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761: The Energy Quotient & How Many Days You Work for Free as a Dentist – Dr. Barrett Straub

You've put a ton of time, money, and effort into becoming a dentist. You deserve to make a profit! If that sounds impossible, keep listening. Kirk Behrendt brings back Dr. Barrett Straub, ACT’s CEO, to explain why working harder isn't making you more money, and how understanding the energy quotient will help you gain ultimate control over your practice. It’s time to stop working harder for less! To learn how, listen to Episode 761 of The Best Practices Show!

Learn More About Dr. Straub:

Learn More About ACT Dental:

More Helpful Links for a Better Practice & a Better Life:

Main Takeaways:

  • Understand the importance of the energy quotient.
  • Calculate how many days you're working for free. Lower that number!
  • Your energy quotient doesn't need to be zero — it’s okay to be charitable.
  • When you manage your energy levels right, your quality of care will increase.
  • You don't need to work more hours and have more operatories to make more money.
  • If you increase patient volume, you will have less control over your practice and your life.
  • It’s not just about the money. Lowering your energy quotient will lead to a better practice.

Quotes:

“Let's say we have two dental practices gross producing $1 million. One gets there with 1,000 patients doing $1,000 per patient . . . You could have the other practice that needs 2,000 patients doing $500 per patient. They both get to $1 million . . . You can see that those are different. Right? One of those practices possibly worked 25% less. One of those practices worked less days. So, really, there's a difference in profit margin there. When you have a lower profit margin — meaning you're making less profit per procedure, per patient, per hour — you need to do more, more, more, more. We need to add days. We have to work longer hours. We've got to churn and burn, and we have to fit a lot more patients into these four or five days that we're practicing.” (3:42—5:00) -Dr. Straub

“What the energy quotient does is symbolize, how many days do I have to work for free? Free, meaning without the potential of collecting income in order to afford my lack of profit margin, in order to afford these write-offs or adjustments that I'm taking off the top. So, basically, to get to that $1 million, how many days do I work for free just to have the right or the ability to produce $1 million? You can see when someone has a low energy quotient, that the number of days working for free is less, and then the other one is high, they're going to feel differently about that same gross production.” (5:07—5:51) -Dr. Straub

“One more thing that happens when you go in that direction of higher volume is you have less control. Insurance companies are now making decisions for you. You're probably seeing patients in the evening. You're equipping extra operatories. A big reason why you went into this profession was that you could do it your way. So, if you're stressed, this far into the podcast, we're here to tell you there is a way out. There is a very, very predictable way out, and it's called our GAPs Method.” (8:06—8:36) -Kirk

“If your effort gap is 35% — we see that all the time — another way to look at it is 35% of every hour, 35% of every day, 35% of every week, month, year, you're doing it for free.  We never say we want your energy quotient to be zero because we want you to be charitable. We know you're going to have guaranteed service. Many of you are going to have some level of PPO. But we want to find the energy quotient.” (12:16—12:43) -Dr. Straub

“We had a To The Top Study Club in here a few months ago and we calculated this. I remember the question was, ‘How does that feel?’ Some [practices] that were 30%, 40% were visibly upset, as they should have been, because they're like, ‘Wow. I didn't realize my profit margin was so poor,’ because when you're doing that, you're working so hard and you're like, ‘I am working so hard, and 40% of that effort, I don't get any remuneration, or I don't get any revenue on.’ That feels bad. But some people are like, ‘I'm at eight, nine percent. I worked eight days. That feels good because I know what that's from. It's because I gave it away to them and they were in need. I did some pro bono, and I did this. Yeah, that feels good.’ And we're like, ‘Great.’ So, it's not necessarily like you should — it's no benchmark like, ‘You should be at 20 days or less.’ It's more of a personal like, ‘How does that feel?’” (12:43—13:43) -Dr. Straub

“Let's think about the word energy. It's long been known, and we advise this in our coaching, set up your day. What's a perfect day? When do you want to do your more intricate techniques? Most people choose the mornings. The afternoons, your energy levels drop. So, our whole quality of care is partially dependent on managing our energy level. When we have more energy, we're better dentists. So, the energy quotient is important, and we want to make sure that you can manage it.” (15:39—16:09) -Dr. Straub

“If you have a high energy quotient, meaning you're giving away a lot of days for free, versus when you lower that, what happens? You make more money, but you can also work less. So, some people would say, ‘I'm still going to work the same days and I'm going to improve my profit margin. Therefore, I'm going to be a lot more profitable.’ Other people are going to say, ‘Yeah, I'm going to do some of that, but now I can actually work under 220 days. I can take those three-week-long family vacations a year. I can do this, and I'm still going to make the same or more.’ So, it's not just about money. It's actually not. Money doesn't even come first. It's about what feels best for your life and your practice.” (16:11—16:59) -Dr. Straub

“It is almost universal that we find our clients whose profit margins are a little out of whack always feel lack of energy. Meaning, they're running hard and they're like, ‘I'm tired. I'm burned out. I go home and I'm not myself. I'm working too long, too many days. I have to go in on my days off to do administrative tasks. I thought there would be more money, so it's not even like it's worth it.’ And then, once we calculate their profit margin, look at their effort gap, and look at their energy quotient, it becomes very obvious why they feel that, and it has all to do with profit margin, PPO adjustments, and lack of collections. There are four gaps that can add to this. Quite often, the biggest one is the PPO write-offs.” (17:01—17:48) -Dr. Straub

“It's interesting because our clients come to us, and profitability is always part of it — it has to be. But what they focus on isn't like, ‘Yeah, I'm just so profitable. I got all this money. I'm investing.’ It's about like, ‘I'm so much more profitable, and what that has allowed me to do is I'm leaving work at 3:00 on Wednesdays and Thursdays. I went to 7:00 to 2:00. I'm reducing my days worked by 14 days next year and I'm making more money.’ So, they're beaming, and their eyes are sparkling. It's about the life and the time. You always say time is the new rich, and it is our most valuable asset.” (18:29—19:08) -Dr. Straub

“Guess what also happens when we have a little more profit and a little more time? We become a better boss. We become a better business leader. We become more charitable. And I think we do better dentistry. I know this is a taboo subject about like, ‘My quality of care is always the same.’ I've been a dentist for 20 years. That would be a lie. I'm a better dentist when I'm not burned out. I'm a better dentist when I'm not doing a molar endo at 4:30 p.m. on Friday. I'm a better dentist when I have more control over my time, more time to spend with patients, more time to do the things I need to do. So, quality of care goes up.” (20:12—20:54) -Dr. Straub

“Money doesn't really give you joy. What it does is it provides options. If you can make an income, you can choose better care. You can choose a better place to live. You can choose your time more wisely. I think a lot of that philosophy exists in dentistry. When you have profitability, you can choose. You can choose a better lab. You can choose not to see a patient. You can choose not to work on a Friday. You can choose to take a great course. You can choose to buy better technology. You have more choice. It's not about getting a nicer car, or a second home, or anything like that. Sometimes, when you're more profitable — and we've learned this firsthand — you can say no to stuff. You're like, ‘Nope. We're not doing that.’” (21:01—21:44) -Kirk

“It's really about profit margin. When your profit margin is out of whack, you are forced to do business strategies that you don't want to do. When your profit margin is managed and it's profitable, now you have a lot of options to run the practice the way you want, options for that practice to deliver the life you want, options to have time and a life. So, really, all these other narratives out there are all about profit margin. When you control your profit margin, you have ultimate control of your practice.” (23:00—23:37) -Dr. Straub

“The person you probably speak to the most about your profit margin — and I'm not here to slam your dental accountant. Or maybe I am. I think there are a handful of really good ones out there. But the truth of a dental accountant is they don't know how much your gross production was. They don't even ask you, ‘How many days did you work? How many insurances are you contracted with?’ You're talking about this thing called profit with somebody who's looking at your P&L, your debt service, and other things like that and telling you, ‘You’ve got to pay taxes,’ . . . They're saying, ‘Maybe you should buy cheaper supplies. Maybe you should add a day.’ And, really, I don't know if that's the best strategy because they're not even paying attention to the third that you're not collecting on the top of it.” (23:38—24:29) -Kirk

“Twenty years of owning my own private practice, and a multitude of visits with CPAs and accountants, and thinking through goals, and looking at P&Ls, no one could ever answer why. Why is that number not higher? Why is that number the number it is? Why do I feel like that number is not big enough? Where did all the money go? Why isn't my profit more? Why did I pay that much on taxes? It doesn't feel like I should have paid that much on taxes. I've never talked to a dentist that didn't share some of these same internal experiences.” (26:14—26:49) -Dr. Straub

“Once you know why your net profit is this, and why there's no money going into your bank account, or the money that's going in, why it's not higher or lower, it's pretty simple and clear and easy to make some small, strategic business decisions to improve them progressively over time. We see it all the time with our clients and people that go through the GAPs. It's like you can see a light bulb going off, like, ‘Oh! I totally get it now. I understand why it feels like I'm not making enough money. I understand why I feel like a hamster and the profit is just not coming.’ And now, once you know why and you have a framework for easily calculating it for the rest of your career, now let's go to work. Let's tweak that. Let's improve that a little bit at a time. And a little bit at a time, like you said, results in success forever.” (26:56—28:00) -Dr. Straub

“The energy quotient is another way to symbolize your profit margin or lack thereof. If you're a dentist out there, whether you're an associate or owner — it doesn't matter — I want you to look at your product, your dentistry, your clinical skills. We've all trained to be excellent clinicians, but we can't leverage that clinical skill unless we do it in a strategic way that brings in enough profit. I want us to be fair. I want us to be ethical. I want you to provide great dentistry and do it at a fair price. But you deserve to bring in a profit. So, we need to understand profit margin. When we put out our output of dentistry, what percentage of those production dollars are going to come back in and filter down into the doctor's actual checking account? That's really what the GAPs does. It's the ultimate equation. Like, ‘Great. I produced X amount this month. How much of that do I actually get to put in my bank account after taxes?’ It's what the GAPs ultimately answers, and that information is unheard of.” (29:44—30:55) -Dr. Straub

Snippets:

0:00 Introduction.

1:28 Gross production and the effort gap, explained.

8:43 The energy quotient, explained.

15:39 Manage your energy levels.

18:29 Time is the new rich.

20:55 Money gives you options.

23:38 What your dental accountants don't know.

26:06 More about ACT’s GAPs webinar.

29:35 Final thoughts.

Dr. Barrett Straub Bio:

Dr. Barrett Straub practices general and sedation dentistry in Port Washington, Wisconsin. He has worked hard to develop his practice into a top-performing, fee-for-service practice that focuses on improving the lives of patients through dentistry.

A graduate of Marquette Dental School, Dr. Straub’s advanced training and CE includes work at the Spear Institute, LVI, DOCS, and as a member of the Milwaukee Study Club. He is a past member of the Wisconsin Dental Association Board of Trustees and was awarded the Marquette Dental School 2017 Young Alumnus of the Year. As a former ACT coaching client that experienced first-hand the transformation that coaching can provide, he is passionate about helping other dentists create the practice they’ve always wanted.

Dr. Straub loves to hunt, golf, and spend winter on the ice, curling. He is married to Katie, with two daughters, Abby and Elizabeth.
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