From 6 Figures to 7 Figures: Lessons To Learn

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Intro: You are now listening to another episode of the Insurance Untangled podcast, where we explore the various challenges faced by dental practices due to their reliance on insurance. Join us in this podcast as we dive deep into the issues surrounding dental insurance dependence and offer practical solutions and strategies to help you take control of your practice’s financial future.

Ben Tuinei: Welcome to another amazing episode of the Insurance Untangled podcast. My name is Ben Tuinei, and I’m one of the co-hosts of this podcast that’s dedicated to helping practices that are tangled up with insurance. You know, we talk about all things dentistry, you know, and it’s more so to help you take control of your practices and create a bigger, better, brighter future for you and your patients and your team members that hopefully is less insurance-dependent, but more so, more profitable all around for your practice.

So, today I have my good friend and co-host Naren with me, and we’re gonna be interviewing Naren. Naren, how are you, my friend?

Naren Arulrajah: I’m doing great, Ben. And yourself?

Ben Tuinei: Doing wonderful, thank you. I’m super excited about today’s episode, so we’re gonna dive right into it.

The title for today’s episode is From Six Figures to Seven Figures: Lessons to Learn. And I guess what we mean by that is that six figures in terms of, uh, practice revenue these days, it just doesn’t cut it. You have to set your sights higher, and it’s for a variety of different reasons that are out there.

But what I wanna start with here is just some context. So we came across an amazing story from a dentist who went from $235,000 in collections to over $1 million a year in just a four-year period. And we knew we just had to share this with you because this is an amazing story.

So this story’s packed with lessons on marketing, mindset, smart strategies, and a number of other things that are very helpful for practice owners these days. So let’s break it down and answer some of the biggest—or at least some of the big—questions that a lot of the dentists might have with regards to this topic.

But Naren, uh, I guess a good place to start is, can you give us a summary of this practice and this four-year journey from start to finish?

Naren Arulrajah: Absolutely. So this doctor—um, now I wanna say something before I jump into the story, Ben. I think today, a million dollars is like the minimum. Like, if you are not aspiring to get to a million, you might as well not be a practice owner, because with cost of living and all the expenses going up, I think a million is kind of like the baseline.

So if anyone is listening to this podcast who’s not doing a million—great episode. And then of course, those who are doing a million, hopefully you can also leverage some of the lessons learned from this experience and what we’re gonna talk about today to further your success.

So, this particular practice—the doctor, you know, moved from a bigger city. He wanted to kind of have a simpler life. His wife’s family lived in this small town, and they wanted to move back. And they had four kids, so they wanted to raise the kids and make that the focus.

Naren Arulrajah: So he didn’t want to, like, you know, spend all the money that he had saved up from his prior practice. He wanted to keep it, he wanted to use it for his house and obviously, you know, keep it as savings.

So he bought a practice that was doing $235,000 in collections. He pretty much got a really, really good deal. You know, he just, uh, you know, didn’t have to pay much because this particular doctor couldn’t make it. So he bought this $235,000 collection practice in this small town. And, uh, this was, I think, in the beginning of 2020. Of course, COVID hit—I think he was negotiating the deal at the end of 2019, and then I think he bought it, like, in January of 2020. Then COVID hit.

Of course, everything went for a six—you know, he was closed for like two months or so.

Naren Arulrajah: And then he had to kind of catch up. So even without looking at all the free money that the government paid, he was able to grow his practice to $400,000, which I thought was an awesome accomplishment.

Like, the way he did it is he was very, very thoughtful and systematic. And I know we are gonna jump into more of the lessons later on.

And then, of course, next year—2021—he saw a big jump from $235K to $400K. The next year was more of a stabilizing year; he went to half a million.

In year 3, 2022, he went to $700,000, and year 4—2023—he went to above a million dollars. So he took a practice that was doing $235K and literally quadrupled it in less than four years.

And it was a fee-for-service practice.

Naren Arulrajah: I think he had one insurance, if I’m not mistaken. So, that was like 20% of his patients. So on 80% of his patients—$800,000 worth—he was collecting full fees.

Many of you know, with a PPO practice, you are only collecting like 60 cents on the dollar. So you’re doing more dentistry than what you get paid for. Like, you know, one and a half times the dentistry to get paid a dollar—you’re doing $1.50 worth of dentistry to get paid $1.

Because 80% of his practice was all, you know, fee-for-service, he was keeping all that money. So his profit on this million-dollar practice was like, I think, close to $360,000. Of course, that includes his salary.

Not too bad, right? For somebody who moved into this town, wanted an awesome lifestyle, was able to build this practice, you know, working three and a half days a week, and doing a million dollars.

He had the life that he wanted. He had the environment he wanted. He had an awesome team, and he was very profitable—for, you know, working three and a half days a week.

Ben Tuinei: Yeah, I love that. He is making more profits than what the practice was doing in revenue when he took over.

Naren Arulrajah: Exactly. Um, exactly.

Ben Tuinei: We see that too, like a lot of times where, you know, we assess a practice in terms of the fee schedules, and a buyer gets a fee schedule—of a number of PPO fee schedules—that are higher than what the seller’s previous office fees were.

And I love hearing stories like this because it brings a lot of hope in terms of what anybody can do with a dental practice or a business.

You know, so a question I have for you—I know that this was in a rural town, is that right, Naren?

Naren Arulrajah: Yeah, it’s in a small town, yes.

Ben Tuinei: Small town. Okay. So is this kind of growth exclusive to small town dynamics, or does this work in big cities as well?

Naren Arulrajah: It works everywhere. Like, I had another client—you know, she was working, um, you know, four and a half days, doing $650K. This was, you know, around 10 years ago, and she was able to double her practice to $1.3 million and end up working three and a half days. That was in a big city, you know, in D.C., uh, close to D.C. in Virginia. So like, as big as it gets, as crowded as it gets.

Um, and so I do think growth is possible everywhere. Of course, I think it’s more so than the location—it’s the dentist. Or more so than the town, it’s the dentist and how they run the practice, how they think about the practice, what they do, what they don’t do.

I mean, I think in many cases, the things we do hurt us more than the things we, you know, uh, don’t do. So it’s like figuring out what are some of the things that we are doing that are counterproductive, stopping those, and then creating new habits that are productive.

Ben Tuinei: Yeah, absolutely. So for this particular practice, I guess, you know, a big question—so this practice is fee-for-service, right?

Naren Arulrajah: Yeah, mostly fee-for-service. Uh, 20% of the patients were PPO—one PPO plan. And the reason he took that plan is because, you know, it was like the largest in this area, and they paid reasonably well. And, like, you know, there were a lot of, you know, government-type employees who belonged to that, um, you know, that insurance plan.

So he didn’t want to, like, alienate them, and he just didn’t wanna make it difficult for them. So he made a strategic choice based on the fact that they paid 80 cents on the dollar versus 60 cents on the dollar. And because he didn’t want to alienate certain groups of people.

So, you know, it doesn’t mean that you have to go all the way to, you know, fee-for-service. You could, you know, go 80% fee-for-service like in this case.

Naren Arulrajah: And this town was not a rich town. It had a lot of, you know, blue-collar workers. But just like everybody else, they also appreciated dentistry. And many of them didn’t have proper healthcare. And, you know, because of the work that they were doing, they still wanted to take care of their teeth.

So he created a membership plan, for example, to make it affordable for them to bring their families in for regular cleanings and checkups.

He focused on, you know, high-value dentistry. He specifically focused on Invisalign, and he attracted people by showcasing cases, by leaning in on Google and SEO.

He also focused on, you know, sedation, because there’s a lot of people who haven’t had dentistry done for a while, and he realized that he can cater to them with sedation.

Naren Arulrajah: So he did a lot of big cases where there was a lot of dentistry, a lot of neglect, that he was able to rectify and fix and sought out for people. And he also educated his customers.

So he created this group of people who really appreciated him, appreciated the team, and above all, appreciated their health. So it was kind of, like, rewarding.

I remember talking to some of the team members there, like, two years into it—they felt like they were going to a different practice. You know, not the one that—like, this particular team member came from the old owner. So it was just like day and night—just the vibe, you know, how excited people were in the work they were doing. I mean, the employees—and how she felt about, like, the difference she was able to make as part of this new practice, making a difference in that community.

Ben Tuinei: No, I love that. So, if you don’t mind, I wanna share my personal experience with what you just said.

You know, it’s hard for me to compare myself to a dentist because, you know, we don’t have the same restrictions of being in-network and getting a lower fee to collect on your services. So we’re like a restaurant business in the sense that we control our own pricing, right?

When our costs go up, so do our prices. Unlike when you’re in-network with insurance—your costs go up, you’re still screwed, you know, with those lower fees.

So yeah, the question that came to my mind is: is fee-for-service really the key here?

And around the same timeline, I doubled my business as well—during that same time timeline that we talked about.

Ben Tuinei: And the real key for me was adopting the fee-for-service mentality. The standard pricing that we had was the equivalent to a 40% write-off for us. And once I eliminated—well, I just eliminated 20%—and it was so interesting that that particular year, when we first raised our fees 20%, we doubled the business.

And it’s more so because we were able to add a dynamic to our services—better, more qualified people, right? Being able to keep up with the competitiveness of the workforce, right? And having the things that attract the quality people to your business.

And so what I found in my own exploration of the fee-for-service model—not being a dental practice myself—is that adopting the fee-for-service mentality helped in a big way. Kind of like Gary—uh, when Gary studied the… oh, what is that? The Kodak study? I researched that and I applied some of the mathematical formulas, and it was a very simple concept for us to double our revenue.

But it was more so looking at it from the perspective of—we added 20% to our fee, then we were able to afford the things that we needed to better serve the clients. That resulted in better reviews and more referrals, right?

But in a practice dynamic, Naren, is fee-for-service really the key in terms of controlling the fees to where doctors have more breathing room to be a lot more successful, a lot more profitable?

Naren Arulrajah: I think I would have to agree with that, because, you know, let’s kind of do some basic math.

Let’s say you’re running a million-dollar practice with 10% profit, okay? Or 15% profit. So you’re taking home $150,000, right?

Now, you raise your fees on the same practice because you’re dropping PPO plans, therefore you start getting full fees. Now, let’s say you add an additional $300,000—without doing more dentistry—just by not letting the write-offs come in, right?

And when I say $300,000, maybe the fees went up by half a million, but maybe you lost $200,000 worth of patients. So net-net, you’re doing $200,000 less dentistry, but you’re collecting $1.3 million, right?

So when you’re doing $200,000 less dentistry, is your expenses going to go up?

Ben Tuinei: No.

Naren Arulrajah: No, right?

Ben Tuinei: Absolutely, right? 

Naren Arulrajah: More than likely, it could go down, because you might—yeah, you know, you might not need as many people. So let’s say, yeah, you’re being generous, you want your people to really relax and enjoy themselves. So they’re saying, "Hey, do 80% of the work you were doing before," but we are making $300,000 more.

So what does that do? It drives your profits. That is, he’s now making $400K instead of $100K. Now, that $400K means you can invest in more, you know, marketing to attract better patients. You can, you know, train yourself to be able to provide or do bigger cases. You could attract and keep even better people. You could invest in technology.

So it’s almost like—it creates this, um, you know, like, think of this image, picture of, like, a snowball rolling down a hill, right?

Naren Arulrajah: It gets bigger and bigger. That positive momentum that started with extra money in the bank—because you’re not taking those cuts anymore—makes a massive difference, right?

And that creates opportunities for you to do all kinds of other things. So it’s like—I’m sure you’ve heard the word, right? Success creates success, just like failure creates failure.

So the question is, how do you get that, you know, snowball to start rolling down the hill? And that’s with you adjusting your fees. In your case, you increased your fees. But in this case, you stopped taking—you know, 40%, you know, 60 cents on the dollar—because of the PPO plan write-offs and stuff.

But I mean, in this particular doctor—the example that I shared with you—he started small. So he didn’t have any bad habits to correct. He just started targeting these people who were willing to pay full fee. He stopped, you know, being on these PPO plans the doctor who was doing $235,000 was on. He got rid of the worst ones. He just zoomed in on only one and then got rid of everybody else—just kept one plan.

So, I agree. I think—yeah, I love—

Ben Tuinei: Yeah.

Naren Arulrajah: Yeah. And of course, with some of the extra money, he invested in marketing. He hired us, and we helped him dominate Google. So he was getting, like, 25 to 30 new patients every single month.

And these are not patients who are PPO patients paying you 60 cents on the dollar. These are patients who wanted those big cases, like sedation cases or Invisalign cases, and they were willing to write bigger checks and pay full fees.

So, like, sometimes he was making, you know, $10,000 to $20,000. As opposed to when he took over the practice—it was all PPO and all, like, a few hundred dollars here, a few hundred dollars there. So he was working harder on day one than he was when he was four times bigger, just because of the way he set it up.

Ben Tuinei: Yeah, I love that. And the more and more I kind of observe the SEO strategies that you and your team implement, I gotta say that it makes such a big impact in dental practices in terms of growth.

But, you know, let’s get back to this particular example because this one is amazing. So, in terms—so while we’re along those lines of marketing, Naren, what kind of marketing actually worked for this doctor, if you don’t mind sharing?

Naren Arulrajah: Yeah. The marketing that worked is—so there’s two things that he really, really focused on.

One is, um, you know, dominating Google. So, he started working with us. We started by identifying the services he was already providing, plus the ones he wanted to grow into.

Within a span of 12 months, we helped him dominate his local area. So, like a one-hour radius, he was ranking for pretty much anything and everything on page one of Google—which means the top 10 results, and in many cases, the top three results.

So when people looked for "dentist near me," "dentist [city name]," "dentist [zip code]," "Invisalign," "sedation"—all the things he cared about—he was at the very top.

So that means, very quickly—within less than 12 months—people started noticing him, right?

Naren Arulrajah: Because people use the internet all over the world, right? They don’t just use it in one place versus another. So they started noticing him. The buzz started building.

The thing that he did to help himself while we were working on SEO was Google reviews. So he really got disciplined on getting 10 or more reviews every month. Some months he got, I think, 12, 13, 14—but he never went below 10.

So he kept getting these Google reviews. Anytime a new patient came in, he mastered how to convert them into—you know, convert them into fans. So they would write these paragraph reviews—what I call love letter reviews.

And before you know it, the reputation also started helping him, because more and more people started accepting treatment.

We also looked at his phone calls, and then we realized in the early days, he was not booking as many patients as he thought, because the team was not trained properly.

Naren Arulrajah: So we took the conversion rate from around 35% to like 80%. So when you combine Google reviews with, you know, amazing phone skills plus amazing SEO, you have a winning formula.

The beautiful thing is, you know, this kind of marketing was costing him like $1,200 a month. Versus—imagine if you get all those million dollars’ worth of patients from PPO plans—you would be spending $500,000 a year, which is $40,000 a month in marketing.

Remember, PPO fees—the only thing they do is drive new patients. So if it’s not a marketing expense, what is it? It is a marketing expense. Therefore, it’s a marketing expense, right? ‘Cause that’s all they do for you.

So instead of spending $40,000, he spends $1,200. That means the extra $38,000 every month that he’s saving—not wasting on PPO plans and write-offs—now goes to investments and profitability, which made everybody happy and successful.

Ben Tuinei: Yeah, no, I love that, Naren. You know, I’m sitting here thinking about this story and putting myself in the shoes of the doctors that are listening to this.

What are some of the big takeaways? As a practice owner, when I’m looking at this story—can you summarize what are the takeaways that are relevant to me as a dentist?

I’m doing the day-to-day, I haven’t seen this kind of growth. How can I get there?

Naren Arulrajah: Yeah. I really think you have to stop and think for a minute, and I would recommend booking a marketing strategy meeting so we can help you—from the marketing standpoint—helping you attract the right patients at a fraction of the cost.

Because, you know, PPO patients are the wrong patients. The first question they ask is, “Is it covered by insurance?” So you end up doing “tooth dentistry,” right? Like, you know, $500 here, $300 there, $1,000 max per year, and so forth, right? Which is really like soul-sucking dentistry.

So it’s very—you know, of course, when you’re not motivated and when you’re not excited, your team sees it. They’re not motivated. Everybody’s just like, you know, “Oh, time to go to the salt mine again.” You know, that’s the practice—every day’s headaches and problems and everything else.

So stop and think:

What do you want your life to look like?

What kind of dentistry do you want?

What kind of patients do you want?

And then start taking control. Of course, marketing will attract the right kind of patients. It’s not going to happen overnight—you have to work on it.

Yes, we can help you dominate Google and get the phone to ring, but you have to help with Google reviews. You have to, you know, work with us on training your team on how to answer the phone. So there are pieces you have to also step up and do.

But when you start attracting the right kind of patients and doing full-price dentistry, and your numbers start improving—what happens is, subconsciously, that success creates confidence. And that confidence drives even more success.

When you first started, you only wanted to do Invisalign. And then you got into sedation. So, like—it just keeps growing, right?

Naren Arulrajah: Your confidence grows, your team’s confidence grows. So people got very good at explaining why sedation makes sense—especially for those patients who hated going to the dentist and came in for the first time. They were doing these comprehensive cases.

Of course, a lot of fillings and a lot of little, little stuff—but combined, it was a lot of dentistry. So the patient got healthy and got their dental health to a certain baseline. And then, of course, the doctor’s revenue started growing.

So I think—I think, um, I think start by making a decision. You know, have a marketing strategy meeting. The meeting link is insuranceuntangled.com/msm.  We’ll put a link in the show notes as well.

We’ll tell you how you are doing versus your competition. Like, if your marketing is weak compared to your competition, you know, you have a huge opportunity to make it one of the best—so you are attracting better patients at a fraction of the cost.

I mean, at the end of the day, it’s about: how much am I spending versus what am I getting out of it, right? So you want to get the most and spend the least.

Ben Tuinei: Mm-hmm. Yeah, I love it. I love it. Naren, I think that’s a formula for success that we can all adapt in our own businesses, you know?

So, for our listeners—if you’re ready to build your own seven-figure success story, I mean, I think to me it really all starts with a very strong, focused marketing strategy that sort of highlights the strengths that you have, you know, and in a way that allows you to attract the kind of patient that you want.

So let’s get creative and really tailor marketing goals to what you want it to be.

Being in dentistry for so many years—but just in business for even longer—it all makes a difference with the kind of marketing strategy and marketing partners that you have.

And there’s no better marketing partner that I recommend than Naren—you know, Ekwa Marketing.

Ben Tuinei: So check out the, uh, insuranceuntangled.com/msm  link for the marketing strategy meeting. If you request that, I can promise you—and give you my personal guarantee—that it’ll be totally worth your time.

Naren, I always love chatting with you. Thank you so much for your thoughts and the amazing wisdom that you shared today. And I just want to thank you again for an amazing episode.

I want to thank our listeners for joining us today on another episode of the Insurance Untangled podcast. If you enjoyed today’s episode, share this with your friends, give us some love, and share this on social media.

Give us some good reviews—some constructive reviews, of course—that’ll help other doctors find our content.

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Until we meet next time, folks, we wish you the very best of success. Take care.