Timothy A. Brown has risen to national prominence as President and CEO of ROI Corporation, Canada’s number 1 dental practice appraiser and broker. His insights, research and experience in the dental field has made him a highly sought after professional speaker and a respected author. As a leading national authority in understanding and identifying the potential of today’s dental market, Timothy has customized a presentation that illuminates themes and trends that are of interest to dentists at all stages of their careers.
His book, Profitable Practice, Why a Dental Practice is an Exceptional Investment, is a potent reminder that dentistry can indeed be very profitable if the right steps are taken from the very beginning. Timothy brings these credentials to the podium and delivers a message that inspires and energizes dentists to reach their highest potential. He communicates clearly and concisely, empowering dentists to acquire the business acumen needed for success with this enthusiastic, insightful presentation.
AUDIO-DUwHF #1111 Timothy A. Brown
VIDEO-DUwHF #1111 Timothy A. Brown
Howard: It's just a huge honor for me to be podcast interviewing Timothy A Brown, the chief executive officer of ROI Corporation, Canada's longest standing and dominant market leader in dental practice appraisal and brokerage. His head offices in Misawa Ontario Canada and they have branch offices and all other provinces across the nation of Canada. He's 55 years of age, his father started the company when he was 11 and he started working for him part-time at the age of 14. At the age of 16 when he obtained his driver's license in Ontario his father asked him to assist in taking dentists into practices so they can have a look at the dental office for sale and then would report back to his father about what their intentions were. It's just a huge honor for you to come on the show today how are you doing today Tim?
Tim: I'm exceptional Howard thanks for having me on man.
Howard: and you want to have this episode be 1111 because the 11 is your lucky number?
Tim: Well I spoke to your producer just before we went live and he said that you I said is the dental town that podcasts up to about 1200 he goes actually today is 1111 so that is my lucky number 1111 a lot of people might know that number numerology but I'm lucky to be here thanks for having me on let's have some fun Howard.
Howard: I gotta tell you I'm looking out your window I'm in Phoenix and let's see what the weather is right now Phoenix is having a massive cold front, it's 73 degrees and Phoenix is 10 percent Canadian and you always know who
I didn't know that about Phoenix
yeah and you always know who the Canadians are because I wore sweats and a sweat jacket to go to work today and the Canadians are walking around in shorts and tank tops
Tim: Well I don't know if the viewers can see but it's minus one and you see the little snowflakes on the iPhone so that's where I am but...
Howard: Minus one Celsius?
Tim: Minus one Celsius which is about minus three Fahrenheit.
Tim: Sorry about 32 fahrenheit
Howard: but I got to tell you my most funny Canadian story so this Canadian dentist pop-by came by the house and we're talking everything it was about like today is 73 middle of winter and he says well let's go swimming I said dude you nobody, nobody ever swims. I mean this is what is the date today November 15th. I said nobody swims November, January, February, December and he dove in so I thought to myself okay this is all in your head he's fine he's swimming he's enjoying the water I think was like 65 degrees or something insane, so I said well I'm just gonna join him so I put on my swimsuit I dove in the I swear to God I almost died my teeth were chattering and I mean I almost went into cardiac arrest and he couldn't figure it out so you guys are just just one tough cookie when it comes to cold
Tim: Well I can tell you why the Canadian dentist is tougher than your average dentist but we'll save that for later in the podcast. So what are we going to talk about man?
Howard: Well I want to talk about your ROI corporation I mean you're Canada's dominant market leader in dental practice brokerage and appraisal. So what what are you what it's the Canadian market look like? I know in the United States right now when the guys selling their practices are my age back when they only had 4,000 dental students graduating every year now there are 6,000 dental students graduating a year. So you got 6,000 dental students trying to buy 4,000 retiring dentist office so it's definitely a seller's market in the United States is it a seller's market in Canada?
Tim: Absolutely it's almost identical but it's a little more heated up here because we not only have we have about 550 graduates to about 25,000 practicing dentists. So the ratios are almost identical Canadian ratios to American ratios Howard are virtually identical, the number in practice the number retiring that our graduating but two things have changed everything here in Canada. The first is that we have a national dental examining board criteria for foreign graduate dentists to re-enter and re qualify here in Canada that is in my opinion a little bit liberal and a little bit loose and we have about 1,200 dentists entering the Canadian marketplace every year, which would be the equivalent of 12,000 coming in America. We cannot fathom and we don't need that many dentists we have no use for them we need about three to four hundred dentists to come into Canada every year to roughly match and deal with the demand and the retirement rate. So when any appraiser and broker be it here in Canada or in the US or I've looked at South Korea we've looked at France on their Germany other advanced markets, you need to know two things how many are exiting and exit means dead, disabled, retired, burned out, moved, whatever that means exciting ownership and how many are coming in that want to be in ownership. Right now in Canada it's probably about five want to be an owner to one that wants to leave in most of the US markets that I've studied it's roughly three to one three one in versus one one out, that's what makes the sellers market that's it that's like real estate in Boston or real estate in Toronto or or real estate in in Honolulu it doesn't matter if you have more buyers and sellers you've got a seller's market and Canada at large mostly the major cities is a total seller's market.
Howard: So if you you said there's 22,000 practicing dentists in Canada your populations 36 million, so that puts sixteen hundred and sixty-eight people per patient that's kind of a little low, United States is eighteen fifty-two one and Canada's 16 16 to one but when you say that that Liberal foreign graduate Entry Program if I moved to Canada from Germany and I was a dentist in Germany how long would it take me to become a dentist in Canada?
Tim: Well there's two there's two entry paths here one is to join in a two-year program we call the IDP or the internationally trained dentist that takes about two years and you join up with the third and fourth year of any Canadian dental program so it takes two years but their's another bell ringer basically if you come in and you can pre qualify you can come in write the exam and you've got a license.
Howard: Wow so if you prequalify you can come in take a written exam and you're a licensed dentist to go.
Tim: and welcome to Canada so come and compete with the rest and we don't have any issues with that certain universities your more pre-qualified than others but it what it has done in the end has dramatically increased the number of new dentists obtaining a license in Canada and we don't need them. Purely from a supply and demand perspective now Howard I want to go back to the ratio you dropped there about 1850 to 1 in the United States about 1,600 to 1 but 35% of Canadians never go to the dentist. I prefer to measure active educated patients to full-time equivalent dentists as opposed to just body count body count means nothing in the business that I'm in anyways. So what we have in some of the major cities in Toronto is the worst in downtown Toronto right now Howard we've got 500 good quality active legitimate recall well-educated patients that can pay their bills per one equivalent full-time dentist, that's very serious.
Howard: Wow Wow Wow and then of course there's this other factor I just lectured in somewhere in Toronto, wasn't in Toronto, south it was a small town about an hour about 90 minutes
Tim: You were in London, Ontario recently.
Howard: Yeah, yeah London, Ontario is that the capital
Tim: No the capital of Canada is Ottawa, the capital of Ontario is Toronto.
Howard: Ok well I thought London was something they had a dental school there.
Tim: Yeah they do the University of Western Ontario
Howard: Yeah but when I was talking to the dentist there and they were very also concerned about corporate dentistry.
Tim: Well they are and it that's another trend. So now we have 550 kids graduating in Canada we have another 800 coming from international schools which are re-qualifying through various means. Well now we have the corporate trend here so but six to seven percent of all Canadian dental offices or talking offices not doctors now, are corporately owned in various...
Howard: Say that number again.
Tim: 6 to 7%
Tim: So in various states in the United States you have some that are 10, 15, 20, 30% corporately owned and some states more so. I think some of the viewers will know this but most might not Heartland Dental centers was sold a number of years ago to the retired teachers of Ontario Canada and it was called the Ontario teachers pension plan and we have one of the largest teachers pension plan funds in all of North America it is huge and they have a massive amount of money to burn I forget that how many billions they've got under management. Point is is that so the retired teachers of Ontario bought Heartland dental centres Rick Workman's empire. Now oddly enough the Ontario teachers of Ontario can't buy a practice in Canada anywhere because of our legislation and our regulation but corporate dentistry in Canada is blossoming and burgeoning mostly because three or four smart dentists much like Rick Workman have got together a hired assisted management team gone down to the the boys that we call Bay Street here or Wall Street there and they've raised some money and one of the biggest here in Canada recently announced and published in our national paper we raised 1 billion dollars, a billion for one reason to buy dental practices. So corporate dentistry in Canada is about to explode.
Howard: and what type of impact do you think that's gonna have on the the dentist?
Tim: On the dentist first of all for the new graduates there may be limited opportunities to buy practices because the corporate dental expansion in Canada is almost exclusively focused on buying existing practices they're not starting out they're not signing leases and building new practices they're buying existing. So if you're your son or your daughter or someone you know is about to graduate here in Canada chances are there's a corporate that already beat you to all of the good practices that come for sale. So they first of all they absorb all the inventory of the good practices and by good Howard I mean the larger ones corporate dentistry generally buys practices that generate 1 million or more in revenue that's all about economy of scale and that suits two business model. So now we've got you know all these young kids all the International dentists flowing into Canada all the good practices are being bought up by the corporates, so these people are gonna end up working for corporate dentistry. So the next generation of dentist may end being the bitch of the corporate dental Empire for the lack of a better term. Another thing it does for the existing entrenched practitioners say some a man or a woman in their 40s or their 50s they're gonna end up competing with these corporates and these corporates are very sophisticated they have remarkable marketing and management teams they have budgets that dentists can't even write out the number of zeros, what do we do for him what do we do for her how do they compete. That's Howard in Tim's burgers competing with McDonald's, we're done.
Howard: Yeah they have better managers, better systems, better marketing, usually better the best locations it's really raising the competitive environment but the dentistry is no longer there.
Tim: You've seen that in America the United States but here in Canada this is fairly new, we're I don't maybe a decade behind you guys in terms of the evolution of this process their's resistance, their's certain sentiments here in the marketplace where people think that corporate is evil their's others that embrace it so well we'll see the way it plays out but I think for the dentist going back to your core question here what does it mean to him or her that means a rapidly changing dynamic of how the Canadian dental delivery system is delivered from a business protocol to the patient that's a whole other topic and probably not of interest here your readership and your listenership right now.
Howard: So what does that mean for your business ROI Corp?
Tim: Well for the brokers we know that the corporates they prefer to go direct they want to take doctors out for dinner and they don't want doctors to talk to brokers. The primary function of any broker be it a Remax or a Roy Corp like us is to expose an opportunity to the open market to bring in multiple buyers to educate them to create an open sealed bid silent market competition and try to create a higher sale price and try to do it elegantly, confidentially, and hopefully the seller gets good results. That's what brokers do that's why you let a realist put a sign on your lawn to create competition. The corporate hates competition they hate it they want to take you for dinner Howard and they don't want to know that they are the only girl at the dance. So what that means to brokers is they don't like us because they want doctors to talk to them and only to them and they do that very effectively and very aggressively and they have a great marketing campaign to say come come and meet with us come and talk to us we have a value proposition and so for brokers not just my company but for all the brokers right across America and Canada we don't like corporates because they go direct they try to take you on a date and be the only person on a date and they don't want your going on any of the dating websites. I use that as an analogy to make my point, the other side of that coin is that about 70 to 80% of Canadian dentists want nothing to do with corporate dentistry, so there's enough business left for companies like ours at least for the foreseeable future I'm looking at a decade or so I think we're gonna be as busy as we always have our company continues to grow. Albeit we're growing at a slower pace because the corporates are are chipping away at the cherries they're getting some of the real good practices off the market.
Howard: So what advice would you have for the selling dentist versus a buying dentist. First of all I would ask about the buying you know when my generation got out of school I graduate 1987, I graduated May 11 and had my own office open a hundred and thirty three days later on September 21st 1987, It seems like these kids don't want to just come out of school and go rent a thousand square foot and open up their office seems like they they just feel like they need to go be an employee for five years. Back when I was little sometimes people would do that in the in the military they said I'm gonna go join the Navy for four years they're gonna pay off a lot of my student loans blah yadda yadda yeah but if you weren't joining the Army Navy or Air Force you just you just opened up your office and now it just seems like these young kids just want to dance around the swimming pool for five years and have enough misery of working for other people they can't stand before they finally say okay I'm so miserable I'm just gonna finally open up my own office and dive in the pool. Have you seen that change in the last 30 years in Canada too?
Tim: Well sure because I think that the first year income expectation in relation to graduating debt ratios is very different so regardless of the dollar amount you have to look at the ratio what is the first year expected income of a new graduate and what is the average student debt ratio of the average graduate and no matter where you are those ratios can be measured back five years ten years thirty or forty or back to May 11 1987 when you graduated our and your ratio of your first year's income even as an associate was probably very different than it is today so confidence levels change competitive levels change and can you imagine graduating today from from Boston or any one of the prime universities here in Toronto we have University of Toronto to know that down the road from anywhere you want to be as a dentist is a conglomerate the corporate could have five or ten locations there are well-established and entrench men and women that have soaked up all of the available qualified well-educated high dental IQ patients. You know we often talk about patient flow and new patients but new bodies and new patients don't mean anything unless they're educated have an IQ and can pay the bill, so today's young graduates I think are graduating with one more debt load more psychological determinants the competitive landscape is horrific for some of them and I think that they get just intimidated into working for the man and be it the senior dentist or the corporate whatever it may be yeah there's also the generational thing but us baby boomers who you know for the baby boomers listening or watching we all know that there's an entitlement generation behind us but that's another conversation. I think it's pretty tough to graduate today and think about setting up only because of the debt load the the the cost to set up in relation to your first years anticipated revenue all of these ratios have changed and I think ownership is the best way to be be an owner be an owner as fast as you can if you even come out of school and have the same courage that Howard Farran did, open up practice but a lot of people just don't have that and it's very different and I'm empathetic to them but I'm a broker and I work for sellers and good practices cost a lot of money.
Howard: So I see some long-term fundamental shifts, we're the same age you know you look at least ten years younger than me I'm 56 and you're 55 we said 55 well you and I are old enough where we've already seen this rodeo I mean 30 years ago orthodontic Centers of America raised a billion dollars but all these
Tim: We watch that explode
Howard: So it was the only one that made it on the New York Stock Exchange and there was a dozen on NASDAQ every last one of them imploded and I'm looking at these I'm I got two red flags I want to ask you back to Wall Street and Bay Street these big DSOs like Heartland went and sold a big chunk to the Ontario teachers plan why didn't they go public on Wall Street why didn't they go public on Bay Street. Dental Corp is Dental Corp publicly traded on Bay Street?
Howard: So isn't it just a monstrous red flag when something is ridiculous as snapchat can go public which serves no purpose to humanity yet 900 dental offices can't go public it's because when Wall Street looks at these business models they grow their sales at the same ratio as they grow their debt. I mean they go buy a million-dollar office say oh we got a million sales, well yeah you got a million on your down your on your balance sheet and then I said oh well we bought 10 more offices or 10 million ok now you're up to 11 million on your balance sheet. I mean by the time they get to a billion in sales they got a billion in debt that's not how Wall Street works. So my question succinctly to you is isn't it a red flag that none of these DSOs are publicly traded on Bay Street in Canada or Wall Street the United States
Tim: Sure it is Howard, I think you've hit on a very important point is you know when you're in the acquisition business model you're your business model is to buy it doesn't you have to focus on acquisition, if you and I got together today and started a company and someone handed us a billion dollars and said go spend it well we've got a lot of work to do to go spend it never mind manage it never mind try to manage it better never mind try to reconfigure it never mind try to make it more profitable which is what we do with our businesses every friggin day we try to make our businesses more efficient but we've got a billion dollars to spend so we better spend a lot of time and money spending in order to keep the capital pool satisfied. If somebody lends you a billion dollars they want to know what you do with my money so spending it is 99 percent of your job, it's five to ten years to spend a billion dollars in the dental industry.
Howard: but see but to me to me that's the other huge long-term trend and I know economists say in the long term we're all dead but I mean I'm talking a long term 10, 20, 30 years it's another red flag because they didn't getting a billion dollars is actually a curse because you're overfunded what they what enforce it it forces you to do a roll up where you just go out and buy a bunch of restaurants where as what seems to work is a roll out where you spend the first ten years perfecting your one your one restaurant and then with profits from that one turns into two, two turns into four four turns into eight eight turn into sixteen I mean you think heartland I mean the consumer doesn't even know a half dozen offices around Phoenix are all Heartland dental offices so I think that getting too much funding forced the strategy to be a roll up instead of a roll out and I don't see any real success in roll ups.
Tim: Well a lot of people would look at a roll up business model and I'm not naming companies right now but you know it looks like pump-and-dump. I mean you buy you accumulate you accumulate a revenue stream you try to accumulate a profitable cash flow along the way but it's really about growth it's just the size matters kind of business model and a lot of these things and when you look back in hindsight at any of these bump and dumps you know all they did was spend money they didn't make anything better they just put a whole bunch of things together and this happens in the corporate world all over the world in the steel industry and in consumable and packaging goods. Imagine just throwing this into the loop and not a lot of people I think I've really thought this through Howard let's say you and I get together and go buy 200 dental offices in the next 12 months, we have 200 dental software 200 cultures 200 systems 200 legacies 200 bad habit systems of we've always done it this way here at Main Street dental in Denver wherever it may be you and I have 200 wives that we just married in one year man. We paid for that we paid in full we might have paid a premium that's not the problem because we've got a billion dollars but now we got 200 brothers and sisters and children that we have to get to all play well together and create this unified system of chaos. I dare anybody in the corporate dental world to go buy a hundred or 200 dental offices in a short period of time it's not about the money you got the money. I dare you to do it see how that human resource challenge turns out in the dental world these aren't widget makers these aren't minimum wage employees these aren't people that you can push around and tell them the uniform system has changed you show up at 8:20 instead of 8:10 in the morning now. You can't do that in dental offices
Howard: I just want to say one last thing that I want change subjects but to you young graduates if if graduating from school and working for a DSO was the Disney life the dental Disneyland life then you should go back and when you're a senior get the list of all the seniors who graduated four years ahead of you and they should all be working in DSO or as an associate for another dentist living happily ever after but that's just not what we find and I don't want to throw DSOs on a bridge because I see the associate turnover with private practicing dentists just as high. I just don't think after you go to eight years of college to be a dentist a physician or a lawyer you're really cut out to be somebody's employee, you're too smart you're too educated. It reminds of one of the biggest takeaway lessons in World War one in World War two when they ran out of all the boys from 16 to 21 and started to have to go up the food chain and start getting 30 year old men and 40 year old men and 50 year old men what the military's figured out is you know you tell a 20 year old to go take that hill, he'll charge it you tell a 40 year old to go take that he'll he says well I think that's a bad idea there's a lot of machine-gun firing and I think I might get shot so only young uneducated people make great employees but highly educated dentists, physicians and lawyers who don't even get out of school till they're 25 they just don't like being employees and they don't make good employees so I see I see the fact that Wall Street won't take any of these dsos public and the fact that they can't keep their dentists longer than a year or two I just think it's just a bunch of noise and I think it's gonna be a repeat of what I saw 30 years ago with orthodontic centers of America and everyone I'm on NASDAQ and remember Wall Street, dentists forgot all those lessons but man Wall Street didn't every time I talk to you bro by the way I had the most hilarious conversation of the broker but Wall Street didn't forget those lessons I don't see any of these people going public but you know how the dentists are always talking about financing and they want to do they want to do like index funds to have low brokerage amounts and all this kind of stuff and they want the lowest cost and I was asking a broker I said well isn't that killing your business he just laughed you don't he said to me he said dude guys like you or these industrial people make all this money then you die your wife sells the business and then she wants to invest it, now she's 70 80 years old and she's got gazillions of dollars do you think she wants an index fund or do you think she wants a broker that she can call once a week and go to lunch with and you know I mean she wants a friend. I mean she's got so much money he's so he's nice he's like I don't even care about all these young kids I only have about $30,000 a mutual fund because I just want these ladies he says all I want is 70, 80 year old ladies who have millions of dollars and all they want is a friend and there's this really good-looking guy I'm Scottdale,all he does every day is that breakfast lunch or dinner with some gazillion year old retired lady and she wouldn't trade him in for an index fund for any amount of money in the world. So now let's go to buying and selling in practice if they're coming out of school $400,000 in debt when can you find them financing to buy a practice? Can they just do it straight out do they need a year or two years what's it take for some kid in Canada to borrow 400 grand 500 grand 700 grand a million dollars what is the sweet spot selling price of a dental office in Canada? The one that's most liquid and most easy to finance like in the United States if a dental office is seven hundred and fifty thousand dollars its liquid once it gets over like 1.1, 1.2 they start to become more illiquid because of the financing and then and then of course rural is twice as illiquid as urban. So how what what is what is the liquid spot look like in Canada and urban versus rural?
Tim: Well I'm gonna give you a viewership in the United States of America shocking news right now here in Canada we have a hundred percent financing system from all of the major Canadian chartered banks we have five big ones and several others on their coattails any dentist in Canada with Google order...
Howard: What are the five big banks?
Tim: Royal Bank Canada Canadian P Rebecca Commerce Bank a Nova Scotia toronto-dominion bank and the Bank of Montreal.
Howard: What about that one what is it HSBC?
Tim: Yeah Hong Kong Shanghai bank they will do financing as well but the point is is that all of the lenders here in Canada will give a dentist 100% financing on a qualified appraisal and there's a number of firms in the cop and the nation that produce qualified appraisals ours is obviously one of them. They'll give a kid one hundred percent financing this is new grads one year two year three or five years out with no money down two years interest-only ten year amortization and today in Canada prime rate is under 4% just under four and that's a slam dunk in this nation and you do not get that in the state's you're paying probably twice the interest possibly shorter terms. I've met with a bunch of brokers down there some of the bofa guys which is some of the other lenders point is that we have a finance system here that is quite frankly unheard of compared to other nations and no other industry that I'm aware of can get acquisition financing at 100% of appraised value or purchase price with no money down two years interest only ten year amortization and they'll throw in a gold card and a car loan and a mortgage if you need it. So the Canadian banks do this for one reason and one reason only the Canadian dentists are doing extremely well, we talked about the new grads lately and then the next gen comin in Howard but let's talk about the well entrenched 50-somethings out there they're doing just fine. We have a very very vibrant dental industry here in Canada we have an aging population we have an ever elevating dental IQ and the average Canadian baby boomer dentist is billing a million netting 30 to 40% of that and those practices are selling for one point five to two I'm gonna repeat that the average 50-something dentist in Canada is billing a million netting 30 to 40 percent of that and those practices are selling for 1.5 to 2 and the corporates are buying them the new grads are getting financing for them which is shocking the foreign dentists that have come here and requalified, many of them are highly motivated to be owners they do not want to be somebody else's associate because they were owners overseas many of them and they're coming here and re qualifying in their 30s 40s and even some of their fifties.
Howard: Okay I want to drill down these numbers because a lot of these dental students they have no idea what ebitda is and a lot of them think that a dental office sells add a factor of revenue like the sales of it does a million that that's tied to the so is is the pricing more tied to the collected revenue sales or is it more tied to the earnings net income?
Tim: Well pricing is tied to market value so in the end how market value is computed just depends on who the appraiser is some use a multiple of evidence which is earnings before income taxes depreciation for those that don't know but most of you do that's just a multiple of ebitda other people use a multiple of revenue other people use a multiple of we use a free cash flow method we prefer free cash because everybody runs their business a little differently and free cash is pure no matter how you run your business no matter what your taxation model is, cash flow in free cash is a pure formula that is applied equally to every single business in the world in my appraisal methodology.
Howard: Okay well trust me I know my homies, so take a little bit of time to explain free cash flow.
Tim: So cash flow is very simple we remove all debt and all debt service the appraiser world the world I live in as an appraiser assumes that everything is paid for. So that's the first thing we remove all debt servicing interest beyond bank charges just to run your business we remove all interest, depreciation, amortization, capital cost, allowance, that's all taken out. Secondly we take out non-essential expenses and every business owner puts through a few non-essential non recurring expenses for example I pay for my father's newspaper subscription and it's probably not essential to the business so we're gonna add that back couple of other things many business owners will put a family member on the business and in the employee pool most of us do that and quite frankly most of them don't actually work for the wage they're paid we have that back. We don't take into account corporate tax or individual tax because taxation, well taxations of moving target it's different in each province it's different each state there's federal tax there's provincial tax there's municipal taxes take tax out I just want free cash please okay that's all we're after and the problem in some of the methodologies out there to get to ebitda you have to put in a managers or operators wage and here's where I'm gonna challenge this and all the attorneys and the chartered accountants and the professional accountants out there and the bankers are gonna choke on this one because I'm right and they don't like this. If you use a notional wage to run a business you've just appraised every dentist in North America the same in terms of their value as a practitioner, so you might have seen some appraisals for those of you have seen them it says you know owners salary 40% of revenue or 30% of doctor revenues lots of methods. The problem with that is you make all dentists worth the same now for a dentist like Howard Farran to buy a business he probably wants to make 3 hundred grand a year for a new graduate who's happy making a hundred grand a year the ebit for Howard and the new grad the ebit is substantially different. So if the multiple is the same and the ebit change is based on the owners expectation of earnings the valuation range just got massive, he can't do that. We as professional appraisers and this is an industry problem today we don't appraise people we appraise businesses we want to know what the business cash flow is not what the cash flow is after you pay certain business people like owners and some have expectations of 300 grand a year and some are happy with 100 so that's just one of the flaws in the ebit methodology. So taking that appraisal debate off the table for a minute in Canada a good vibrant practice will sell and folks this is rule of thumb but it works one and a half times two times revenue mostly in the big cities rural Howard we're down to about 1 times revenue and the banks will finance it 100% all the time.
Howard: and by the way there's nothing that makes me more furious when people are talking now that is the Fed is moving up the interest rates a quarter every quarter and getting back to normalized rates and people are saying to how it's gonna hurt everything. Dude when I got out of high school in 1980 1981 interest rates were 20 prime rate was 20.5%
Tim: 17.5 up here Howard I graduated in 83 from you know from sorry high school and 87 from college so you and I are literally right on the same track and it was 17.5% that was about 19 and I thought how the frig am I gonna get a mortgage even on a sleazy little town home or a condominium anywhere I couldn't afford that I recently renewed a mortgage about a year ago at 2.29% this is one of the lowest interest rate periods our economy in North America's ever seen and recently our prime rate creeped up here up in Canada I think we're at 3.85 right now but I don't even follow that anymore because anything less than five is free as far as I'm concerned and between five and ten just means work harder and above ten that changes a market substantially but these little these little incremental creeps in the Fed or what we call the Bank of Canada rate they don't change anything if you're an entrepreneur and if you can handle $1,000,000 debt 3% 4% 5% interest that's nothing.
Howard: I also I also want to remind kids because the kids it's not what you earned it's what you burn and you'll I guarantee they're so entitled they come out of dental school four hundred thousand dollars in debt and the first thing you buy is an $80,000 Beemer and then they go buy a four hundred thousand dollar house but I just want to remind you one thing I was born in 62 in 1950 prime rate was 2% I lived I lived through that error as it went from two to twenty and not one person saw that coming not one person saw the Berlin Wall coming down not one person saw the Arab uprising and I've lived through four huge shocks the the 80 with interest rates twenty point five eighty seven October Black Monday the stock March off two quarter the y2k bubble popped in March of 2000 Lehman Brothers August so people just just go easy on the spend earn money and don't spend it yeah earn and don't burn.
Tim: You know for the readers are for the viewers and the listeners out there Howard and I didn't script any of this this is completely off the cuff that's why it's called uncensored, we didn't mean to you know we're purposely sitting here to try and beat up or trash the corporate dental phenomenon or the dental service organization but for the young dentists it's not your only option you should maybe get a little experience in a dental office maybe a year or two sure that's fine yeah don't be intimidated by that student loan be it owner. Be an owner as soon as you can now setting up in certain highly concentrated areas it's competitive yes it is very competitive and in Canada it's very serious but buy a practice and even if the number blows you away banks wouldn't finance it if it didn't, it wouldn't get services, it works.
Howard: I want to I wanna switch gears completely now I'm you're talking about going into someplace like Toronto where there's a dentist for every 500 people and it's the same in San Francisco versus the the rural a lot of these Millennials I get it they say well I want to live in a place it's got sports and theater or museums and fancy restaurants how advantageous is it to go an hour outside of the city limits of Toronto versus downtown?
Tim: The dentists that live one or two hours outside of the major centers go to more theater more movies and more vacation now let's live in the big freaking cities.
Howard: I know
Tim: On Thursday afternoon they closed their practice at 3 or 4 o'clock in the afternoon and no one bitches and complains they get in a limo they're at the big city the airport the theater they live their life they're not open 7 days a week. We have many practices here in Toronto right now that are open 7 days a week Sunday's are just another day of the week in the dental world now, evenings the rural dentists are living the life man they have holidays their houses are paid off younger their children go to the greatest private schools ok so the kids are away at private school ok if they're go to private school 5 kilometers or 5 miles away or they're going to private school 500 miles away you have time and freedom to visit with them and to see them these rural dentists have the greatest thing going right across North America and for those new grads that are listening the rural dentists the sensibilities of rural dentistry are far outweigh economically all the benefits of the big city and you can argue with me and Howard all day long if you want to, get out of the city and you'll be fine.
Howard: and the other thing is alphabet owns Google and YouTube and that driverless car program Waymo I don't know how I'm but the the Phoenix was their Ground Zero their two-year test period and they finished like six months ago and Google just ordered 60,000 driverless cars and what they don't realize is that when they live two hours from Toronto you're just a few years from when you're done from work your car will just be a box it'll probably just be a bed with a big-screen TV in it and you'll just go lay down and plug into your iPhone what hotel condo wherever you want to be in downtown Toronto or you'll just have a desk and a lazy boy so driving two hours won't even be an issue. I mean right now driving two hours but that's a lot of effort but in two years but in three or four years from now you might just take a nap on that two-hour commute.
Tim: You know Howard I'm sure you've beaten this drum before it we've never met Howard and I by the way folks have never met that we spoke today for the very first time in person and we're doing this by Skype, we exchanged a couple of emails starting about two or three days ago Howard was one
Howard: and I asked you to be on the show you didn't ask me.
Tim: You ask me, we're both on the Caribbean dental program in Barbados in April 2019 you can look that up Caribbean dental program the point is is that none of this is scripted it's uncensored dentists of America if you're young and you're not committed get out of the big cities you will be welcome you will be popular you're needed you will do a scope of Dentistry that you've only dreamed of working in the city you will actually be required to do dentistry that you're probably not quite ready to that's why you take your CE that's what you get in the friggin car and drive two hours and learn the endo learn the surgeries talk about implants, you have Dentaltown you've got networks all over the world you got video training. Get out of the cities if you stay in the city as a recent graduate or a young dentist in north america today you are in that most highly competitive of all the healthcare professions as I view it. It is cutthroat it is it just not professional in some ways in regards and you're only gonna suffer and you're not going to be busy and you're not making money, get out of the city.
Howard: and you're gonna have 50 different website companies telling you in downtown Toronto that they can make you come up first on the Google page how is that even mathematically possible how do all the dentists in Toronto come up first?
Tim: Social media exists and you know and the social search engine optimized social media whatever it's fine to get the hits, their's one type of patient you want through your door and one type of patient only, educated, high dental IQ or someone receptive to elevate their dental IQ and can pay the bill. 50 new patients a month doesn't mean anything if 25 of them have no money and the other 25 have no dental IQ. New patient flow means nothing if they're not educated and financially able to accept and understand and pay for treatment planning, if you want to be in the patch and fill and that business that's emergency walk-in dentistry I know guys who do that I know a guy gets 250 new patients a month not one ever returns but it's a very profitable business that's just emergency clinic know the difference folks so look at your location and look at the way you want to attract.
Howard: I want to talk about the the dark side of practice transition that I've witnessed in 30 years first of all 30 years ago I used to love it more because the owner would always carry and when the owner you need to buy a practice back then say $500,000 and usually the owner they'd always charge 10% interest and they usually carried it 7 years what I liked about that is the seller had skin in the game and he wanted to make sure that you were successful and then if you were in there and you had a patient that had come in in there for a long time and I have said Timothy brown you know he was he knew you for 30 years so he could call you up and smooth things over but here's the other dark side when I sell you a practice and I have no skin in the game and I was doing all these implant cases and these big full mouth reconstruction cases and then they sell it for a million dollars to some punk kid 26 years old who can't do comprehensive dentistry doesn't understand it can't sell it can't present it and then they'll buy a million dollar practice and the next year it does 600 and the next year it does 500 and it takes that kid five years to get it back up to where was. So talk about buyer beware when some young kids buying a practice what should though their eyes open what are the buyer beware stuff.
Tim: Okay their's two sides of that Howard, first is purchase or analysis so you're looking to buy enterprise good I would look to financial policies and the ethics of the way the money is handled here in Canada we don't have the same pa system you do we have a third party insurance system so effectively it's all fee-for-service and are what we call assignment up here, we don't have the same PPOs that you do so it's a little hard for me to talk about financial because I don't really study the American system per se it's very different up here and it's very privileged but I would still look at the way that the billing is processed the way the accounts are managed in terms of receivables and how any co-payment or uninsured portions are handled I would spend a lot of time on that when you're looking at buying a practice hopefully the company that's brokering it has some language and some discussion and analysis about that in their appraisal and if they don't and it's not thorough I'd either think that the appraiser or the brokers an amateur or the owner didn't tell them the truth spend time on the money. After that I would definitely look to the preventive in the recall program or the re-care program let's see how they run that how do they run that what's the frequency, what's the education program behind that, how are they raising and elevating the dental IQ of that patient pool so that they come back more often for optimal and the best dental care that you and your team have to offer. The third thing I would look to for a dentist a buyer today is what's the customer service offering. Howard I'm sure you would agree with me I'm going to say this and I'm gonna say it probably to the chagrin of most of the viewers the average dental office does a really shitty job of customer service, shitty is the best rating I'm gonna give you the average dental office dental service is probably maybe 10 to 20% of the businesses and probably 10 to 20 percent of the dentist in North America really hit killing and they're just killing it and their patients love them and they tell everyone about them and that's why they have Google reviews and social media and new patient flow off the charts it's nothing to do with their advertising it's nothing to do with the fees they charge in many cases not even to do with the quality of Dentistry it's the experience. So look for a practice that offers terrible customer experience and buy it and change it or look for a practice that offers exceptional customer experience and pay for it and run it those are your options and I think your profession at large Howard in terms of customer service and experience is horribly lacking at large I would rate the average dental practice in terms of its overall management at fair I might give it a poor good is not even the average good is above average and exceptional is 10 to 20 percent excuse me I've met practitioners that run practices where just the team dynamic and the the energy and the element in that office is just it's unfathomable it's you want to work there, I want to work there and that's very rare so for the buyer dentist I think was the question here I got a little off track look for either just pathetic business management and culture and change it or look for exceptional business management and culture and just pay for it.
Howard: You know one of the what do you see that the number one expense in a dental office well I mean technically the number one expense in the United States is the adjusted price off your fee schedule to the PPO so if you're charging a thousand dollars for a crown and you're doing the the PPO crown for 600 you're number one expense forty percent is the adjusted adjusted production, but after that it's Labor and these kids are on Dentaltown and they're always talking about you know I'm going back to my town and I'm seeing these practices for sell and their labor varies anywhere from 20, 30, 40 what what kind of variants of labor do you see and what type of advice do you give on looking at that number?
Tim: So you know wages are the number one expense in just about any business, I mean if you look at Farran Media and I look at ROI Corp and we look around with oh my god we pay so much in wages but that's human resource. So in Canada we will see it remember we don't have the 30 to 40 percent PPO fee reduction here we do have a co-payment system where a lot of the insurance companies will not cover the balance excuse me, the entire fee but most of the dentists here are very effective at billing and collecting the difference from the patient we have a very different system here putting that aside. Wages in the average Canadian dental practice we have a wide range say 25 to 35 percent of top line revenue gross revenue.
Howard: What is that range?
Tim: 25 to 35 percent that's kind of where we sit.
Howard: That's a huge range though.
Tim: Well sure it is but you know if I started a practice two years ago and I hired a bunch of rookies when my wages should be low because they're all new recruits they're new grads the new recruits a new hygienist the new assistant knew that. Imagine you walked into the practice with you know collared furans practice with people that have been there 10, 15, 20, 25 years you get what's called wage creep folks if they don't do anything different and your practice doesn't grow you still have to give them a little raise every year even if the job doesn't change the responsibility doesn't change the practice doesn't change you get wage increase. So good dentists keep staff and good staff that is kept costs more every year it just goes up you can't stop that it's called wage creep, so now you got a practice doing a million well you were doing a million ten years ago now you're doing maybe a million 2 so your wages went from 28 to 32 percent of gross that's just called wage creep. That's not necessarily a bad thing it looks bad statistically because oh my god wages are over 30 percent of revenue crises, yeah but these are 20-year employees and know what they're doing and their goal and you as an owner walk in do your work and walk out. Now if you let you buy that practice Dr. Smith or Dr. Brown go buy that 32% wage practice and say I'm gonna get rid of this expensive hygienist at 42 dollars an hour and get someone at 22, well good luck with that let's see how that plays out how are those patients and third generation families gonna feel when you got rid of Sally that was 52 years of age because she was too expensive you got to think that through now don't ya.
and it's especially worse in rural areas I think one of the one of the common factors of very large successful companies in America as they started in a small town like take Walmart Walmart started in town in Bentonville Arkansas. So he had to pioneer all those return policies I his wife Helen was a church one day and a lady walked up and said I bought these shoes from your husband the heel fell off I took him back he says it's not my responsibility I'm never going to that store again and was Helen telling Sam you're gonna take those shoes back and he's like what am I gonna do with them and then he pioneered well the next time Tim comes and sells me a box of shoes I'm gonna push this defective shoe back so he pushed defects all the way up the value chain and when you go into that small town of 5,000 and you buy this practice I mean you fire all the expensive long-term legacy staff within a week the whole town saying oh I heard that new dentist went in there and everyone quit.
Tim: Don't do that
Howard: Oh my god
Tim: If the economist said this is the human service business this is a professional service practice that you're in doctor you don't mess with that I don't care if the staff is expensive according to the stats and the ADA and the economist and all the enamel analysts who cares do they do their job well and do the other do the patients appreciate them and respect them. If you're the buyer you're the new person you're not the boss you're the rookie in the beginning yeah you signed the bank loan and you sign the lease and you sign the paychecks but you're the rookie you keep your ego in check you go to work you say please and thank you listen observe watch and be very careful and for at least a year just be humble just be humble, start like that and then it becomes your business and slowly over time you start to win the trust and confidence to the patients and then the staff and once you win the patients you win the staff you don't win the staff first he win the patients you'll win the staff because they want to stay with winners and a patientsí staff leaving because of you you're not a winner your staff is going next right at the previous dentist of course I think everybody knows that.
Howard: I want to ask to another couple questions on the dark side of this of a lot of these kids in school they're like I'm scared I'm sure you know Socrates said there were two emotions fear and greed and that they're getting scared so they think well you know what I'm gonna do I'm Amy and Suzy is my best friend for life I think it'll be better if we both buy a practice together because marriages never fail. What would...
Tim: Okay well the word partnership starts with four letters part and part...
Howard: Oh nice I've never heard that one before
Tim: It's only a matter of time before you part
Howard: Can I steal that one or do I always have to give
Tim: Howard the average partnership in dentistry I think it's got a ten year or less lifespan but it's only a matter of time and part is a four-letter word. Some of them go really well for a long time kind of like marriage some people graduate from school get married and die as a married couple, in dentistry I gotta tell you this for you and your profession you you men and women don't play well together you're very individual you're very unique you work in a meticulous and it did hundreds of inches matters and you should not be partners you're microeconomist and if you haven't heard that word I've trademarked it here in Canada microeconomist it's a my micro economist, I'm not doing it microeconomist sorry. You know micro economy and micronome is the art of looking at all the little stuff and you spend so much time dealing with, you know their used to be seven purets on the trays in the hygiene why is there now six I think the hygienist meets seven no I spoke to the lead hygienist she says three are fine and you just get into the stuff you know like stop it and partners in the dental profession they they micromanage each other they become microeconomist the administrivia, you've probably heard that one before the administration and the trivial side of it is the administrivia like just stop it and being a solo business owner is enough, being a partner is two solo business owner trying to manage one solo business and it doesn't work well in the dental profession. So I see the attraction we're buddies we graduated together you're gonna do the endo I'm gonna do the surgery you know I'll look after the equipment you'll look after the staff it's a dream it's like marriage but businesses and money don't marry well.
Howard: Yeah and it's so crazy because then you'll tell the staff no so then they run to the other dentist they try to get her to say yes number two is years down the road you want to buy $150,000 cad/cam and she wants to buy $100,000 CBCT and man I tell you what their's nothing more fun in business than being a totalitarian dictator and not having to answer to anyone.
Tim: In the famous words of home were the greatest Greek philosopher ever let there be one ruler let there be one king
Howard: Yeah and that's why capitalism is so damn efficient and by the way who's moved more people out of China I mean more people out of poverty than any country in history it's China, Singapore's the most well-run country I've ever seen in my life yeah and so I want to touch on another sense of issue. They go back she graduates and she goes back and she wants to practice with her mom and her mom's her mom, I mean her mom gave her life but just like getting marriage they never get a prenuptial agreement and then she's been working with her mom for five years and now all of a sudden her mom says she wants 20 gazillion dollars for the office, their's no paperwork they get married without a prenuptial and they go back to work with their mom and dad with no paperwork and something sometimes they're working for their dad their dad drops dead and there's of a heart attack and there were three kids and now the other two kids think they inherited two-thirds of the office and the office is worth the gazillion dollars. I mean what advice would you give these kids when they're going to family businesses and nothing is in writing and the emotions are off the charts.
Tim: So the family business in transition has been studied by a lot of the psychologists a lot of the business advisors all the banks have studied is because the banks actually want to finance these businesses and the banks are furious that families don't talk about it because everybody loses and the banks are one of the best at this. The attorneys the Charter the accountants everybody knows that family businesses are a big clusterfuck okay 80% of family businesses are not going to make it to the next generation. So if you're in one or you're tracking towards one you have an 80% chance of failure if you own one and you're the senior leader or the patriarch of the matriarch of a family business there's an 80% chance your kids aren't going to get it or take it over and it's mostly due to the family dynamic okay it's not due to money and it's not due to jobs and description it's the family dynamic and the family dynamic is we don't want to talk about that there it is right there. So the lack of communication all the secession and transition planning experts in North America probably the world say we really need to sit down and talk this through there's a great website here in Canada I wish I could come up with it the guy's got like the top ten ways to sell your family business and at Howard I'm gonna get this for your readers www.willingwisdom.com but he comes to top ten ways to sell your business to the family kids and the first one is never talked about it and the second one is make sure you let them know that's all gonna be there is one day but don't tell them what it's worth or what their job is I think the third one is pay them way more than the job is worth but don't expect them to show up in the morning and if they want to take early don't worry about the other employees they're never gonna mind you know that Daddy son takes off at 2:00 in the afternoon and doesn't show up the next day. So there's all this humor behind it that's very humorous and all these ten points of humor go right to the heart and the core of why 80% of family businesses will not transition, so you gave a brief descriptor at the beginning of this about you know the mother and the daughter scenario I've seen dozens dozens of them in my career the failure rate is huge because everybody's dancing around. Howard you and I met today if we want to do business do we have any legacy do we have any like problems here it's yes it's no it's black it's white, you want one I want to that's business. In family what do you want Howard if you were my uncle my brother you know you're afraid to speak with me and the failure rate in the family business is significant second generation has what but 80% chance of failure, third generation business and some industries is down to like six or seven percent chance that the third generation will actually carry on. I'm a second generation I took over my dad we made it so we're in the top 20% yeah whoo. So for you dentists that are owners of businesses listening or watching I would strongly recommend you consider having a conversation and most of you don't have the courage to do it or the wisdom to do it or the balls to do it if you don't mind, so hire a professional and that's not the family lawyer the family accountant get an outsider and for the kids out there start that conversation because it's your future intermediary.
Howard: One of my very very best at his friends in the world last year his daughter the hygienist missed work and called in sick more than the other 15 employees combined
Tim: Okay how's that working...
Howard: and you're like you know you know and it's so tough because it's your daughter you got your wife you got your other kids he's...
Tim: Like so many stories so many done it let's do it for you family business owners out there get ahead of it.
Howard: Okay I want to ask another overtime question and a lot of my viewers gonna think well he can't answer that because he's got to be incentivized against it but what would you even though you sell practices what do you think honestly is the pros and cons of that dentists doing a de novo starting up from scratch versus going to you and buying old man McGregor's dental office?
Tim: Well I have no bias for whatsoever I mean in an underserved area started practice don't buy one but you have to find an underserved area and that's the problem in North American city is there's not many left unless you go to rural America. So if you do if you want to be in a city that's you're done it's already served so I can't be unbiased because there is no bias anymore. If you want to start a practice match in a major city in North America good luck, good luck with that you know 25 years ago I had you asked me that I would say oh no buy a practice you know pay the retiring man his good will because you'll have immediate cash flow and established staff a phone number it's all different today so there's not a lot of hope for the new startup these days in the major centers you know people say but I'm gonna have a website and I've got my buddy that does social social media and search engine optimization and I'm part of this community and I go to this church and and I have a following, forget it you're over valuing yourself you're over praising yourself and I think many people that start a brand new practice today find themselves in two to three years after opening he cut the ribbon you opened the door two to three years later you broke two to three hundred grand on a Visa and a MasterCard and a line of credit and you're going oh man I'm still not paying the bills and had you paid a million bucks for the established guys practice you'd at least have cash flow it'd be a little equipment so what your staff you pay high wages so what you have cash flow.
Howard: So does your name ROI Corp does that is that the obvious return on investment corporation?
Tim: Yeah pretty much
Howard: That's what ROI stands for?
Tim: Sure and my dad's name, the founder is Roy so we pronounce it Roy Corp
Howard: ROI Corp, so he was Roy?
Tim: Yeah with a y-yeah
Howard: and you named the company ROI pronounce Roy for return on investment
Tim: I was eleven years of age when my daddy started this company and ROI means return on investment it also means Roy, here in Canada were bilingual for some of you and all for all say ROI means for what which means King so ROI also means King corporation not queen but king.
Howard: That is amazing so the final question that they're listening to you they're thinking well how do how do I find demographics how do I find a good demographics. What are they will they find this if they go to www.ROICorp.com ROICorp.com I see that you've got hundreds I mean literally hundreds of dental practices listed how do they go about finding demographically good dental office on your website ROI Corp or how do they find demographics in general?
Tim: Well thanks for checking out the website didn't know you had, and many of them are already sold we leave we leave our solds up. So a lot of those listings are already sold and the new owner is already in place. Secondly we don't really advertise the demographics but we advertise the Geographics so if you want to be in Ontario well you can narrow your search that way and unfortunately Howard most of the people that come into our website we have excuse me we have a thing called a new listing service and it's administered by the MailChimp server system and I'm gonna go to our list right now and we have two thousand three hundred and thirty-four registered buyers that's a voluntary subscription that says I want to buy a dental practice in Canada it's a real nuisance to get on my list it's a pain in the ass to be blunt and we have two thousand three hundred and thirty-four voluntary subscribers you can unsubscribe with one click of a button that somebody people want to buy a practice in Canada. So roughly I would estimate it ten times that in America right now if the ratio is hold true. So the United States all the brokers of the United States should have somewhere between 20 and 25,000 registered purchasers. So Geographics is where the first start is where do you want to be secondly forget about it because prices are high and there's very few for sale, thirdly if you want to set up talk to your dental dealer all of the great and reputable dental companies out there have a plan to put you into a brand new dental practice as fast as you can sign that contract thirdly follow your heart and then expand your geographic parameters and get out of the major cities and you'll be fine 5 to 10 years from now if you don't like it you can always come back but your student loan will be paid off faster the practice will be paid off faster you'll expand your competency and the clinical spectrum of treatment in which you offer much faster guaranteed, the patients will love you and most of you probably won't leave that small town and you'll have Fridays off and weekends off and you'll travel the world and all your big-city contemporaries will think you're genius those are my closing comments Howard.
Howard: Well you got it close some more on your website I can't I see your book but the link won't open the book the preview of the book but you have a book Timothy Brown's profitable practice a must read for any dentist is that on amazon or just on your website.
Tim: No it's down seventh and final edition it's not that's not for sale anymore, I published put out over seven thousand copies here in canada that's seven thousand copies for twenty five thousand dentists but at seventh and final edition it's old news don't buy the book folks I really don't have anything to sell on this podcast other than if you're coming to canada you know you're welcome to become one of the other two thousand three hundred and thirty four buyers but if you own a dental practice in canada and you've stayed this long where at one hour and twenty minutes will happily appraise and sell your practice for you that's my motive.
Howard: Well Timothy Brown of ROI Corp, ROI Corp I had so much fun podcast interviewing thank you so much for coming on my show today and talking homies.
Tim: Thanks Howard
Howard: and we're gonna be in Barbados when?
Tim: third week of April, fourth week of April 2019 it's called the Caribbean dental program just Google that folks if you're still listening after an hour and 20 minutes Caribbean dental program I'm on Tuesday the 24th and Howard is the keynote on Wednesday the 25th.
Howard: Forget all that we're just meeting in the bar
Tim: Tuesday the 24th I've rented the boat I got the whole Caribbean dental program on my boat for the night I'm buying the rum. We're going Lyman man.
Howard: So I can come on your boat that night?
Tim: It's called going Lyman man, Lyman is when the rum and the lime come together on the boat
Howard: All right buddy I can't wait to be drinking with you in the Caribbean thank you so much for coming on the show.
Tim: Thanks Howard