Welcome to Bitesize Dental Marketing. Today,
I have Taylor Hill. Taylor is a CPA and CFP at
Serity Partners. And what a wonderful time to
have you on the show. We can talk about planning
in the midst of the 2025 tariffs and hear about
it. Taylor, when you jumped on, I was sitting
here debating, are we going to talk about tariffs?
I can't imagine tariffs are too impactful to
dentists. And then on the pre -show, we were
talking about how the investments and what you're
doing. But before we jump into anything in -depth
and political or crazy, Taylor, I'd love to hear
more about you, Serity Partners, how you came
to be. I know at some point you were at E &Y
and you've had a great career there. Talk to
me more about it. Yeah, well, I appreciate you
for having me, Eric, first of all. And it's definitely
an honor and a pleasure to be on the podcast
with you. Yeah, so I'm Taylor Hill. I'm with
Serity Partners. We are a national financial
planning firm, investment management firm all
across the country. As you mentioned, I... came
out of college went to oklahoma state i'm from
a small town in wichita falls texas two hours
northwest of here and uh graduated from oklahoma
state and i had no idea what i was going to do
when i went to school and about even two years
into school to be honest um but when i was 19
i read a book by dave ramsey called the complete
guide to money and it really impacted me and
how i thought about money in general and how
it impacts all of us we can't really get away
from it to be honest and what shocked me about
it is how little i knew and how much how little
i knew from not only from my parents but from
the school system and uh you know public high
school and so it really fascinated me and so
because of that you know i eventually majored
in finance at oklahoma state and then eventually
switched over to accounting I went to Ernst &
Young, just like you mentioned, worked at EY
Dallas as an auditor and got my CPA. I quickly
realized that not everyone loves auditors. And
when you walk into the room, they're not exactly
fired up to see you walking in. And so within
a couple of years, I realized I really didn't
want to stay in that industry, in that space.
But I did want to switch over to financial planning.
And so I found myself in the, in financial planning
for Dennis. And so that's the space that I am.
How'd you hook up with just Dennis? Yeah. That's
a, that's an odd group of, that's an odd group
of people. To be, yeah, to be honest, I, that's,
it kind of came out of the blue to, to an extent.
I mean, I knew I wanted to be a financial planner
and help people manage money and, you know, do
tax planning and all the things. But to be quite
honest, not every account can easily transition
to the financial planning space. And so the first
group I got connected with just happened to be
in that industry, in that space. And I said,
sure, you know, why not? And so now I know way
more about dentistry than I ever thought I would.
And I've really enjoyed it. But, you know, at
the end of the day, it is a niche space. But
you're also what you're really helping is small
business owners. And, you know, that's that's
really what I enjoy doing. I love working with
small business owners and helping them grow their
practice and plan their finances and tax planning
and investment management. And so, yeah, that's
how I mean, that's how I got connected. It was
I wish I could say that I had like an uncle or
whatever. That was a dentist. But it just happened
to be our place at the right time. And that recruiter
hit me up. There's dentistry. You know, vets
have been brought up. bought up in record number
by private equity in the last few years right
i've heard dentistry chiropractics are kind of
the last bastion of small businesses out there
in the medical yeah plumbers are being bought
up like crazy they are so they're they're not
even uh most most you know fred's plumber down
the street he's probably working for some they're
still around they're still around because i do
have family in that industry but yes you're right
they are getting They already bought everything
with private equity. I agree. Air conditioning,
HVAC is crazy and, you know, bought up there.
What other like small businesses are out there
that you know of? Like, is dentistry the last
of, are we a dying breed in these non -private
equity backed industries? I think that, I don't
know that I would say that. I mean, there are
plenty of small niche. companies that are run
by just a few people. One stat that has fascinated
me when I joined with Serity, and we'll get into
that here in a minute, but in joining Serity
Partners is the stat that 87 % of businesses
that have over $100 million of top line revenue
are privately owned businesses. And so when you
think about that, now you're right, a lot of
that has been swallowed up by big PE groups like
KKR and all those. Which would be considered
private, right? which would be considered private.
You're right. There are still plenty of not just
family -owned businesses, but partnerships that
have not been swallowed up by the likes of KKR
and Apollo and all those giant guys, BlackRock
and those guys. I still think there's plenty
of opportunity for small business owners. Dentistry
is one of the major fields that is still hanging
in there. I think it's just because it's such
an intimate People have really intimate relationships
with their dentist. I mean, they want to go to
the same person over and over and they get really
close with them. And I think that's why there's
always going to be opportunity for small private
dentists to run their own practice. Yeah. And
we've seen it in the past couple of years. Now,
some of it's because capital is so expensive.
I don't know that there's any of the big DSOs
that have recapped recently. Yeah, it's definitely
slowed down. No question. And I'm not seeing,
I'm seeing prices still behind practices, but
there for a while we were, you know, we were
losing an account to DSO. Yeah. Because of course,
you know, I mean, just bang, bang, bang, bang,
bang. And now we've, I don't know, we've lost
an account to DSO in the last 16 months, maybe.
It's been a minute. Yeah, interest rates have
had a part in that. And also, I mean, let's be
honest, they were moving quick, like rapidly
acquiring dentists and small practices. And so
inevitably, that's going to slow down. There's
going to be ebbs and flows with private equity.
But yeah, you're right. It's definitely slowed
down in the last couple of years. No question
about that. So today, we're just entered Q2 of
2025. What are you talking to your clients about?
Yeah. Well, and we were talking about this pre
-show, but the buzzword right now is tariff.
I mean, that's the word of the year. Somebody's
favorite word. Yeah, tariff. I can guarantee
you 80 % of the population didn't even know what
a tariff was until the last couple of weeks or
maybe the last quarter. But, you know, right
now, I mean, to be honest, our meetings really
haven't changed. I mean, what we do with our
clients at Serity Partners is, you know, they'll
come in i usually don't meet me here in arlington
texas or i'll fly to them wherever they are in
the country and we will start with an update
what are the goals for the day and we'll spend
most of our time on the practice hey what's working
what's not i noticed that this piece of overhead
is a little bit higher than last year why is
that um and that really hasn't changed you know
just because tariffs have become a bigger player
in the investment world investment landscape,
it hasn't changed how we go about our business.
And I don't expect that to change. Now, whenever
we talk specifically about investment allocation
and you've noticed that the S &P 500 has come
down 10%, 15 % in the last couple of weeks, of
course, we're going to talk about rebalancing
their investment portfolios, their accounts,
and we'll talk about what's going on and what
we can reasonably anticipate in the coming months.
But it doesn't change how we go about our...
our business with our clients and with our dentists.
So it's definitely, and again, we're only in
the first couple of innings of this. That's right.
It's going to be a long game. Yeah, it's going
to be a long game. We think it's going to be
a long game, but who knows? But it really hasn't
changed how we go about our relationships with
clients and our meetings so far. Just making
them more aware of, hey, what is a tariff? What
is going on? Why is this a thing? helping them
plan for working around that and working through
it. Now, is it correct to say that outside of
the investments, the personal investments, right?
Your supplies, maybe some equipment at some point,
but any equipment here is probably already on
the US, right? What would be the next 60 days
impact to a dentist office outside of the investment
side? Well, number one, I would say that tariffs
implemented for the long term at this rate that
Trump just enacted, if they are left in place
for a long period of time, everything as a consumer,
everything that you purchase will eventually
get touched. And that includes Dennis. Dennis
will not be immune to that at all. All supplies.
And I shouldn't say all, but the vast majority
of society. The vast majority come out of China
or somewhere like that. When you go to the grocery
store, that's correct. When you go to the grocery
store, when you go buy clothes, food and clothing,
everything will be impacted if they are left
in place for a long period of time. However,
if this becomes a one -month, two -month negotiation
tactic by the current administration, I don't
suspect it's going to have a material impact
for the long term. For now, nothing that's going
on right now should impact how our clients are
behaving or how they're buying supplies, how
they're purchasing products. This is not just
because tariffs are in place and we expect prices
to rise over time. If they're left in place,
it doesn't mean you should just go out and buy
all kinds of equipment and do all of that. But
long term, I mean, if they are left in place,
then you can expect all supplies to creep up.
No question. Yeah. What else are you seeing in
the industry today that dentists might be struggling
with? We have rising labor costs. We have increased
competition. What is it that is mid -2025 we're
seeing as the big challenges they're facing?
Well, I think over the last few years, I mean,
inflation has been a problem and it's impacted
staff staffing. And that's whether you're a general
dentist. orthodontist pediatric dentist i mean
it's impacted all the different sectors of the
dental space all the different specialties and
i would say that that's at least with what's
going on right now that's still a primary focus
of our clients is inflation hey are we keeping
up with inflation with our current fees and it's
a really tough balance because if patients are
experiencing this at home and you're experiencing
this in the practice You know, it's a delicate
thing to keep up with your current costs and
keeping your current profitability. And so I
would say that's a primary concern right now.
Not just and not just right now, but over the
last few years, you know, gauging what is actual
inflation and are we keeping up with with costs?
And that's been that's been a very tough thing
to work around, to be honest, you know, because
no one wants to feel like they're. squeezing
their patients. No one wants to feel that way
at all. And I see a lot of my clients that are
very hesitant to raise their fees because of
it. And so that's been a primary focus. And the
other thing too is, yes, there is increased competition
with the DSOs. And another big thing has been,
hey, do I want to sell to a DSO? That's still
a thing, even though that has slowed down, that's
still a primary factor in all of our clients'
momentary plans. To negotiate fee schedules,
are you advising them they should? We look at
that every single year they come into our meetings.
And so we have a fee comparison report to the
NDAS, and we will run that based on their zip
code. Now, this is not the end -all, be -all.
It's not the Bible. Just because that report
tells them they're only in the 50th percentile,
well, there's some new ones there. Like just
because you're in the Houston, Texas zip code
or Dallas, Texas zip code. I mean, you could
be on a different side of town. Like there's
a lot of factors that come into play. What type
of dentistry are you doing? But yeah, every year
they come in. I mean, at a minimum, we recommend
clients raise their fees at least 3 % to keep
up with inflation at least. And then outside
of that, there's nuance and determining. What
percentile are they in their community? Is it
time to raise fees a little bit more dramatically?
Do they need to stay put? it's a very nuanced
conversation for sure yeah now is there a strategy
that you like as far as keeping your hygiene
fees lower but your cosmetic fees a little on
the higher side or do you do you like to raise
everything is there a strategy to it or just
you know let's just raise fees well i would say
there's absolutely a strategy and it really depends
on the client eric um it depends on what they're
trying to do, what niche are they in their community.
But I would say that for your crown fee, if someone
comes in and they need a crown, whether it's
$2 ,000, $4 ,000, it's going to be a lot of money
to them. And so for those, what I would usually
tell clients is they can be more willing to raise
those a lot faster than their pro fee fees. Right.
Because those are the routine fees that everyone
sees every time they come in for their six month
cleaning. Right. Well, more importantly, it's
the fee that everyone thinks they're going to
pay. Exactly. Whether I need a deep cleaning
or not. Yeah. How much is cleaning? Yeah. And
so when we look at that, that's usually a huge
part of our strategy. Now, again, every client's
different. Every community is different. And
it's a very nuanced conversation. But that's
definitely one thing that we typically approach
fees. I mean, if you're in the 20th percentile
in your area. we're going to be more willing
to raise those bigger fees, those bigger codes
than the pro fee or oral exam. And so you're
looking at the fee structures, you're looking
at the overall P &L of the practice. How are
you balancing that then? Because I assume you're
getting into some version of tax strategies and
things. How are you bridging that office P &L
and office expenses? And I've got a car and I'm
paying my kids or whatever into it. their personal
tax strategies. How are you sort of drawing the
line in those meetings? Every planner is different,
but how I approach our meetings is if you were
to look at a P &L and go from top to bottom,
at the very top is going to be revenues, right?
Are revenues growing? Are they declining? Are
they staying stagnant? That's the first thing
we're going to look at. Why are they, if they
are stagnant or they're declining, why is that?
Did you scale back on your days? Is the population
in somewhat of a decline? If you're in a smaller
community, people are moving out. I mean, there
could be all kinds of reasons for why top line's
decreasing. But that's where I start. And so
we start with collections, which is a function
of production and fees and insurance or the in
-network or the out -of -network. And then I
go down the line. And so we start with the top
line revenues, like I said. And then next we
go to our direct costs. What are direct costs?
A great example is staff. Right. If you are going
to produce, you know, two million in production
where you're going to need more staff staff than
if you're producing one million of production.
Another great example of direct costs would be
dental supplies and lab bill. The more you produce,
the higher in terms of dollars. that that line
item is going to be on your profit and loss statement.
Credit card processing fees is another example
of direct costs. It's directly correlated to
the top line. It's directly correlated to how
much you produce and collect. And then once we
get past the direct costs, we'll talk about fixed
costs. What's a great example of fixed charges?
One of the best examples is rent. Whether you
produce $100 ,000 or $200 ,000, The rent is the
rent is the rent unless you own your building.
Then you can kind of manipulate that a little
bit. What's another example of fixed cost advertising,
right? When they come and meet with you guys
and they sign a contract or a deal, no matter
what they produced or collect that month, typically,
you know, their advertising budget is what it
is. And so that's how I go down. That's how I
organize our meetings is we start with the top
line and go all the way down until we get to
their net profitability or otherwise known as
their quote unquote EBITDA profit margins. And
how are you deciding what to push through the
office and what to leave personally? And I know
that's different for every person, but just sort
of broad strokes, right? Well, that depends on
the client and how aggressive they want to be.
You know what? Exactly. Everybody wants to be
very aggressive until they see how much work
it actually takes. Or they meet an IRS agent,
and then all of a sudden they're nearly as aggressive.
Yeah, the Augusta rule sounds great on paper
until you really realize what is required to
implement it at a practical level, and then you're
like, oh, that doesn't sound fun anymore. Yeah,
but you know what? I have clients who are willing
to do it, and they're willing to document it,
and they get away with it. And so it is totally
dependent on the client. You're 100 % correct.
But how do we determine? One thing that we do
in our meetings is whenever I meet with my clients
every year, they will give us a lifestyle spreadsheet.
Because we want to know what are they spending
just to project out cash flow. I don't really
care so much about what the dollar amount they're
spending as long as it works in their plan. As
long as they can meet their goals, they could
spend 5K a month, they can spend 25K a month.
I genuinely don't care what they spend as long
as they can reach their retirement goals. or
their you know annual cash flow goals as long
as they're covering that that doesn't really
matter to me but one thing we'll do is we'll
use that lifestyle spreadsheet that they fill
out and we'll say okay just as an example cell
phone bill can this be justified as a practice
expense and we'll talk through it dining out
if their spouse is on payroll hey can this be
justified as a business expense whenever you
go out with your spouse and you eat are you talking
about the business Right. Can we justify this?
Those are just two examples. But we'll go through
the list and we'll say, OK, what what could be
classified as a quote unquote business perk and
what should be left in personal expenses? And
typically I'll recommend clients be pretty aggressive
with that because the worst thing that happens
is their CPA looks at their books at year end
and they say, hey, that's not actually a business
deduction and they code it. they reclassify it
to a distribution. And so I'll typically recommend
them be pretty aggressive. If they think it's
a business expense, then I would recommend them
ride it off a hundred percent. And the beauty,
I mean, we have the same, you know, Andre and
I have the same thing. We deal, we like someone
who does other businesses like ours because they
have an eye for like, Oh, look, your Porsche
911 is in fact, not, I can't defend this. No,
you know, your truck. Sure. You know? Yeah. And
I've, I think that's to me, where we were talking
on the pre -show about how dentists and businesses
and private equity, I know that you can get your
taxes done cheaper somewhere else. I know that
there's, you know, I'm sure cheaper places, but
the fact that you get to see other dentists and
what they're coded, like that just has to have
so much confidence. And this is an outlier, you
know, to me that. That's always brought me confidence
when I do talk about my taxes as an agency owner.
And, you know, I'm obviously not this, but what
do I see other agencies doing in travel? You
know, how are they paying their kids? How are
they doing their vehicles and how are they doing
client visits? You know, all of those. Why is
it I always visit my clients in Hawaii? I don't
know. Yeah. It works out. They're needy. Yeah.
Yeah. It's one of the biggest things when we
first meet a client and they come in for their
first meeting. That's always a huge topic is
we look at what they're running through their
practice and it's just not nearly enough. And
that's not because we're trying to cheat the
tax code. That's not that's not our goal ever.
Our goal is to just make sure that anything that
can be justified as a business expense should
be written off through the corporation, through
the business. And so that's one thing that we
help clients with. And we usually spend a good
amount of time on it, especially for our first
meeting. Now, by the third or fourth meeting,
they usually have that down for the most part.
And we don't have to spend the same amount of,
you know, we don't have to go through their lifestyle
in detail. Yeah. Taylor, you should talk to Andre.
Andre has a printout of all the things that he
should be expensing regularly. And he's got to
buy his monitor. So every time we buy something,
he's like, can I do that? No. Exactly. I love
that. Yeah. Now, let me ask you, you know, sort
of a summary question here. So what are the three
things or X number of things that that you find
dentists or just you just wish they knew? You
know, when they come and talk to me, I. I wish
they had a better understanding of how X works.
I wish they had a different set of questions.
Someone come and talk to you. What's the dream
first meeting you're having, Taylor? Well, I
think three things that I wish more dentists
knew, and you just hit on one of them. They're
not writing off enough deductions. That is one
of the things I would tell you. Another thing
is managing staff and connecting with their staff
members. I feel like a lot of dentists, I think
when they first start their practice and they
hire those first couple of employees, they meet
their front desk person, they meet their first
hygienist, they meet their first assistant. They're
very close with that group because they're the
first employees, just like any business owner
would be. But then over time, I think they lose
that connection. They lose that camaraderie with
their staff. And so bringing that up during our
meetings and how they manage people and how they
connect with people, I think a lot of it, and
this isn't just specific to dentists, I think
a lot of business owners, they kind of miss that.
And so when you meet with a third party that's
advising you on your business, your practice,
I think bringing that up is very important. And
you'd be shocked at whenever you have a staff
member or staff that feels feels like they matter,
feels like what they do is important, and that
they're actually being watched and appreciated,
that's when you notice that production and efficiency
comes up. So that's one thing that's big that
a lot of people don't talk about. The second
thing you hit on, writing off expenses and not
paying more to the IRS. I mean, no one likes
the IRS. I haven't met one person yet. I keep
looking for them, but I haven't met one single.
And that's not just business owners either. Let
me know if you find that person. But then number
three is I feel like they aren't as aware of
how to save for retirement. A lot of business
owners in general and a lot of dentists are not
aware of how powerful a 401k plan can be. They're
not aware of, if they're a little bit older and
they've been practicing for a while, what a cash
balance plan is. and how that can that can keep
a lot of money away from the federal government
and save them a lot of a lot of cash um that's
so that's another thing um and so number one
managing people number two keeping the government
away from their money you know write -offs and
then number three saving for retirement one thing
we spend a lot of time on in our first meetings
is the three buckets the taxable bucket the tax
deferred bucket and the tax -free bucket so an
example of a taxable bucket would be a brokerage
account or a bank account right if you earn interest
or capital gains in that bucket you pay taxes
on it a tax deferred an example of a tax deferred
account in the second bucket would be a 401k
plan or a cash balance plan when you defer money
into that type of plan you are keeping it away
from the government and so you are deferring
taxes that's why it's called the tax deferred
bucket and then the third type is a tax -free
bucket so the best example of that is a roth
ira Or even a Roth 401k. Whenever you contribute
to that, you aren't deferring it in the year.
You contribute from taxes. However, just like
a 401k plan, it grows tax -free. So all the interest,
dividends, capital gains within that bucket are
kept away from the government. And so we talk
about how important all three of those are at
retirement. and how they all are interconnected
and how we can use all of them as tools to efficiently
pull your assets out and use during your retirement
phase. So, yeah. Now, I'm going to test my financial
acumen. Okay, I'm ready. Is it a true statement
that an HSA maxed out, not used, is one of the
best investments you can make in 2025? It absolutely
is. You're correct. Look at me go. Proud, yes.
And I saw you light up right there. You were
proud. I was proud. I knew I knew it was going
to be. Yes, it's the only it's the only type
of account where when you contribute to it. And
by the way, to be eligible, it has to be a high
deductible health care plan. Your health care
plan is not a high deductible plan. You are not
allowed to contribute to an HSA. But it's the
only type of account where whenever you contribute
to it, it is deferred from taxes, just like a
401k. It grows tax free, just like a 401k and
a Roth IRA. And then when it's pulled out, as
long as it is for health care costs, it is pulled
out tax free. It is the only triple tax advantage
type of account that we have like that. And so
you're right. It's a great account and it's a
great tool to use in saving for retirement. Now,
one thing that's important about that is you
have to document your expenses and you can do
that for a long period of time. scan your receipts
in, save them into a folder, and then down the
road, you can pull those expenses out tax -free.
And so that's one important thing to note is
you have to keep track of your healthcare expenses.
Well, man, Taylor, thank you so much for jumping
on the show. I'll link Serity Partners and your
bio out there in the show notes and certainly
give Taylor a call. I mean, it's been from tariffs
to taxes. Taylor does it all. Yeah. I don't tariff.
I promise I don't. Do not confuse me with that.
But I will help you work around tariffs. Work
around tariffs. Yeah. I mean, we can work out
a jingle like Taylor does tariffs and taxes.
I mean, we can work something. We can workshop
some ideas, Taylor. You know what? I would love
to have a happy hour when we come up with that.
That would be fascinating. Yeah, a little jingle
goes along. Taylor, tariffs and taxes. Yeah.
Well, Eric, I appreciate you for inviting me.
Yeah, of course. And it was a pleasure. And I
always love connecting with you and your team.
You guys do a great job and have helped many
of my clients. And so I really appreciate that.
Thank you again. Absolutely. You bet. Anytime.
Appreciate it, Eric.