Dental Entrepreneurs and the Growth Journey with Perrin DesPortes: Next Level Executive
Episode Description
In this special roundtable episode of Simplified Dentistry, Dr. Mustafa Shah-Khan and Dr. Richard Offutt are joined by dental industry veteran Perrin DesPortes (Co-Founder of Polaris Healthcare Partners) for a live Q&A-style discussion on leadership, group practice growth, mentorship, and the financial realities of scaling as a dental entrepreneur. Whether you’re solo and curious about expansion, or navigating the transition from hands-on clinician to strategic CEO, this candid conversation delivers practical wisdom with humor and heart.
Episode Navigation
01:35 – Defining leadership in solo vs. multi-site practices
04:30 – Communication as a leadership skill
06:50 – The clinical risk of inconsistent philosophy across associates
08:20 – Should I grow? Buy? Hire an associate?
11:00 – The income dip that comes with growth
14:00 – Coaching leadership & the value of credibility
16:45 – Hiring partners or assistants: when is it worth it?
20:30 – Mentorship as the core of transition
25:30 – Avoiding burnout in expansion
27:30 – Adding associates without adding ops: is it viable?
30:00 – Aligners, implants & specialty care to increase scope
33:00 – Is the wave of dental growth over?
35:00 – De novo strategy: build right, not fast
40:00 – Cannibalization as a de novo growth tactic
43:00 – Vetting consultants & calculating ROI
Key Takeaways
Leadership in Dentistry
Leadership = creating greater results through others
Communication systems (like regular huddles & team check-ins) are critical
Trust is earned through consistency, clarity, and presence
Dentists must move from “outworking” problems to developing others
Growth Isn’t Always Profitable—At First
Adding an associate costs money before it makes money
Mentorship is essential: teaching new doctors how to earn, not just practice
Hiring team members (even assistants) can free up your time to lead
Know your numbers before expanding—revenue, margins, capacity
De Novo vs. Acquisition
De novo can work—if you understand patient value, break-even points, and have a strategy
Many group practices fail due to rushed build-outs and unrealistic expectations
Cannibalizing part of your current practice to feed a new one can accelerate growth
Aligner, sleep, and implant services can improve per-op revenue
Meet Our Guest
Perrin DesPortes Co-Founder of Polaris Healthcare Partners, executive coach, former dental industry executive, and trusted advisor to growth-minded dental entrepreneurs. Perrin specializes in helping practice owners transition into CEOs with clarity, confidence, and strategy.
Featured Discussion Topics
Clinician-to-CEO transitions
Dental leadership development
Associate onboarding & profitability
Strategic expansion & de novo practices
Avoiding burnout in multi-site ownership
Evaluating consultants & coaching ROI
Private equity trends & independent growth
Connect With Simplify Dentistry
🌐 Website: simplifydds.com 👥 Facebook Group: Simplify Dentistry Community
Topics: dental leadership, clinician to CEO, multi-site dentistry, dental expansion, mentorship, de novo practices, associate integration, practice management, dental consulting, financial strategy
Transcript
Murtuza Shah-Khan
Yes, I’m Murtuza Shah-Khan with my other partners,, Richard Offutt and Mustafa Shah-Khan were pumped to have Perrin DesPortes of Next Level Executive with us for this somewhat Facebook live event that is now a different kind of event. Thanks for your patience with all this stuff. Sorry for technology issues. Looking for some great little Q&A and casual conversation between the four of us. Hopefully we can share some of these questions we received from some members in our group and kind of go from there and you know give our four takes on things.
Mustafa Shah-Khan (00:41.8)
Yeah, kind of the whole deal here is, know, I mean, we’ve all been through lots of things in dentistry. Rick has started, you know, group practices. He’s gone from solo practice to multi-location, started a DSO. Murtuza and I have been in kind of individual practice. And Perrin has advised and consulted with people trying to do everything in the gamut. So the thought of…
clinician to CEO, I think is the best thing that we can do and kind of what, you know, what are your thoughts? What questions do you have for it? You know, and I’ll just kind of go to a couple of questions that we had, you know, kind of what, let me get back to this. Do y’all have any of the, let me pull up a couple of questions, but what questions do you guys have from users?
Richard Offutt (01:35.006)
I think the biggest thing that people talk about is leadership. And I know everybody’s talking about leadership, but Perrin, maybe talk a little about leadership and then specifically leadership in the dental office practice, whether it be a guy and two hygienists and a couple of assistants, or whether it’s a guy with five offices. mean, the leadership skills have to scale, right?
So just if you talk a little bit about leadership, I think that would be helpful to all of our listeners.
Perrin DesPortes (02:09.139)
Yeah, great question, Rick. And thanks guys for pulling this together. I appreciate the offer to be with you and with the members of our tribe here and everything. So leadership is probably the most overblown topic of all self help literature and podcasts and everything else. Right. So that being said, as much as been written and talked about it, this stuff isn’t easy. And when we think about a dentist,
ending up with his or her first practice, they immediately go to the top of the food chain in that business. They’re the business owner. It’s their name on the license. It’s their name on the loan documents to buy the business, right? And you now have no one to model yourself after. You have no one to measure yourself against. It gets to be really, really lonely, really, really quickly.
Now in a practice scenario, a solo practice scenario, when you’re the only dentist in the practice, you can kind of outwork your problems. So leadership in a solo practice with one dentist, as long as you can keep the thing glued together, you’re the straw that stirs the drink. If you can do more complicated dentistry, you can generate better clinical outcomes. You can also make more income doing it. And probably
managing the staff is less complicated because they’re all within the same four walls. All right. And, you know, that used to be the way dentistry was for most of my life and what we’ve always seen. Well, now with multi-site healthcare practices, you can’t, to state the obvious, you can’t be everywhere at once. And what you find is that person who has mastered a clinical skillset that generates a lot of tremendous clinical outcomes and a high level of income.
really starts to transition from being a clinician who owns a practice into a full-fledged entrepreneur who owns a business. And those are not the same things. So when I, when I think about leadership in this context, especially there, there are a couple of things I’m going to share with you. They’re kind of conceptual. And there are a couple of things I’m going to share with you that are highly tactical in that five location group. Like you mentioned, Rick. the first thing is
Perrin DesPortes (04:28.405)
If you are, if you see yourself as a leader and if you’re a multi-site healthcare practice owner, you, you very much should, the way you measure yourself is to create greater results through the efforts of others than what you could achieve on your own in the same amount of time. To create greater results through others in the same, same amount or less time than it would take you to do it. That’s the measuring stick.
The way we do that first and foremost is through communication. So the people that can’t manage a morning huddle have a really, really difficult time managing multiple locations all at once when they can’t be in front of them. That’s one of the first fundamental flaws. When I asked somebody, tell me about your communication schedule with your business, your individual teams, your doctor team, your operations leadership team.
And they say, well, you know, we get together occasionally and it’s usually when we have a problem, that’s not leadership. Leadership is driving results through other people and communication is mission critical to that process. Your people want to be led. They want to hear from you and they want to feel confident that they’re with a winning team. If you’re able to successfully do that, you create a high degree of trust in your organization and trust is critically important.
when you can’t be around everybody all at once. The last thing I’ll say tactically in multi-site healthcare practices and we’ll stick with dentistry here is that you got a couple of different leadership hats that have to be filled and the likelihood is you’re going to fill most of them. One is visionary or CEO, the person who has the vision for the business that’s the figurehead of the business, usually the outright owner that is the leader of the business. The second is chief clinical officer.
Just because you employ four or five or six or eight or however many young associates and we’re all dentists, we all pass the board, we all have our license does not mean that any of them have fully embraced or adopted your clinical philosophy. And that is a point of risk immediately in group practices that people who own group practices and start group practices, fallaciously assume
Perrin DesPortes (06:51.953)
that everybody sees dentistry the same way and they don’t. And if you can’t solve for a clinical philosophy, if you can’t translate it into your doctor team, and if you can’t enforce standards, then you are, it’s a point of jeopardy in the business. It’s an unnecessary point of risk.
Mustafa Shah-Khan (07:12.552)
So apparently, I was talking to somebody the other day, I’ve got the million and a half dollar practice, four to five chairs or whatever it is in my place. And they were like, look, how old are you? was like 54. They’re like, you need to either acquire a practice or you got to bring in an associate or you really need to acquire a practice and bring in an associate. Should I do that? Or should I just keep on going?
Perrin DesPortes (07:40.116)
Yeah, so we’re the same age, Moose. you know, my first question would be not to divulge anything intensely personal, but, you know, how much longer are you thinking about working and how necessary of a, how necessary is the sale of your business to fully funding your retirement? You know, that, because that there’s an outcome that those questions are indirectly pointing to.
that is usually financial in nature. So without pressing you on any of that in a live session.
Mustafa Shah-Khan (08:14.696)
Let’s say that the sale of my practice or whatever is a piece of my retirement.
Perrin DesPortes (08:20.029)
is a component of it. Yeah. So at this stage of life, you know, if you are fairly well off financially and not carrying a heavy debt burden personally or professionally, I think simpler is better to be perfectly candid with you. And I think, you know, you’re going to have to figure out how to transition that business because the likelihood is that your business will value at such a high level.
that it might not be a bank might not be willing to loan money completely to a young associate looking to buy you out in one fell swoop. All right. So this does have a banking component to it. And as long as you’re in good physical health and can continue the demands of the profession, my advice would be keep it, keep it simple. Simpler is better at this stage of life. All of that being said,
And I think what the person talking with you about this was, was really referencing is there is a major risk profile in healthcare practices that have sole owners and they account for what 80 % or more of the revenue and the business. And if you have a shoulder problem, a head and neck issue, something with your, your eyes and your site or anything like that. Now the business goes up and smoke all together. And when you start thinking about building.
two locations, three, four, five, a handful of different associates from a hedging your bet standpoint, I think that’s very, very prudent. So if you were 44 or mid-career, my advice might be different. I would probably tell you if you’re 44 or mid-career, the opportunity to own three or four locations over the next 10 to 15 years is really compelling given the state of the market.
and it de-risks your position in the business from a clinical and a revenue generation perspective.
Mustafa Shah-Khan (10:22.344)
Yeah, you know, we had Paul Goodman on one of our podcasts and he was like, yeah, pound for pound. The most profitable thing in Dennis is the solo practitioner. If you bring on another practitioner, everybody thinks all of a sudden you’re going to make a bunch of money. Well, the reality is you have to give up some of what you’re doing. So initially you’re going to make less money. You got to give them guarantees. You got to do this and you got to do that. But so then when you have that, that thought, do you bring them on?
Does it de-risk things a little bit because you have somebody else in there, you’re feeding them a little bit, which means you do less, but does that translate into the growth that you want? And at the end of the day, is it a more profitable scenario?
Perrin DesPortes (11:03.347)
Yeah. So, Paul’s exactly right. The dirty secret is that anybody and everybody who builds a group practice takes an income hit to do it. So the question becomes how big of an income hit and for how long, because you are making an investment in that associate or those associates to do the work that you’re no longer doing clinically. And this kind of goes back to Rick’s point about our question about leadership as well, which is that if you are going to have multiple locations,
You can’t afford to be an absentee owner. The margins in these businesses on a free cash flow after debt service perspective are razor thin if they’re positive at all. So you have to start acquiring practices with the intent upon improving them operationally from a cost structure standpoint or from a revenue generation standpoint, ideally both. And that means you,
going from four days a week, clinically down to three, possibly down to two eventually in your core practice so that you can devote a little bit of time into the new practice and that you can mentor and develop your associates in a perfect world. You know, you might take a five year, look at things from a reinvestment standpoint, the first year before you make an investment in another, associate or in another location, you might be
building up cash on balance sheet, which is very prudent in terms of a rainy day fund to weather any storms or depending on how bad of an income hit that is when you start handing off some of your clinical responsibilities, at least you have a fallback position. And then that allows you to be more flexible in terms of making those investments in associates and other locations. The long haul, it ought to be much more profitable than a solo practice though, to answer your question.
Richard Offutt (12:56.85)
You know, apparently.
Mustafa Shah-Khan (12:56.872)
You’ve it. Yeah.
EVRYBDY Studios (12:57.038)
So.
Richard Offutt (13:00.03)
when you talk, when you’re looking at leadership and you know, people will say you’re, you you’ve got a, you’re on a sports team and somebody says, man, he’s a natural leader. You know, he’s a, he’s just, he’s, he’s got it, right? Or so, so, and I kind of always thought that’s kind of a bunch of crap. I always felt that, that leadership is, is acquired in a bunch of ways. It’s acquired through experience. It’s learned.
And, Perrin, talk for a little bit about coaching leadership, right? mean, you know, can you take a doctor who aspires to be an entrepreneur and to grow? Can you take him and give him the skill set that he needs to be able to be a leader, lead his own business, you know? Are those things that you’ve got in your toolbox?
Perrin DesPortes (14:00.429)
Am I a magician? No. Do I work? Yeah. Yeah. So, and given the fact that that’s, you know, where I invest all of my time these days, I’m going to be completely honest and say that, look, there are some people who aren’t coachable or who don’t take coaching very well. And maybe that’s a different stage of life that they’re at or age. Maybe it’s baked in the cake.
Mustafa Shah-Khan (14:02.386)
Sure.
Richard Offutt (14:02.558)
Right, right, right. Can you walk the tightrope and come out of a cannon?
Perrin DesPortes (14:30.509)
so, you know, when you’re, when you’re working with somebody in a, a coaching capacity and trying to develop them, they have to be willing to admit that they don’t know everything. They have to be willing to admit, that they have either blind spots or shortcomings and they have to be willing to put in the work to turn the corner on all that. And I know that that sounds like it would be a given, but I can’t tell you how many people have hired me in a consulting or a coaching capacity.
listen to all the guidance that I’ve given them and ignored every bit and piece of it. You know, it makes no sense to me because you’re paying me for it and you don’t want to listen to my guidance. That being said, you know, the other piece to this is that this is not a charisma comment by any stretch, but I mentioned trust before. And if you’re not credible, if you don’t operate with honesty and integrity, and if you can’t communicate to your team, even in points of uncertainty like we’re living through right now,
which I think this is a great opportunity for growth oriented businesses and growth oriented entrepreneurs. And maybe we can talk about that at some point, but if you can’t communicate with some degree of credibility with your team on a one-on-one basis, on a small group basis, on a video conference basis, live in front of them in a company address, if they don’t buy in and believe what you’re saying, then they’re not going to follow you. We talk about leadership.
But it starts with management. When you’re a manager and you’re effective at what you do, then your people are the ones who anoint you to be a leader by saying, I’ll follow you. I’ll trust you when I don’t understand the outcome and frankly, when I’m scared about it. And that’s when you know you have the credibility with them. A lot of it does go back to communication and engagement with them though. Yeah.
Richard Offutt (16:22.478)
know, comparing kind of
Mustafa Shah-Khan (16:22.972)
So I’m take this around the horn instead of just listening to parent talk. What’s a must do that’s gonna cost you money in the short term, but is necessary to achieve your long-term goals of being a clinician to CEO? What do you think that is, Rick?
Richard Offutt (16:42.514)
I’m sorry.
EVRYBDY Studios (16:44.142)
You
Mustafa Shah-Khan (16:45.125)
I said, what is a must do that costs you money in the short term, but is necessary to achieve your long-term goal of going from clinician to CEO?
Richard Offutt (16:55.266)
I promise you, I promise you, as a parent said, it’s adding a partner. Because basically, you add a partner and let’s say he’s getting paid 15 or 16, 15, 16, $17,000 a month. Well, he’s producing zero. Okay, he’s at zero. And just from personal experience,
Mustafa Shah-Khan (17:22.376)
Well, when you say, how do you say he’s producing zero? I mean, he’s getting paid 15, $16,000. He’s not doing anything in your office? Oh, they guarantee it. Yeah.
EVRYBDY Studios (17:25.068)
Yeah.
Richard Offutt (17:27.23)
He’s got a guarantee. So day one, day one, your doctor’s getting paid, he ain’t gonna come work for free. It’s usually a guarantee with a kicker. So you guarantee them X amount of dollars a month, and then if they exceed a certain number, then they get a kicker as a percentage or something like that, something to try to drive the mule team, right? So.
EVRYBDY Studios (17:38.947)
Yeah.
Mustafa Shah-Khan (17:52.104)
So you gotta take a leap of faith and that’s gonna cost you money.
Richard Offutt (17:55.368)
you know, it costs you a lot of money because you think that he can just slide in and sit where you sit, but then you’ve got to gear up for that person. You got to gear up staff for that person. You have to gear up equipment for that person, you know? And so you take a pretty significant hit and what you have to do is decide is, you know, in my case, strategically I wanted to build a
you know, handful of practices with a handful of doctors, right? Over the last 10 years of my career. So I just decided, well, what the hell? I’m going to take the financial hit, but that’s what I’m going to do. Okay? And it works out fine, but you can’t go in it, you know, thinking that this is all easy because it’s not. Now you flip that coin around, the person that you’re doing all that for,
totally believes they built it.
Mustafa Shah-Khan (18:55.26)
sure. Yeah.
EVRYBDY Studios (18:56.206)
Is that from first hand experience Rick?
Richard Offutt (18:56.316)
Okay, so you do all these things, or if you bring in an associate, you start them at zero, you build them up. In my particular situation, we gave my first partner four out of every five new patients that walked in the door. Okay, but all that’s forgotten. so you do take a sacrifice. You do have to just gut it out and say, is my vision for the long-term, does it cover?
that a couple year deal where the person’s not really supporting himself.
Mustafa Shah-Khan (19:34.28)
So let’s say you’re going back to, you’re taking the jump with hiring somebody. That’s gonna cost you money. But now you gotta be the leader. How do you do that? How do you be the clinical director? How do you still operate? How do you do this? What about hiring a personal assistant? Does hiring a personal assistant solve your problems and cost you money but gives you that transition?
Perrin DesPortes (19:48.935)
you
Richard Offutt (19:57.566)
Everybody you hire costs you money. the deal of it is that you, and this is something that I was gonna direct towards Param, because I think he has tremendous insights in this, is the whole idea of mentorship, right? What you hope is that you’ll be able to teach that doctor skills that…
Mustafa Shah-Khan (20:12.104)
Here’s a look.
Richard Offutt (20:26.514)
I’m not telling you’re going to teach him how to cut teeth or teach him how to tie surgical knots, but you’re going to teach him how to earn a living for sure. so the mentorship is a huge part of that, whether it be it in your own practice or the guy down the street, right? Dentistry tends to mentor better than a lot of other professions.
Mustafa Shah-Khan (20:51.4)
Yeah, I mean, what I was saying is we’re dealing with, we understand we’ve got the clinical piece of it. Hiring a doctor, nurturing the doctor, that’s going to cost us money. But if you want to be a leader and you still want to do all of the things you need to do is hiring a personal assistant. Is that a helpful solution in your journey from clinician to CEO? mean, that’s not for you, Perry.
Richard Offutt (21:11.878)
Yeah, for me personally, as I added doctors and employees, it was a function of that. Well, I liked running the business, okay? And I was older than everybody. So the people kind of came to me, or the employees, or everyone else came to me for advice on a myriad of different things. I don’t know if I would have been good at abdicating that.
You know, I think I was very much of a control person. I was just able to practice five days a week and do that. Right. So, you you may, you may take your day off and you go look at a new office site. You may take a day off to hire, hire people, do it at night, you know? So it’s, it’s not a, it’s not an easy journey, but it, I was very fortunate that I had a lot of very good clinical mentors.
and then sought out a lot of good advisors. would, Perrin would be the equivalent of an advisor that I had 30 years ago when I was first in practice. I sought out people like a Perrin to help me be better at my management skills and especially my skills. I was doing a podcast not long ago with a
a gentleman and he said, well, would you have done differently in your career? And I said point blank, I’d have collaborated much, much earlier, bringing other doctors into the practice, right? I waited until I turned 60.
Mustafa Shah-Khan (22:52.988)
So, parent, let’s talk about the personal assistant. What do you think about the personal assistant?
Perrin DesPortes (22:56.467)
Yeah. So essentially the, root of the question is freeing up time, right? So when we start making that transition from clinician to CEO, and we start not walking away from, but scaling down our clinical responsibilities to free up an additional administrative day, the question becomes, what the heck do you do with it?
Mustafa Shah-Khan (23:01.191)
Yes.
Perrin DesPortes (23:15.845)
And the answer is not go back into the office to do a bunch of hygiene checks and push paper and respond to emails. When you free up time, you start to understand that for an entrepreneur who owns a business, time is your most valuable commodity. And it is absolutely imperative that you get the most return on that time. So it could be recruiting and development on the doctor piece. It could be what we call business development, finding additional practices to potentially acquire.
or doing due diligence on them. It could be networking with, if you’re a specialist, networking with other general dentists in the area. I’m not a huge fan of a personal assistant because my belief, at least in the one to two type location space, you ought to have a capable operations team that if you start to delegate operation or operationally oriented duties, they ought to be able to cover for it.
You shouldn’t need a personal assistant or an executive, an EA, an administrative executive assistant to do that for you at that stage. You get to five to 10 locations and things probably start to look a little bit different because you need somebody to be an air traffic controller to help you manage your schedule, not your not your clinical schedule, your your leadership administrative schedule outside of the practice or the business. So it’s a point in time type of an answer.
Sorry for being a bit long-winded.
Mustafa Shah-Khan (24:43.144)
world.
Richard Offutt (24:43.23)
And,
EVRYBDY Studios (24:44.172)
Yeah, no, I’d agree with that.
Richard Offutt (25:12.666)
And he said, yeah, I have an HR person. I have a person that runs the clinical side. I have a person that runs the business side and an HR person. go, well, that’s great. said, because otherwise it would kill you to be in and out replacing 40 plus employees and trying to figure out how to make it work. yeah.
Mustafa Shah-Khan (25:33.925)
What questions do we have from our audience who submitted some questions ahead of time?
EVRYBDY Studios (25:39.64)
So I’ve got some of those here. It kind of circles back to some of the clinical stuff we talking about in that bridge from clinician to CEO. One’s from a local dentist. He’s in talking about his personal situation. He’s going from two owners to one owner and an associate. He wants to actively expand, but what’s the biggest mistake he should avoid and what’s the one thing he should absolutely do in order to be successful?
Richard Offutt (26:06.302)
Wouldn’t that depend on his goals? mean, if his goal was to go to five docs, he needs to build 20 ops, right? If his goal was to have the three of them, then he can stay in the comfortable size. It’s that organic growth thing that every parent can speak to this. When I was building the DSO, especially in the last 18 months,
There’s a lot of pencils down on that to the acquisition world. And the DSOs are trying to have organic growth in by, they may add a little bit of facility or they may add a little bit of something else, but they’re not trying to just stack EBITDA, you know.
Mustafa Shah-Khan (26:52.806)
Yeah, I think this guy’s talking about him. He’s the only owner now. So it used to be two owners. So does he want it? So he’s going from one associate, he wants to go to two associates. He’s not trying to change his footprint, but I think he’s talking about what is he doing and building and where he is.
Richard Offutt (27:13.246)
Yeah, well that is the thing is what are his goals.
Perrin DesPortes (27:13.338)
STI-
Perrin DesPortes (27:16.892)
But he’s
EVRYBDY Studios (27:17.164)
I think, you know, work a little less, spend a little bit more time with his family and, know, still have, you know, yeah. Yeah.
Mustafa Shah-Khan (27:24.004)
and make more money. I think he wants to make more money by still being the owner but having more associates in the same footprint.
Perrin DesPortes (27:33.43)
without adding locations, we infer… Okay. So that’s going to be hard to do, but you’ve got to think like, what am I doing right now in this scenario? mean, what am I doing right now to take maximum advantage of the fixed cost structure of the business and the capacity of it? So one of my first questions would be, okay, what are…
Mustafa Shah-Khan (27:35.495)
Yes.
EVRYBDY Studios (27:35.692)
that yeah.
Perrin DesPortes (27:55.274)
What’s the new patient volume that he’s got coming into the practice? And if he’s going to bring in a second, I think if I heard correctly, a second associate, and he’s going to start to scale back, do we have enough to feed that person? And if so, what’s the overage? Bare ass minimum for a full time doctor is 20 new patients a month, ideally closer to 40, but certainly not less than 20. So just rule of thumb to gauge new patient flows by. Second thing I would say is, how many days a week are we open?
You know, if we can drive more through marketing efforts or whatever, if we can drive more new patients into the business, do we have the capacity to accommodate them in terms of days and hours? Is it staying open later a couple of days, a half a day on a Saturday, God forbid, or something like that, to be able to accommodate all the new patient flows that we’re hopefully driving through marketing efforts? Because for him,
to hand off a substantial amount of his clinical workload and not take a personal income hit, he’s got to be able to make that up through the margins of the business, not the clinical compensation rate attributed to the work that he was formerly doing. So it’s a math equation you got to solve for, but you got to go into it knowing what those variables are and how to drive the results so that
So that the business will yield what he needs and what he needs is not to have his income drop, you know
EVRYBDY Studios (29:26.158)
Yeah, I think part of it too is that math equation on the difference in what his partner was taking and then what the associate would be taking and making that difference work for him. And right now the math doesn’t work to my understanding.
Perrin DesPortes (29:39.816)
Okay. mean, yeah, that’s math is hard to follow verbally also in a scenario like this. But I mean, if he’s looking to like reallocate part of what his partner was doing to another new associate, but is he buying out his former partner? So it’s a free cashflow issue at the end of the day. Like there’s, there’s a lot to that, but I mean, you got to, at the end of the day, the answer is some combination of revenue generation and margin expansion.
EVRYBDY Studios (29:44.62)
Yeah.
EVRYBDY Studios (29:57.048)
Yeah.
Perrin DesPortes (30:08.167)
And if you’re not going to add on to the building itself, you know, or, you know, maybe equip a couple of unplumbed ops or something like that, then you’re probably, you’re probably going to have to do it through revenue growth.
EVRYBDY Studios (30:08.462)
Mm-hmm.
EVRYBDY Studios (30:23.854)
Well, what about like, you know, expanding the scope of your practice, you know, doing aligners or things like that, doing implants? Do you see that being a substantial thing that would work in a larger, you know, two to three dot practice?
Richard Offutt (30:36.562)
More that comes that that’s the whole thing I started about what is the goal within the physical plant limitations. I mean, you know, if it is when we were looking to buy practices and parent has expertise in this area as well. If you if it was a five operatory dental office. Can’t work two docs out of there. It just doesn’t work with two full time docs had to have a minimum of six and then and if then if you’re saying, well, I’m going to have an aligner room.
EVRYBDY Studios (30:42.062)
Yeah.
Richard Offutt (31:06.258)
where to quote Professor Agarwal, who we all know and love, that you gotta have a space where those are high yield, low time procedures. Well, but you still gotta have a room. I’ve got a good friend that runs a sleep clinic machine out of her dental practice.
Mustafa Shah-Khan (31:16.296)
Okay.
Richard Offutt (31:34.418)
but she’s got like 15 operatories and she’s got a lady in there doing the stuff and that’s, she has the same thing going with aligners. And so, that was my question initially is what is this doctor’s goals? And to look at it and see, if he wants to go to part-time like two days a week and he aspires to have two full-time associates, then he needs
EVRYBDY Studios (31:43.662)
Mm-hmm.
Richard Offutt (32:03.806)
8,
Perrin DesPortes (32:08.149)
Yeah, I would think so. Yeah. And if he doesn’t have that, then there’s going to be a capacity issue. There’s just going to be a, you know, a lid on the pot, so to speak.
Richard Offutt (32:22.366)
No seat to put a butt in, right?
EVRYBDY Studios (32:25.484)
Yeah, exactly. But then you have somebody like Ryan Mollis who has four ops in his office and you know, crank crank. Yeah, one doc, four ops, four and half million dollars.
Mustafa Shah-Khan (32:26.609)
Yeah.
Richard Offutt (32:31.774)
Right.
Mustafa Shah-Khan (32:32.632)
One doctor. One doctor.
Richard Offutt (32:34.855)
One doctor.
Mustafa Shah-Khan (32:38.094)
But you can do that with one doctor.
Richard Offutt (32:40.88)
especially doing especially doing doing a heavy aligner practice.
Mustafa Shah-Khan (32:43.824)
Yeah, because you think about what one orthodontist can do. mean, so I think it’s the scope of what you’re doing and the margin of what you’re doing.
Richard Offutt (32:52.668)
And Mullis works more days than most orthodontists.
Mustafa Shah-Khan (32:56.828)
Yeah.
Richard Offutt (32:59.07)
mean, how many horse-a-dollars can you know that have a bad ball?
EVRYBDY Studios (32:59.282)
I got a couple more appearing that we got from a few guys, and girls here. do you think the wave in dentistry growth is over? Is it too late to grow de novo general denta, general dental DSO?
Perrin DesPortes (33:16.789)
No. So do I do I think the wave of consolidation is over? Is that what maybe the wave comment was about?
No, look, I mean, this I’ll try not to be long winded on this, which is my nature. But look, right now, private equity backed enterprise DSOs, a lot of them are in a world of hurt. And there are a lot of reasons for that. But I think, you you’re seeing a stall in the &A markets, not just unique to dentistry, but certainly we know it up front and center. And I think that creates a
massive opportunity over about the next five years for entrepreneurs who want to start adding additional locations and building that, you know, three to four to five location type of a group, you know, and get a head start on it. And the reason I say that is because I think there are a lot of people that have successful practices that are near retirement age and they’re scared to death about selling their life’s work to a private equity backed venture.
So all of a sudden it turns the market back into, you know, the favor of guys like y’all, if that’s the risk you want to take to do it. so I think, you know, the world of and A that we, find ourselves in, in terms of dentistry is, you know, consolidation is, this is a, this is a unit economy of scale type of a
Mustafa Shah-Khan (34:33.692)
Right.
Perrin DesPortes (34:50.273)
business, you know, and when you have greater volume, you can take unit costs out of it. That doesn’t matter if it’s healthcare services, dental distribution or hardware stores or anything. So the principles are the same. Consolidation is not going to stop, but the private equity driven piece of it right now is really kind of choppy. I love the de novo model, you know, which was part of the person’s question. The fear is people
EVRYBDY Studios (35:15.278)
Mm-hmm.
Perrin DesPortes (35:17.685)
the build outs take longer than what they plan. They’re over budget and they don’t come in on time. And then when they open their doors, they have no idea how to define success. Right? So if I build it, I pray that the patients will come. Well, hope’s not a strategy. If you know the amount of investment that it takes to get the thing equipped and built and everything, you ought to be able to reverse engineer numbers.
Mustafa Shah-Khan (35:27.833)
in your face.
Perrin DesPortes (35:47.26)
on a free cashflow break even standpoint. Again, it’s a lot of math, but it’s math. We can find out what that answer is. And when we know the first year value of a new patient in our practice, then we can figure out how many new patients we need to break even in the first year or 18 months or whatever the timeframe is. And it gets to be a bit formulaic. Now I made it sound overly simplistic, but
Hardly anybody does any of what I just said in a de novo. They just think this is a great location, so I’ll build another practice. So I am not an advocate in a de novo, multi-location de novo model. If you’re just going to say throw darts at the map, and let’s just put up a bunch of new practices. I’m not for that. If you say, look, I’ve got my box that I’m going to build out. I know the unit economics. I know first year patient value. I know the number I got to solve for on free cashflow.
all day long. I love it.
Richard Offutt (36:46.174)
You know, Perrin, I think that’s that’s.
EVRYBDY Studios (36:46.37)
Yeah, essentially when we had Rick Workman on for an earlier podcast, we asked him about, you know, de novo versus, you know, buying existing practices and bringing it as a partner. And I don’t want to put words in Rick Workman’s mouth, but my interpretation was all day long, he would rather do de novo than he would to absorb a partner practice.
Perrin DesPortes (37:07.123)
No culture issues.
Richard Offutt (37:07.428)
And that’s the culture. Yeah, the cultural issues and trying to do, had a similar, well, there’s two points I would make on that. We had a similar conversation with Dr. Shahzeed about High Point University Health and how they’re approaching their practice, their clinical facility solution. But the difference,
Mustafa Shah-Khan (37:14.086)
song.
EVRYBDY Studios (37:14.946)
Why, and you don’t have build-out problems either.
Richard Offutt (37:36.99)
The difference between Rick Workman’s operation and say Dr. Chacon’s operation is that he has the patience of liquidity. He has tremendous patience because he knows that it can’t ding him badly enough to hurt him financially, right? Whereas Dr. Chacon goes out and decides he’s got a great practice.
Mustafa Shah-Khan (37:50.446)
What a sad
EVRYBDY Studios (37:58.562)
Yep. Yep.
Richard Offutt (38:06.61)
and he’s gonna go de novo three miles away, well, he better plan on having a lower income because, yeah, yeah, exactly, exactly. And even if you’re using cash on hand, which I probably wouldn’t suggest, but even if you’re doing that, I think you’re gonna have a challenge. So yes, I agree. The large DSOs would definitely draw their,
Mustafa Shah-Khan (38:12.904)
Well yeah, because you’re have to fund it.
Richard Offutt (38:35.836)
go de novo than buy praxis, especially if they can’t find a practice that fits their model. Certain amount of production, certain number of operatories, certain amount of EBITDA. They’d much rather go de novo.
Mustafa Shah-Khan (38:42.888)
Thank you.
Mustafa Shah-Khan (38:46.866)
think it’d be really hard to do de novo as being a guy like me in a solo practice and having success. let’s say I took me and one of you guys and said, okay, we’re gonna do a de novo practice. So we’re gonna put this thing in, we’re gonna bring it out of the ground and we’re gonna fund it. Well, how long do I have to do that for it to make any sense to me financially?
Richard Offutt (39:12.542)
I’ve done that with with perio practices and the fact is you have to make a commitment and say, okay, I’ll give it a day and a half a week and you’re going to give it a day and a half a week and you got to be there, right? know, and so if you’re not there, if you’re there, you’re not at your other shop, right? So that place kind of
Mustafa Shah-Khan (39:32.092)
Yes, you have to take away from your day job unless you have enough docks that now you’re rotating through the whole thing.
Richard Offutt (39:39.72)
Yes, yes, yes. And the other way to think about it, and Perrin, I’d love your comment on this because this is how I did this, is I only had eight operatories in my main office. So I felt that I needed another office with four to six operatories in it because I needed more chair hours available, right?
EVRYBDY Studios (39:39.97)
Yeah, and you’re losing the money that you know you used to make in your regular office.
Richard Offutt (40:09.63)
So whereas I could have more doctors, this was after I decided to build, I could have more doctors if I had more chairs in more spots and I couldn’t change the footprint of my main office, right? It was a standalone building and that was it in a condo complex. So I used that other location to add chair hours.
so that I could, I don’t want, I know this is a bad term, is I love all of these guys that came to work with me, but a place to put them, right? I need.
Mustafa Shah-Khan (40:42.076)
Yeah, I mean, so you did a de novo to put doctors somewhere.
Richard Offutt (40:47.622)
Yes, mean almost Dr. Chakhan, almost all of the satellites that I built and I probably opened a half a dozen periodontal satellites. That was the deal.
Perrin DesPortes (40:58.611)
Yeah, look, you the other piece to that too, that, that I’m sure happened for you, but just to be clear for the audience is you can intentionally cannibalize part of the patient base and a, and a practice that is at capacity. So if you’re, you know, for example, Mustafa’s, practice, if you’re, if you’re not taking new patients because you’re stacked, packed and racked the schedule is full and you can’t accommodate them and you wanted to do a de novo.
in a zip code where some of your patients come from to see you right now that would be more convenient to them. Well, you do a de novo in that zip code and it alleviates maybe 20 % of the patients that come to your core practice. But now you’re funneling them to your second practice to give that practice a shot in the arm. And it allows you to start taking more new patients in your core practice where you didn’t have that capacity before.
Richard Offutt (41:51.656)
Perra, that is fricking brilliant because that is the thing that we did when we opened the office down in Waxhawks. We did a zip code study of where do we have patients coming from, and this happened to be from the next county, and then moved those people to that de novo. So it really wasn’t a bare de novo, if you know what I mean.
Perrin DesPortes (42:19.305)
Yeah, wasn’t a true coal star, yeah.
Richard Offutt (42:21.599)
It wasn’t really a cold start because we moved people from the in town practice to that practice that had been, and they loved it because they’ve been driving. They loved it because they’ve been driving so far to get there.
Mustafa Shah-Khan (42:28.296)
I don’t make this a lawful.
Mustafa Shah-Khan (42:34.856)
I’m gonna move us along a little bit because we’re running out of time. What other questions do we have from our listeners?
EVRYBDY Studios (42:40.814)
I’ve got one other one here that I’ll throw out. Kind of directed more towards parent again. So when evaluating consultants, how do you truly determine a real ROI? And then the second part is how can you figure out a consultant or partner to trust?
Perrin DesPortes (43:01.637)
so really, so there’s a different, yeah. Well, it wouldn’t, it wouldn’t be the first, it wouldn’t be the first time I’ve been asked that either. so, so first.
Mustafa Shah-Khan (43:04.648)
It’s kind of a loaded question.
Richard Offutt (43:06.11)
That’s a big one. That’s a big one.
EVRYBDY Studios (43:06.476)
Yeah.
Mustafa Shah-Khan (43:10.096)
I don’t think that was an owl.
EVRYBDY Studios (43:13.294)
Full disclosure, I trust Perrin. This listener apparently needs to get in touch with Perrin because he doesn’t trust the person that he’s working with.
Perrin DesPortes (43:17.938)
Yeah. Right, right.
Richard Offutt (43:18.84)
We all do, we all do, or we wouldn’t be talking doing here.
Mustafa Shah-Khan (43:22.568)
I don’t think there’s any way…
Perrin DesPortes (43:28.158)
Yeah.
Mustafa Shah-Khan (43:28.744)
Yeah, I don’t think there’s any way you can go to a consultant and try to get the answer from, personally from me, and get the answer from the consultant. I mean, if I’m going to do something like this, I have to vet them through networks that I have. mean, mean, Perrin, I trust you. I you live down the street from me. I can come get you if I got to. But the reality is…
Richard Offutt (43:50.942)
Well, the four of us all live, Dr. Shakan, the four of us all live in the same neighborhood, but we know where each other live.
EVRYBDY Studios (43:51.18)
You
Perrin DesPortes (43:56.884)
Yeah.
EVRYBDY Studios (43:59.033)
Yeah. Yeah. Yeah.
Mustafa Shah-Khan (43:59.048)
That’s me. There is no way in hell I would call up a consultant and let the consultant give me their spiel and make a decision on if I’m gonna use that consultant. No. That’s just me.
Perrin DesPortes (44:09.493)
So, well, so, so I think, I mean, this is a, it’s a good question. Okay. So let me, let me try to, to rip it for a second. First things first, there’s a difference in consulting and coaching. Okay. And we just, need to be mindful of that because I’ve done both. don’t do consulting anymore. I’m a business executive coach now. That being said, in a consulting relationship, it’s a one-on-one relationship and what I’ve done in,
my prior career was what I would call white glove consulting. What’s the business that you want to build more? And I’m going to help you do that. My expectation of our working relationship, this engagement is that I’m going to help you build the business and execute on the game plan that you have will not allow you to step on the land mines. And my goal is to return two times your investment in an increase in EBITDA.
All right, because all of our clients were group practices and EBITDA is the name of the game, obviously. And so if somebody engages me on an annual engagement for $100,000 after having worked with me for a year, I would want the impact on their EBITDA bottom line to be a net increase of $200,000. So I didn’t have a problem saying that, you know, unless they’re
Unless their goals were really just hard to pin down, but most of them were oriented at growth and they were building in a business with a high degree of intentionality. right. Coaching is different because coaching is more experientially driven. It’s more like professional development. If you will, I’m working more on the person than I am the business arguably. And that has a lot, it’s a lower price point, obviously now what I do. But it’s more of a
an intrinsic confidence leadership value of the person who’s engaged in the program. So that’s more challenging.
EVRYBDY Studios (46:11.992)
Nice.
Richard Offutt (46:12.968)
You know, that’s actually a great return, Perrin. If I give you a dollar and you give me back two, on a multiple, I mean, on a multiple, right?
EVRYBDY Studios (46:20.578)
Yeah. Yeah.
Perrin DesPortes (46:21.417)
Yeah. yeah. I mean, if the business values at a low end of six X, all of a sudden that’s not bad from a valuation perspective, you know? So yeah. Yeah.
Richard Offutt (46:30.034)
That’s right. That’s right.
EVRYBDY Studios (46:32.692)
I think it’s the same deal too, where if someone’s preaching to you how much they’re going to make you and it’s going to be an unreasonable number, you know it’s not really going to work out and it’s too good to be true.
Perrin DesPortes (46:43.765)
Yeah. And I mean, I think last last soapbox comment from me on this is that if you’re working with somebody in a consulting capacity, if you hire a consultant to help you improve your business and they come at you with a formulaic adaptation or a cookie cutter approach, I I don’t I’m not an advocate of that. I’m not a big fan of that, you know.
EVRYBDY Studios (47:13.518)
Yeah, we’ve seen that with marketing people that we’ve interacted with to help with this. You know, they’re, oh, if you spend this, I’ll get you this. I was like, there’s no way. You can’t guarantee.
Perrin DesPortes (47:20.201)
Yeah. Yeah.
Richard Offutt (47:21.982)
Well, know, the thing that’s so key to this is we could have Perrin come consult with the three, work with the three of us, right? Two Chacon brothers and me. And Perrin, you could come work with us and you could, let’s say you did give us a cookie cutter approach, just for the experiment. All three of us are gonna react differently.
to those factors that he’s asking us to do, right? Depending on life situation, practice situation, risk tolerance. So it’s very interesting. It’s a very interesting business and web you weave, parents.
Perrin DesPortes (48:05.535)
Well, I don’t know if that was a compliment or not. I’m going to try to take it that way, but…
Richard Offutt (48:08.964)
It is. It’s very much a damn compliment because otherwise, you know, we wouldn’t have you here.
Perrin DesPortes (48:19.605)
And I do appreciate it. It’s been fun. I hope it won’t be the last time we do it. Hopefully the audience gets something out of it.
EVRYBDY Studios (48:25.071)
We’ll definitely do it again. Yeah.
Richard Offutt (48:26.768)
Yeah, we kind of had a bumpy start, but good things happen on bumpy roads,
Perrin DesPortes (48:29.973)
That’s right. That’s right. That’s right.
Richard Offutt (48:35.144)
Can’t hear you moose.
Perrin DesPortes (48:36.009)
Moose, you’re muted, Moose. Yeah.
EVRYBDY Studios (48:36.883)
he mis-muted himself.
Mustafa Shah-Khan (48:39.272)
I I think it’s been a good discussion. You know, I mean, I think, I think we touched on a bunch of, a bunch of little things here that helped people go from kind of being the single clinician to CEO. Just really for me, it’s kind of, um,
almost seeing the things that I don’t want to do. I think half of it is understanding what is not going to work and what is realistic. know, I mean, in my practice, you know, with four or five, yeah, I be five chairs, but does it make sense to have an associate? I think that answer I’ve gotten in this, you know, I mean, so I think there are things that I think will help people just from hearing these discussions, you know.
Perrin DesPortes (49:19.805)
Absolutely. Yeah, it’s
EVRYBDY Studios (49:21.196)
is out there.
Mustafa Shah-Khan (49:22.844)
Yeah. Well, thank you guys. And let’s do it again. And I don’t see any cocktail glasses this time. So next time we’re going to have to cocktails.
Richard Offutt (49:29.854)
I’m heading there though, right soon.
EVRYBDY Studios (49:32.782)
Rick has a weekend of cocktails.
Richard Offutt (49:35.216)
Yeah, do. Playing a member desk off tournament site, you got to get warmed up.
Mustafa Shah-Khan (49:35.336)
That’s right.
Perrin DesPortes (49:40.378)
Well, I will go open a bottle right now myself then.
Mustafa Shah-Khan (49:40.754)
Bye.
Richard Offutt (49:41.786)
I always stretch before the performance.
Mustafa Shah-Khan (49:43.846)
That’s right. Thank you guys. I appreciate it. Yeah.
Perrin DesPortes (49:45.813)
You got it. Enjoyed it. Appreciate it, fellas.
EVRYBDY Studios (49:45.944)
Thanks, guys.