Busting the Myth that More Production Guarantees Success

You're listening to the Phil Klein Dental Podcast So what do we mean by profit over production or even profit first? Doesn't this notion go against everything we're about as healthcare providers? Well, maybe not. Because working really hard and having little left over at the end of the week is not a sustainable situation, nor is it good for your practice, employees, or your patients. So let's talk with Dr. Julie Woods. She's a board -certified periodontist and has been practicing since graduating from Baylor College of Dentistry in 2004. Her book, Profit Over Production, Understand Dental Business and Choose Your Practice Destiny, was released in September 2023 and is still an Amazon bestseller. We're honored to have Dr. Woods on the show, and she'll be joining us in a second. But first, when it comes to fighting dental disease, we all understand the importance of an effective prevention strategy. This includes patient home care compliance, regular hygiene visits, and using the best prevention products available. That's why so many dental practices rely on VOCO's award-winning preventive care product line. Recommended by top dental clinicians, Remin Pro, Proflorid Varnish, Admira Protect, and Grandiose Seal are tried-and-true products that are effective, easy to apply, and result in successful clinical outcomes with high patient satisfaction. Whether it's for fluoride treatment to seal pits and fissures or to treat hypersensitive teeth, VOCO's premium preventive care products help you win the battle against tooth decay and sensitivity. So when you're thinking prevention, think VOCO. Request your free sample today at vocoamerica.com. Dr. Woods, thanks for joining us. Thanks, Phil. It's great to be here today. So it's very exciting that you wrote a book. And for most dentists, I think we can all agree that writing a book is not the first thing on their mind, nor is it typically something they would ever do anyway. Most dentists just don't write books. Did you ever think you would write a book is my first question. And the second part of that is, how did this book come to be? So no, I'm an avid reader and have been for a long time, but I never thought I would be an author. And in fact, in the opening pages of the book, my daughter, there's a conversation between my daughter and I, and she asked, what am I doing writing a book? Because I'm a dentist. So the very sentiment you just shared, I had been sharing some part of my journey about some of the struggles I'd had from about 2017 until COVID. And when we all started connecting more online. And we were talking and people were asking me to share more about kind of dumbing down some financial things. And what did I mean that profit was more important than production and whatnot? Because I had been talking about profit first and cash management. So they needed it simplified. And so people began asking me to write accounting for dummies or accounting for dentists or some version of that. And so I began to explore the idea some. Who was asking you to write this? Oh, colleagues, fellow dentists. You know, when we were all home in the shutdown and wondering where we were going to, during COVID, have enough money to stay in business and pay our people and buy all that expensive PPE and, you know, gowns, people were asking about that. And then especially, you know, from then on, we've had rising costs of business pretty much everywhere and less reimbursement. Dental colleagues of mine began asking friends. Okay. And you're a certified profit first professional. What does that mean? That means so I'm the only dentist that was crazy enough to do that. It's usually accountants and bookkeepers. And that's why you've never heard of the term most likely. based on your circles of being mostly dentists. But it's folks that have gone through the training and proven themselves to know the cash management system, use the cash management system, profit first that he, Mike Michalowicz outlined in his book. and can therefore help others do it. And so we have the resources of our whole Profit First Professional Network, which is, like I said, more accounting, bookkeeper type-based folks. So before we go into the book and how it transformed your practice, what is going on in the dental world right now as far as their understanding or knowledge of what you wrote about? I mean, how pervasive is your approach? to running a practice in the dental community now? And if it's not, you know, well practiced and well understood, how detrimental is that to a practice that really wants to grow and enjoy their career while they're doing it? Right. Well, I think so many of us, I graduated dental school back in 01. So I've been out 20 plus years and went on to perio. And so just in that short timeframe. um i still think most of us under you know work under the premise that if we just produce more if we make more widgets if we see more patients get more new patients and we do more crowns and we do more crown lengthenings and and all the things that we were taught to do in dental school that the a the business will work out on its own that it'll just magically happen um and that our collections will follow um and that we will be profitable and so i would say most people are still under that impression i see um patients or not patients uh people will post about that and you know group forums about how well they've produced so much like there's always this focus on production and then then they'll say but you know our accounts receivable is out of control You know, we're not getting the money. And so that can be for various reasons. But, you know, it could be just bad reimbursement. It could be terrible systems. A lot of times, though, folks aren't focusing on that, those other ends of it. They're merely focusing on the production. So part of why I wanted to write the book was to save people from that burnout. Because when I was at the height of my production and the height of my collection, those two were at least matched up. I was still miserable. And I definitely was not profitable. I had to put money back into the business to cover payroll. So I was ready to walk away from dentistry completely. Wasn't even 20 years into my career at that point and had never thought that I would dislike dentistry enough to consider walking away. So you wrote this book and we certainly don't want to, you know, give away the crux of the book. We want everybody to buy it. But and we don't want to sound a spoiler alert. We have to be careful of that. Yeah. So but we do, you know, if we can in this podcast. Give us an idea of what we should be looking at. What should a dental practice owner be very focused on and making sure that they're going to do the things they need to do as far as bookkeeping to maintain a successful practice? And how did this focusing on profit transform your practice? So I think the main things, for me anyway, what needed to happen was I needed to be... involved in that business part, actually looking at not only what I was producing, but what we were collecting. And I did that. I mean, I looked at it, but I didn't quite understand how important that was. I wasn't, I was the one paying the bills. I was the one putting in payroll, all of that. it's a little bit more nuanced than that, that you've got to be making sure you're not overspending on your staff, that you're not, you know, paying too much for your supplies. So you've got to know what the norms are, which I would, I think people know that more than they used to, but we didn't receive any of that kind of training. At least I didn't in my program. And, you know, so far as filing claims or any of those things, we didn't learn that. And a lot of you can't learn until you're, you know, in practice, but. I think you need to know the basic premise of Profit First and any cash management system, whether it's a Dave Ramsey cash envelope. It's basically you don't spend the money if you don't have it. And you can use sort of psychology to work with you if you divide things into smaller plates or smaller bank accounts. or smaller buckets, if you have less to spend, you will use less and you'll be more creative in how to do more with less. And so you are making sure that you are getting paid, that you are, if you're going to do all this work as a business owner, that you focus on making sure you have profit, making sure you get paid a decent salary, not just taking the leftovers of your practice. Yeah. So it's important, in other words, To build your practice, you want to increase your patience on record. You want to get your chairs filled and all the operatories. And then to accommodate that additional work that's coming in, you hire people, you buy more equipment, and then you kind of get yourself in a situation where, you know, you're in some debt now, you have quite a payroll to pay. So can you foresee what might come down the road as you build your practice as far as profitability by reading your book? You can and you can plan for it. You know, you can you can use the principles on do I have enough money to pay a new hygienist? You know, even if we didn't increase our efficiency, which you hopefully would and actually make more money with another producer. But do I have enough? Do I have enough money to pay a new associate? Because a lot of times people think, well, if I just bring in an associate, I'll make more money. Ideally, you will, but you may not at first because they're going to be slower than you and maybe not as good with supplies and those kind of things. So, yes, you can plan for that. You can certainly evaluate your travel CE expenses. You can determine if you should buy a laser or not. You can figure out if it's better to pay literally cash for it, which is what I've done for everything ever since I started working the system. You know, I've I've paid for remodels. I just I just finished. repainting, recarpeting, you know, all that thing with cash, because I don't want to finance right now. And it's not a good time to be financing things. So I definitely think that it can help you plan for it. And it's obviously going to help you have more money in your account, if you so choose, if you'd like to take it home as a profit distribution as to get paid for doing your CEO or what I call the dentist officer in charge, the DOC. Because I think we forget that hat that we wear. We're not just the provider. Right. And cash flow, is that part of your formulary to understand the cash flow of a practice thoroughly? Absolutely. Okay. So cash flow is very important because you may not have it on hand at the moment, but if you have every month consistently a certain amount of cash coming in, you can account for that as a resource to expand your practice. Hire, buy more things. Okay. So do you think it's ever too late to be a better business owner? You know, a dentist has been practicing for seven, eight years, 10 years, whatever, and they have a set way of doing things. Can they reinvent themselves with some of the doctrines that you're proposing in your book? 100%. In fact, when I was working with my developmental... editor on the book you know she was like what is it is it ever kind of exactly what you're saying is it ever too late you know is this book just for people that own practices or Is it for associates that aren't even owners right now? And I said, no, it'd be for anyone, you know, that even if you've sold to a DSO, if you wanted to come back in and be the owner, the CEO of your own practice again, I think you could do that. I think you could learn the tools of what you would need to do to be successful and how to manage systems better. You know, there's a lot of that's a buzzword, of course, now, but it really does come down to all kinds of systems and make it where it's simple. You don't want it to be hard. We'll be right back with Dr. Woods in a second, but first, if you're looking to make teeth whitening a successful part of your practice, then you need a system that not only dramatically whitens teeth fast, but also ensures little to no sensitivity. Philips Zoom Whitespeed does both. Whitespeed's light-accelerated technology speeds up the whitening process, clinically proven to whiten up to eight shades in one visit. And what's really impressive is that 99% of patients surveyed experienced little to no sensitivity with Philips Zoom. Philips offers two professional whitening solutions, in-office whitening using Philips Zoom Whitespeed, and take-home whitening, with a range of whitening gels for either daytime or nighttime use with custom trays. For a comprehensive, tried-and-true, state-of-the-art whitening solution for your practice, check out Philips Zoom Whitespeed. To learn more, visit philipsoralhealthcare.com. Do you think that dentists, if they get a better understanding of what you're proposing in your book, will they be less likely to be purchased by a DSO where they can actually stay completely independent and running their own business through this protocol where they stay focused on profit over production? Sure. I think it definitely gives you more options. And I'm not saying you shouldn't go to a DSO. I have my own opinions about that. But if you are a more profitable practice, though, you're also more profitable. You're more, you know, you'd be something they would look upon highly, too, because they want a profitable practice because they think they can make it even more profitable by their own systems and their group buying and that kind of thing. But definitely, I think all of us can do that. And I kept saying that, you know, it took me about two years. to do this whole process to get this book out there. And I kept thinking, I gotta hurry up. I gotta get this out there because I think we're at a crisis point. I think we're at a point where if dentists don't change the way they're doing things, then we are going to have fewer and fewer private practice owners. And I think that's unfortunate. It's been a great life for me. I would like it to continue to be that, but new students have a huge debt load. They need to know how, they've got to have cash. to pay all of their debt. There's just no getting around that. We all do. Yeah, without a doubt. And I agree. It would be kind of a sad day if we start to see very few independent dentists that are working in their own business world, in their own business environment, where they have nobody to report to and they can do things they want to do. Could you sum up your opinion of DSOs before I ask you my last question? In like one minute, I'm curious to know someone like you who's so erudite in this field of building a business independently. What is your opinion of DSOs? I think they're great for the DSO owner. I think they, you know, I think they're a great business model for the person who reaps the profit, which is them in that case. Whereas I feel like for dentists. there are ways that you could handle the parts that you don't want to do without turning over the control to a DSO. And then therefore you could still keep the profit. So that would be the main thing I would say that it's, it's personally not for me. I wouldn't, I wouldn't want to sell. I love all the things you just said. I like being my own boss. I like deciding when I leave, when I start, who I hire. I love those parts of being an owner. Now the day to day when someone calls in sick or something, nobody likes that very much. But that's just part of it. Typically in a dental practice, does the dentist deal with the accounting and the kinds of things that you're teaching in your book? Or is there a business person in the office or another third party that handles cash flow? And the dentist says to this person, am I in good shape to buy a CBCT and hire one more hygienist? I feel like it's kind of all over the board. And I'm sure you would agree that some dentists are very dialed in and know exactly all their numbers and could tell you how to read. You know, maybe they had a business background and they can read their financials and explain to you the different things like I try to in the book. But I think a lot of people don't understand it and they don't even know what kinds or what questions to ask their. their team whether That'd be someone in the office that's handling deposits coming in or bills going out if they're not doing them themselves. Or they don't even know what to ask the accountant. They don't know how to ask. And I was that person. I was the person that didn't even know what to ask. I didn't know if I got to have a bonus at the end of the year. I didn't know if I had enough profitability to do that. But I've taught myself. And so I know that it is information that can be taught and learned. And so that was the point of my book was to help those that want to understand, even to know you don't have to do it forever if you don't want to, but you at least will know what kinds of questions to ask. Yeah. And Dr. Woods, hats off to you. It's so impressive to talk with you, to talk to someone who took it upon themselves, who felt very deficient in a particular topic, which is so important to running a business. And you said, I'm going to learn this. I'm going to go out and do this. And then you go ahead and write a bestselling book. And you're doing podcasts on this stuff. And it's really impressive. And you still have time to do great dentistry, which is also very impressive. So to wrap up this podcast, what's the most important change in the dental profession that you hope to see as a result of your book being out in the world? Well, I hope that dentists will gain confidence in their skills. They will learn how to run a business like a business owner, because it is, it's not just a dental practice where they should be producing. I think they should learn, and I know they will, learn what they need to do to reap the benefits of running a profitable practice, and whether that's cash or new equipment, whatever they like to be. without having to work more days or produce more widgets. And I think that's important because if you want to be in this career for a while, those of us that have been there know that you cannot, your body isn't going to keep up necessarily forever if you're just always running ragged. And that's not the way any of us want to live, I don't think. I think we want to. I think we would like to focus on the profit. And I would hope that people would quit thinking that's a dirty word, that we're not allowed to say we want to make money. I think it's okay to say that. We have to make money to be able to keep our business in place and serve our patients. Right. I think that's okay too. That's exactly right. I mean, if you care about your patient. then you have to care about your profit because if you don't have profit, you're not going to be able to take care of your patients. Very well said, Dr. Woods. Could you tell us the name of the book and where to get it? I assume Amazon and how to reach you if someone wants to reach out to you. Sure. So the name is Profit Over Production, Understand Dental Business and Choose Your Practice Destiny. So I hope it will help you do all those things. And that is available at Amazon, Barnes and Nobles, any of your normal online retailers. And then if you wanted to reach out and either have any kind of book a call, that kind of thing, it's just drjuliewoods .com. And the book resources are drjuliewoods.com. com backslash book, because there are some forms and whatnot that people can download and use. Got some good information from this. And I certainly encourage everybody to check out the book or buy the book even better, because those are the kinds of things that will help you for the rest of your career, I'm sure. Dr. Woods, thank you so much. And we'll talk to you soon. All right. Thank you, Phil. Have a great day. If you've been enjoying our podcast, we'd love to hear your thoughts and feedback by leaving a review on your favorite podcast platform. whether it's Spotify, Apple, Google, or any other platform you listen on. Leaving a review is a fantastic way to support us and help others discover our show. Thanks for listening. See you next time.