Dentistry Uncensored with Howard Farran
Dentistry Uncensored with Howard Farran
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931 Save Tax Dollars with Garland W. Mahan, CHBC, EA, RTRP & Chris Mahan, CHBC, MBA ACC : Dentistry Uncensored with Howard Farran

931 Save Tax Dollars with Garland W. Mahan, CHBC, EA, RTRP & Chris Mahan, CHBC, MBA ACC : Dentistry Uncensored with Howard Farran

1/26/2018 10:09:27 PM   |   Comments: 0   |   Views: 149
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931 Save Tax Dollars with Garland W. Mahan, CHBC, EA, RTRP & Chris Mahan, CHBC, MBA ACC : Dentistry Uncensored with Howard Farran

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VIDEO - DUwHF #931 - Garland & Chris Mahan



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AUDIO - DUwHF #931 - Garland & Chris Mahan



Garland & Chris Mahan whose company, Mahan & Associates, LLC;  in Nashville that have been serving the Healthcare Community for Collectively over 50 years. They specialize exclusively in the Dental and Medical market space have a dynamic and complementary service model where all things are coordinated for the most optimal financial and practice development outcomes possible. Their company, provides distinguished service lines that are essential to all Practice Businesses. They provide Financials & Write Up Services, Tax Strategy and Tax Services, Practice Management Services, Payroll & HR Services, Pension and Retirement Planning Service and Financial Planning Services. With coordinating all these separate but necessary disciplines, they are able to offer a competitive advantage to their clients by integrating all business services and objectives to work in a competitive manner. Today we will be discussing one the core disciplines that affects all of us and that is Taxes and what initiatives and strategies need to be considered to save tax dollars!


www.mahanassociates.com


Howard: It is just a huge honor for me today to be podcast interviewing Garland W. Mahan, CHBC, EA, RTRP and Chris Mahan CHBC, MBA, ACC. You'll have to explain what all that means. They're in Nashville, Tennessee.


Garland and Chris Mahan, whose company, Mahan and Associates LLC in Nashville, that have been serving the healthcare community for collectively over fifty years. They specialize exclusively in the dental and medical market space, have a dynamic and complementary service model, where all things are coordinated for the most optimal financial and practice development outcomes possible. Their company provides distinguished service lines that are essential to all practice businesses. They provide financials and write up services, tax strategies, and tax services, practice management services, payroll and H.R. services, pension and retirement planning services, and financial planning services. With coordinating all these separate but necessary disciplines, they are able to offer a competitive advantage to their clients by integrating all business services and objectives to work in a competitive manner. Today they will be discussing their core disciplines that affect all of us dentists, that is taxes, what initiatives and strategies need to be considered to save tax dollars. 


I believe it was you who taught me that taxes is the most we'll ever spend anything on in our entire lives, more than house, car, kids, everything. Is taxes really what Americans spend the most money on? 


Garland: Yeah, the clientele that we work with in healthcare, that will be their number one expense that they have in their lifetime 


Howard: Even higher than alimony? 


Chris: It depends on their (inaudible 00:01:51). 


Garland: It depends on their lawyers. 


Howard: By the way you guys had me speak at your annual meeting in Nashville last year and I'm telling you, you have the most raving fans. So many dentists told me their stories of what you've done for them and how awesome you are. You walk on water with your clientele. You've got to be very proud of that. 


Garland: We are. I think we do a lot of hand-holding with our clients to help them through because they're so focused on their practice every day and they didn't go to school. They didn't go to business school. They went to dental school. This is where we help them to help them focus. That's why we concentrated our services just for the doctor. 


Howard: Well, my father used to sing a song to me when I was little when we were driving to work and he'd say, "The easiest dollar earned is a dollar in expenses saved. The second easiest dollar earned is a dollar in taxes delayed, and the hardest damn dollar you're ever going to earn is to go out there and work and sell and collect another dollar." Live below your means and try to avoid taxes and delay taxes and that's what you guys do. 

What do you think the average dentist listening to you right now in the United States doesn't understand about their taxes? What are some of the common mistakes that you've been treating over your combined fifty years of doing this? 


Chris: Yeah. Howard, that's a great question. I think the number one lesson is that they can control a lot of their destiny in terms of what they pay in taxes. 

The tax code has many, many opportunities that if they're instructed and taught and shown how to apply those deductions and strategies, they can materially reduce their tax liability for the current years and years to come. Garland can go in, and most clients that we look at, he'll go in and do an assessment of their tax returns and we'll typically audit, two to three years they'll get missed deductions, where they just didn't even apply some of the easy-breezy tax deductions. So they're leaving money on the table for example.


Howard: Well, first of all when a dentist tells me that they're on top of their taxes, I'm like: “Dude, the U.S. tax code, according to Wikipedia right now, is seventy-three thousand nine-hundred and fifty-four pages.” My question to you is why the hell is the tax code damn near seventy-five thousand pages long and there's no way any dentist could understand seventy-five thousand pages of the IRS tax code. Why do you think the tax code is so complicated in the United States? Why do you think it's seventy-five thousand pages long? 


Chris: I think that goes back up to Washington and getting the Democrats and Republicans to sit down together and really look at serious simplification. That would be number one. I think that our leaders, the ones that are making the laws, they're just not sitting down and communicating. 


The second reason is the tax code that we have in the United States, since we are such a free society, is the number one way that our lawmakers can control us. They get us to spend money in directions that they want us to spend and that's what the tax code helps manipulate by and large. 


Howard: Yeah, it's social engineering, isn't it? They want you to buy a house, so they deduct the interest, when so many people shouldn't even be in the house. They should be liquid. They should be in an apartment, a condo, a rental. Because these Millennials - my generation, they graduated from high school, got a job at Boeing, and then retired there when they were sixty-five. The average Millennial, even at the four greatest companies in America: Amazon, Apple, Facebook, and Google, their average employee is two years. Amazon's closer to one. Why should that person who's going to be jumping around their old life, why should they be in a house? But the tax code, it's social engineering, isn't it?


Chris: We feel that it is. We get asked this question all the time, like you just asked, why is it so complicated. The two reasons that I can come up with are the ones that I just said. Our leaders sitting down and having honest communication and they want to still be able to have the ability to manipulate us and to move money the way they want to move money. 


Howard: Let's go through all these services that you do. First you provide financials and write up services. When I'm out there in the field lecturing, I mean I only meet like one dentist every three to four months that knows the difference between a statement of cash flow, a balance sheet, a statement of income, a P&L, Profit & Loss. I mean they don't know. They don't even know the three basic accounting deals. How do you handle clients that really in the bottom of their heart want to be sitting at an implant course learning how to place an implant and you're sitting there talking about a statement of cash flow? 


Chris: That's a good question. Howard, our job as Garland has worked with our clients and what we try to strive to deliver is to make it mean something. If I looked at a 3-D image or if I looked at probing depths, I wouldn't know what any of that means. But whenever the dentist makes it means something, explain what it means to me is where it builds value. 

There's all kinds of guys out there that can do financial statements for their clients, but what we strive do is to show them what the value is inherently with those financial statements. We customize our financial statements where they make sense and they measure certain key performance metrics of the practice so we can always be an asset to them, optimizing our profitability on their financials (inaudible 00:07:49).


Howard: What is your tax strategy for dentists? By the way, before you continue, I just want to keep telling dentists over and over and over that in 1900 there were no medical specialties and healthcare was only 1% of the GDP. By 2000 it was 14% of the GDP with fifty-eight specialties and dentistry had nine. Now 2017 it’s 17% - every dentist out there knows that it endodontist can do better endo than a general dentist. They all know that a dentist shouldn't be delivering your babies or removing your prostate cancer. Then when they go to use a CPA, they go to their church pastor and say, “Who would you recommend?” and they recommend a really nice moral, ethical man or woman an accountant, but they don't know crap about dentistry. I ask every dentist, when I see them I say, “How many dentists does your CPA do?” and they never know. I say, “Well, if someone's going to do a bypass on me I'd want to know how many they’ve done. If they say, “Well, actually Howard you're my first bypass,” I’d run. The power of using someone who focuses on dentistry is just beyond huge, isn't it? 


Garland: We think so. That's why we set the firm up the way we did. You can't be all things to all people. Boy, we thought how unique would it be to gather a lot of disciplines under one roof and focus them just for the healthcare practice. That's what we’ve tried to do here. 

There's no doubt because we focus so much on the dentist and physician that we're able to immediately assess and look at their situation and look at the opportunities that they have before them. We do things that other tax preparers, you would say, or even tax strategists - that's a whole discussion in itself - don't even think about doing because we're always focusing on what can you do in this practice. We don’t concern ourselves with Joe's pipe shop and what we can do with Joe's pipe shop. We just work with the healthcare professional, so we've been able to fine-tune our tax strategies for them and look to discover new ones that fit them. 

Howard: Do you do it all over the phone and online or do you like to see your clients in the flesh once a year? 


Garland: Let me answer this one. This guy is the go-to-meetings-Skype guy.  I’m the sit-in-front-of-you guy. Now obviously you can tell there's a difference in our age and I think that has a lot to do with it. 


Howard: Well, the behind the scenes story of this podcast that we do, Dentistry Uncensored, is I cannot tell you how many times we scheduled an appointment to do a podcast and the dentist is fifty, sixty, seventy, eighty years old and it might take us three hours over the phone just to talk - he thought he was going to go to Skype.com. He didn’t know he had to download anything. Yeah, it's definitely a generation thing. 

But I'll tell you what. Seriously, my three favorite streets in America - I'd rather go visit you in the flesh because (inaudible 00:11:06) go to because you're in Nashville. I mean, my three favorite streets are Bourbon Street in New Orleans, greatest music ever, Bill Street in Memphis, greatest music ever, and Second Avenue in Nashville. I would be your client if I lived in Alaska because who the hell wouldn't want to go to Nashville. It is really a hot tourist place.  Let me tell you something out there. I know what some of you guys are thinking. I don’t like country music. Dude, everyone loves country music when you're in Nashville. It is not that twangy stuff you heard when you were a little kid with your mom and dad in Kansas. It is just rocking hot. If you don't like the band, all you got to do is go next door. It's band after band – live, live, live band after band for what? Like six blocks on both sides of the street.


Chris: Yeah, t's a good time down there. 


Howard: The police are on your side too. That's what I notice. When somebody is drunk and falling down and being a goof. They're trying to help him get a taxi. They're not even arrest - they’re just like, “Come on buddy, let's get you back to the hotel.” But I love Nashville. 

One of the greatest vacations I ever sent my mom on was to Opera Land, USA. Oh my god, she was in heaven sitting in that atrium for a week. Just oh my god, she still talks about that. 

But so do you have a lot of out-of-state clients that fly down there just to see you for a day or two? How long is that meeting? Is it a one-day meeting? A four hour, a two-day? What's it like for a long-distance client coming to visit you in the flesh?


Garland: Typically, we have a program called Genesis Financial Pathway. When they come in, they will come in and we will have a program all laid out. It will look at all phases of their financial life. We start all the way up at practice revenue and go all the way down to estate planning. When we have those type of clients, then it will be pretty much a day-long process with some breaks, obviously in there. 


Howard: How long is this this Genesis Financial Pathway course/lecture? 


Garland: This was Chris's brainchild. 


Chris: Well, yeah.  Again, with our Genesis Financial Pathway, it really capsulizes all of our services into one and ties it up with the financial planning. It's a more intensive day, day and a half a year engagement when they come in and as Garland was speaking to look at everything from their business optimization, their retirement planning, their kids’ savings accounts, college savings accounts, financial strategies, investment, real estate, tax strategies, asset protection, and all of that good stuff. That's the big service engagement. We’ll fly them down and we’ll put them up at the Opera Land Hotel and show them all the good places to go. 


Then we have clients they subscribe to our to our financials right up, pension and tax work from the business side on an annual basis. That could be a two or three-hour meeting and they'll fly, get in, get out, and then they get to go play all weekend. 


Garland: Sometimes we go to them in other states as well. Not to mention all the middle Tennessee individuals we serve. 


Howard: You know what? I think the best marketing you could do is put up an online CE course on that. You'd share a lot of information. You’d educate a lot of homies. I'm sure you’d get a lot of business out of it. 


Chris: Yeah. 


Howard: When these dentists are coming out of school and they're going to start a practice or buy a practice, one of the first questions they always ask on Dentaltown is what type of corporation. There's a wide variety of corporation types. What is best for dentists? 


Chris: It depends on the state they're in, Howard. For the past ten – twenty years our clients in Nashville would fly out to Scottsdale or Seattle or Miami and go to a seminar and come back and say, “Garland, Chris I've got to be an S corp. I need to set up an S corp.” I would say, “That S corp is a great modality except in Tennessee,” because Tennessee had a tax that was specific to dividends, distributions, and interest income. S corps were not the best modality for Tennessee practices, but they were better for a lot of surrounding states. But again it's about the state taxes and if they have state taxes and regulations. LLCs, S corps, anything but a C corp really. 


Howard: C corp is Inc, I-N-C? 


Garland: Well, they’re actually a PC, a professional corporation, but it's called a C chapter, where they're taxed at the corporate level, where an S chapter, professional corporation, is taxed at the individual level via a K1 flow down. 

One other thing that we look at, to add to what Chris said, which is so true, is we look at the type of individuals and their temperament. There are some entities that have a very loose structure, which gives you flexibility. But it can also get you in trouble with paying taxes if you’re a quarterly estimated taxpayer. But if you’re very strong discipline, that's a good way to go because you have flexibility. But if you feel like you lack that discipline, maybe having a more professional corporation model, where you're an employee and you take out your taxes as you go, may be a better entity structure to be involved. We not only look at the state, we look at the individual as well. 


Howard: Well the individual - I can tell you all my homies are - the type of people that become a dentist, a lawyer, and a physician, they've already decided they're going to have a bigger house, a nicer car. They're not going to go camping at the lake and fishing with worms. They're going to fly to Hawaii. They're not going to drive a Chevy or a Honda. They're going to get a Lexus or a BMW. The reason their beautiful wife married them wasn't for their hot looks and charming personality, it was because they wanted to marry a rich dentist, doctor, lawyer and they're spender's. 

I seriously think - it's the eighty/twenty rule. When I see dentists happy, healthy, laid back, they're going good, they live well below their means on their house, their car, and their vacations. When I see them stressed out of their mind, and depressed, and crashing, and start drinking, and all this stuff like that, they just spend way too much. It doesn't matter what you earn. It matters what you spend and what you save. 


Chris: Amen, amen. One of the best suggestions or financial advice you can ever give is what you just said earlier, always try to live below your means. 


Howard: A minimalistic lifestyle, it is so much less stress. You don't want to buy a boat. Can't you go find a friend with a boat and just show up with a case of beer? Why would you buy a cabin? You could just rent the damn thing. I know these people that have condos down in Rocky Point, Mexico and up north in the mountains and they go to each one once or twice a year. They’ve got to maintenance it and pay taxes on it. It's like, God, just shed all that crap. 


Chris: Yeah, so true. It's funny it was a couple weeks ago they had a thing where Einstein had his definition for happiness, Albert Einstein, and he gave it to a guy in Germany I believe as a tip, a waiter, because he didn't have any cash. He wrote it on a napkin and it said live a modest lifestyle below your means. It was number one thing to living a happy life. If Albert Einstein said it, it’s got to have some meat on it. 


Howard: Yeah. That guy is amazing. It's amazing how they still keep proving his theories a century after he's been gone. I mean that is just absolutely - what a freak. Him and Sir Isaac Newton, those are the two that stand out the most in my mind. 

You also do practice management. How many people actually work for you? 


Chris: We have about twenty-five or twenty-six people. Actually, we've been interviewing today. 


Howard: These guys are in beast mode. Talk about your practice management service because the one thing I notice about your team, they all adore you. They've been with you forever. They were just sharp as a tack. What type of practice management services do you offer? 


Chris: Well, Howard, with our practice management, again, we look at operations optimization, going through and ensuring that they're giving the best patient experience, patient care. We look at their marketing from a three-sixty point of view. We look, more importantly, to ROI and tracking their marketing inside of our practice management. We look at their hygiene productivity and see if there's any opportunities there to increase their ancillary production and efficiencies. We look at basically all the systems that they have in their practice. We help them implement incentive programs that we feel work to get the team on the same vision and be rewarded accordingly and move forward. 

Then we have a more customized kind of consult deal inside of our practice management, where (inaudible 00:20:32) come in and give me a blanket assessment to look at our fee schedules, our perio mixes, our fluoride mixes, our hygiene productivity, our payer mixes, our revenue cycle management and, again, how we're doing there. We look at pretty much everything from top to bottom in the practice and nine times out of ten can find some immediate opportunities for them to take advantage of. 


Garland: Just one addition to that and there are so many things that Chris and his team does because he works directly in that area more than I, but one area is that we get involved internal controls because we all know and all dentists are very concerned about (inaudible 00:21:13) embezzlement in the practice. It is a problem. There's no question. We probably do at least on a yearly basis four or five internal reviews about do they have any fraud or embezzlement going on and what type of procedures can be set up to help protect against that. 


Howard: What percent of dentists do you think, based on your combined half-century of experience, what percent of dental offices right now today are being embezzled from? 


Garland: Oh golly, I would say easily over 50% percent, what I would say.


Chris: 50 – 60%. 


Howard: That is so amazing because every time I talk to a consultant that's the number they say. They say when they go into an office, half the time they're being embezzled. They also tell me that it was a lot harder when everything was pay per checks on a pegboard system, but with all this digital technology there's a hundred ways to embezzle.


Garland: That is correct. It made it more difficult. 


Howard: Have you noticed any type of pattern in the embezzlements?


Garland: They get more creative. Again, I can tell you, always close in, close out every month. Have static copies digitally or hard copies of your month end reports. But there's a lot of different ways embezzlement can go on now as well. They need to be looking to those patient refund checks that they cut every month and make sure that their front office hasn’t named their boyfriend as a patient and cutting refund checks to them every quarter. Also, look at their vendor checks. If they’re not - have somebody, either themselves or have a third party reviewing a lot of that stuff, there's a lot of open holes that could unfortunately be taken advantage of. 


Howard: What percent of the time in your experience is it one person doing it versus a couple in the office working like a pack of hyenas?

Garland:  Most of the time it's one person. Whenever it goes to two or more it becomes complicated and typically they’ll leave a trail very soon.  It will be picked up. 


Howard: What I've noticed, the only time it's two is when a mother/daughter are working in the dental office. 


Garland: Yup. 


Howard: That’s the only time. Basically would you say that if you create a series of systems where it would take at least three people in your office to embezzle, then you'll probably nip it in the bud? Would you agree? 


Garland: The vast majority of times, yes. We feel like we can set up proper checks and balances. If they’re adhered to and monitored. That's the big problem that we run into is we will go in and we will set up these systems but yet we say, “Now you want us to come back in once or twice to ensure that they're being followed, and the dentist says, “No, I know how to do it. I'm good. I'm okay.” A lot of times the front office, they just start doing again what they want. 


Howard: Right. Changing a habit is so hard to do. The thing that I think is the saddest part of the embezzlement is every dentist I've talked to about it that's actually broke down and cried over it, it wasn't about the amount of money even though it was a lot. It was the fact that that lady was his child's godmother at baptism. They went to the same high school. It just broke their heart.  It was kind of like how I felt when this Louis C.K. news broke out. He has been me and Ryan's favorite comedian for years. Then you find out he's just a disgusting psycho animal. It's the break of trust that really, really hurts. 


Garland: That's right, Howard. Most of the time it’s somebody very close to the doc. 


Howard: The funniest one I ever saw was - and I've seen this one a couple of times - where the wife has decided that she's going to divorce her husband, but she goes along for years because every single month she's sending checks to the Bahamas or one case was Sydney, Australia. By the time the dentist figured out something was wrong and then you found out she's embezzling and then the next day she has filed for divorce. Oh my God, what a double whammy to find out you've been taken to the cleaners and then divorced, all in one day. Isn’t that nice? 


Garland: Yes. 


Howard: Another big thing that's out new lately. That wasn’t out thirty years ago or twenty years ago or ten years ago. There's a lot of these dashboard companies, where they hook into your practice management system and they give you a dashboard of metrics. Are you big fans of any of those? Do you recommend any of those to your clients or-? 

Chris: We work with Vijay Sikka at Sikka Soft. We’ve been working with Vijay since 2008. Also have some that utilize Dental Intel and it’s pretty cool, but I like those software platforms because I haven't - that's very meaningful information that Eaglesoft or Dentrix have not plugged into their software that I've seen work very well. Again, Sikka Soft, Dental Intel. There's a couple of other ones out there. Rick Willeford started one out of Atlanta that I looked at a little bit. They all bring meaningful data. 


Howard: Yeah, I mean it's amazing. Dentrix is out there in Provo, Utah and there's just a dozen companies around them doing very well of all the things that Dentrix should have done themselves. 


Chris: Yeah, it’s easy. 


Howard: Yeah, I can't think of how many companies have been started, how many consultants are even in business because of the lack of practice management information from Eaglesoft and Dentrix.

If some kid was going out of school, you see all these software and said what practice management software system would you recommend, what would you tell them? 


Chris: Open Dental is looking pretty slick right now. I've been historically a fan of Eaglesoft for many years. But, again, Open Dental. I like the Denticon platform as well or Planet DDS, that works very, very fluid. Again, Eaglesoft, Open Dental, and Planet DDS - it depends on what they want to do. If they’re going to be a standalone shop, again, a historically server-based modality may serve them, but if they’re going to have more than one location, they’ve got to find a truly functional enterprise edition that works that way. 


Howard: After thirty years of using SoftDent-


Chris: Oh, bless your heart. 


Howard: What’s that?


Chris: I said bless your heart. 


Howard: Oh my God. Well, I'm old. Back in the day that was the mothership. I mean that company was long before Dentrix and Eaglesoft even existed. But I switched to Open Dental and I have no financial connection or anything like that, but I'll tell you one thing that you think about. Open Dental is the only practice management system in America that doesn't advertise because they don't need to. It's like you don't see ads on TV for Facebook and Google or Amazon, but Open Dental doesn't advertise. They have so much growth. They're just trying to handle a controlled explosion of growth because everyone at Dentaltown is just raving fans of Open Dental. I agree with that. 

Another thing they always ask. We start off with the basics, what type of corporation to get, talking about an S corp, LLC, C chapters, S chapters, another one thing they ask is what should overhead be? Go through the major line up. What should their goal be for rent, mortgage, equipment, build out, computer, all that stuff? Of course, starting with the big dog, labor. Start with the big dogs labor, lab, supplies. What do you guys like to see? 

Garland: We like to see labor at 25% and that's aggregate. That will be benefits, payroll taxes, and cost on labor expenses. 


Chris: National average running twenty-seven. Yeah. 


Howard: The eighty/twenty rule. What are the highest labor overhead in the top 20% that you're seeing?


Garland: The highest that I've seen probably has been about 32 to 33%. That's the highest that I've personally seen. That was a recent client, recent being within the last two to three years. We now have got that trimmed down through various methods down to about twenty-seven. 


Howard: Do you reduce it usually by reducing headcount or individual pay? 


Garland: Yes and yes. 


Chris: There are a couple ways to reduce salaries and wages as a percentage of overhead. One is to reduce the salaries and wages and the other is to increase the production and collections, so I think you can get a balanced approach there because they may come in and say, “I've got one front office person, been here for twenty years, can’t touch their pay. One hygienist and one assistant, where do I cut? Because if I cut their pay, they’re all going to walk away from it.” 


You brought up a point at our dental summit, Howard, that I thought was very perfect, man, was that sit there and wonder why you've been working for twenty years in practice and you still got the same two columns of hygiene. Why didn't you open up another column and then fill that up? It's kind of like if you build it, they will come. Sometimes that high percentage of their revenues may be a symptom of them just having low revenues and we look and see what we can do to increase that side of it. 


Howard: It's the craziest thing in dentistry that when the dentist is making 35% percent, the staff is making 25%, percent, labs – ten, supplies - five, mortgage - five and you go in there and everybody is standing around and waiting for a chair. "Well, Margret's got to empty - she's got to dismiss the patient then clean it up, then set it up, then seat the next. I'm going to sit back here on my hands for twenty minutes," like, dude, chairs have no cost. 

The people who make the most money - every time I see someone taking home three-hundred to four-hundred, one of the number one things they all have in common is it doesn't matter if they schedule two chairs, three chairs, four chairs, they have two chairs that aren't on the schedule. If I'm running fifteen minutes late they can seat the next patient. I can go over there, start getting them numb. I can finish my molar root canal, walk right over there, ready to go. Sometimes at the end of the day every operatory has been destroyed. I'll go home and drink beer and they might stay there for hours cleaning it all up. 

Yeah, you've got to be chair long. The endodontist and the oral surgeons are the best at it. Every oral surgeon and endodontist I know, I've ever met, has two extra chairs for flow, for emergency, for walk in, everything. Chairs aren't your costs. 

You said labor 25% percent, but that's aggregate, which includes benefits, payroll, taxes, and what was the third thing you said? 

Garland: And comp.


Howard: And what?


Garland: Just a gross comp, compensation, benefits, and payroll taxes. 


Howard: Okay. Next big ticket, lab. Where do you like to see lab? 


Garland: Well that's kind of a moving target. Number one, what kind of office do they have? What kind of dentistry do they do? Do they have a CEREC in their office? We have different standards for our CEREC clients versus our lab clients. 

We suggest trying to have three labs so that you can get some level of negotiation. A lot of dentists like to have more than just three labs, for some reason. But we like to see labs I'm going to say anywhere, depending on the dentist, non-CEREC, I'm going to say 6.5 to 9%. That's where we'll see them run. 


Chris: That 9% high level, I rarely see that even on our CAD/CAM practices, it gets to 9%, but those are a lot of our high-end cosmetic docs that are doing at one point four million in production a year. I'd say, "Hey, your labs are high but it's due to how much cosmetic full mouth rehabs you're doing, so I'm cool with that." 


Howard: Yeah, that's only about 5% of the dentists. 96% of all the crowns sent to Glidewell, who does 5% percent of the entire U.S. market, ninety-six out of a hundred crowns are sent one at a time. 

You say lab, if you're sending it to a lab, 6.5% is what you like to see, but it could be as high as 9% if you're doing a lot of full mouth rehabs and all that stuff. Where do you like to see the lab at if you own a CEREC machine or are an E4D chairside milling machine?


Chris: Four. No more than four. 


Howard: Do you put those CAD/CAM blocks, do you put that under lab or do you put that under supplies? 


Garland: Under lab. So many people we find and we see, they'll just put them in dental supplies, but that doesn't really give you the true cost, the true overhead of that category. 


Howard: Germany does it the best. I love Germany. If you want to know the difference between Germany and United States go drive a Chevy and then go drive a Mercedes, a Volvo, a Porsche. The Germans are amazing people. By the way, did you hear the Germans just found a nine and a half million-year-old human tooth in a cave? They just published it.  


Garland: No! 


Howard: Yeah. It was weird because my whole life every anthropology book you ever said humans originated out of Africa because every one, two, three million-year-old Homo sapiens they ever found was in this one ridge on the eastern side of Africa and now out of nowhere Germany finds a nine point eight million-year-old tooth in a cave, so now every anthropologist is like, "Okay, everything we believed, you just turned it upside down." I mean all physical evidence now is the oldest human was in Germany. 

But the Germans, the lab bills the patient. The lab cost is between the patient and the lab. And the dentist said, "We ain't going to get in the middle of that." 

Your physicians, I mean how many times have you gone to a physician they sent you somewhere for an MRI, or blood work, or whatever, everywhere they send you, the payment's between you and wherever they send you. The physician doesn't get involved, so: “Oh, go get a MRI and I'll bill you.” That's the cleanest deal. 

I'll tell you what, these guys doing full mouth rehab cases, I can't tell you how many of them, their life changed, they just say to the patient, "Look, I can send this to a low-cost lab. I can send this to a medium lab or I can send it to-" I mean, there's crown and bridge labs that charge four-hundred dollars a unit. Doesn't matter to me because you're going to pay the lab fee, so here's my fees. I know a lot of high-end doctors and when they started getting all German and started having their labs bill their patients, my god, did their overhead drop. 


Chris: Yeah


Garland: Yeah


Chris: That's a great idea.


Howard: So what about supplies?


Garland: Six, six and a half max.


Howard: Okay. And what about do you like rent or mortgage? 


Garland: That's kind of a loaded question because most of our practices, if I can jump in, most of our practices we have them separate, typically they're building out in another real estate, LLC, so they end up renting from themself. But in essence they're paying a mortgage as well. But we pull it out of the practice in almost all cases. 

Chris: In most cases, I'd say 90% of the time, Howard, we'd go with the dirt. If they get the dirt, they're building another asset throughout the duration of their career that it can be a revenue stream when they retire or another cash injection to their nest egg. There are some cases, especially in high-value commercial areas, where it just makes more sense to pay the rent and put other monies aside in other investments. 


Howard: Yeah, it depends on where you're at. I mean if you’re downtown San Francisco or Manhattan, it's not even an option. 


Chris: Exactly.


Howard: I agree because I think every doctor that sells her practice for a million dollars could have sold it for three million dollars if they just think about this. You sell your practice for a million, but if you carry the note - you screen this dentist. You wouldn't let your patients be treated by anyone. Obviously, this person worked for you, has great skills, all that, so then you carry the note at 10% for ten years, there's another million interest. Then when they pay off the practice, they're in that land and building. That location has been there thirty - forty years. The only variable in real estate is a tenant. 


After Amazon, the number one - if you drove around Phoenix all day long, you'd think the number one store in Phoenix was ‘Space Available’ because every time Amazon does another billion - anything that can be shipped to you in a box or a package and doesn't involve a human interaction is going online. The only thing I see staying in these retail places is when a human needs to touch you like a barber, a mani/pedi, a dentist, a physician, an accountant that needs to sit down with you. The number one variable in real estate is a tenant. After they pay off the practice and you made all that plus the interest, now you have a captive tenant to buy your practice, buy the land and building and they're really in no room to negotiate. You can have an income stream for - if you didn't want to carry ten years, I mean seven years, but 10% interest on a - the average practice is seven-hundred fifty thousand is the average one the sells. Finance that at 10% for seven years, in your walnut brains can you figure out how much money that would be? What would seven-hundred and $750,000,00 carried at 10% percent for seven years, how much interest would that be total? 


Chris: I'm guessing maybe three seventy-five - four-hundred thousand. 


Howard: Okay.


Chris: That's a guess. 


Howard: Okay, so that's half. You sold it for seven-fifty and now you're going to make another half of that. Then you sell the land and building to a person who’s in no space to negotiate.  Why this is good for the kids is I cannot tell you how many times I saw a dentist sell a practice to a kid who he knew didn't have the skills, the treatment planning, all this stuff and they sold him a million dollar practice and then left. They're done. Now they're between Bank of America or someone else and the kid's first year does six-hundred thousand in production. It’s just upside down. But when a dentist carries, they got skin in the game. They're going to be going to their church - they're going to be at the back of the ward handing out business cards, and at the mosque, and the temple. Then when you get an upset patient because you're a young kid and you screwed something up or you rubbed the patients the wrong way, then you call old man McGregor and he's known that lady for twenty years and he smooths it all out. I really think dentistry, the way owners carried thirty years ago was a far better model now than outsourcing that to these big Fortune 500 banks. 


Chris: Well, also if they had the real estate then he has another level of comfort to carry that note. They have more leverage too. That really brings the whole triangle to - if they have real estate I think they have a lot comfort, tolerance to carry the note and realize that revenue because hell, the banks are making all the money, so why can't the dentist make the money? 


Howard: Well the Phoenix, Arizona world record - what was that guy's name. Oh my gosh, he retired and went to Minnesota. But he had the world record. He carried and the minute you were ninety days late on your payment, you defaulted and it was his practice. He sold a practice four times in like seven years. It was just the craziest thing ever. He'd always tell everyone, "Oh my god, you've got to carry." Then when you carry you're torn between do I help him make it work or do I hope he just walks away from it in two years so I can sell it again. Even if the owner won't carry, why don't you get the owner to carry half? Why don't you say I'll go half, Wells Fargo, Bank of America, whatever and then you carry half, especially in small towns? Man, in small towns, doctor sells, then decides he's going to move and retire to Phoenix or Florida, and then it starts going south with either the staff or patients or whatever, the whole town of five-thousand smells a rat right out of the gate and you've literally lost your investment, where if the old dentist would have been carrying, he would have been working it. He'd been working reputation management. Screw Yelp reviews and Google reviews. In a rural area, they're not on Yelp. They all know what's going on. 


Garland: They go down on the corner drugstore and find out the scoop. "Yeah, this guy is a good doctor you should go to him," and they do that. 

You talk about the building, when we start working with a new client, we look at that client and we don't look at just exactly what they're doing today, we look at where we want them to be when they get ready to retire, whatever age that is. We consider the building one of the four cornerstones to successful retirement 


Howard: One of the four cornerstones. 


Garland: The four cornerstones is you own your own practice and sale and that goes into your retirement pool, you own your building and sale, that goes into your retirement pool and you set up a qualified retirement plan, and then the fourth one is just some other outside diversification of investments, which - 


Chris: Real estate, other investments. 


Garland: Yeah, exactly. We really get them to focus on the four cornerstones of retirement and the sooner we can get them to focus on that, the better they are. 

We say, "Okay, when do you want to retire?" "Sixty-five." "Okay, screw that. Let's retire at fifty-eight." We try to put them on a track to retire at fifty-eight or sixty, well before they want to. Not that they're going to retire then, we just want them to see as soon as they can that they have that ability and we feel like they relax and they settle in and then they become a better practitioner. 


Howard: I'm going to add a fifth cornerstone. We're going to turn this into an octagon. 


Garland: Okay, it's a weird looking house though. 

Garland: Never ever, ever get married unless you're going to make a baby. If you do get married and make a baby, never ever, ever get divorced. I see these kids walk out of dental school and they marry a classmate. I'm like, "Is she pregnant? Is she showing? What's the rush?" It's like why do you need to get a lawyer involved unless you're going to make a twenty-five year commitment with the child. It's like, why. 

Imagine if you were my drinking buddy at the bar and I said, "Hey, if you want to still be my drinking buddy, I want you to sign this contract. If you ever quit drinking with me on Monday Night Football and the Sunday games, you've got to give me your car." I mean would you sign that?


Chris: No, typically not.


Howard: No, but if we decided we're going to build a dental office together or we're going to make a baby together, then you get a lawyer involved. But I just see these dental students getting married for just no apparent reason. 


Garland: True story here. I was on a golf trip and I only knew about half the individuals that I was on the golf trip and they were mostly made up of dentists actually. After they got to know what we did, one of them turned to me in between waiting on someone to hit the next shot he said, "Well, what would be something you think is great financial advice? What two things? What two things?" I said, "Well live below your means." We talked about that earlier. And the other one I said, "Always know good marriage counselors. Stay with the one you're with." 


Howard: Yeah, no doubt. 


Garland: They just laugh. There's truth in there because we've had clients that have been pretty much decimated by divorce 


Howard: Yeah, you know what's so cool about it now? What's so cool about it - thirty years ago, all the men were crying and whining and whining. Now I get to meet all these women dentists crying and whining that their husband decided he was going to go back to school because he knew in his state that if he didn't have a job for one year that helped him in his alimony and palimony and all this stuff. Now you see all these fifty or sixty year-old women dentists who are now getting it. I think now that the women are getting it as bad as the guys, maybe some of those laws change. 

But I've got to go back and have you qualify something. They understand own the practice, own the building and they understand a retirement plan. But you said qualified retirement planning. What's the difference between retirement planning and qualified retirement planning? 


Garland: Well qualified is your type of retirement plan, like a 401K. A lot of individuals, like a 401K, a defined benefit plan, a lot of individuals have been advised by clients that a simple plan is all you need, a simple IRA-type deferral, a set plan. These types of plans, they just don't have the horsepower to get you where to go. 

Then we have other outside individuals that will tell clients or hope to be future clients that we get, says, "Well, those qualified plans are really complicated and they cost a lot of money." Well, money and cost is relative to benefit. If you get a greater benefit with a qualified profit sharing defined benefit plan, defined contribution plan, even though it may be a little more complicated, if you get a greater benefit, then it's relative and you just are able to sock away a lot more money. If you cover your cost, you cover your cost. 

To me someone who says, "Boy, that's really complicated," is someone who's saying, "Well, I don't really fully understand it." Here's the thing and I'll shut up and let Chris talk, Here's the thing about rocket science. Rocket science isn't hard if you're a rocket scientist. 


Chris: You have two things talking about taxes. One, you come out of alimony. If anybody's going to get a divorce they need to do it before December 31st because in this proposed tax changes, alimony is now deductible to the payor, so not the payee. Historically, you write a check for alimony, the spouse that's receiving the alimony has to pay the income tax on it. Now, effective January 1st, if this proposal legislation goes through, then it's taxed at the payors bracket. That's one thing. If you're getting a divorce, do it by the end of the year. 

I think with these qualified retirement plans, they're a great way to build assets that are a) they're untouchable. The IRS can't touch them. You can't lose them in civil courts. That's why OJ Simpson wants to get back to Florida, has low income taxes and he can draw on his NFL pension even though he's bankrupt. You can't touch pension money no matter what you do. They're bulletproof. 


Garland: Heretofore. 


Chris: Heretofore. It could always change, but heretofore. 

Then also, I always use the analogy if I came to your front door, Howard, and I rang it and I said, "Howard, if you give me a check for sixty-three thousand dollars and I turn and I do three circles and hand you one right back right now for seventy-two thousand dollars. How many times would you take that ride with me?" That's because of the tax strategy and the tax deductions if you have the right type of 401K plan that you're utilizing with your business. 

There's a lot of different ways to build a 401K plans, whether they're cross tested, integrated, safe harbored, et cetera. That's based on employee demographics which change all the time. These 401K plans, if they're used the right way, they can drop sixty-three grand. A better thing, eleven of that or ten of that would go to their staff as an additional compensation model. They're taking care of their own and they're saving eighteen grand in taxes. When you net the tax savings with the staff cost, they just made that nine-thousand dollars that I did three circles and handed to you on your front porch. 


Howard: Now can I give my tax advice? If you have three-hundred fifty thousand dollars in student loans, you owe seven-hundred and fifty thousand on a practice, you owe five-hundred thousand on your house and you're about to get divorced, I'd just buy a one-way plane ticket to the Bahamas or Sydney, Australia and change my name and start over. Wouldn't that be the best advice?


Chris: That’s pretty good advice.


Howard: I mean that is rock solid. 


Chris: We've had some clients that have really considered that. 


Howard: I'll tell you what. When you go to Mexico, Central and South America, and you go on Caribbean cruises and things like that, almost every time you see an American dentist down there, almost every time they had their license taken away. A lot of times it was for substance abuse. They say, "Okay, They said I've got to go to treatment or this or that or they're going to take it away because I'm addicted to Vicodin or whatever and I thought, hell, I'm just going to move to Cabo, where you can buy it on the street and walk away from everything." They say when you when you emigrate - that's why people have always been nervous about immigration because when you leave your country it's always for a job, for love, or you're running from the law. They think about, for the average country, about one in four is running from the law. Usually, when you have an American dentist practicing in Cabo or Puerto Vallarta or Mexico City, usually the law was the one.  I want to open up a big can of worms. PPOs, when you're saying your labor should be 25%, lab 6.5%, rent or mortgage, a lot of dentists are going to come back and say, "Well, you don't understand, man. I used to get a thousand dollars for a crown and now 80% percent of my practice is PPOs. They're only paying me 600%.” Their number one overhead is 40% of adjusted production. I mean it's like screw labor twenty-five, my number one overhead is adjusted production of 40% percent of my usual and customary fee to the PPO fee. What's your thoughts on these PPOs? 


Chris: I think the PPOs, it's a supply and demand thing. I think it's been documented for a long time now that the number one barrier to dental care is access to care and it's not because they don't have a dentist around the corner, they can't afford it. Inflationarily, dentistry is going up more than any other service segment over the past twenty years, higher than any other service segment out there that I'm aware of.  I think PPOs have their place. I think it's how many people - they say the most expensive chair is the empty chair. I think the most expensive care is the chair you're doing free work in, but then the empty chair. But that being said, it's supply and demand, Howard. We've done studies and models where I've taken multiple model practices that were in network with five or seven PPOs and in Medicaid and then I took models up to with five or seven PPOs and in Medicaid and then I took models up to four, I took models up to three, and then two and then one. The most profitable, it was astonishing, the most profitable practice was the one with the most PPO participation. 

Now, again, I think it is a practice specific assessment. I think it's practice specific based on their skillset, their locations, demographics because I think there are some that can opt out of network and make more money and work less. I don't know how viable long term that is because I've seen some of those practices that were high-end cosmetic, fee-for-service back in 2007- 2008 go out of business because even people with discretionary cash flow prioritized their money more when they lost half of their retirement. I think it is based on demographic and practice volume. But man I've seen some high PPO participations making lots of good money and giving a lot of good clinical care 


Howard: The curse in healthcare and dentistry is that your cost are basically time and you bill in (inaudible 00:54:47). A lot of people will say, "Oh well, the hospital why did they bill my insurance seventy-five dollars for a Tylenol,” because they don't have a room rate. I mean if you stay at the Hilton, they don't charge for how much toilet paper you use, if use the shampoo; they just have a night fee. The billing in healthcare - if you reduce your fee 40%, you just got to go 40% faster. But they're not going to switch from composites to amalgam on a crown and bridge. I see so many dentists that only need thirty minutes chair time to do a crown and then right next door in the same medical building, the next guy schedules an hour for every crown. Then there's three guys in the building that have scheduled an hour and a half for a crown for every single crown going back to Adam and Eve when they got out of dental school. It’s like dude, you've been doing crown and bridge for thirty years and you didn't get any faster, but you signed up for a PPO. No, I mean look at it. You can numb the tooth and then go back in your office and play on Facebook for ten minutes, then come back and go through more gloves and masks, and then drill, and then instead of you packing the cord for a minute, they go back and play on Facebook for another hour, and then they come back and take an impression and then they leave, and the assistant takes a half an hour to make a temporary. Then there's dentists that walk in there, they numb, they set a timer for four minutes, they fill out the sheet guide, then they pack the cord, when the timer goes ding, they prep the tooth, and then when they're done prepping the tooth, they study their prep by making the temporary, and when they're trimming the margin of the temporary, they realize they're margining right and redo it, and when they're adjusting an inclusion on a temporary, they realize they don't have enough clearance, and they would have had a reduction coping if they wouldn't have made the temporary first, and then when the temporary's all perfect, then they take an impression, go do a hygiene check, come back, look at the impression with their loupes on, cement the temporary, patient is done in thirty minutes. If you're not on a PPO charging a thousand dollars for a crown and you schedule an hour and a half and you are on a PPO only getting say six-hundred for a crown, but you do one every thirty minutes, now you doing eighteen hundred, would you rather be the dentist charging a thousand dollars for a crown, taking an hour and a half or charging six-hundred for a crown and taking thirty minutes. 


Chris: Obviously the thirty minute.


Howard: When you watch P90X, what's the first thing that guy says on every tape? Okay, let's bring it. You're here. It’s working out. It's consistency, it's volume, and it's intensity. When you're going to go do your P90X, that ain't the time to get lazy. When you're in there doing dentistry, that ain't the time to get lazy and slow. I think a lot of overhead is because there's just a lot of lazy dentists that want their assistants to pack all the cord, make all the temporaries, give me long appointment times, and then they come to you with these crocodile tears, "Why is my overhead so high?" Because you're lazy. Is that fair? 


Garland: No, no, I think it's totally fair. Sometimes it's hard to say that, that you're lazy but we feel that we try to get that point across that you need to do more.


Howard: Well, just tell him that Howard said he's lazy. It's really easy for me to say it. It's really hard for you to say it because they're your customers. 

What I also think every dentist should do more is instead of spending so much time talking to all these other dentists on Dentaltown, and Facebook, and Twitter, and LinkedIn, why don't you go start talking to the dentist in your own damn medical dental billing in your own small town because so much of their thoughts, they think it's America, it's the economy, it's the Federal Reserve, it's China. It's everything but them. Then if they were hanging out more with the dentist in their neighborhood then they'd realize oh wow, despite who the president is, and the interest rates, and the deficit, and international trade, that guy is crushing it and he's only one-hundred yards from my office. 

They got to get focused on the man in the mirror and not doing what intellectually lazy people do, which is go through their whole life blaming everybody else for all their problems, going through life as a victim. They need to get damn ownership. 

How do my homies contact you? What's the best way? If they go to your website, MahamAssociates.com, what are they going to find? 


Chris: At the website, Howard, they'll find a contact us form, they'll see the service mix that we offer, they'll see some quotes from some clients, and they'll be able to see kind of an overview of what we're about. Then they can always call the office, six, one, five, eight, eight, three, seventy-eight hundred, which is on the website as well and ask to speak with Garland or myself.  We'll do a complimentary tax assessment and review where they're sitting their taxes, which are a lot of times what move people to reach out to us. We put our money where our mouth is. It's a no cost. We've had doctors come out and ask us to review their taxes and we've given them a hit list of missed deductions, and they've gone back and given it to their tax preparer. Hey, that's cool, man, we're helping them save taxes. Again, there's nothing out there for him to lose if they'd let us look at them and give them some insights. 


Garland: Routinely when we do a tax analysis or a review, we will save a client, and I comfortably can say this because we do it all the time, we save anywhere from the low twenties and sometimes - we had this client in Daytona, Florida, where we saved him a little over a hundred thousand dollars a year in taxes. 


Howard: Easiest dollar earned is a dollar of expenses saved, second easiest dollar earned is a dollar tax delayed, and the hardest damn dollar you'll ever do is to prep another tooth. 


Chris: That's right. 


Garland: So manage what you have first.


Howard: Anything else you want to say to my homies before you go?


Chris: Man, Howard, again, I just appreciate you coming to speak at our dental summit once again this year. Man, love hearing you every time. It's been a pleasure visiting with you today. I think we're on the same mission is to help dentists be more successful and I appreciate the opportunity to visit with you, man. 


Howard: Do you think you'll make us an online CE course with Howard Goldstein? 


Chris: We've been looking at going online with our CE curriculum. 

Howard: Well, we put up four-hundred courses and they've been viewed almost a million times. They're just crazy. The other thing about a lecture, it's all day and a lot of people are like, "Ah, I don't know if I want to go and spend all day. I don't know if I want to travel and stay in a hotel," but then when they see a course and it's just an hour. It doesn't take much discipline to commit to an hour. A lot of them they're just on their iPhone. They've got the Apple TV, so they're throwing it up on their big screen. 

But everybody that's put up an hour online CE course, always tells me it was the best marketing they ever did in their life. Everything you talked about today, I just think it would be amazing. You would educate so many dentists from around the world and you get business out of it. I hope you guys do that. Think hard about that because that's really - you were talking about putting online CE courses on your website? 


Chris: Yes, (inaudible 01:02:20). 


Garland: Yeah, there. And I've already - Facebook Live is huge nowadays too is what I've been told. 


Howard: Well, Facebook Live you've got to kill the time. The difference between time in Hawaii, California, New York City, archiving it is so much better. But how many online courses are you going to put on your website? 


Chris: Gosh, we have canned already probably thirty (inaudible 01:02:45). 


Howard: So you've already got the materials, so that's perfect. So just take your best hour, put it on Dentaltown, and then say if you want twenty-nine more hours of this, go to MahanAssociates.com.


Chris: Okay. 


Howard: Try one, get one free. You know what I mean? Because we've got the distribution. I mean, with two-hundred and eighty-five thousand townies, that's huge. After listening to you for an hour, they're going to fall in love with you, they're going to see your energy, they're going to trust you. They're going to like all that and then say the next twenty-nine hours are on MahanAssociates.com


Chris: Okay, perfect. Also, I wanted to extend a compliment and a thank you to Ryan because he's been an uber professional and helpful in helping us get all this set up so, again, thanks a lot, Ryan. 


Howard: Oh my god, Ryan. Are you going to get a big fat head now? You know what? It's an honor. When Ryan got out of college, he was so embarrassed by my first hundred podcasts. He said, "Dad, I'm going to come back home, move in with you, and get that." He has taken this show, seriously Ryan, the show's exploded since you came on board. I mean I used to be sitting there. The audio was bad. I listen to some of those first hundred podcasts and they're so hard to hear. 

Man, the green screen, you cleaned it up. He said, "Dad, women can wear makeup and mascara. You're so ugly, at least wear sunglasses so they can see less of you." He wants to put a sack over my head. He says, "Dad," he said, "You have a face for iTunes not YouTube," but thanks for that and thanks for moving back home Ryan. It's been a pleasure. Sorry, can I ask you an overtime question.


Chris: Sure. 


Howard: A lot of these Millennials are stressed out of their mind because they got out of dental school and her mom's a dentist. Her mom wants her to come practice with her and she's working with her mom and sometimes she just wants to go to the bathroom and scream and pull her hair out and cry. What advice would you give to these young kids working for their dad or their mom or their twenty-year-old brother? What advice would you give them? 


Chris: Boy, that is a very good question. 


Howard: Do you guys just go to mom and dad when the shit hits the fan? Do you call your mom, dad, sister, Aunt Lulu? What's your secret mediation service?


Chris: In a family businesses, man, it's solid contracts, clearly defined contracts, make Thanksgiving and Christmas easy no matter what. Then you've got to have that go-between. Honestly, if Garland and I operate in agreement, if we have a disagreement we've listed our father as the tiebreaker vote. We've never had to use him once. I’ve threatened him a few times with it. But, man, clearly defined contracts, expectations are very important in family businesses. 


Garland: Especially if you get into a situation where you've got a son-in-law or a daughter-in-law type situation, it's even more important. We see so many times when the mother and daughter, mother and son, whatever the case may be, they want a contract, they get a contract, and then they never execute it. We've got two or three situations right now that we've drawn up, what we think are good working agreements, and they're never executed. Of course, you don't need an agreement if you don't have a problem. 


Howard: When you go around the world… When you look at last names like, Smith, they were a blacksmith, but when you go around the world, everybody talks about the Fortune 500 all day long, but most people work for a family business. I don't care if your dad's a goat herder in Somalia. When I go in these dental schools, at least a quarter to a third of the class I say, "How many of you have a dentist in your family mom, dad, uncle, aunt, someone?" One out of four to one out of three hands come up and it doesn't matter if you're in New Delhi, Tokyo, San Paulo, Rio, or Kansas. Family business is the majority. I think it's romantic as hell. I only worked for two people: my dad for ten years - that was the love of my life. Best time I ever had, most I ever learned, and then I worked for myself thirty years and it has just been an honor. Three of my four boys have worked for me at some level for some time and I just think family is everything. But what you said is so profound that if you were in the Fortune 500, you'd have a lawyer and a contract and you'd go to an HR guy, you'd have an attorney. You'd have this in writing. I mean hell even when you go on the People's Court the first damn thing they say on TV, "Do you have a receipt?" "Oh, no, I didn't save my receipt," “Ah, whatever.” Then these guys have this big feud with their dad. 

I have a good friend of mine, who’s a dentist. His dad's a dentist. They went ten years without talking when he walked away from that practice. A lost decade. And you gotta have a contract. 

Same thing when you're dating, when you're in love, and you're hormonal, and all that Millennial young, youth crap, no contracts, no marriage. But then when you decide you're gonna have a baby, or you’re gonna work for your mom, or you're gonna buy a practice, then you need a damn good attorney and a damn good contract. 


Chris: Yip.


Garland: Yip, you do.


Howard: What percent of your dentist’s get prenuptial agreements? 


Garland: Well, when we're involved, I would say close to 50% or 40%. Now a lot of times that horse is already out of the barn before we get involved.


Howard: Yeah, and you know what? Divorce is three ways: money. It's over three subjects a third, a third, a third, everything I read. Money, sex, and substance abuse. When you go back to all three of those, ‘coz they're not talking about their money, their sex, or their substance abuse. They're not addressing it. They're not communicating about it. When you sit there and you feel like you can't float the idea that we get a prenuptial agreement, who are you going into business with? Really? Really? 


Garland: Yeah.


Howard: You can't talk about a prenuptial agreement, but you're going to be married for the rest of your life and if it goes south, lose half of everything you own. 


Chris: Yeah.


Garland: Yeah.


Howard:If you can't communicate about a prenuptial, then you can't get married and communicate about money, sex, and how much beer you're drinking at night. 


Chris: That's right. That's good. 


Garland: There you go. 

Howard: All right. Hey, seriously, thank you for your fifty years, half-century combined service to dentistry. Thank you for all that you do for dentistry, your clients. It has just been an honor to be able to podcast you guys.


Chris: Thank you, again, for the opportunity, Howard. Look forward to working again in the future. 


Howard: All right buddy. Have a rocking hot day. 


Chris: Thank you.


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