Passive Income From Dentistry

Welcome to the navigating dental insurance podcast [music] where we don't take from insurance companies. Here are your hosts, Mr. Jordan Comstock and Mr. Ben Tuinei. This podcast is sponsored by BoomCloud Dental Membership Software, www.boomcloudapps.com, [music] and Veritas [music] Dental Resources, www.veritasdentalresources.com. Enjoy the [music] show. >> What's up, everybody, and welcome to another exciting episode of the navigating dental insurance podcast. I'm your co-host today, J Com, with Mr. Ben Tuinei. >> [laughter] >> I just shortened it up, you know, I'm going to be a rapper, I

think. J Com. >> Yeah. They called my son B Dub when he was when he was in the the NICU. >> Really? >> So, Benjamin Welton >> That's his first and middle name. B Dub, B Dub, what's up? >> we made a big sign, you know, like everything that they they had on the board where they write the patient's name, we erase that, put B Dub. >> [laughter] >> Nice. Yeah, that's awesome. If you were a rapper, Ben, what what would your name be? >> [laughter]

>> I'm a little bit embarrassed to admit, when I was a kid, my nickname was sniff dog. >> Sniff >> [laughter] >> And that's cuz like I I would I was so obsessed by smells that everything, like when we cracked [clears throat] coconut open, I would smell the coconut before I drink it. When I would when I would open a can of soda, I would always smell it before I drank it. And even food, I would smell smell the food and and they they they gave

me the name sniff dog. So, sniff >> Sniff dog. >> That's among people that I grew up with, I am still sniff dog. >> Yes, [laughter] sniff dog. >> That's cuz we listened to a lot of Snoop Dogg back in the days, that's where that name came from. >> [laughter] >> I saw a post on Facebook last night and it's like if what your rock star name, right? It's like your rock star name color combine the color of your underwear now and what you last ate

and that's your rock star [laughter] name. So I'm like I was thinking I'm like yeah, my rock star name would be like gray salsa. >> [laughter] [laughter] >> Or black salsa. >> We need to issue an official apology to our listeners for that. >> [laughter] >> Yeah, there was so many people I saw so like so many people in the dental industry were like posting on it. It was I was laughing. I was I was crying so hard. I was laughing. I was laughing. I was

crying so hard cuz I was laughing. >> [laughter] >> That was the thing they said like you this is your rock star name and it had like 30 30,000 I think more like comments on it. It was I don't know who posted it, but I was laughing so hard cuz it was just it was just so funny. >> [laughter] >> Like I saw a couple people that I'm like like that are like influencers in the dental space like commenting on it and I'm like wow, I

would have never thought of that cuz it's like choose your color of underwear and the last thing you ate, that's your rock star name. It was it was funny. >> [laughter] >> I I can't even remember the last thing I ate. >> Oh, I I ate crab. I ate crab legs last night. >> Nice. >> So I guess white white crab legs. >> [laughter] >> Yeah, it's awesome. Anyways, yeah, yeah, I've been I've been hanging a lot on Facebook lately and there's a lot of funny

things happening in the dental world. >> [laughter] >> That's good. We we need a little bit of a break. Dentistry is stressful, you know, it's I'm just surprised that I think three four years ago when we did a podcast with um somebody that wanted to talk about the stresses of dentistry. >> Sure, yeah. >> To me it was probably the most boring episode that we did, but it was one of the most listened to episodes and I was like I didn't I had no idea that

dentistry was that much of a tough career for most people. And I wonder if I wonder if it's you know I I I kind of get it, you know, dentistry is a hard career physically, too, but I think financially, which is what we want to talk about today, right? >> Yeah. >> It's the stresses of running a business and you know, it's the bucket model, right? You take your bucket to the lake every day and you're going back and forth. Yeah. I like your model where

it's a pipeline model, right? >> Yeah, yeah. I'm glad you remember that story. It's the the [clears throat] pipeline it's called the the story of the pipeline where um basically if you're running your business [clears throat] without proper systems and automations and things like that it's like you're carrying buckets like you got hired to carry water from from the lake to the a well, right? And you're you just were given a bucket and you're carrying back and forth um hauling water back and forth with buckets.

You know, in fact, the story has two people in it, right? Where there's one guy that just had the bucket mindset where he's like, "I'm just going to go. I'm going to carry water with a bucket every day um and just fill up the well and then get paid with water I deliver to the well, right?" So, it's a parable. Um I think the book the book is called the parable of the pipeline or something like that. I probably butchered the name, but um and then

you had the second person that would got hired to deliver water to the to the village, right? This time. >> Mhm. >> And he's like, "Well, I'm going to spend time my time building a pipeline and initially it's not going to generate revenue for me when I deliver the cuz I'm not delivering water to the village yet." And he he eventually builds this pipeline and all of a sudden he's delivering water day in and day out without having to carry buckets back and forth every day

and wear himself out. And in dentistry, we can we can we can compare it to dentistry where you're using your your hands, your your body to help patients and restore patients' smiles. And it's a lot like carrying buckets back and forth to deliver water to a well to to people, right? >> Yeah. >> So, the point is to understand the importance of of passive income or recurring revenue or just systems, right? It doesn't have to always be things that deliver revenue. It could be making sure

you're hiring people to help you in your practice or hiring associates. But, this has been a hot topic I've seen lately with at least people that follow what I've what I've been doing in in the industry. And it it seems like passive income is becoming more important, especially as inflation increases and insurance continues to get harder and harder to work with. Practice owners need to figure out ways to generate passive income, which means and if you don't know what that is, I hope you do. Passive

income is basically revenue coming in whether you do dentistry or not, right? >> Mhm. >> Um a couple examples of that, Ben, are are you know, I I managed a dental lab and there was no passive income. It was very similar to a dental practice business model where we'd come in and as a technician, I was required to create something or a a lot of things in one day, a lot of crowns, dentures, things like that in order to generate revenue. And one thing that always

bothered me is I could never produce revenue, like if I were sick, I could never produce revenue, right? And it strained that that business, too. If one of us were sick at the dental lab, it would strain that company. We couldn't produce as much in that day. We're kind of capped with human effort, right? >> Right. >> Same thing if one of us went on vacation, and we all want to take vacations. I think that's very important. >> [laughter] >> You've got to have a break

every once in a while, right? >> Mhm. [clears throat] >> And um it always bothered me at the dental lab that we could never we could never scale our revenue um because it was it was tied to us carrying buckets every day, right? Us creating crowns every day, which is equivalent to buckets. So >> [sighs and gasps] >> um years ago I wrote a book called The Automatic Customer that talks about passive income and recurring revenue. Um also read a an amazing book called Rich Dad

Poor Dad. I don't Have you read that book, Ben? >> Oh, yeah. I've read both of Yeah. >> That was the first book book I read that that really inspired me to become an entrepreneur. Um I always wanted to own businesses, things like that, but after I read Rich Dad Poor Dad, it um I remember I read it in like 2 days cuz I was fascinated by what what he was talking about. And it's all passive income. So revenue that comes in whether you do dentistry

or not, or whether you do whatever business you're in or not, right? Um and I'm a big um advocate for generating passive income in a practice and and helping others. Like my daughter, for example, Ben, I just bought We just bought like four claw machines. I don't know if you've passed by my garage and you've seen those blue claw claw machines. >> I I have. I was tempted to stop by and play one of them. >> [laughter] >> We've I I've teaching my daughter how to

make passive income, and we bought these claw machines, and we put them in pediatric dental offices, and we're we're trying to place one in a in a movie theater in Orem, Utah cuz it's cash only. And um like last month as an 8-year-old, she made like $100 or so um while she was in school, while she was playing at recess, while she was at home, while she was doing homework. And I I told her I'm like her name's Lennon. She's a she's she's a badass. >>

[laughter] >> My daughter I have all daughters and I think I'm going to I want them they're they're so cool and I think they're going to be really successful cuz they're just they're just driven um human beings and they're curious about everything. It's it's fun. It's fun being dad of all daughters. >> That you know that's a better way to teach them about money, you know, the the kids that go out and do the lemonade stands that's great. You know, they make that effort to do

that. >> Totally and I taught her that too. >> Yeah and and this is a this is good for them to know that they can create a system or create a service >> Yeah. >> that they don't necessarily have to manage. Like my brother and I were doing ATM machines. >> Yeah. I got I got an ATM machine just by >> You you get 20 or 30 of those and and that's a really good amount of passive income. The maintenance is really low. You know, I

just spoke to a client a couple weeks ago in North Carolina and he's going on a 3-week vacation next month. >> Uh-huh. >> And he does it three four times a year. He's like, man, how do you how do you make that work? You know, and he's like, well, I have associates, you know, that are committed and there's there's opportunities for them to buy in as partners. >> Yeah. >> prove themselves. So he created a model where the production and the of the associates is very

is almost identical to that of a practice on the right. Big difference with what his associates do and and I think when you talk about building an associateship model to have passive income, we struggle with this when when I first started in dentistry at a DSO >> Sure. >> we had associates most of which had their own practices. We didn't have any doctor owners that were part of the group. Well, I think no, no, no, I think we had one but he didn't practice. He he

lived in Vegas and we were in Phoenix. Um but the the production was different. When I looked at some of the doctors numbers at the group, the DSL and then looked at their private practice like man, they produce they kill it at their private practice on the days that they're there but they don't here, right? >> Yeah. >> at the group practice. So so this client in North Carolina just kind of opened me up to his model and how how he does it, how he he

can take uh what, three times three, nine weeks of vacation in a year as a as a as a doctor, >> Right. And still generate revenue with his with his associate model. >> And he makes more now than he than he made when he was solo. >> Yeah, it was the it's the law of leverage, right? Goes along with passive income models like this. >> So, so dentistry is a bucket business, right? We're just transactional, but >> It could be, yeah. >> you can convert it

to a passive business with this type of model, right? Where >> Yeah. >> You know, the key thing is that the business will run, you'll have income even if you don't show up. That is the ultimate holy grail, [clears throat] excuse me, of of business ownership is not necessarily being the producer >> Yeah. >> that will determine whether the the business makes money or not. You know, if you get into an accident tomorrow and you break your hands, you know, that becomes a question is how

how do you generate that passive income? >> So, what are some of the ideas that you have? >> Yeah, so obviously what you just said this. So, like hiring associates and even giving them a piece, like minority share of the company, that could always be smart. I would I would never do the 50/50 model. I mean, in some cases that works. Um especially with associates, like let them earn it. Um >> Right. >> I I think the associate model's good. I know our good I just

got back from Dr. Mark Costes' conference and I know he utilizes that model in his locations. And we just I actually did a podcast with Mark a couple days ago talking about the same topic, because I think it's really important as as practice owners that you understand this type of revenue model in your business. It's it's it it'll give you a lot of peace of mind, but a lot of things obviously that what I'm seeing out there, cuz I deal with a lot of this in

in the industry, are are are membership programs, right? And I'm seeing a variety of different types of membership programs that being a revenue or subscription geek you know, I'm like I'm like really like geeking out over here. Obviously, um so I wrote a book recently. It's a short book. It's called how to how to create 50k a month with a membership plan. Um so obviously the the most common thing practices doing are are these like hygiene maintenance plans, right? Or just standard membership programs where they

got hygiene and clean and you know, cleaning regular exams baked in. Um on Dr. Mark Costes' podcast the other day we talked about discount only membership plans. That's what his office uh his offices uh do. And it's basically the patient pays a subscription to get, you know, 10 to 20% off of cleanings, off of restorative, off of everything. They're not including those in it. It's a discount only plan. And that's really interesting and everything you do every patient that signs up with that is a passive

income stream. Right? Um another thing that we're seeing are are perio maintenance plans. And keep in mind that not everyone who signs up for a membership plan will you will utilize it at 100% meaning that that's where you know, a lot of the passive income can come from. Um and recurring revenue comes from. Very similar to insurance, Ben. What what's the usage of insurance? If if a patient's on a PPO plan, how many patients use it? >> Well, well 50 52% of children on a PPO

use it every year. 37% of adults use it every year. 22% do restorative. 6% max out their benefits. So it's low utilization. This is This is why the ortho programs are pretty pretty good because, you know, you have a flat fee, but that's paid out over a couple of years, right? Where it's kind of like a passive income model where it's it's it's maintenance over time, right? >> Sure. >> And one of the things I see in a lot of practices that's a big miss is

that even if you have a a PPO patient where let's say the treatment plan is even $5,000. A lot of times when you max out that 1,500, most practices will require the patient to pay the remaining 3,500, right? >> Sure, yeah. >> Um what we did at the the group practice that I really liked is we did a 90-day same as cash. So, if they did 90 days of payments, you know, there's no interest and if they paid in full, but we also did treatment plans

that that did go two, three years out, especially if they were bigger treatment plans. Credit the tough part is having a system to qualify for on the credit component. But our recurring payments every month in that [snorts] one location practice that I was working at was over 120 grand >> Wow. >> in in in recurring subscription payments. Yeah. Well, at least not I guess it's not subscription. It's more so we financed >> We did in-house payment plans. In-house payment plans. Yeah. >> Came with interest. So,

the guy that set this up for us was an employee. He was a former personal banker. >> [laughter] >> So, he created the risk model >> Sure. >> and then he created the interest percentage as well. And so, it it worked out really well that that 120,000 paid for the entire overhead of the practice and it had a a good chunk of interest that came with it. >> That's passive income. >> Yeah, so that's something to consider is that you know, whether it's membership plans or

perio plans, when you have insurance, you can still capture those large treatment plans by not you know, working with a patient, having flexibility on some type of in-house financing. I personally never do CareCredit because that's a 10% fee, right? >> 10 to 15% on top of the PPO discounts even on top of membership discounts. >> And you don't earn any interest on what the patients pay CareCredit. No. CareCredit has some merit. They they work out pretty well. >> But but what we did is we were

our own in-house version of CareCredit and carry that risk and we charge interest to offset the risk, right? >> Yeah, we >> And it worked out beautifully. Oh, yeah. >> It's genius. And you know, we we actually built a long time ago in BoomCloud a way that manage it what we call installment plans what you're talking about where you can add your own interest and and manage the the payment the monthly payments, you know, Um I think that's a a wonderful way to go about it.

Even like car dealerships do that. You go to a car dealership and you if you do get financing they've they're partnered with some of the financing they get kickback of the the payments and the the uh the interest, right? So, I think it it's a smart model. >> And I have an opinion on how that helps the practice owner especially this case the doctors that are focusing on clinical care. Like for me, you know, in looking at the next several months, if I do nothing, I

have income, you know, I have you know, I have payment plans and income that'll not only pay for our overhead expenses, um but it it'll pay everybody's salaries including mine, right? >> Yeah. >> And I from a from a uh a business perspective, I'm not stressed, right? I'm not thinking about where >> You're sleeping well at night, Ben. >> You [laughter] know? And so from a clinical you know, a a practice ownership perspective, it it relieves so much financial stress to where your focus you know,

your focus is it it is on what you want to what you need to focus on, right? Clinical care. >> Yeah. >> And that's the biggest thing for me is that seeing that down the road like man, for the next year, we're good. >> Yeah. >> Now I can focus on my clients, right? Recruiting will happen, people will sign up, we'll still add to that. >> You can focus on growth. Yeah, it's it's it's awesome. One of the one of the most surprising ways to make

passive income for for industry recently I I I was driving down the street here in Utah and I saw a little company um that just offers whitening subscriptions. They they don't do restorative care and everything. It's it's a fascinating model and I think it but they charge $39 a month 30 to $39 a month um for unli- unlimited whitening and whitening maintenance and all the stuff and I'm like, "What?" >> [laughter] >> That's more than what a PDO plan charges. And I'm like, "What? That's That's

crazy." [laughter] I call the office and they have over 2,000 patients signed up on their on their $39 a month plan which is what? Like 80 What is that? Let's do some math real quick. It's like 80 80 >> 78,000 a month. >> Yeah, just under $80,000 a month in predictable recurring revenue from whitening and you know that not 100% of those patients are going to utilize all of it, right? So um I've been encouraging a lot of our customers here at BoomCloud to to set

up these plans cuz number one, you probably can charge a little bit cheaper than a whitening only uh practice, right? or business. um So you can get a lot more patients signed up but you can also attract your your insured, your uninsured, your inactive patients to join that these types of plans and get them back into the office. um And it was funny cuz I had I posted some things on on um I think it was DentalTown. They're like, "Well, there's a lot better ways to

make money in dentistry than whitening memberships." And I'm like, "Yeah, that's [clears throat] true." And I get it and this was a doctor that was he started talking about, you know, doing more all-on-4s. I'm like, "That's amazing and smart. Yeah, I agree. All-on-4s are a great way to make money in dentistry. You can make $20,000 on one case or more, right?" But that's not my point. My My point is saying have the 20 $30,000 a month in predictable recurring revenue from like a whitening plan plus

the 20,000 from a from an all-on-4 case. >> Oh, yeah. >> Like that's that my point is that every every aspect of of the business you should be trying to think of how you can make predictable recurring revenue or passive income, right? And then on top of it, that's when you do the bigger cases and things like that and it adds more to the to the revenue component of the practice. You know, and I thought I just thought it was interesting that this doctor was thinking

buckets, right? He was thinking, "Well, I can just go find a an all-on-four bucket and carry it across the county." >> Yeah. >> And get 20K for that. I was like, "Yeah, that's cool, but you want pipeline, too. You want pipeline plus your your your big cases, right?" And when I say pipeline, I'm passive income. >> You have to be open to these things because you never you're sometimes you surprise yourself, right? When you're like you're open to some of these concepts cuz when you first

told me about that whitening thing, I thought who in the hell would pay $39 a month? >> Yeah. >> 2,000 people would. Right? In this >> In this particular case, yeah. >> That proves the model. And and we're often afraid. Like I I hear this all the time in working with clients when we we pitch an idea to them and they're like, "Oh, patients won't do that." And I'm like I have over 5,000 former clients and you know, 700 current clients that have done this. You

know, you can't tell me what can and can't be done because it's already been done, right? >> Already been done. And I was surprised, right? Cuz I've been I've been at the this subscription game for a long time and this is this is kind of a new wave that I'm I'm looking and I might I love it. I love that a practice went out and and not even a practice, it was I think it's a hygienist that owns it with her husband and she went out

and she's like, "I'm just going to do whitening." And I'm going to charge a subscription for it. And I'm like, "That is genius." >> That's awesome. >> Cuz what? I've I looked it up, Ben, and like 56% of of people in the US aren't happy with the color of their teeth. It's a simple problem. >> You know, that's >> we're focused on like the big cases. Oh, I only I'm going to do focus on all in force. Like, no, you can still do that but with

whitening you know whitening unlimited whitening memberships. It's it's genius. >> It is. It it that's kind of well, it's not kind of smart. That's genius smart right there. >> [laughter] >> That's thinking outside of the box. >> It is. And the and the the cool thing is that the majority of general general practitioners and even like pediatric dentists. I called my mom up. She manages an office. I'm like, you guys should offer whitening membership plan. She's like, well, you know, we've actually been thinking about that.

I was talking cuz they get parents coming in every day waiting. I'm like, why don't you just like capitalize on that waiting time? Just go to the the parents and say, hey, you know, you can join our our our unlimited whitening plan and we've got you know, the you know, how they have whitening lasers or the like the the glow systems. There's a lot of options out there that you can implement in your office. >> There's so many. >> Um all the way just down to

the most simple which is like the into the ultra dent, the opalescence. >> Mhm. [clears throat] >> Like just hey, you get you're on the subscription, you get unlimited opalescence trays or whatever it is. Do you get creative with it? >> The material costs are so low for things like that. >> Yeah, I was talking to the this pediatric dentist that my my mom works with in the office. And he's like, we have been thinking about that but I did not think about making it a

subscription. I'm like, everything you should do is you should be thinking how you can make it a subscription so it generates passive income every month for your practice. And you know, how you went on a vacation the other day doctor and you had to shut everything down and the only thing that was making you money was your your hygiene membership plan, right? It was cuz they got you know, a couple hundred active patients on their membership plan. I'm like, this like add a a layer of

membership. You know, every single parent that comes in is probably going to be interested. Not everyone's going to sign up but you can at least get a a handful of patients signing up and and even though you're a pediatric office, you're still you know, helping um the the patients while the parents while they wait. So, anyways, I just think it's super interesting that they're this model exists. Um but we're encouraging a lot of our practices to do this cuz number one, you can like one of

the biggest issues is, "Oh, you know, I got x amount of patients on insurance. We can't offer them a membership plan." Well, yeah, you can. Um you can do a a white unlimited whitening plan. You can do you can create a plan that uh helps to if they hit their maximum a a PPO maximum plan, right? After they've hit their maximum that they get benefits on that. So, you can be really creative, but um Ben, I know you've got a a call here soon. I have

a I have a book that I've written that's called how to how to make it make 50K a month with a membership plan or more. And it talks about all these things and I have a course that's uh called the passive income for dentistry course that I'll share in the show notes, but you can go to boomcloudapps.com/50K, 50K, so 50K. Um and you can get that book that will then um take you to you'll get that book download that talks about how to make that type

of recurring revenue in the practice. But then we have the passive income course that you can get um that talks about a lot of the stuff that Ben and I were talking about today um and then some like how to attract small business owners and their employees to help you scale your your subscriptions and all that stuff. But that's that's kind of what was on my mind today, Ben. So, hopefully >> it. >> Hopefully we we inspired several people to get more passive income. Um there's

so many ways to do it in dentistry and I think a lot of people aren't thinking about creating passive income. They're thinking about the big all-on-4 cases, right? Which are cool. I [laughter] I always love getting those in the dental lab, but passive income was the biggest thing that we were missing at the dental lab and the same thing with practices. So, I encourage you all to go check out that book. >> Yeah, and then come check us out Principles of Practice Management in August 2022.

Where is that? Is that in Nashville? >> That's in Nashville, Tennessee. Ben and I are speaking there, so come check us out. Let's come say hi, hang out with us for a weekend at the Principles of Practice Management in Nashville, Tennessee. Just Google that, you'll find it. In last episode, I had Pam come on and talk about the show, so check out that episode. Okay, everybody, we hope you have a rocking day. Ben, good seeing you. Likewise, man. Take care, everybody. We'll talk to you soon.

Well, at least we'll be talking talking with you very soon again. >> [laughter] >> Rock on, Jordan. Let's see you. Bye. See you.