice and doing your business, that it's all about you, that it's all on your shoulders, and this kind of belief that all the pressure needs to be on you.
Speaker 1:I think there's. It's the wrong way of looking at it, right, because the reality is that none of us can do what we do without our teams. And so I think if people spent more time focusing on their teams and focusing on kind of what they're building with their teams, both in terms of the people they're hiring, the messaging, how they're interacting with them, I think they they will realize that they can achieve faster growth, because it's not just on them, it's on everyone, from the receptionist to the back office people, from the clinical people, everyone. And I think people sometimes realize that too late, where they think that the team is just another piece of the puzzle, but not an important piece of the puzzle. It's you, and they are a key portion of that puzzle, and if you can have some good team members, then you can have exponential growth. Yeah, that's.
Speaker 3:I like that. I think everybody has that conception going in. It's all, it's all up to me. I got to do everything. If I'm hiring somebody, then it creates this hierarchy in your mind of I'm above them or I'm smarter than them, and so I got to know everything more so than they know. But maybe that's true at the beginning, but if you do it right then it becomes not true, because you want to start hiring people that are smarter than you, especially in certain areas, and then that can be really scary, right.
Speaker 1:Exactly. No, that's exactly right. No, you're hitting it on the head. That's exactly right. And that's the key is knowing who to hire, when to hire, and then trusting them. Don't get me wrong you got to know everything about your business, but then letting people, putting people in good positions and letting them succeed so that you can then succeed, that's a. That's that's the thing that sometimes people learn too late. Are there any?
Speaker 3:structures that you see people doing consistently that don't seem to backfire or don't work well, and other structures that do work well and specifically in terms of getting vested equity or anything like that. If you have a single practice, I know it can be tempting early on to hire co people and give them a small sliver, but if you start to grow and have multiple practices like that, small percentage can grow. So it seems like people have done well, but people have also been given away too much too early.
Speaker 1:Yeah, oh, yeah, yeah. I think I see a lot more of the equity conversation happening when there's multiple offices, and here's the mistake that I see. Here's the mistake that I see a lot of times, when somebody opens up their first office, they'll set up a corporation for their first office. Smart, right. Then they go okay, I'm doing really well here, I'm going to go open up a second office, right. And then they go to open up the second office and they buy the second office, or they open up the scratch practice inside the corporation of the first office. Okay, now it makes sense initially on the surface, financially, right, because you're like hey, I have a corporation, let me just put another practice inside this corporation. Cool, I don't have to pay 800 bucks or whatever the state fee is, I don't have to do another tax return. But here's the problem, right, as you said, let's say that second office starts to do really well too.
Speaker 1:Now you got two rockstar practices and you bring on an associate, because you can't be in both places at the same time, of course. Now you bring on an associate and the associate doesn't want to work in office number one. They just want to work in office number two. Right, and you don't want to lose that person because maybe if they leave they go open up a competing practice or whatever. So you can give them ownership. If you've got two separate corporations, you can give them ownership of that second practice and we'll talk about the percentages when the time is right but you can give them ownership without putting them in ownership of the first practice. Do you see what I mean? And so that's a very fundamental thing, but it's such an important thing for people to know because it allows you to just grow quickly, because now, then you go open up the third and you find an awesome associate. You put them there.
Speaker 3:What about if you were to continue growing and then you have your own DSO? Right, that's going to be its own entity, which owns the multiple entities all underneath it. So is there any ownership in that parent company? Because a lot of times it seems like I know every DSO is different, but it seems like a lot of them like most of the value is held in that hold code. Is that accurate?
Speaker 1:Yeah, so there's a couple of different things. So there's a lot of different methods for the DSOs. But yeah, most of the DSOs that we see are just management companies and so they're providing services to the dental practices or the medical practices. And then there's via contract, there's associations where you can and can't do certain things in terms of selling and whatnot at that point in time. So they don't technically own it because they're non-dentists in many ways, or non-physicians, depending on the setup. But they have control where you can't just sell your practice to anybody. You have to go along with the DSO.
Speaker 3:Okay, all right, that makes sense. So is there anything that you've evolved your thinking on, like a belief that you had, that you changed over time?
Speaker 1:I think, to me. I always thought that you have to own multiple practices to really be successful if you wanted to really expand, but what I'm seeing now is that's not necessarily the case. For a lot of people you can have one really large practice and be very successful with just that and no reason to have multiple. We have doctors who have three, four, five offices and they're making less than the person who has one office. That's doing three and a half four million dollars, and so I think it's a matter of figuring out what works for you and then running with that, but not feeling the pressure of necessarily owning multiple practices if that's not your jam, because it's a lot more work, it's a lot of this, there's a lot of things.
Speaker 3:Yeah, I think that's an interesting perspective and it opens up like a deeper philosophical conversation almost, which is especially when you go to these groups and you're listening to podcasts and you go to events and you see all these things. This guy has this many locations and this group has this many locations and you can live a very great life with one location, like you can make a very good income and. But if you start to compare yourself to others and see what they're doing, then it leads you down this. Ok, I've got to have more locations because I need more. But I think initially, like you're taking for sure, taking a haircut and in your pay when you go transition from like one to two or three because you're no longer the right leading physician, leading dentist, the main revenue generator, and you're the CEO of a percentage. That percentage has gone down of the total profits because now you've got more associates doing your job.
Speaker 1:That's right. That's exactly right. That's exactly right. And there are cases after cases of people who grew to 30, 40, 50 offices and they're just hating life and this old adage of grow to 25, 30 and then sell to a larger group and make a killing Like they don't care about that. They don't. It's not about the number of offices, it's about profitability and growth, and that's what they, that's what they care about.
Speaker 3:Yeah, I think it's just one of those things I think we all struggle with. I know I struggle with it too. It's like being content with what you have while simultaneously striving to grow, versus letting yourself feel unsatisfied, Like overly unsatisfied right, In order to chase more. So it's like kind of the same thing is I don't know, it's hard because everybody has a different motivation but just deciding can you be okay with less Right? If you can tell yourself to be okay with what you have, then probably a lot of people would just be very happy with the single location. But it's always that tendency to compare ourselves to what others are doing rather than reflecting on what we're currently doing. That's right, that's right, that's right.
Speaker 1:And also, too, remember, the grass is not always greener on the other side. Just because you have more of something doesn't mean you have it better. And so it's just because somebody has five offices doesn't mean they're making more than you. Right, you might be making way more than them, and you have more free time and you have other things. So, yeah, it's absolutely a balance. But that's the thing that I probably learned, that a lot of people are now wising up to.
Speaker 3:Yeah, that's cool. So what's been like your biggest failure and or learning experience in at least growing your company and working with these groups?
Speaker 1:Oh, that's a good question. I would probably say, moving some of my team members into roles that I thought were good for them, that they don't, that I don't think they were really ready for yet. Like that person, and you're like, oh my gosh, you're amazing, you're a rock star, you're so good at what you're doing. Like you want more for them, right. Like you want more for them. And sometimes I've been guilty of encouraging that person to take on a different role within our practice, like changing them from a receptionist to a legal assistant, and then they failed as a legal assistant, right, because that's just not what they were about, right. And then what happens is that people leave, right. So I've lost amazing people who, because we moved them into the wrong roles. So I think that's what I would, that's probably what I would. I regret the most that I've learned letting people grow naturally.
Speaker 3:So then, to summarize what you're saying, you have people that you really like working with and you had a void that you needed to fill and because you like this person in this role, you try to put them in this role, but it didn't work out Exactly. So how do you decide? Because I do hear on the flip side of that, there are cases is where people see a rock star player and they can level them up and up and up and do these things. So what's your decision making criteria now for handling people's roles?
Speaker 1:It's. For me, it's like it's a feeling, more so than anything else. Right, it's more of a feeling. In other words, you see, someone started with a certain role, certain job description, and then, as they do that really well, you start adding more and more responsibility. And as you add more and more responsibility, if they continue doing well, you're like, oh great, Maybe you could do this other thing. But but but moving into a different role sometimes means so much more pressure, so much it means other things that they may not be ready for yourself. So sometimes they're just like yeah, I just want to stay a receptionist or legal assistant, and I'm happy with that, because they don't want that level of stress, what we were talking about earlier. You know that one office doctor who's oh, I'm going to go to five, maybe one is better. Right, grow that one to three, four million dollars is better than having five million dollar practices. And so, anyway, just like that.
Speaker 3:I like that. So let's shift a little bit. I'd like to talk some about kind of the macro framework that's going on. What are you do you work with a lot of groups that end up taking on private equity. Yeah, oh yeah, yeah, oh yeah. Maybe you can coach the listeners through some things that you do that you've seen that help them become like very attractive to a PE group.
Speaker 1:I would say that there's probably a couple of things that that the PEs are looking for right now. They're looking for a lot of things, but I think the three things that I see most commonly are they want to see really consistent growth in each of the offices right, so I would focus heavily on that. What, what marketing is working? Continue doing that marketing, continue showing same sales growth right, and I think if you're able to show growth per store for a practice that's consistent, I think they care about that.
Speaker 1:Two is, I think, having systems in place that are repeatable across the different offices. So making sure, for example, that you have HR for health for all of your HRs across the offices, right. You're doing payroll the same way benefits, time clocks, performance reviews using the same practice management software, ideally across the platforms, using the same marketing billing systems all just making sure that it's cookie cutter right, like McDonald's. And then I think three is having doing things that minimize your risks right, and so, as an example, when we do our due diligence program with buyers private equity or purchasers who are buying practices, they'll hire HR for health to do due diligence for them.
Speaker 3:Do you say due diligence? Are you also speaking about quality of?
Speaker 1:earnings. You know that's more on the financial side, more on the HR due diligence side. So, making sure the employees have all their documents you know they have an employment manual. Making sure the associates have contracts that are valid in their state they're not independent contractors but employees. You know doing all the things that, like you know, from a risk minimization perspective, that a private equity group would want, because the quality is that the worst thing is to for PE to buy you or a purchaser to buy you and then and then be sued because things are changing. Now they may not end up paying anything because you as a seller are indemnifying them, but still there's the headache of dealing with all of that.
Speaker 1:So I think, growth, growth, consistent growth, similar systems across platforms or offices, and then and then making sure you're reducing your risk.
Speaker 3:Okay, I think that's really helpful. Are there any sort of unwritten metrics or benchmarks to shoot for? So, specifically, what I mean is, in general, when you're looking at selling a business, the higher the EBITDA, the bigger the multiple. And so it's like when you get to let's just say hypothetically, you're doing 100 grand, right, like you might get a two, maybe a three multiple. You go up to a million and you start to get a lot more. You go up to 10 million and EBITDA and now you're looking at eight to 10x and so it's almost exponential.
Speaker 3:Right, it's not quite exponential, because usually, as your revenue goes up, then your percentage of EBITDA goes down, because it's just it's harder to keep those really great margins. And so, ironically, like you're, the multiple that you're paying for the EBITDA kind of is in line with the total revenue. Sometimes, right, like when you look at, yeah, so it's funny. But is there like a certain, if you're at a certain level, does it make sense to hold on and reach this next benchmark to maximize your value? You know what I'm saying? Yeah, that's a good question.
Speaker 1:I think, yeah, that's a good question. Again, it's not based on a number of offices, right, it's based on EBITDA, like you mentioned. I think if you have across the board, if you have three to five million of EBITDA right of profit, you can get the probably the top in terms of valuations nine to 11X right of that. Obviously, the more profit you show if you're insurance independent, you're going to get more right than if you're relying on your insurance, and so what I would just aim for is just keep your costs controlled and just show growth and at some point there's not that return anymore. Right, because you've already hit 10, 11x, but most of the deals we see now are six to eight.
Speaker 3:Yeah, if your EBITDA is around two million, it kind of makes sense to grow it to that three million benchmark, maybe a little more to be on the safe side, in order that you can get that extra turn in the multi-view.
Speaker 1:Yeah, but there's so much that goes into it. I did a presentation the other day and we had 100 sellers in the room and I told them the number one mistake people make when selling to private equity is sharing their financials with them. And the whole room was like what? And I said, yeah, you can't just share your tax returns and your profit and loss that your CPA gave you with a private equity firm. They'll eat you alive Like. You have to prepare yourself for that conversation with private equity, and so you got to follow a process to make sure your financials are ready and maximize so you can get top value and so do you mean prepare yourself?
Speaker 3:Does that also mean being able to tell the story like hey, this is what we did, is why we invested here. These expenses were on there, but you can whatever.
Speaker 1:Yeah, yeah, I think the story. I think figuring out what are true expenses of the business versus things that needed to be added back, normalizing some expenses. We had one doctor the other day who owns owns her building and she pays herself double rent Austin, double market value, like fair market value. She submitted her financials to this group and of course the group was happy with that because they're going to lower her valuation as a result because it just shows higher expense. But we came in late to the game but we had to stop the whole thing and basically have her start over. Dude, we got her like an extra $400,000 of value.
Speaker 3:Just by lowering the rent to market value.
Speaker 1:Yeah, by lowering the rent and doing some other things similar to that, across other things that she was doing. Geez man, like $400,000. When you extrapolate that out for the next 30 years, if the money doubles every seven years, you know how much that is that she could have lost.
Speaker 3:So wait, it was an extra $400 a year, or is it was $400? It was an extra $400 in valuation but what.
Speaker 1:I'm saying is that if she takes that $400 and she invests it 20, 30 years, that $400 doubles five times. So it's like these little things, and so it takes me back to my dad, right, when we were talking about why I'm doing what I'm doing is because, look, doctors him included, and many of our clients are really good doctors, but when it comes on the business side, they need our help, and this is where that's what it gets me excited. Right, you'd be able to help them do more and get more.
Speaker 3:Yeah, what industries do you work with besides dental?
Speaker 1:A ton of dental optometry. And then we work with a lot of veterinarians, physicians, med spas, and when I say physicians I mean like the whole gamut from plastic surgeons to dermatologists and whatnot. So we've got a ton of clients along that spectrum because a lot of them are doing MSOs or being part of MSOs, but so are the optometrists or the veterinarians.
Speaker 3:Okay, yeah, I was actually having a conversation earlier today with the orthopedic group and they had mentioned, like healthcare is recession resistant but it's not inflation resistant, and how that was really interesting. Yeah, it is, and so have you noticed that in the groups that you work with?
Speaker 1:I have. Yeah, we're starting to hear that more and more where there's a little bit of more pressure on practices because of inflation yeah, we're hearing that, especially those ones that are insurance independent.
Speaker 3:So yeah, from a macro perspective, what do you think are the biggest headwinds and what do you think are the biggest tailwinds for healthcare as a in general?
Speaker 1:I think, from a tailwind perspective, there are still a lot of people who, if we're talking about dental like specifically, there's a lot of people who still don't go to the dentist, so there's a lot of opportunity for new offices to open up and go after patients, and so I think that's great. Optometry is doing fantastic. Vet is doing very well. Medical.
Speaker 3:That seems like it's getting pretty close to like saturation and optometry too. I don't know if that affects you or not, but does that mean that there's more room for de novo's, because there's a lot less vet and optometrists than there are dental offices?
Speaker 1:Yeah, yeah, you're exactly right. Yeah, you're right. We are seeing a ton more startups on the vet side and the optometry side. So, yes, absolutely, absolutely, and so there's there's just more right Of that, there's just still more of that, and so that's happening a lot. On the dental side, there's a lot. There's a lot happening that where there's a lot of startups, because there's not necessarily always great practices to buy, but the beautiful thing is that healthcare is strong, it's healthy and it will continue to be as long as there's humans on this earth, there are any doctors, so we're good to go there Headwind wise. I think inflation is probably part of it. Things are going high, costs are going higher. Employee finding good employees is tough on the healthcare side, and so I think if you're able to make keep your employees, you're much better off than than trying to find new ones, and then having, I think, a strong recruitment program where you're getting really good employees is vital.
Speaker 3:But yeah, I think that's really helpful. Is there any? Do you have any like podcast recommendations or book recommendations that were influential for you that you might want to share with listeners?
Speaker 1:One. My favorite, I think book of all time is the One Minute Manager. It's a super small short book from many years ago, but that's probably one of my favorite books.
Speaker 3:What was your base takeaway? What did?
Speaker 1:you do so quickly. Gosh, there's so much, there's so much. With the One Minute Manager, I think it's more about how you can reach success. How you can reach success by not over-complicating your goals and by being able to focus on what matters right being able to increase your productivity, managing your team, managing your children, even. I think the messaging from that, I think, has been vital. The podcast Gary Takis has a really great podcast. He's a godfather of dental podcasts and healthcare podcasts and he does a really good job and I think he's probably my favorite podcast, After yours, of course.
Speaker 3:No, I've talked to Gary. It seems very knowledgeable. It seems like he's got a great following and so that's really cool. I think it'll be helpful for people to check out. Is there anything that you'd like to talk about that we didn't get a chance to talk about before we wrap.
Speaker 1:No, I'm excited for what you're doing and your success. I'm excited for the audience and I hope people know that doing the Novos and doing startups is great and, in many ways, less risky than buying a practice and keep doing it. Yeah.
Speaker 3:I love that. Let's double click on that real quick, because I feel like conventional knowledge is acquisitions right by existing EBITDA, by revenue, and there's a lot of financial engineering you can do to maximize your IRR, because IRR is measured with time, but from an actual dollar standpoint perspective it seems like you can make more money with the Novos. It's just less like. The IRR isn't as good, so it doesn't seem as sexy, so can you. Obviously there's pros and cons of both, but can you maybe give a couple examples of why you think the Novos are a good strategy?
Speaker 1:Yeah, yeah, to me it's really simple, right, when you're buying someone's practice, you're buying it with all its warts, right, and you don't really know where the bodies are buried. And so, just like buying a used car, people can tell you whatever they want, but you just really don't know what's going on with the car until you drive it yourself for a couple months. And so the same thing happens with a dental practice. And, yes, it's great that there's cash flow, that's awesome, but you're just taking a risk, whereas with a Donovo there's no patience, so it's going to take you some time to build it. But you design the office as you want, right, exactly the way you want it to be Colors, number of chairs, the style, the design, everything is yours. And then you slowly build it in your own image, and I think that's pretty cool. That's pretty cool, and I think for a lot of people who can't afford to buy a practice, doing a Donovo and doing it slowly is a good option, especially as they learn.
Speaker 3:Yeah, I love that. Yeah, from a real estate perspective, we like it too, because we can control everything, from the site selection, making sure it's sacking the deck in their favor, making sure you can out position the competition. Yeah, I think there's a lot of benefits to it for sure. A lot of benefits, a lot of benefits. Okay, and then do you want to let everybody? You guys have an event coming up in October.
Speaker 1:We do, yeah, we do. We have a super exciting event. It's the second largest group event in the nation on the dental side. It's called the DSO Leadership Summit. It's in Austin this year, highly recommended. It's between October 12th and 14th and we hyper-focused on how to grow your offices, how to grow your teams, how to get the best out of all situations. We have tons of bankers, consultants, great speakers nationally who sometimes don't speak on these topics, but we've recruited them to speak on these topics for us. So it's a really exciting thing. The website is DSOsummitcom.
Speaker 1:Again, dso Leadership Summit in Austin on October 12th through 14th. Highly encourage everyone to come. It is a lot of fun and you learn a lot and, because we keep it intimate, you get hands-on opportunities to talk to other executives. We had the CEO of Heartland and others there in the last couple of years and people were able to go and sit down and shake their hands and ask them questions. When do you get to do that with somebody of that caliber? So it's pretty cool, but we highly recommend it again. Dsosummitcom in Austin on October 12th through 14th.
Speaker 3:Great, okay, and what's your guys' website? Can you see anybody wants to look you up?
Speaker 1:Dental Medical Council. Our law firm's website is dmcouncilcom, and then council is spelled c-o-u-n-s-c-lcom, so dm like dentalmedicalcouncilcom, All right.
Speaker 3:Great, Great Riley. Thanks so much and it's been a pleasure.
Speaker 1:Yeah, absolutely. Thanks for doing this. This has been a lot of fun and look forward to seeing you in Orlando.
Speaker 4:If you need help finding the perfect location for your practice or you're ready to invest in commercial real estate, email us podcastleadersrecom that's podcastleadersrere as in realestatecom, or go to leadersrecom and fill out our form. See you next time.