Roadside Live: Why a Startup? + First Steps to Success
Ever wondered how to build a startup + the first steps to success?
We get it – it can be so intimidating starting your dental practice from scratch.
We’re here to help!
If you’re considering a startup and want to learn the steps to successfully growing your business, this Roadside Live’s for you.
Angela and Michael Dinsio, Founder of Next Level Consulting… This text opens a new tab to the Next Level Consulting website… discuss why you should consider a startup, and the first steps to success including:
- Why a startup is the easier way to bring your vision to life
- Two crucial steps in building a successful startup
- How communication can make or break your business
- Two mistakes you need to avoid
Angela: Hi, everybody. Welcome to another Roadside Live!
I’m here today with Michael Dinsio from Next Level Consulting… This text opens a new tab to the Next Level Consulting website…. Most of you have probably caught the first time that we chatted back in January. If you haven’t, I’ll tell you in a second how to go back and watch that one.
Michael is with Next Level Consulting. It’s a practice management organization. He helps doctors nationwide get into ownership, manage their business, establish a new one, maintain the existing practice, prepare to sell, or the elusive start from scratch, opening it from the ground up.
And that’s the focus of our conversation today.
As I mentioned, if you missed our previous conversation about practice acquisitions:
- Go back to Roadside Marketing’s media hub
- Look under videos and look for the video, “How to Buy a Dental Practice The Right Way.”
Let’s jump into our topic for today.
Thanks so much for joining us again. We had so much fun last time, but let’s talk about startups.
Sometimes, that’s kind of a scary phrase for a doctor. Instead of buying a practice that’s already got its legs under it, it’s starting from the ground up.
So why would a doctor choose a startup instead of an acquisition?
Michael: Well, first of all, thanks for having me, Angela. We love doing things with you guys.
I love the program. I love the content. I think your audience and followers do too. So thanks for doing this. It’s super fun.
What a startup is, is really cool. I was thinking about it this morning. I was getting out of bed and knowing that I was going to do this interview with you today.
And I think the answer is:
Because it’s an opportunity to create something from scratch.
Most doctors who talk to me about doing a startup just don’t want to buy something they feel could be, I don’t know, used or worn, or it’s not their vision.
They’re afraid that the team doesn’t reflect them and their style; the patients might be different. The demographics might not be exactly what they thought it would be.
It’s an opportunity to mold clay, to paint your own Picasso. It’s the purity of it.
And I’ll add to that.
That’s what most people get attracted to, but then there’s the fear of the cash flow and not having that.
And I think we’ll probably get into that later. So I’ll pause.
But I will say that there are not that many practices to buy right now. And that was what our last episode was about.
When there’s a lack of demand for something, where do those people go? They’ll go to startups.
My business at Next Level, I was really heavy acquisitions.
Probably right out of COVID, I was super heavy acquisitions, but now my business has kind of shifted to heavy startups.
And I don’t think it’s anything that I’m doing differently with marketing or promoting myself. I think it’s just because there’s no inventory.
People are getting fed up with where they’re working, and they’re saying, you know what, I’m not going to wait anymore for that unicorn practice. I’m going to go build it.
Those are my two things about why someone would want to do a startup.
Angela: Yeah, that makes a lot of sense. And I know, right when COVID hit, many practices had been considering selling, who did.
There was a big influx of availability, but I have heard that it slowed down a little. I’ve also gotten more and more calls from startups for some of the same reasons you mentioned.
And sometimes, the remodel of a practice, not the physical remodel, but the structural remodel, is just almost more work than starting from scratch. They would rather, just like you said, have their vision.
Those are great points. Love those. Thank you.
If I was a doctor who wanted to start from scratch and I wanted to build my own dream, what would be the first steps in doing a startup?
Michael: I get that question a lot. And I think when people approach me to help them do the startup, I find them in different phases of it.
It’s interesting because I find that they kind of fall into it. They may have made some mistakes in the beginning, but we got some cleanup to do or things that they had not thought about.
We have to go take a couple of steps backward to take three steps forward type of thing. I love this question because the right way to start a startup is to really know your business and understand what your vision is going to be.
I know that it’s such a corny thing to say, but we talk about this on my podcast, “Start-up Uncensored.”… This text opens a new tab to the Startup Uncensored website…
You have to know your vision to drive that vision all the way through the process.
Because if you don’t, the contractor, the architect, the space plan, or the equipment people, they’re going to take you down a path that they think is the way it needs to go.
And it’s not wrong. But it might not be your vision.
Vision really is the first step, the business planning of it.
The key next step is demographics.
I think that’s the first step of the risk. There are lots of risks in opening up a business. There’s a risk making an acquisition.
But the first insurance policy to take down potential risks is demographics.
If an area is heavy in competition, then you’re going to have slow growth. Someone that drives marketing like you guys do could spend 20 grand and kill it. And someone could spend a hundred grand and not kill it.
That’s because of the competition.
Demographics, to me, is that first step. Once you figure out your spot, you obviously get that real estate person involved to find that spot within the demographics you’re looking for.
Angela: Right. My thought would be, going along with that, is properly communicating their vision.
Practicing their communication is important because we’ve seen that, where doctors may know in their head, what their uniqueness will be, what their mission is, what their vision is going to be…
They forget to communicate it to every single person along the way.
Maybe they think that for their interior designer, it’s not important for them to know what their overall scope of the vision or the practice is, but that’s not true.
The more they can communicate it with everyone, the more successful getting everyone on the same page would be.
So I would add to that, too.
Reminding them to communicate it. It sounds so easy, but sometimes doctors get, especially on a startup, so many balls in the air, and they assume that everyone knows what they are thinking.
That doesn’t happen, though.
Michael: You’re a thousand percent right.
The only way that you could communicate it is if you know it.
If you don’t know it, you can’t communicate it.
It’s just one of those steps that is so simple. I think most people do know the kind of practice that they want.
They know that they don’t want to be Medicaid-based, or maybe they do want to be Medicaid-based or even spa-like.
That’s two different types of businesses, and if you don’t know that and what it feels like, the feeling that you want to give your patients, the look, the whole thing; there’s no way your team that you’re going to hire is going to deliver on what you’re trying to do.
There’s no way unless you communicate. You nailed it.
Angela: Absolutely. So other than not communicating properly, what would you say are some of the biggest pitfalls that doctors make when they do a startup?
Michael: I love that question.
So two things, number one, a budget.
I think the banks today are lending as much as they’re willing to lend. With COVID, there was a crunch where there was a restriction in their lending amount.
You have to get super intentional about where you’re going to spend your money and how, and many people don’t know how to do that.
A big thing that I help my clients do is going through everything from top to bottom, from window coverings, all the way down to furniture to the signage.
No one’s talking about these little things that add up, and you have to have a budget for every piece that plays into it.
Otherwise, you might spend too much on equipment.
One of the biggest pitfalls and I hate to say this, is probably spending too much money on equipment.
However, I would rather them spend money on equipment than construction. So don’t get me wrong when I say that because equipment actually helps the practice drive.
But the construction costs are so expensive that it’s restricting how much money we have. Sometimes people get a little carried away with the equipment or the setup.
So budgeting is number one, focusing on that and really having a game plan there.
But number two really falls into your world, and that’s marketing.
Once you get through the project and everything looks like it’s moving and construction’s happening, then it’s getting marketing going as soon as humanly possible.
And that might be as simple as getting your brand done 90 days before.
We had a chit-chat about this before, but if you don’t have your missiles ready to launch in marketing, as I say, you need to get your missiles ready within 60 days, or even 30 days before you open. Or else you’re going to be missing out.
You’re the expert. So why don’t you take us there?
Angela: Yeah, we actually recommend the same thing. We recommend that the website or landing page or whatever they’re going to use for their starting point launches at least 60 days before the doors open, which means you need to backtrack your planning.
If you’re going to have a website launch, you need to backtrack a few months before that for construction.
Then, backtrack, maybe even a couple more months, for your branding and your logo and your planning, and make sure your brand is well established.
Thankfully it happens rarely, but we’ve had the occasional office say, “We’re going to open in two weeks. What can you do for us?”
And I say, “My time machine’s broken. I can help you, but I really wanted to do it six months ago.”
Starting early enough is what I see and also the thing that I’ve seen from startups – and jump in if I’m incorrect here, but the ones that have had the most success are the ones that plan in their construction loan or in their startup loan for the first four to six months of marketing so that they have that budget.
They’re not panicking because the doors open, and they don’t have full chairs yet; they’re trying to market for it.
The ones that I’ve seen that are the most relaxed about their marketing and have it the most successful have already pre-planned that budget way back in the loan stage.
And they’re like, okay. When I hit the six-month mark, I’m out of the loan, marketing money, so my practice needs to be rolling by then.
Michael: And the revenues are coming in. That’s why I put budget first on the pitfalls because if you don’t budget, you can get yourself into some really big trouble.
That is a beautiful point because if you don’t have those two things, marketing money and working capital the day you open, you’re in bad shape.
If you don’t manage that project budget… well, I’ve seen a lot of startups struggle right out of the gate.
And the ones that thrive are the ones with plenty of cash, working capital, and plenty of marketing money.
You’re not going to get patients in the door without marketing money, period.
Angela: That actually leads to my final question.
You’re talking about taking out loans, but financially, coming off COVID, coming off the uncertainties, does it make sense to do a startup?
How can they make it work financially versus buying an acquisition, buying a practice?
Michael: It works, period.
The client that goes after acquisitions, it’s because they’re so worried about the financial piece. So it’s a great question.
I’m glad it’s the bonus question for today because it really solidifies why you might want to do a startup.
It works because of a few things. I always say it’s like a tooth prep or a crown prep problem. There are steps to it. If you don’t go through all the steps, you’re going to have some margins.
The steps of doing a startup are very systematic.
Your vision might be different, but going back to the financials, you’re going to get a loan that has discounted payments.
You’re going to get a loan that has a working capital built into it and cash to pay your payments over time for the first six months. If you budget right, you’re going to get a lease that has free rent built into it.
If you have a real estate person who knows what they’re doing or a consultant, you’re going to have your jobs still because that’s a loan requirement to keep the revenue coming.
Lastly, you’re going to have your own personal cash because that’s also a requirement. You have these fail-safes built in that you wouldn’t normally have for an acquisition.
The structure is different, where it gives you that launchpad that you need financially.
I will go out on a limb and say, when I was a banker at the Bank of America, who does most of the startup loans in the country, they taught me that a startup will make, on average, about a hundred grand their first year.
You can make it work. Is it as much as you’ve made as an associate? Maybe not, but to make a hundred grand your first year as a scratch business – that’s pretty good.
We talked about the budget in the construction piece of it.
It’s also budgeting your ongoing expenses, wages, loan, rent, supplies, and your lab; it all matters.
If you do it right, and you have help and a great team, like you guys and us, you’re going to be fine at it.
I know who they can call if they’re considering a startup, and you can walk them through the process because I’ve talked to many doctors that are not quite ready to start their startup yet.
Part of their hesitation is:
- It sounds like a lot of work
- They’re not sure of what steps to take
- Who a good consultant would be for them
Here’s your good consultant. We’ll put his contact information right here.… This text opens a new tab to the Next Level Consulting website…
If you’re considering leaving your practice and starting from the ground up, this is your guy.
We always enjoy having you on our lives and chatting with you. And we really appreciate you being part of it today. Thank you so much for your time today.
Michael: Thanks for the opportunity, Angela. You guys are great. Thanks for what you do for the industry.
Angela: Absolutely. We’ll talk to you soon.
Michael: See you guys. Bye.
Meet the guest
Prior to founding Next Level Consulting… This text opens a new tab to the Next Level Consulting website…, Michael Dinsio spent six years representing one of the nation’s largest financial institutions in a territory stretching from Alaska to Colorado.
In that time, he guided more than 220 dental office start-ups and facilitated 200 practice transitions. Through this journey, Michael found that his passion was helping dentists navigate the complex process of launching or purchasing a dental practice.
Along the way, he recognized a hole in the marketplace when it came to practice management consulting. As corporate dentistry and regional DSOs continue to find success, today’s generation of practice owners face new challenges to grow their businesses and thrive. With that goal in mind, Michael followed his true passion and started Next Level Consultants.
Next Level is a premiere practice management organization that helps independent doctors nationwide get into ownership with the goal of being expert business people.
Michael advises clients in all stages of their practice – whether it is establishing a new business, maintaining and/or expanding a practice, or preparing to sell. Having analyzed thousands of cash flow and business models, Michael is qualified to serve as a key business strategist and advisor for any healthcare professional. Now, as the founder of Next Level Consultants, Michael works with owners and their teams to clarify their priorities, implement procedures and create accountability. Working with everyone from the dentist, to the hygienists, to the front desk staff, his unique blend of skills and insights inspire and motivate teams to reach their goals.
Based on his excellent reputation in the region, several top dental schools have requested Michael’s expertise for annual guest presentations for their students. These include the University of Washington School of Dentistry… This text opens a new tab to the UW dental school website…, Oregon Health & Science University… This text opens a new tab to the OHSU website…, and the University of Colorado School of Dental Medicine… This text opens a new tab to the University of Colorado’S dental school website…
Michael gains great satisfaction in helping healthcare professionals reach their greatest potential. Passionate and committed, he brings his dedication to helping doctors and their teams turn their dreams into realities every day.
A Midwest native, Michael has lived in the Pacific Northwest for over a decade. He resides in Tacoma with his wife and two young children. In between chasing toddlers and taking client phone calls, he enjoys golfing and rooting for The Ohio State University… This text opens a new tab to The Ohio State University’s website… football team.