Navigating Business Cultures and Dental Industry M&As: Insights from Andrew Tralongo, Co-Founder of Good Hope Transitions

Ever wondered how cultural exposure can shape your business perspective? Get ready to learn from Andrew Tralongo, president of T Management and co-founder of Good Hope Transitions. Raised amidst the cultural melting pot of New York, Andrew takes us along his career journey, which interestingly landed him in the dental industry. He shares compelling insights about managing healthcare organizations and unlocking their potential through innovative real estate strategies.

Andrew's experience extends beyond managing businesses; he reveals intriguing aspects of underwriting and diligence in the dental office M&A landscape. He underscores the importance of aligning business cultures and goals, giving us a candid recount of his personal experiences and failures. We also dive into the tricky terrain of business compatibility, sharing firsthand encounters with challenging business owners, and emphasizing the need to pay attention to red flags.

As we move towards the end, we discuss the dynamic world of dental industry acquisitions and valuations, contrasting the two strategies: building a company to last versus building to sell. We touch on employee retention and customer experience, considering their integral role in the health of dental service-based businesses. And as a cherry on top, Andrew shares some of his favorite business books and their biggest takeaways. Get ready for a thought-provoking episode filled with invaluable business insights. Join us!

Get in touch with Andrew: andrew@tmanagement.net 

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Transcript

Speaker 1: 0:00

I think one of the things that makes people from New York or people who grew up in a city or biased city look different is just the exposure to other people, cultures, appetites and you know theories. So I grew up in going to be 45 minutes from Manhattan. So go to plays, you go see different cultures, different. You go to Chinatown, little Italy, you do all these other things and see how they interact with people and see other cultures interact with different societies. So having that kind of mix and like philosophies definitely something I enjoyed as a kid and cherish now.

Speaker 2: 0:33

Yeah. So as a kid did you think that you were going to get into the world of dentistry?

Speaker 1: 0:38

No, as a kid when I was younger I always wanted to get into like management, consulting and own my own hedge fund. Was kind of gold when I was younger I realized that's by a crazy expectation as a young kid. But I always loved business and understanding it and managing things and doing things like that.

Speaker 3: 0:55

The goal of this show is to help health care organization 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 2: 1:21

Hello everybody, welcome back to another episode of Helping Health Care Scale. I'm Austin Hare and our guest is Andrew Cholongo. He's the president of team management and the co-founder of Good Hope Transitions and team management was founded in 2005 and they have 12 locations all over the Atlanta area. So, andrew, thanks for coming on the show today.

Speaker 1: 1:39

Yeah, thank you for having me.

Speaker 2: 1:41

So, yeah, let's dive into it. I know that you're spending. You're not quite a snowbird like I am, but you're spending part of your time in Atlanta, part of your time in New York, but what about? What part of the country did you grow up in? And I'm just curious to hear your story and like what led you on this path.

Speaker 1: 1:57

Yes, I grew up in Long Island, new York, about 45 minutes from the city, a little town but a medium-sized town called Massapiqua. I grew up there. I still live there to this day. A bunch of my family's there my aunts, my uncles also live there too Very Italian Jewish community. I played lacrosse still on my whole career under early development stages, played lacrosse in college and was there Been in Long Island most of the time. So I grew up at the beach most days hanging out with friends and doing kind of kid things there. Then my travels took me to Plattsburg, new York. I went to college and got paid lacrosse there and studying business and finance there for four years.

Speaker 2: 2:36

So as a kid growing up outside of New York, there's a lot of stories about people who really get a lot of the most successful hedge fund managers and I'm while sure guys obviously grew up in the city, so was there? Were you close enough to where you felt like the draw to financial markets or doing something that would be like very lucrative as you got older?

Speaker 1: 2:59

Yeah, I think I was always in a lore right Like as a kid. We can sneak on the train and go to the Manhattan and go to Canal Street and hang out there and do mischievous things as kids. But that was the allure of the city and I think one of the things that makes people from New York or people who grew up in a city or by a city look different is just the exposure to other people, cultures, appetites and theories. So I grew up in going to be 45 minutes from Manhattan. So go to plays, you go see different cultures, different. You go to Chinatown, little Italy, you do all these other things and see how they interact with people and see other cultures interact with different societies. So having that kind of mix and like philosophies definitely something I enjoyed as a kid and cherish now.

Speaker 2: 3:41

Yeah. So as a kid did you think that you're going to get into the world of dentistry?

Speaker 1: 3:46

No, as a kid I was younger I always wanted to get into like management, consulting and own my own hedge fund was gold when I was younger. I've realized that's by a crazy expectation as a young kid, but I always love business and understanding it and managing the things and doing things like that To this day. I cannot spell my life-dependent on me, but I'm really good at managing, so that's why I joke.

Speaker 1: 4:07

All my friends that was joke up. They're like you can't text for shit, but you're really good at managing the process and all these other things. I'm like, yeah, I think I skipped, like third grade or something.

Speaker 2: 4:16

So then, yeah, what did end up happening that got you on this path to, I guess, originally team management, and then everything else that transpired?

Speaker 1: 4:24

Yeah, so my uncle was a dentist by trade. He hasn't practiced in probably 25 years and our budding joke is that if you need a filling, just call someone else, because he is no clue. We're starting, but him and his business partners got me on. When they founded Denowale, probably about 10 years ago now they broke me out. I was in New York City working in a brokerage firm and doing some finance stuff and then they came in to flew me down to Atlanta. I met with them for three or four days and I came on board and helped them with M&A integration and managing the offices for the next four or five years. So I was in assisting and in charge of not only buying assets but managing, integrating and then taking them from one place to another. We bought a call center in San Antonio, texas, and I did the deal and then the next two days later I became the CFO for a month or two at the age of 24. I didn't really know what I was doing, so I could figure it out.

Speaker 2: 5:15

So you're 24 at the time, so you were just fresh out of school. Did you do anything in between graduating and working for them?

Speaker 1: 5:21

Yeah, I worked at a brokerage firm in Jersey for a while, so about a year I worked there and then I came down here and so working with Florida.

Speaker 2: 5:30

Yeah. So what did you learn there, Like how did that help you for this Working?

Speaker 1: 5:35

at a brokerage firm in Jersey. Talking people is definitely key. I would say it's a little more hostile about talking environment.

Speaker 2: 5:42

The Northeast compared to the Southeast is a big cultural shift.

Speaker 1: 5:46

Yeah, and I think it's also get your point across pretty quickly, because if you don't, they're going to say something to you. So I learned how to get my two cents out without looking at my head shoot off pretty quickly, and it was a good fast-paced environment. You had to move quick, you had to understand things and fresh out of school you don't know much. I don't care if you're a dentist or a doctor or me in finance. The world's your oyster. You really don't know what's going on. So getting exposed as much as you can is the key to it.

Speaker 2: 6:14

Yeah. So when you say you were at a brokerage, what exactly were you guys selling? Was it like were you doing M&A, or were you doing like selling public equities, like what?

Speaker 1: 6:23

No, so we were selling transportation brokerage, so we were selling like trucking routes things tripping the thing. Yeah, third party logistics, exactly, and it was moving left and right pretty quickly, so it's an interesting place to work for the couple of months.

Speaker 2: 6:38

Yeah, sounds like it was a brief stint, but yeah, then when you went out to dinner at Whale, you said you were spearheading this acquisition of this call center. So yeah, I would love to hear the story there, because I think Dinner Whale their name says it all. They're giant and they try to do a lot of different things at least. And yeah, when I say Dinner Whale, it's still a little bit confusing to me because I think they have a DSO and they've got like management and they've got all these different companies that are under the umbrella of Dinner Whale. So I would love to learn like a little bit more, maybe kick under the hood.

Speaker 1: 7:04

Yeah, yeah. So I was in charge of acquisition for M&A for the dental offices and then obviously we're doing M&A for one thing, you do M&A for other things. I bought a call center education business, a handpiece repair business, a other education business. Well, let's say bye, I don't think that's. I mean looked at probably 200 assets a year we'd look at. So being exposed to all those assets and underwriting and diligence items exposed you to how things should look and things shouldn't look. So when we'd buy assets, I reported to the CFO and the Chief of Staff, so they were really exposing me to all these things and allowing me to spread my wings in it, which was nice of them both.

Speaker 2: 7:42

That's cool. And how long were you there for?

Speaker 1: 7:44

About four or five years. Okay, those by quickly.

Speaker 2: 7:48

Yeah, and then while you're working with them, or is that when you decided that you wanted to go and start your own DSO? What's the timelines like there?

Speaker 1: 7:56

Some uncle and I were partners there and we became partners in this too. We had a hundred dental offices that we owned and managed, so when we sold our equity in the business, we took six of them and moved to Adam and Atlanta already and just kept them and started.

Speaker 2: 8:08

Oh, okay. So yeah, I didn't know that.

Speaker 1: 8:10

So you and your uncle had a hundred locations for this we were managing, so we only 40 managed 60 at the time when we were down a well and you're doing well, okay, gotcha, yeah, and so, yeah, the after, maybe, when you split off it.

Speaker 2: 8:27

So I guess you just diverse or diverge, whatever you call it. Yeah, exactly, all right, and then everything like from there. What was that? Well, yeah, that's an issue, because we talk a lot about murders and acquisitions, but don't talk a lot about divesting. So what was that process like?

Speaker 1: 8:44

A crazy speed months, yeah. So the other stuff was definitely not that I wouldn't wish it upon anyone. It's not a fun part of doing business divesting and then separating. You work really hard to build something together and then, when you separated, something that's a little difficult to have, I think better, better on our own. I think that's a fair comparison to say. But at the same point, right Like I tell everyone, to get into a partnership, you have to be aligned on cultures, you have to be aligned on the right and you have to be in the right way, and if you can't agree on that, you can't really agree on anything else. So that was some of the issues we had and just make sure that things are right and you've agreed, like high level, on what the business is going to look like in five to 10 years, and when people don't agree on that, that's a huge problem.

Speaker 2: 9:25

Yeah, let's talk a little bit about that, because one of the questions I like to ask is just like one of the biggest failures or slash learning experience that you had a great career is because a lot of times they end up being the same thing. Yeah, in your case, what do you think was your biggest learning experience?

Speaker 1: 9:40

I've had a bunch to be honest with you and we can do multiple yeah, I've scraped my knee plenty of times on assets and people and my theory is I was going with your gut. You don't believe in a person or something like that, or you don't agree with their philosophies. Go with your gut. Your gut's telling you right. I always tell the story. We looked at an asset in Michigan and the doctor picked us up with the wrong terminal. I kept shaking my head. I'm like I told us to go to the arrival part the part, the part you're not the arrival and the theory was less traffic. I was like, yeah, but the right thing to do is go in the right section. And he just that. He just didn't believe in rules. So I document to him. I know it's a very small scale of what reality is, but at the same point that little red flag was a red flag in my gut that I should have kept went with and understood.

Speaker 2: 10:24

That's funny because, like we always use the wrong terminals based on traffic, so probably wouldn't be a good dentist at your organization.

Speaker 1: 10:33

We're buying his business. So there's just other things that kind of snowballed and you're like we did that first time and he also had a picture in his lobby and taken a golf club and on an asset. But you live and you learn.

Speaker 2: 10:45

Yeah, that's funny.

Speaker 1: 10:47

And being agreeing on culture. I think that's the biggest thing, like how to treat people, how to do things and I bought an asset one time and I never forget they were. The owner required everyone to wear suits but he wasn't paying them enough to wear the suit. It was like he was paying the minimum wage but then required him to wear a suit and was like they don't know enough to feed their family, but you're gonna force them to wear a suit. That's not right. Give him a raise or give him the suit.

Speaker 1: 11:09

You can't have it both ways.

Speaker 2: 11:10

So you're talking like different desk people hygienists Is that is it or was it different? Was not a dental office?

Speaker 1: 11:17

Different business but required, Like you're paying them $12,000 an hour, $15 an hour. They don't have the money device suit that you're saying every day in your suit. We supply them with this thing.

Speaker 2: 11:29

So what was it so in terms of what you learned? What was it that attracted you to both those businesses and then did you end up acquiring them? Or Did you, were you able to draw the line after you saw what was going on?

Speaker 1: 11:45

We had it, acquiring both of them actually, and sometimes ignorance is is was blessed, like you didn't know it when you got there, cause you're like, oh, like the numbers look good and this is this business we can make into this and equity roles for this and that, and the spreadsheets are good and all. But there's one thing you can't change. It's an asshole Like I could change a spreadsheet all day long I'm really good at that but I can't change someone as an ass cell to people. I can't change that. So when you look at a spreadsheet, we look at a business, and you can say we can change it from a 10% margin to a 30% margin within this one little flip of a number, but you can't change someone, the way someone treats someone on a consistent basis. For an everyday.

Speaker 2: 12:20

Yeah. So even if numbers look good, multiples look good, the deal of pencils out, but it's more of the intangibles in those situations that you don't know unless you physically go spend a lot of time with that person, and even then it sounds like you still didn't really, you sound like you were still sharpening your teeth and so they don't know what the red flags were at the time. So it's just one of those things. And we hear that a lot of so many platforms that are just the goal is to acquire roll up, exit right and it doesn't really matter. A lot of times they're overlooking the cultural similarities or differences, they're overlooking the synergies, because it's like the IBG, ybg, like I'll be gone, you'll be gone type mentality, and so I think it's the difference between built to last or built to sell, type things.

Speaker 1: 13:00

Yeah, I look at two things, right. We look at things on an infinite basis. People look at a finite. We're always thinking infinite. Just how I operate. I'm Italian. We have a. We cheers you to chin down to a hundred years, and we always say so. Only things is always to a hundred years. And we look at a business. I always say it's, this is forever. We can get rid of this thing. It's mine forever. So to a hundred years of keeping this thing successful. What does that look like? So it's always chinned on to it.

Speaker 2: 13:23

How many locations did you guys have when you divested and how many do you guys have now?

Speaker 1: 13:30

We had six, now we have 12.

Speaker 2: 13:32

Okay, and how recently was your last acquisition?

Speaker 1: 13:35

About a year and a half ago, I think Okay.

Speaker 2: 13:37

So yeah, and then that kind of goes right hand in hand with when interest rates started. At least we started to see how interest rates were going to start hiking up. And one of the things that I want to talk with you about is just the overall, like macro environment, or even maybe like the macro M and a world of dental environment, like outside of just your company. We're seeing a lot of slowdowns, like a lot of trends slowing down. If you look at real estate as an indicator, it's like prices haven't dropped but deal volume is down by 40%. So just think about anything any industry if you lost 40% of your sales, that's a huge hit. And so obviously interest rates are making things more difficult. It hasn't killed everything, but it's definitely making things more difficult. And so I'm just curious sounds like you guys are more opportunistic with your acquisitions, but what are you seeing out there and what are you looking for?

Speaker 1: 14:28

Yeah, we looked at 110 deals last year and we did zero. So to me it's in and outs inputs and outputs Well, and we've got to get more to find the right ones. I call this out the idiot in the room. I'm a cash guy. It's half the cash. Well, I know people look at EBITDA and all these things, but at the end of the day, if I don't have cash in the account, I can't operate the business. That's how I look at it. So cash flow is the most important thing to us. I know EBITDA is great and we all want that, but that's a derivative of cash flow, so we have to make sure that the EBITDA at the cash flow is right when we do a transaction and we can't buy an asset and start negative cash flow and it's just. It's not something I want to do or joy doing, so we don't do that. Why we look at some of the deals yeah.

Speaker 2: 15:08

And EBITDA accounts for a lot of different things Taxes, depreciation, interest, debt, I think. I think it's the entire debt thing. So, like when you're looking at cash flow, it's possible that it could be somebody who has zero cash flow, but it's because they just have a lot of debt. But once you acquire it from them, they take the debt with them most of the time and do you factor that part out of it of the equation.

Speaker 1: 15:25

Yeah, Of course, if we factor in our own debt or don't debt accounts. So when we do a cash flow like a financial model, we factor in our interest rates and depreciation and compensation all those things into our model. Let me get a free cash flow generating report and sometimes it could be a large influx of cash that's needed. On the CapEx standpoint that makes the deal bad too. So we have to look at all those factors and looking at that position, yeah 100 and looked at 100 to 120 deals, passing all of them.

Speaker 2: 15:53

So it's just like a lot more workload for the same output on your end right now. Yeah.

Speaker 1: 15:58

But we look at about 100 a year anyway, just what we usually see in and out, and to me you've got to find the right thing, and sometimes we put offers in. We don't bid high enough, right? It's not like we just look at them and say no to every single one, like we put moffers out last year and you've got zero of them. May it be structured timing maybe money all those things.

Speaker 1: 16:19

And as much as I'm not everyone's cup of tea either, it's okay. Not everyone likes me, I'm fine with that. I'm fine with that.

Speaker 2: 16:27

Yeah, and everything's at a price that it works. And so, yeah, it's something in real estate Like we're having to look at four times as many deals for every one that we purchase, compared to what it was like a year and a half ago, two years ago. So, yeah, it's just like a lot like equal or more work for essentially less deals. So it is a bummer. And we're seeing the same things with seller expectations just being really sticky.

Speaker 2: 16:49

It's hard because we all have a tendency to compare ourselves to other people. So when that comes to sellers, if you're a seller, what are you going to do? You're going to look at what your buddy got, and so in real estate, he's going to look at what cap rate his buddy sold for, and in dental, he's going to look at what multiple his buddy sold for, and so, yeah, it could be a pre-interest rate hike environment, but that doesn't matter, because it's like a lot of this is just about our ability to stroke our egos or tell our friends that we got a certain price. And so, yeah, there's just really it's just hard right now because that's why the deal volume has dropped so much is sellers expectations are just they're not coming down to align with the new financial reality.

Speaker 1: 17:27

Yeah, and to pull that over on this, when it comes to transactions like structures, the most important thing like you can get the, I can give you the highest multiple in the world. I'll take the structure and I'll still win.

Speaker 2: 17:36

Hammer ties it out over 20 years, or whatever.

Speaker 1: 17:39

Yeah, I still win on that occasion. And the other thing is I won't call someone's dog fat. Is how I look at it. So some of the expectations are X. I'm not going to come in here and say it's this. I just won't put an offering because it's to me that's calling your dog fat. I don't like doing that.

Speaker 2: 17:54

Yeah, it makes sense. Have you seen anything change recently? So, specifically, does it seem like the sellers expectations are starting to soften a little bit?

Speaker 1: 18:06

I think a little bit I'm not saying by much, but a little bit I think it's a lot of larger DSOs have gone under. I think that has really changed expectations a lot lately.

Speaker 2: 18:16

Yeah, yeah, saying that these groups that were paying 7, 10, 13x, whatever it was, are now no longer a business, right? Yeah, if you, over time, if you inadvertently turned the market right and sold at the peak of the market, great congrats. It doesn't mean that it's going to. You're going to be able to do that, moving forward. That means you're going to be able to do that, moving forward.

Speaker 1: 18:34

Exactly. I think that's something that's humbling to other dentists too out there. This is their life's work. At the end of the day, you want to treat it with respect, and when someone overvalues it and overpays for something, they not only put someone's life work at Jeopardy, but people that will work for him at Jeopardy, which is a lose for everyone involved. So that's just like we do, and I strive to tell everyone that sometimes that's why I don't put offers in. We just don't because I'm not doing that to my team or the person whose work we're buying. So I'm not going to put ourselves in a bad spot.

Speaker 2: 19:02

Do you think that you can guess a multiple reduction average that we've seen over the past couple of years? And, as an example, if it was an average, private practice was trading at a six. Has that come down to a four? Or if it was trading at a nine, has that come down to a six? Have you you feel like there's like a certain percentage decrease in these valuations?

Speaker 1: 19:28

I think you're going to see a turner to decrease in valuation and my only reason for saying that is that lately everyone is putting a turner to in some sort of earn out form, which is really unbeatable. They're giving them the education with the businesses worth X and then just not telling them what they want. They're massaging it a little bit by giving them unreasonable earn outs on one or two turns when the business really worth one or two turns less.

Speaker 2: 19:53

Yeah, so can you talk about your structures, like how you guys structure your acquisitions? What makes you guys unique?

Speaker 1: 20:01

Yeah, we are. We struck all over the place but we're opportunistic in it. We can structure transactions on cash. We can structure I want to sell our note. We can structure over the equity. We can partner with you on an asset World's kind of your oyster.

Speaker 1: 20:13

I will not do earn outs. That is just not my business model. To me people are like if you're a man of your word, a woman of your word, you say you're going to come to work, come to work through your thing. Forcing you to come in and do X amount of production on a patient is just to me like short-sighted on it and to me it's not looking out for the best, what's best for the business, looking out what's best for the earn out. So every time we've done an earn out is always short-sighted to your three year window. They do what's best for that earn out for those two or three year window but not what's best for practice in the long haul. So how do we make sure it's best to practice a long haul? And that's just showing off and doing what's good for that.

Speaker 2: 20:46

So then, on that note, yeah, how do you look for practices where the seller is going to stay on or the primary dentist is going to stay on? Is that a big factor for you guys?

Speaker 1: 20:57

Yeah, it's a huge factor. That's basically our whole model is the selling doctor staying on and assisting them in transitioning out over time. Most of our doctors we buy also they want to transition out in three to five years and they've been working us for 10. Yeah, we make our doctors life pretty easy. So I have six business partners of mine who work in individual offices and some of them work anywhere from 12 hours a week to six hours a week, and some of the sellers work two days a week and they work Tuesday and Wednesday and that's their week and they're done. There's multiple doctors in the office and it allows them to see their patients make good money and still have a life outside of the house or their family that they can come to and enjoy.

Speaker 2: 21:35

Yeah. So then I guess, how do you? So you want them to stay on, but you don't want to do an earn out, so are they getting shares of the parent company? Is there some sort of incentive to stay on? Obviously, you want to do business with people that you trust, and a handshake should go a long way, but is there anything aside from that that increases that incentive?

Speaker 1: 21:57

There's some proportion of the transaction or seller financed or a seller note we do. So. We do a transaction and call it 100%. 80% is paid in cash. The other 20% is held by the seller and that seller is that 20% is tied to this employment. So you just got to show up. I joke with everyone. If you show them your book, you won. Yeah.

Speaker 2: 22:17

So it's not an earn out. Yeah, they just yeah. They don't have to hit these crazy numbers. It's just keep doing what you've been doing and we'll pay you, because the thing that you're protecting against is having the business fail completely, and as long as it doesn't fail because they continue to show up and work there, then they're going to get paid 100% of the purchase price.

Speaker 1: 22:33

And if you think about rationally too, these guys have been doing women have been doing this for 30 years. They've been coming in and doing the same thing for 30 years. They're not going to change that. They might slow down a little bit, but okay, slow down a little bit, it's not going to kill me. But they're not just going to stop going seeing patients that one day.

Speaker 2: 22:51

Yeah, the other issue that we're hearing a lot of talk about we've been hearing a lot of talk about it is just staffing shortages, and it's just hard. First of all, I think that there's a shortage of just hygienists and dentists in general coming out of school, and then in every industry, though, you're facing the same thing. So what are you guys saying? How are you guys dealing with that?

Speaker 1: 23:10

It comes down to culture. Right, we can recruit well and do all those things, but keeping your people is probably one of the most important things. I tell everyone this we all have the same 24 hours in a day. I try to give it to my people. That's what I try to do, and I think that goes a long way for them. I think they could tell me I'm wrong and they don't want to give me any of my time, but I think my time is useless. But my two senses that they enjoy it. But that is one thing. We try to do a lot.

Speaker 1: 23:33

We also work on building a life cycle for these people and getting them a point A to point B. I don't care if it's with me or someone else. That's not my job to judge debt. My job is to get you to be a better person than a debt, and that's what we focus on.

Speaker 1: 23:44

I joke with our younger employees sometimes if you want to be a bartender, you'll be the best bartender. Right now I'll be drinking martinis all night. We're going to make this thing work, but that's what we focus on. So how do we get our employees from point A to point B? It's really a big focus of my team here every day and we sit on a couple of hygiene boards, we sit on a couple of schools there and it really stemmed from the fact that we had dental assistants who wanted to go to the hygiene school which never could get in. So we got into that process and got into the hygiene school to help bring our dental assistants to hygienists, and thus the hope is they come back around and work for us later on in life. But that's the hope.

Speaker 2: 24:19

Yeah, that's cool. I remember because I used to have some fitness centers around Orlando and some of the mentality of other gym owners was like, oh, I don't want to invest too much in my staff because then what if they learn how to do everything that I know how to do and then they leave? And it's the flip side of that is what if they never learn anything and they stay? And so, yeah, people just have different motivations. That's unlikely that other people are going to want your exact same lifestyle.

Speaker 2: 24:43

It's unlikely that you're going to invest a lot into a person's education that works for you and they're going to go out and become a competitor one day or a half yeah, sure, maybe, but if you invest in everybody, like even when that was your goal right to get everybody to do that, it would still improve your business more than enough to offset the potentially increased competition.

Speaker 1: 25:03

I always joke with people. I said I'm not a selfish person, but giving makes me happy. It makes me really, really feel enjoyable and helpful. So when I give, it's like I'm helping myself. I know I'm helping them, but it's also helping me. I go to bed in a smile on my face, no, and I change someone's life for the better, so that makes me happy.

Speaker 1: 25:20

And even with our employees going from one place to the other I don't know if you've ever been to a Houston's restaurant in Atlanta or around the country they're world class for training. So, like their people, they put a ton of effort into training their people and it goes a long way. So every time you go to Houston it's the same thing everywhere you go. And some of the people have gone on to start other trains and their philosophy has always been if we could take our people and train them well, and they go somewhere else they're known for the training Like it's a good thing for us. The good recruiting college yeah, marketing for them Basically yeah, it's a marketing thing for them too. So it works.

Speaker 2: 25:55

Yeah, it's cool, yeah, so yeah, the exact same thing that I was just talking about, and then I yeah. So one of the things I know you were we talked about earlier is that dental is still a service-based business, even though it's healthcare, but you're still delivering a service to a client at the end of the day, and so can you talk a little bit more about that?

Speaker 1: 26:14

Yeah, I'm a big hospitality guy. I read a lot of hospitality books like on a call today and we're talking about I'm reasonable hospitality by the owners of Love in Madison. And how do you make that experience exponentially better every day, and I've always had this saying that there's really not much of a difference between a restaurant and a medical facility, just because the patients and the patrons have the same ability to go somewhere else. Every time I can go to any restaurant or any medical office I want. There's no forcing factor to keep me there besides a good experience. So we have to deliver that experience to people and, especially in a world where anxieties are high people don't like going to you have to make them feel comfortable and make them want to come back to you. So going above and beyond whatever that may be is key.

Speaker 2: 27:00

So can we dive into that a little bit. Can you talk about some like the specific strategies that you guys are doing to increase the customer experience?

Speaker 1: 27:06

Yeah, I call it a micro customer experience. We do so. Every one of our offices have a little budget every month and they have the ability to like a patient to a new puppy or something. Right, they can go out, spend whatever dollars they want, get the dog toy, whatever that thing is. So it's called a micro customer experience and the theory is it's supposed to be small and captureable. They don't really capture it much, but we try. It's one of those things where they have the ability to empower them to do it is to make a patient experience better by listening, hearing, engaging them and taking that listening, engaging and reacting to it and getting them something.

Speaker 1: 27:39

Now, I've always thought this could be wrong on this too. It's people don't love the Dom. Everyone loves Dom Perione, but that's not moving the needle left and right. If you got Dom every day, what would you get happy? At that certain point, we got a bottle of Dom. But when someone does something that you didn't think about or didn't anticipate, that would actually make some feel engaged with that business. We also do something for all our employees. I call it a $20 indulgence. It's something $20 less you can't live without. So when everyone's birthday or anniversary, we flop it left or right, they get that $20 indulgence, whatever it might be. So some people it's tequila, some people it's specific, so it has to be that specific thing. One lady she loved it was cold stone creamery ice cream. We got to get her for her birthday, like in Atlanta heat. So I was like, oh shit, we got to go find this thing now. But that was part of what she liked, so we made sure we got it for her on her birthday.

Speaker 2: 28:27

That's cool.

Speaker 1: 28:28

Yeah, the intentionality behind it. Yeah, they forget that they filled this questionnaire out and that we listened. It's the same fact that we listened, we learned and we reacted to it that make them feel like part of a team.

Speaker 2: 28:41

Yeah, I think that's really helpful. So then, yeah, let's pivot, talk about real estate a little bit. What is your guys real estate strategy, if you have one?

Speaker 1: 28:51

We really don't have one. Be honest with you. We buy real estate when the opportunity comes. We don't always search for it, just not our business. We success. We're successful in other things. We haven't always been successful in real estate. We have one building we own with three or four tenants and that's about it. We've looked at others and we have some options to purchase other real estate opportunities in the city. We're just waiting on those to come to fruition when they do.

Speaker 2: 29:11

Yeah, and look, I totally get it. We see both sides at all time. We work with some groups. They just they exclusively own the real estate. They won't do a deal unless they can own it, and we're still happy to find locations for them. Let them buy it. And we work with other groups that are focused on hyper scaling, and it just it's they're making so much money in their core business that real estate is going to slow down their either their capital or their balance sheets, or their, their bank lending, whatever it is, and so then they need somebody like us to come and come in and buy it for them. Right, and I see both sides of it, and so I totally get it like there is no right or wrong answer. I think that your strategy of using options, though, is really interesting, and so I know we talked off camera about that a little bit, but, yeah, let's talk a little bit more about your motivation to do that and how that works out on a practical level.

Speaker 1: 29:57

Yeah, we. How it started was we were going buying these assets for dental offices and the sellers own the real estate. They didn't want to sell the real estate at the time and I wasn't looking at buying any of you there. But I thought to myself that having the option to buy it was by a good idea. So he's put in the lease. And we did it in one deal and didn't get any comment back from it. So I was like all right, let's put in all the other documents. I didn't really want to say that's how it started, not much more thought into it than besides. Put it one document and stuck it in one document. I just take one document and keep going down the line. And that's how it kept going. Not saying we're smarter than anyone else, just I would say a little lazier than the X is by the reality of it.

Speaker 2: 30:33

Yeah, no, it's good because nobody loses in that deal. Right, there were. Dentists still gets their opportunity to sell the real estate at the same price. It's just you would now get a chance to buy it and so you can choose whether or not it's a good deal and you want to control the real estate or not.

Speaker 1: 30:47

Yeah, and in hindsight that's the reality of it. It's nice to have that, but when we first did it it was just like a through it in the document and stuck. It was nice. Yeah, absolutely.

Speaker 2: 30:58

So yeah, in terms of like your own self development, and I see that you wrote down biggest favorite books right of a lifetime by Robert Eager. Or is Iger Robert Iger?

Speaker 1: 31:08

Iger, yet CEO of Disney currently yeah, okay. I'm back now.

Speaker 2: 31:13

Yeah, he was there, he left, came back the whole ride and then unreasonable hospitality, which you referenced a second ago, and I would love to learn what your biggest takeaways from those books were.

Speaker 1: 31:23

Yeah, robert Eiger's book is really just. He has learned from everyone every chance he got and that was the one of the biggest thing that took away was everyone's a learning opportunity and giving people your time is the most important thing. He develops a way with his team that's uncanny and what he does is that he gives them unlimited, unfettered access to him 24 seven. They can call whenever Robert or Bob's there and help in a system and develop them. And one of his biggest things developing his team around him to make him stronger and he gets them a full autonomy to do with it, please. And a such a large company like Disney is crazy to see that.

Speaker 1: 31:57

And one thing I always liked about him was how he started. He started ABC Partners when they were this chemical capital cities. Cap cities bought ABC back. I don't know what year it was, but years ago and he was a young guy then and these two guys gave him the kind of ability to run this company and that's how he found and then ABC. Disney bought ABC and that's how he got to be CEO. But it was really just hard work and he always just says in the book he says I just worked a lot of people and was friendly to him. That's my mentality too. I'm definitely not the sharpest tool in the shed. I was in recent work room when I was younger. I'm dyslexic now where glasses and I barely spell.

Speaker 2: 32:32

But there's a whole theory on why there's so many successful people with dyslexia and it's because, a developed a strong work ethic, like early on, because a lot of kids learn how to read easier than people with dyslexia, so you had to put in a ton of effort and ton of work to go to. And then B they also became good at bringing in partners to help them accomplish things Right. And kids with kids who are dyslexic and they're having to ask for help, and what is in school that's called cheating, but in the real world that's called bringing on a partner. So I'm not sure if you ever heard about that or not.

Speaker 1: 33:03

No, I never have and I always thought about that. Yeah, I work people to better at this than I am, or I'm better at that than I only constantly in our lanes. But as over time is navigated that way not as of, not because of my thought about it that's how it's set up and worked.

Speaker 2: 33:16

That's fine, that's fine.

Speaker 1: 33:18

Interesting. But yeah, and then I'm reasonable. How does this really just about culture and giving a great experience? And that's something I strive for people to do every day here is give a great experience, regardless of that.

Speaker 2: 33:27

What does it mean?

Speaker 1: 33:29

Yeah.

Speaker 2: 33:30

I was going to say what is, what is culture? Because culture means different things that are from people, right? So what is? I think one definition could be what are like writing down your cool values and then abiding by them, but it doesn't have to be in that, right. So what does culture mean to you and your organization?

Speaker 1: 33:43

Yeah, for me it's getting people from point A to point B and wherever that might be, point B might be for them, right, that would be with me or someone else. Our job is to develop people for the better and to make our patients feel great with that. So that's developing a hygienist to be a better hygienist or developing a hygienist to go sell real estate wherever that may be. That's our job, is to do that, and our culture is one that we take care of our people, we take care of each other and we're always available.

Speaker 1: 34:07

I call it a smile policy. We have it. It's called. It says underneath it to smile cheesy face and then we're, and it says we're always available, open door, smiling, and it's our smile policy. I always tell everyone having open door policy is one thing, but being there and being approachable is something different. You can go to any of your. I would say this to younger people when they go to their boss's office and the guy sitting there in his desk or woman sitting there in her desk and their doors open with their own, approachable, that's not really having open door policy. No one wants to come in there.

Speaker 2: 34:34

Yeah.

Speaker 1: 34:34

So open door policy and smiling is the one thing that I think we all have to have and something that I strive to do here personally. So we've a book club. I have wine in my office this week with the girls off to get the everyone the team gets to try it and spend time together. We spend more time at work than we do at our families, so we have to enjoy what we do here.

Speaker 2: 34:54

I love that. Yeah, this is. We've covered a lot of ground today. Is there anything that you want to add that we didn't get a chance to talk about?

Speaker 1: 35:02

No, I think we're pretty good at it. On your end, I think hit it. Hit a bunch of topics today, so I know yeah.

Speaker 2: 35:07

No, it was awesome. We're all over the place. If anybody like wants to, you know, get in touch with you or your organization. Just learn more about what you guys are doing. What's a good resource for that?

Speaker 1: 35:17

You should email me, andrew, at team managementnet. I'm usually pretty good at responding some days, I think.

Speaker 2: 35:24

Most time. Okay, yeah, cool, I will drop that in the show notes for anybody's listening and but yeah, look, it's always fun to learn how other people are doing it and I think you guys have a lot of really great things going for you, so definitely appreciate your time for them on the show.

Speaker 1: 35:36

No, thank you. Thank you for having me Appreciate it.