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On 1st January 2025, The Extreme Business 100 community will begin its 4th year together and, although there are no minimum membership periods, contracts, notice periods or any other boundaries – we notice a number of joiners and leavers at the start of each calendar year.
Some members decide to take a break and consolidate what they have learned, some decide to work with an alternative coach/community to get a fresh insight, some (sadly) fall by the wayside, unable to keep up and some have sold (although fewer of those this year – about which, more later).
So, you can take today as the official opening of our 2025 marketing for new members. We do see around 25% “churn” in the community each year and that means that, between now and 31st December, I’m going to be marketing to attract around 25 dental businesses to join The Extreme Business 100 for 2025.
We have members who are starting their first squat or making their first (or subsequent) acquisition; we have existing successful practices looking for continued growth, we have mature practices whose owners are looking to plan a future exit.
Mixed, private and specialist, old and new – there are no barriers to entry in our gang – and we get along famously. Some members have even gone ahead and formed their own special interest groups that don’t include me!
p.s. Let’s get the price out of the way – full membership of The Extreme Business 100 is £750 pcm (Inc. Vat) per business (irrespective of size and number of chairs/locations – our “biggest” member has 50 sites, our smallest is 1 dentist, 1 nurse, 1 chair in a rented room).
It’s an absolute bargain for the benefits provided – I like to think of myself as your lowest paid team member, with 100 like-minded colleagues, who are all helping each other and you!
Over the weeks ahead, you will see a variety of marketing content from us, some of which will be explaining the content of next year’s programme (guest speakers, events, focuses of attention) and most of which will be testimonials from existing members of our tribe, sharing their thoughts and experiences.
Across various social media channels, I’ll be talking about the advantages that Extreme Business members enjoy and offering you a complimentary Zoom call to hear your story and for us both to see if we are the right fit.
Today, however, I want to return to the title of this article – “2025 – The Year of the Golden Goose” and explain what I mean by that.
When The Extreme Business 100 launched, we made a BOP (bold outrageous and provocative) promise – to double our member’s profits in three years.
Did it work?
Cue the real world – “Yes” for some and “No” for others, which motivates me to ask “why?”
We ask our members to follow a 50+ step programme of action to create what I like to call a “Champions League” practice.
It’s called The Extreme Business Process© and I shared a copy of the list in my blog last week – you can see it HERE – so I report back that there is a direct correlation between the high scorers on the “how many steps did you implement?” list and the increase in profits.
Many members have been motivated by the idea of planning their exit strategy – preparing their business for sale. In fact, I ran a full-day workshop on this subject in Q2 of 2024 and it was very well received.
However (and as I have been referencing in my posts and articles in recent weeks) I have a strong sense that the landscape for UK and Irish practice sales is going to become much tougher in the months ahead:
· A slow-down in acquisitions by some of the larger dental groups, as they circle their wagons to deal with the impact of rising overheads and payroll costs, challenges in clinical recruitment and reduction in EBITDA and, thus, returns for worried investors;
· The attraction to dental groups of buying practices overseas, often at half the price they would pay in the UK;
· Ever less attractive terms for vendors who sell to dental groups as cash payments up front reduce and earn out terms become harder to achieve;
· A noticeable shift in the sentiment of younger dentists looking to step on to the ownership ladder, who seem to be asking about squats and not purchases (by the way – there is a yawning gap in the market for a Squat School for those younger associates/therapists/hygienists/managers who want to open their own practice – I simply don’t have the bandwidth to open such a “a school” but I’m seeing some dentists do it and welcome their efforts);
· The caution of financial underwriters who are approached to lend for either squats or purchases;
· Thankfully, more “new buyers” are taking advice from their professional advisors and creating cash flow forecasts before they take the plunge. Paradoxically, when they see the numbers (especially the cost of debt servicing) they sometimes back down from the idea – too risky for them;
· Last – but very definitely not least – we await the Budget on 30th October and the promised/threatened changes to Capital Gains Tax. To put it bluntly, if “Entrepreneur’s Relief” is attacked by the Chancellor, the exit plan of many (including my clients) could be put back for years.
With all of this in mind, I’ve been thinking a lot about the future landscape and I’m concluding that the history books may well report that, from 1996 to 2024, we saw “The Age of Acquisition” as the corporates and groups gathered momentum, grew their portfolios of practices, entered into bidding wars with each other (ah – he glory days of 2019) and multiples of EBITDA started at 1x, grew to 8x, temporarily surged to 11x and eventually fell back to 6.5x (give or take, of course).
Perhaps those same history books will record the dawn of a new age – 2025 – The Age of The Golden Goose – an era in which dental business owners built practices that they didn’t want (or need) to sell.
Imagine, if you will, owning a dental practice where, of the 4 possible hats that you can wear, you only wear two – let me explain:
· The Clinician’s Hat – turning up and doing dentistry, as well as mentoring other dentists;
· The Managing Director’s Hat – ultimately responsible for making sure that everything else gets done – finances, marketing, the patient experience, operations, compliance and HR;
· The Landlord’s Hat – you (or your pension fund) own the property and collect the rent;
· The Investor’s Hat – your money tied up in the goodwill value.
When clients start working with me, they are almost always wearing:
· The Clinician’s Hat – 35 hours a week;
· The Managing Director’s Hat – 16 hours a week or more;
They may be wearing The Landlord’s Hat but that doesn’t take up much time (and makes good sense).
They are wearing The Investor’s Hat by default but have little or no idea what the real goodwill value is and don’t measure any ROI from this.
The Clinician’s and Managing Director’s Hats are consuming their time and energy, often late into the night and at weekend.
In The Age of Acquisitions, the game became to build the practice, sell it and get out of Hat Jail either straight away or after the earn out.
(Side Bar – then they go and buy/open another practice and put all the Hats back on again 🙄)
In The Age of the Golden Goose, the strategy changes completely:
· Create a clinical team and a Clinical Director, who allow you to take the Clinician’s Hat off;
· Create a Managing Director and a senior management team who allow you to take the Managing Director’s Hat off;
· Keep the Landlord’s Hat;
· Keep The Investor’s Hat;
· Build a dental business that requires you to attend 12 board meetings a year, for three hours each – total involvement in the business 36 hours a year – total return on investment – 100% of the profits;
· Do other fun stuff with your life.
So, Chris Barrow is reinventing himself from 1st January 2025 – I’m transferring my energy from building practices to sell – to building practices worth keeping.
I’m excited – and I’m confident – because this isn’t just theory – I’m already working with clients who have escaped The Clinician’s Hat and The Managing Director’s Hat.
They are a minority in The Extreme Business 100 – but they are there – and I’m already planning activities for 2025 that will allow us to share their top tips and tactics with the community.
By the way – if you are determined to sell, of course we can help you with that.
I’d love you to consider joining us – if you’d like that “free consult” with me – simply complete the online booking form here and we will plan a date for a chat.
Golden Goose?
Ask me how.
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