Drs. Michael Saba and Nima Aflatooni each opened new practices in the last year, one in California and the other in New Jersey. They give us straight talk on what it’s really like to open a new office.
This is episode one of Beyond the Mouth, a podcast series in which Dr. Betsy Shapiro of the American Dental Association (ADA) chats with a diverse group of people who can help with the non-clinical challenges dentists experience every day.
This episode was released on January 16, 2019.
Dr. Nima Aflatooni
Dr. Aflatooni is a general dentist in Sacramento, CA. He graduated from UC Davis with a degree in genetics. He attended the University of the Pacific Arthur A. Dugoni School of Dentistry. Dr. Aflatooni is active in the Sacramento District Dental Society, is a member of the California Dental Association (CDA) Government Affairs Council, the CDA Board Composition Task Force, and the ADA Council on Dental Practice, where he is the subcommittee chair on dental practice models.
Dr. Michael Saba
Dr. Saba is a general dentist in Union, NJ. Michael graduated from Rutgers University with a degree in Biology before receiving his dental degree from Temple University in Philadelphia. He continued his education in implant dentistry by completing a two year mentorship program at Vizstara, in Englewood Cliffs, NJ.
Betsy Shapiro: Welcome to Beyond the Mouth, the American Dental Association's practice podcast, where we won't discuss clinical dentistry, but everything else is fair game. I'm Dr. Betsy Shapiro, a director with the Practice Institute of the American Dental Association.
In this episode, we're talking about life, liberty, and the pursuit of starting a dental practice. Joining me today are doctors Nima Aflatooni and Michael Saba. Both are fairly new to private practice ownership, both are active volunteers in dentistry, and both find time for their families and their hobbies.
Nima practices in Sacramento, California, so he's our West Coast dentist for the day. He claims that he went to the best dental school in the universe, both now and throughout the history of time: the University of the Pacific, Arthur A. Dugoni School of Dentistry. Prior to that, he got a degree in genetics from UC Davis, because he was rebelling against going into dental school, primarily because his father was a dentist and he just felt he had to escape for a little while. He worked in biotech on some defense and intelligence agency contracts until he could no longer avoid the allure of the tooth. In 2015, he purchased two practices and merged them together.
Mike, on the other hand, practices in Westfield, New Jersey, our East Coast friend, his dental degree is from the premier dental school in the universe and beyond, Temple University. He started out with a biology degree from Rutgers, and then took the plunge into private practice in 2017 by purchasing a practice in Westfield, New Jersey. He's currently in negotiations to buy a second practice. Since both doctors recently opened new practices, we're here to discuss the highs and lows of their experiences and of course everything in between. Nima and Mike, welcome to the show.
Nima Aflatooni: Thank you.
Michael Saba: Thanks.
Betsy Shapiro: Maybe we could set the stage just a little bit by discussing your experiences coming out of dental school. Nima, can you tell us what you did right out of school?
Nima Aflatooni: Sure. I graduated in 2010, and I'm not sure if you'll remember at that time, but the economy wasn't doing so good, especially dentistry. Dental practices were really suffering. There was a busy-ness issue, so finding a job was incredibly difficult. I was able to get a job working for a large group practice — a large DSO — and that was my first job out of dental school. And it was in Sacramento and that's what brought me from San Francisco to Sacramento. Also, my father had a small practice here in Elk Grove and I would help him out every now and then, but it was primarily working for the DSO, that was my first experience.
Betsy Shapiro: Got it. Okay. How about you, Mike? What did you do right out of school?
Michael Saba: My first experiences out of school were going to a couple component meetings. And I met one dentist that I ended up working for, and eventually ended up buying out his practice, and he's the same doctor that I will be buying the second office from. My path was a little bit more organized than Nima's in the sense that I kind of took the local component chapter and everything kind of fell into place from there.
Betsy Shapiro: That is excellent. I mean, I'm assuming that was a good experience for you since, you are now looking at purchasing a second practice, right?
Michael Saba: Yeah, it's been fantastic and it was easy for me because it was a very trustworthy situation. I only had one practice that I worked in and that's pretty much where I stayed, so it has its pluses and minuses. I was only exposed to one place, one private practice, but I don't really regret that motion.
Betsy Shapiro: Very, very good. How about you, Nima, in terms of what happened next? How long were you at the large group practice and then what was the next step for you?
Nima Aflatooni: I was with a group practice for about a year and a half. And throughout that time, I was trying to get out and I had worked at various private practices. Unfortunately, I didn't have the good luck like Mike did as far as getting in with somebody and eventually buying them out.
Once I left the DSO, I just came to a point where I realized that clinically, their philosophy and standard of care did not match up with mine, which is fine. And so I decided to leave and ended up working for another private practice for about another couple years. And I went onto that private practice with the intention of being a partner. But after a year or two...two years, I realize that that may not possibly be happening. And so I think that that might be the position that a lot of new dentists find themselves in. They go on to a private practice with the intention of partnering in; but however, there isn't anything written on the contract from the very beginning. Everything's kind of verbal. I had ambitions to own a practice sooner than later.
And again, my ambition to start a practice didn't line up with the owner's, so I decided to kind of branch out on my own and either start a de novo practice or purchase an existing one with an existing patient base. And that's when after a couple of years of looking, I found the right practice. It was actually two practices in one and had the right patient base, right location and it had the capacity to overcome the few reductions I would inevitably be facing by being sort of forced into taking the Delta PPO. That's pretty much where I went after leaving the DSO.
Betsy Shapiro: Let me ask you this. When you left the DSO and then were going into looking for your own practice or a practice with which you could eventually associate and buy in or something, did you have another job when you left the DSO or did you take a blind leap of faith and then find something afterwards?
Nima Aflatooni: I actually got in touch, and this is where the Dental Society came through for me, they matched me up with another doctor in the area who was looking for an associate and who was interested in doing a partnership. But like I said, I think their timeline was a little different than mine. And again, I mean that's something that new dentists should always pay attention to. I mean, if you're taking a job and you're getting promised you can buy in or you can do this, I mean, that's all great, and the owners might even be completely truthful; they might be coming from a great place; but, if you don't have anything written down on a contract from when you first start on when you will buy in, what that buying amount was going to be, don't think that you have anything, you know? That's really important. It was after that that I decided the only thing I'm going to do is just purchase a practice on my own. And I was interested in just being a sole proprietor and not being in a partnership.
Betsy Shapiro: So life lesson, get it in writing.
Nima Aflatooni: Absolutely. Get it in writing. Especially if you're looking at a partnership situation, you need to have everything in writing and to have milestones, you need to have evaluations, all that stuff in writing from the very beginning.
Betsy Shapiro: Okay. Thank you for that. Mike, I'm interested in your mindset. I want to get inside your head a little bit. Going out and starting your own practice pretty much right off the bat is gutsy. Was that just your nature or how did you land there?
Michael Saba: I always knew that I wanted to have my own practice. And as a matter of fact, we kind of talk about the DSO model. I don't think that the DSO model is necessarily bad. There's a lot of different models out there and it's something I'm kind of interested in, but there's just a lot of factors that go into it. But I knew I wanted to get into a private practice. I knew I wanted to own my own private practice. And because I said that I purchased this practice, it was the only practice that I worked in before buying something doesn't mean it didn't come with the same hurdles that Nima was describing. I don't think that an owner dentist necessarily wants to make it hard for new dentists. I just think that a lot of them aren't ready to let go of it. They don't know how to let go of it. They don't know how to manage even an associate coming into their practice because they're so used to doing it their own way.
One thing that becomes big issue for every employee dentist, whether you're new or older, I think, is vision. Everyone has a different vision of what they want. Everyone has a different practice philosophy, and finding that match is very hard on both ends. For the new dentist going into the workforce and for the older dentist that might be thinking about letting go, may not be ready to let go financially and emotionally, and there's a lot of hurdles with that.
And I agree with Nima 100 percent that if it's not in writing, it's not going to happen. The contracts are unfortunately super, super important in every aspect. But yes, coming out of school, I knew I wanted a practice and I kind of told... His name is Dr. Louie, early on, "This is what I want. Do you think it can happen?" And when time came for it to actually happen, there was a lot of hesitation, there was a lot of uncertainties on both of our ends, but we were able to work through it. Even though we almost didn't, but in the end of the day it worked out.
Betsy Shapiro: You are jumping right back in, Mike, and you are now about to buy the second practice. What's your biggest hesitation about that? Do you have any fears or did you learn a lot from the first one and you're good to go?
Michael Saba: I don't think that I will ever be fully ready for the second practice. I don't think I was ever ready initially for the first practice, but everything kind of had its weird way of just working out, and right now it is just working out. I don't know how it happens, but it does. And no one really told me that in the beginning it works out. I was so scared. I was like, "I don't know if I'm making the right move." There was a lot of, "I don't knows," but everything worked out.
My biggest fear moving forward is risking everything I've built up now. And I think that that... I don't know if Nima can agree, staff is one of the biggest fears.
Nima Aflatooni: Yep.
Michael Saba: When you're getting into a second location, you're depending on an associate now. As a new dentist coming out, looking for an associate and having another new dentist looking at a new dentist for direction, it's a big pill to swallow. But I'm going with my gut and hopefully everything will work out the way it did in the first, but I would say staff and finding that right associate to help me through the process is probably the scariest part.
Betsy Shapiro: Nima, how about it from your end? You kind of went the reverse route and have got two practices that you then merged together in some form or fashion. Tell us about how you decided to do that.
Nima Aflatooni: First of all, I completely agree with Mike. It has to do with your vision and you really need to have one before you even decide to purchase a practice or two practices. You need to have a clinical philosophy and a business philosophy, or else it's going to be really hard moving forward, and you develop that over time. But I realized that I didn't have a choice but to purchase that really great practice where you have two or one doctor that have an established patient base, have great relationships in the community. And what I wanted to do is just preserve that and move forward and continue growing that patient base. And a lot of these practices don't come around too often.
What I did was I formed a really close relationship with a couple of different practice brokers in the area. This is the advice I give to any new dentist who's looking to buy a practice. Get in touch with the practice brokers, these guys who work for Schein or some of the other ones and get to know them and let them get to know you. Because what they really like to do, especially some of these more seasoned guys who do this, they like to be matchmakers. They want to know what your personality is and match that up with the personality of the seller because they like to be successful. They like successful transitions.
So I did that. I got to know the practice broker for Schein. And so when this one office, actually two of them, they're basically two practices located in one location so it was ideal. When this practice came up for sale, he kind of let me know before anyone else that "Hey, this is available." And so I immediately went out and I met with the dentist, the sellers. I really got to know them. I really got to learn about them and what they want. I learned that it was important to them to maintain their legacy for their patients because they live in the community, they're friends with the patients. They didn't want to just sell it to anybody.
Taking those extra steps to form relationships is incredibly important in being successful in anything, but also in purchasing a practice. And that helped me actually purchase these two offices even though the dollar amount I came in was probably lower than some of the other offers they had. Because for them, it was more important that if they go to church, if they go to the grocery store or they run to their friends, patients, whatever, that they still say, "Hey, thank you for leaving my dental care in the hands of someone you trust," as opposed to someone that was the highest bidder.
That's kind of how I went about purchasing these offices, and I knew that I would be purchasing these offices probably at a high valuation. They were Delta Premier-only practices, so I had to really take a closer look on the makeup of the practices, what the insurance mix is of each practice, how much hygiene was being done, how things were being treatment-planned, and seeing if there is room for growth for me to overcome the 40 percent to 50 percent fee reduction I would have to take on those Delta patients. You have to think about a lot of different things when it comes to purchasing the right practice for you. Those are the few considerations that I had and few things that I did to help me out.
Betsy Shapiro: That brings up an interesting question. You do need to think about all those things. I know when I was in private practice, you have to think about the bottom line and what happens when you take a fee cut in a certain area and all those things. It's also something we hear very commonly from our newer dentists that they aren't prepared for coming out of school. Was this something that the best dental school in the universe prepared you for or was this something you picked up innately? How did you learn to do that?
Nima Aflatooni: We did have practice management classes at Pacific. And I know now, Natasha Lee, who is the president of the California Dental Association, she also teaches at Pacific, which she actually uses computer modeling so students can look at a practice in a computer model and make various parameter changes like insurance, no insurance, patient types. You can see what happens to your practice.
We got a very rudimentary, basic, still pretty good introduction to practice management. But I got to be perfectly honest, you're in your third year, or third year for us, and you're graduating and you're trying to meet your requirements...that class doesn't tend to be high on your list of priorities. A lot of it came from just talking to people. Again, it goes back to relationships. Get involved in your dental society, get involved in organized dentistry, get to know dentists, ask them questions, learn from their experience. And then when it comes time to purchase a practice, you'll have a baseline to go with.
And the thing is, everything I've learned it's from getting to know people or getting introduced to a consultant or getting introduced to an advisor or someone that can help me manage this. And the way you find out who the good consultants are, who the good advisors are because there's a ton out there, you find the good ones by forming relationships in your community with other dentists, and so that's kind of what I did. It was kind of a learn as you go thing, and it always is with any business you really get into, but it goes back to the relationships that you form, and how you can basically capitalize on those.
Betsy Shapiro: How about you, Mike? Did you have a business background coming into this industry, in the profession, or was this self-taught for you as well?
Michael Saba: In dental school, we didn't have the best business education, but networking is key. Networking is something that I cannot stress enough. I mean, if it comes down to financial stuff, there's a lot of great companies out there that are looking to help new dentists through the process; one, to create that relationship, and two, for their own business benefit as well. But the amount of resources out there are incredible.
In my situation, I learned a lot just by being there. I alluded to being the owner in a couple of years. I always kind of looked at the numbers and and my owner dentist, he really did show me the back end of a lot of things. And coming out of school, you're used to using let's say an endo system, and I would go to him, "Dr. Louie, I want to buy this endo system," and he would just flat out say, "No." And to me, I was like, "Wow, that's just the mean dentist, grouchy, old guy saying, 'The new dentist doesn't know anything.'"
But looking back, he's thinking about that bottom line, and whether I realized it or not, he was training me to kind of think about those bottom line things and return on investment and all that. Looking at practice numbers is a whole science of its own. And I don't know any of the programs that Nima was talking about before, but I would highly recommend, if you know of one or someone that you've networked with can recommend one, it is probably a very valuable thing to do prior to actually making a huge purchase. Because once you purchase a practice, you're married to it and you need to make it work. Knowing those numbers beforehand and really understanding the future metrics is so crucial.
Nima Aflatooni: Absolutely, absolutely.
Michael Saba: It can either make or break your happiness. It'll make or break how much you love dentistry, but you really have to know what you're getting yourself into, and do your homework.
Betsy Shapiro: I think I have heard that coming from both of you, doing your homework, and I just know both of you are the type who did your homework. I don't want to dig deeply into your personal financial situations whatsoever, but just as a short answer, I'm guessing each of you had to take out some kind of loan or seek some kind of financing when you were going into this and we know that student debt can be very high. Did you have trouble getting a loan?
Nima Aflatooni: No. I graduated... As much as I love the greatest dental school in the universe, I don't love the amount of debt that education put me in. And I'll be honest with you about that, it's incredibly high and it keeps getting higher. I did not have an issue when it came to buying this practice because when a banker looks at a practice valuation, a practice purchase, there's one thing that matters more than anything else and that's cash flow, the cash flow analysis. Looking at historically what that practice has collected, and based on the valuation, based on everything, there's going to be a cash flow number, and you need to work with a good accountant.
Let me just step back to the relationship aspect. Before you buy a practice, you need to have a team together. It's incredibly important you have a team. You need to have a dental attorney, you need to have a dental CPA, you need to have a dental consultant to actually go through a chart audit with you. You need to have your insurance in line. You need to have a dental insurance broker. And these advisors will really help you sort of do the evaluations moving forward.
So for me, even though I was in a lot of debt coming out of dental school, also taking on a high level of financing in purchasing these practices, there wasn't really any concern from the finance side because the cash flow was so strong. Again, going back to what Mike said, educate yourself. Take as many courses as you can. You need to look at a profit and loss statement. You need to know what every number means. You to be able to look at financial reports and really understand what it means.
Whatever course you can take, I know the ADA has a Center for Professional Success. And I wished that was there when I was purchasing a practice or I wish I had known about it. It's incredibly helpful in providing a lot of this information. But if not, educate yourself as much as you can. Make those relationships, get your team together and learn as much as you can. So really, debt is only how you look at it. When it comes to financing, again, it just came down to cash flow and that was not really a problem.
Betsy Shapiro: Well, I love the unsolicited plug you just gave the Center for Professional Success.
Nima Aflatooni: Did you like that?
Betsy Shapiro: Yes.
Nima Aflatooni: I hoped you liked that.
Betsy Shapiro: Very much, very much. Thank you.
Nima Aflatooni: I was trying to work it in.
Betsy Shapiro: Your check in the mail. How about for you, Mike? Were you able to get a loan? Did that work out for you as well as smoothly as it sounds like it went for Nima?
Michael Saba: For dentists, and I think most people that are listening to this podcast are dentists, you have no excuse not to get financing. Now, I had a different situation where I got owner financing and it was a little bit of a creative method. But even if I needed bank financing, it wouldn't have been an issue by any means because banks love dental offices. Dental offices don't fail. What could be a failure is, what I alluded to before, is your happiness, how much you've taken out of that practice financially.
But in this day and age, I mean, I said that you should take a course, but there's no excuse not to be educated in all of this stuff in how to manage student debt...on how to manage the book. I mean, you just go on Facebook, it's free. There's plenty of groups that are talking about business aspects of dentistry and Dentaltown. The ADA has tons of resources. We all graduated with at least 50 or so dental students that we can reach out for advice and mentorship.
But student debt, while it's very high and very unfortunate, it's not really hindering most new dentists from being able to acquire a practice. It didn't from my situation at least.
Betsy Shapiro: I love what you said there, Mike, about that you took a different path and had owner financing. I think that speaks really highly to your relationship with your dentist from whom you were purchasing, and that's part of the collegiality I think we see a lot of times. If you take the time to invest in a person and the personalities mesh and the practice philosophies mesh, we can be creative about things like that and everyone's happier in the end.
Michael Saba: Absolutely. And on that note on creativity, because Nima did mention before about having a dental accountant or a dental lawyer, a lawyer is not a dental lawyer or an accountant is not a dental accountant. While there's no specialization in law or accounting, it's important to find someone that really focuses and understands the nuances of dentistry. And there's so many nuances, and this is a mistake that I made with my contract and the lawyer that I chose for my buyout: he didn't focus on dentistry and didn't understand certain nuances just to make it simple on patients and HIPAA and things like that. It wasn't detrimental to me, but it could have been an issue moving forward. What Nima had said before about finding the right people for the right job, in this case dental, is very, very important.
Betsy Shapiro: You just read my mind and answered my next question, which was what might you do over, and I know what you might do over. Nima, is there anything when you look back that you might have done differently?
Nima Aflatooni: I think, and this is going to sound a little bit cold-hearted, but I would have managed the way I deal with HR a little bit differently when I bought the practice. This was my transition into purchasing these two offices. Both doctors called... And both doctors have been practicing for about 30 years, they called an office meeting at 4:00 p.m. on May 28, 2015.
Betsy Shapiro: Not that the day is burned in your memory.
Nima Aflatooni: No, no. 4:00 p.m. and five seconds. They called an office meeting of the staff and they told them, "As a 4:00 p.m. today, we no longer own the practice and your new owner is waiting outside."
Betsy Shapiro: Oh dear.
Nima Aflatooni: I walk in and everyone's just crying and this... I mean, I purchased an older practice. No one really knew how to use a computer, paper charts, films, which is fine, but it was just a little bit different than what I had been used to. But that's all okay. I always thought that you could train people and that's fine.
I think when you purchase a practice and you, let's say inherit an existing team, in the first 90 days you have an opportunity to see who is going to go along with their clinical vision and the vision of the practice, and who isn't. And you need to be very decisive on who you decide to keep and who you decide to let go. And this is very important, and it's really important that you actually let go of the people that you need to let go. And I didn't because I was afraid about the relationships they had with the patients and things, so I kept people on who necessarily did not go along with my clinical philosophy, and that was a mistake.
I am actually looking to purchase another office within the next year, year-and-a-half. And knowing what I know now, I know that I will probably let people go within the first 90 days if they don't agree with me; with my clinical vision and business vision. And so that was the only real regret that I have. And not to sound cold-hearted about it, but it's just the pure, basic fact of saving yourself a lot of misery moving forward.
Betsy Shapiro: I don't think you sound all that cold-hearted. I think you sound practical and I bet that was a really fun meeting after you walked in.
Nima Aflatooni: Oh God, it was brutal.
Betsy Shapiro: Yep. There's not enough ice cream in the world to make that better them.
Nima Aflatooni: Oh, geez. No, not enough ice cream. Everyone was... It was really interesting. But like I said, moving forward, I would just say, "Hey, listen, you're either with me or this isn't a good fit for you." And you need to not be afraid to make those changes.
You need to be not be afraid of patients, let's say, leaving. If they're going to leave because they liked an administrator or they liked an assistant or a hygienist, then that's fine. It's okay, you're going to make up for that. But I was dealing with a lot of fear because I had taken out such a huge amount of financing that knowing what I know now, I would make those changes earlier.
Betsy Shapiro: Well, we truly appreciate that both of you were willing to share that you were scared at some point and that you overcame it, that you worked through it and as we-
Nima Aflatooni: I'm still scared.
Betsy Shapiro: Yeah. Well, that's probably healthy, I think. As long as it doesn't overwhelm you. And then we have some wellness resources if it does, but I think a little bit of fear is a good thing.
Well, thank you both for sharing your time with us today and explaining how the process worked for you and sharing with everyone the good points and the bad points. We truly appreciate it.
Nima Aflatooni: Great. Thank you, Betsy.
Michael Saba: It was great being here and we hope we help a lot of people out.
Betsy Shapiro: Now we're at the part of the show where we answer a question we've received from a member. In the Practice Institute here at the ADA, we answer member questions every day, and we wanted to share one of those with you, our listeners. To help us, we have with us Katie Call. Katie is on staff with the Center for Professional Success and is the answer woman for our members' calls and emails. The question is, Katie, I want to start a practice, so tell me how I go about doing that.
Katie Call: Thanks, Betsy. That is a really big topic, and every dentist who asks this is likely coming at it from a different position. Some dentists know where they're heading already and others are just starting to think about where they want to be. The best place to start is to take a look at Starting a Practice on our website at ada.org/startingapractice. On that website, you'll find a lot of really helpful links and resources that we've developed on this topic, such as our new practice checklist, tips on how to choose a location, elements of developing a business plan, information about setting up payroll and so much more.
But at the end of all of that, if a dentist who is looking to start a practice still can't find answers to a specific question, they can always send us an email at centerforprofessionalsuccess@ADA.org or, of course, call the ADA Member Service Center at 800-621-8099.
Betsy Shapiro: If you want more information on all aspects of dental practice management as well as dentist health and wellness, please visit our website at Success.ADA.org. Or as Katie noted, contact us at our email address: centerforprofessionalsuccess@ADA.org. That's all one word, centerforprofessionalsuccess@ADA.org.
We want to thank our sponsor, ADA Member Advantage, for their support, and to Sandburg Media for producing this podcast. And thank you for listening to Beyond the Mouth.