Daniel Priestley started out as an entrepreneur at age 21 and built a multi-million dollar event, marketing, and management business before the age of 25. A successful entrepreneur, international speaker, and best-selling author, Daniel has built and sold companies in Australia, Singapore, and the UK. Daniel is the founder of Entrevo, which runs a 9-month growth accelerator program for small enterprises, working with over 500+ entrepreneurs each year to develop their businesses. Entrevo has offices in the UK, USA, Singapore and Australia. Daniel uses campaigns to help raise up to $100,000 for charity each year and is connected to some of the world’s most known and celebrated entrepreneurs and leaders. With a passion for global small business, Daniel is the author of the three best-selling books Key Person of Influence, Entrepreneur Revolution, and the newly released Oversubscribed.
In this episode we talk about:
- How Daniel became an Entrepreneur
- What led him to the Key Person of Influence program
- Insights and advice on leadership
- The critical business insights for growth
- How to find out what people like
- The role of culture on how the team develops
- The benefits of scaling a business
- Developing roles and sharing resources to retain trust
- How to develop good leadership and management
- Creating a culture of sharing
- The key or turning points and decisions
- The systems of best practices to make a business grow
- How to develop a strong brand
- Having great systems in place to run business operations
- The importance of a reputable, interesting, creative, and valuable marketing strategy
- Creating a remarkable budget
Where to find Daniel Priestley
Hello everyone, welcome to the show. Today, I’m joined by Daniel Priestly, who is the bestselling author of 3 books, the Key Person of Influence, the Entrepreneur Revolution and Oversubscribed: how to get people lining up to do business with you. Welcome to the show, Dan.
Thanks very much for having me.
Look, it’s an absolute pleasure, thanks for coming along. For the audience members who haven’t been so familiar with some of the work, Dan Priestly is the founder of the business growth accelerator called the Key Person of Influence program, it’s a fabulous program, I’ve been through it myself. That particular program, Dan, correct me if I’m wrong, it originated in London, is that correct?
Yeah, so I’m Australian by birth, my background is building businesses in Australia. I moved to London about 9, 10 years ago in 2006, launched business over here, and in 2010 had the opportunity to set up a business growth accelerator based on some insights that I had about what was going on in the marketplace. We launched in London, and very quickly, we thought, “This is something that would benefit people all over the world,” so we launched in Australia, Singapore, and the USA over the following 4 years.
That’s on a fairly impressive scale mate, and that’s obviously some of the key stuff I want to have a chat with you about today, because one of the key things that dentists are always asking is, “How do we take our operation, how do we scale it, how do we go into new territories, how do we grow, and how do we grow really well and cleverly as opposed to just growing for the sake of growing, creating chaos and mess, and so on and so forth?” Those are some really key points that we’ll obviously dive deeply into today. Before we get into the nuts and bolts of that Dan, can you tell me a little bit about more of your background, a bit more of your story, and how the program came into existence in the first place, and then what were the key triggers to make you think, “Okay, this is the time that we need to take it to another country,” or, “How do we scale up?”
My background was, as I said, an entrepreneur in my teenage years, running dance parties and different events. In my early 20s I set up an event marketing and management company which became … It was very boutique, but it became quite large. We were making over $10 million worth of sales by the time I was about 24, 25, so it was one of those very fast growth businesses. I’d never really travelled internationally, I wanted to go and live in London, so I set up the business in London in 2006, and we grew a very similar business to about 4 million pounds, which at the time was about $8 million, or $9 million worth of revenue. That all happened within about 2 and a half years. Along the way, part of what we did with the business is we brought international speakers from around the world into London, we brought people who were bestselling authors, we brought people who were ex-CEOs or CEOs, people who’d sold their companies for tens of millions, if not hundreds of millions of dollars.
I got a lot of opportunity to sit on trains and hang out in hotels, and actually get the behind the scenes look into the lives of those people. It led me to reading the … Sorry, led me to writing a blog called How to Become a Key Person of Influence, and that blog was well-read, and then it led me to writing the book, Becoming a Key Person of Influence. Around that same time, I became really fascinated with the tech space. I was giving talks myself, and we were … Our company was offering trainings on social media marketing and social media strategy, it was very much the new thing in 2009. We were advising companies around how to scale using technology, and I became aware of something called an entrepreneur growth accelerator in Silicon Valley, and there was a number of very successful growth accelerators there where they would take young technology men, basically, to be blunt about it, 22 year old boys who could code.
They would find these young guys who could code, and they’d try and get them to have some sort of an insight about the world and the world at large, and then turn that into a business. Because they were very good at coding, they could turn things into businesses very quickly, but because they were so young and inexperienced they didn’t have very many valuable insights. They would come up with really predictable, stupid stuff that you’d expect 22 year old boys who had never had many social interactions with humans to come up with. They weren’t producing, for the thousands of businesses that you’d put in one end, they weren’t producing high success on the other end. What I did is I thought, “What if we reverse-engineered it a different way? What if we took people who have no idea about technology and scaling through coding,” and all that sort of stuff.
“What if we took people who’ve been in their industry 20 years, and have very valuable insights about how their industry works, how it should work, how the client experience should be, and we take people like that and we actually help them to become more successful at building a business, using some of the tools that are being used to scale businesses around the world. That led me to launching the Key Person of Influence program, the results, to be honest, shocked the hell out of me. Our first group was of 40 people, and all 40 of them just started to lift off the ground. Businesses that have kind of been ticking along sideways for 5 to 10 years started doubling very rapidly, and people started talking to me about how this was creating brand new 6 figure revenue streams, sometimes 7-figure revenue streams, and we knew we were onto something. The case study’s basically, “We’ve grown because of the case studies,” people hear about our clients, they hear about what our clients have achieved.
They say, “How did you do that,” and then they talk about us. We’ve done no traditional marketing, in the traditional sense. My first businesses were built on newspaper advertising, and we’d spend up to a quarter of a million a month on different display ads. This business has been built on word of mouth, our clients tell other people what we do and we’ve grown internationally as a result. We now have over 1500 clients globally, and that’s set to double. We work with some of the world’s most celebrated entrepreneurs and leaders, we now behind the scenes advise some of the world’s biggest companies on how their leaders should show up in the world and how to develop insights for their team and turn those into new products. We’ve got a corporate training division as well, we’ve got a technology hub, so we actually have a team of technologists who built technology for our clients here in the UK, in Milton Keynes.
We’ve grown off in all different directions, we’re a team of about 50 people across 7 time zones working with 1500 clients.
Dan, that’s a significant enterprise there, that’s a lot of moving parts. Clearly as you’ve grown there would have been some key lessons that have cropped up along the way. As you stand and look back upon that journey now, what do you think some of the key insights have been as you’ve gone from that fledgling business into something growing and then growing further and further and further into the organization that it currently is now?
There’s a few insights, and one of the first insights is that business moves in a very predictable pattern. It goes from start up, which is all about the idea and being in love with the potential and the possibility, and seeing a very clear picture of what it’s going to look like when it’s big, when it’s done, or even what it’s going to look like at the next stage. The next stage typically is a stage called wilderness, which is basically living hand to mouth and surviving, trying to set up a business and trying to pay for a little team. Normally that is between the founder plus 2 or 3, and then, the next stage is called lifestyle, which is where you build a boutique business of 3 to 12 people, that’s a beautiful business for most people. Most people don’t ever want to get beyond lifestyle, that was one of our key insights when we set up the accelerator, is that most of the time we were talking about performance businesses, which were really big.
Our people were actually saying, “Hey, wait a second, hold up, I don’t want a big business, I want a lifestyle business.” We had to actually reverse-engineer what does a lifestyle business look like? We did the research, we found that it’s 3 to 12 people, in fact, it’s 3 and a half people to 12 people. It’s doing revenue per person of about $140,000 plus. It’s got a few other parameters, but that’s the next predictable phase. After that you’ve got a scaling phase which is incredibly difficult called the desert, and that’s where you take the business from 12 to 50 people and during that whole phase you’ve got quite a lot of growth to achieve. You’ve got to go from a couple of million dollars to $10 million plus. It’s 500% growth that’s required to get onto the other side, very few companies do it. Most companies fail in the desert, but it’s a scaling phase and there’s almost …
There’s not a lot of money around, there’s not a lot of room for error, and it’s a dangerous part of the business. The culture has to shift considerably, a lot of the time the winning strategy that got you a lifestyle business now becomes the bottleneck and the losing strategy. If you can get through it, if you can get to 50 people plus, you’ve got a performance business. Between 50 and 150 is your typical performance business, now your revenue per employee has to go up over 200,000 Aussie dollars, actually, quite a bit more than that. About 240, 250,000 Aussie dollars, by the way, I’m mentally calculating the shift from pounds to dollars.
I’m impressed with the conversion rates going on in your head, mate. That’s pretty impressive on the fly.
Then you get a performance business where you’ve got evaluation, you’ve got people wanting to buy, you’ve got money from the bank if you need it. The business is bigger than the founder, but the founder’s still important. You’ve got a board and a chairman, and you’ve got a HR person, and all of those things that a grown up business has. You get there in a performance business. One of the first insights was just trying to find out, what do people actually want? The first real question every entrepreneur should be asking themselves is, “Do I want a lifestyle business, or do I want a performance business, and then the real question is, real deal, not fantasy land, what does that actually look like? The fantasy that people have is that they’re going to have a lifestyle business with just them, or them plus their wife, or them plus one, or them plus their husband, or them plus one other person, and that’s not true. It’s 3 and a half to 12 people.
The other fantasy is they’re going to have a performance business with 10 people, and that’s not true. Performance businesses are 50 plus people. Some people say, “It’s just going to be me and my laptop, or me in my little office, and we’re going to somehow sell a business for millions of dollars.” It’s like, no, that’s never going to happen. You’ve got to choose a design, it’s either going to be a performance design or a lifestyle design.
On that Dan, I guess there’s some really critical points about … In some ways, although the journey is predictable, I guess as you’re traveling through that and you’re thinking to yourself, “I’m at that lifestyle level, I’m pretty happy here,” then I guess you’re at that fork in the road point. “Do I continue to enjoy my lifestyle, do I sit here and enjoy all that I’ve created, or am I ready to cross the desert and move into that performance business?” We see that a lot with dentists as well, we see a lot of guys who, to be quite frank, they’re quite successful, they’re making a good income, they’re in that lifestyle business, they’ve got that 3 and a half to 12 number of people working in and around the team there, and then all too often people say, “Look, I really want to take this to another level, I want to scale it,” and as you say, that’s a risk.
The Richard Branson moment comes in, and you sit there, and it especially happens for guys and girls who’ve got 10 people on their business and they’re sitting there going, “Wow, I’ve built this great business, I’ve got a Porsche 9-11 on lease, and I’ve got a BMW 3-Series on lease, and I’ve got a nice house, and I’m comfortably making my mortgage payments and my kids are in good schools, and we’re comfortably making those payments. They’re sitting there going, “You know what? This is good, but maybe I’m the next Richard Branson, maybe I’m the person who could be building a big global business, and a brand.” You start attending some business seminars and reading some business books, and you think, “Yeah, I’m just going to do this thing, and I’ll just tiptoe into the water and hire the 13th, 14th, 16th person, and that’s when everything goes horribly wrong.
Talk to me a little bit about culture, now obviously, as you transition from a lifestyle business to a performance business, there is that great divide, the desert in between. I’m guessing that, in your experience, and you’ve seen many, many businesses, and dental practices really are no different, just to make that clear. We are speaking to dentists of course. Dental practices are exactly the same, the journey is very predictable and even though we all think our own business is unique in its own way, and of course it is in many ways. The journey that each practice goes on is absolutely predictable. What I’m really curious to understand from your perspective in the general business community is Dan, the role of culture and how as the team grows, the importance of that culture, how do you establish it, and equally the role of the owner, going from almost a manager to a leader, and what sort of growth needs to happen for them?
There’s 2 journeys that the owner has to go on, and one of them is either from entrepreneur to leader, and one is from manager to leader. We need to end up, at one point, being a leader as we grow our business, and the starting point is either manager or entrepreneur. An entrepreneur is the wild ideas guy, who’s that part of your brain that’s constantly coming up with new stuff and that part of the brain that is thinking about humanity and thinking about the market, and thinking about products and all of that sort of big, big picture stuff. That kind of person is going to scare the hell out of the team, and they’re going to sit there and go, “If you just do that every day, I’m going to get exhausted, because nothing’s actually happening, and I need something to actually happen.” Then there’s the manager part of the business, or even for a dentist, the technician.
The manager technician is the person who’s thinking about the individual customer, the client journey, what’s each individual customer experiencing, is it consistent, is it right, is it manageable? Do we have enough staff on to manage that client journey, and to meet compliance needs, and all of those sorts of things. The manager and the technician are very much hand-in-hand, they want to work on the customer, and make sure that their experience is at a detail level, as good as it can be. Then there’s the leader, and the leader wants to build the team around the vision. The leader wants a vision, and the leader very quickly gets the vision, and then the leader says, “All right, let’s inspire a team to fulfill that vision.” If you’re like me, your default position is called entrepreneur. For me, that means that I’m just going to … Give me a blank piece of paper and I’m just going to come up with ideas that can change the world, as far as I’m concerned.
They’re probably not, they’re probably rubbish most of the time. My default position is, give me blank bits of paper and let me tackle the world’s problems and let me dream, and let me think outside the box. What I have to do is I have to say, that’s who I am and that’s appropriate for me, but I can’t bring that into the office every day. I have to put a document together that is going to be our vision document, and I have to become a leader when I’m in the office, helping my team to understand vision, and to rally around the vision and to do what needs to be done to build the team and to build the client journey around that vision, and actually just stick with it long enough for it to work. I’ve got people on my team who are naturally managers, and their day-to-day, if you leave them to their default position, it’s just about getting their head down and being side-by-side with the team and managing things.
Managers have a tendency to be technicians as well, and they tend to say, “Oh, something’s not working, I will jump on top of that, roll up my sleeves and get it done,” which sometimes is not a bad thing, but too often means that they’re just basically working in the business and they’re not leading a team or creating a culture that gets things done as opposed to working on it. On the issue of culture, there’s that dynamic, there’s another dynamic. The culture that builds a lifestyle business is different to the culture that builds a performance business, and one of the reasons the desert is so hard is because the culture has to radically shift. That little lifestyle business of 3 to 12 people, the way that works is you build a culture that’s like a family, and everyone’s in on it, everyone’s part of this business. You get to know people, you get to know what’s going on in their family life.
You call forth from people that feeling of, “We’re a close-knit group who really cares about each other, inside work and outside work, we go to the movies together sometimes, we really have that fun little family culture.” That’s what a team of 3 to 12 people typically build around, and you also have a bit of what I called Swiss army knife culture. Swiss army knife culture means everyone’s okay at doing their job, but they’re also willing to do anyone else’s job and they’re also willing to roll up their sleeves and just do whatever needs to be done in order to get through. Swiss army knife can do 25 things badly, and that’s actually what makes it a useful little tool. It doesn’t do any of those 25 things particularly well, as soon as you want to actually chop down a tree every day you don’t want to use the little saw that’s on a Swiss army knife, you want to go get yourself a chainsaw.
If you only can carry one little device, well then a Swiss army knife is not a bad choice. When you’ve got a small team of 3 and a half to 12 people, you typically have these Swiss army knife people who … They’re not particularly great at anything, but they’re good at everything. That typically builds your business up to about 12 people. Here’s the problem, when you get up to a performance business, everyone is a chainsaw.
You need a specialist.
You need people who, their job is cutting down trees, they’re a chainsaw, they’re going to slice through there because that’s all they do. They’re not particularly good at opening a bottle of wine, so they’re not the corkscrew. Sure enough, they’re the chainsaw. They get out there and smash their particular thing. If it’s sales, then they’re brilliant at sales, but don’t ask them to do anything other than sales, if that’s delivering a particular service, then they’re really good at that particular service, but don’t ask them to do anything else, that’s their thing. You end up with people who are highly trained specialists in that particular area, and then you end up with a leadership and management team who manage all your specialists, and so your CFO is a particular brilliant CFO. They’re a finance person, their whole life has been built around finance.
In the early days, you didn’t have a CFO, you had someone who was an accountant/ops person. Here’s what happens, unfortunately during the scaling session, all the people that you told were your family, you told about 12 people that we’re a band of rebels, we’re a family, we stick together, we’re a merry band of people getting things done. Unfortunately, there’s almost no place for them up at the top level, so all those people that you told were family, they’re going to feel displaced through the desert, they’re going to feel rejected through the desert, they’re going to feel out of their depth through the desert, they’re going to feel like the culture of family is out the window, now it’s a culture of performance. Families don’t typically measure performance the way elite football teams would. You basically piss off your first 12 people.
With the transition there, Dan, as you go through that, what I’m guessing is, as you go through the desert you’re keeping an eye on the organization you’re building, and you’re looking at the key roles as opposed to the key people, because one of the things that I hear about in the dental world at least, is when people are thinking about their organization, they’re kind of designing their business around the names of their current staff, which sounds so obvious when I say it like that that it’s not necessarily a good thing to do. I guess that’s probably part of the transition from a lifestyle business to a …
Going to performance business, they’re going, “Well, I’ve got Suzie, she does this, and Mary does that,” as opposed to saying, “I’ve got my chainsaw, and that role happens to be filled by Bob,” or, “I’ve got the corkscrew and that role is filled by Peter,” or whoever it happens to be. Do you see that a bit?
That’s a huge part of it. Organizational design at a performance level is around roles, and when I say around roles, you have your job description, you have your on-boarding process, you have your development training for that role, and you have your management for that role. When you look at every single role in the organization, you actually say, “Do we have a job description, do we have a way of on-boarding the person in the first 90 days,” or, “Before that, do we have a way of selecting and engaging who we select for that role, do we have a way of onboarding them, do we have a way of managing that role, and managing performance in that role? Do we have a way of keeping that person sharp, on the cutting edge, with training in development?” All of those questions, but you’re not actually talking about any particular person. What you’re trying to do is create a role where if John leaves, Sally replaces John, and it’s no big deal.
It takes 2 to 3 months to have a new person up and running as good as the previous person, and successful organizations, they hire and they retain, and they absolutely … Retention is the goal. However, it’s not a make or break scenario. In the issue of a lifestyle business, it’s the opposite. In a lifestyle business, there’s only one job description, which is, Swiss army knife, and then with a leaning towards would be the caveat. This is a Swiss army knife with a leaning towards being a dentist, and this is a Swiss army knife with a leaning towards being the front desk receptionist. In small businesses, the front desk receptionist is also the person who’s doing all sorts of other things, and the dentist is occasionally probably picking up the phone when the receptionist is out. Swiss army knife with a leaning towards is typically the job description in a lifestyle business.
One of the things we’re seeing in the dental profession a lot at the moment, is we’re seeing a lot of aggregation, a lot of roll ups, a lot of, I suppose, consolidation of ownership within the profession at the moment. That’s happening on many different levels. There’s the well-established corporations buying up practices, and yet there are other dentists who are looking to roll up their own group of practices and so on. Given that you’ve been through the process of A, scaling one particular business, but then aggregating other businesses, as you said, you’ve got the technology hub and so many other things around your organization in general. What would be, as you look back on it, were there any, I suppose, boo-boos you made? Any kind of, with the retrospective scope, things that you go, “Well, hang on, with the benefit of hindsight I realize that was a mistake,” or equally, with the benefit of hindsight, “Though I didn’t know it at the time, that turned out pretty well.”
Scaling is… One of the best ways to scale is through acquisitions. If you want to cross the desert, if you’ve got …
Get there fast.
If you’ve got an operation that has … Let’s say your operation’s doing $5 million, and you’ve got to get over $10 million in order to be a performance business, it makes sense to look at 2 other businesses in the desert and bolt 3 or 4 businesses together and you’ve now got a performance business. That’s the theory, and it all sounds lovely in theory. Essentially, businesses become valuable once they hit $10 million plus, let’s say. A lot of small businesses, they sit there and go, “Ooh, I’d love to sell my business one day,” and I say, often you’re probably dreaming. You’ll get a small amount for your business, it won’t be life-changing, you’ll get enough to clear the lease on your [BIMA 00:26:46]. That’s the kind of money you’re probably going to get, you’ll get a payout of sorts. You’ll probably get some money over 2 or 3 years, if the business continues to perform.
You’re not going to get a million dollars, you’re not going to get anywhere close to that. You’re not going to get a big lump sum check from a lifestyle business. As soon as a business hits 10 million in revenue, the opposite happens. You’re suddenly big enough for big companies to go, “We will give you money, we will buy you out, we will give you shares in a bigger business if you want them.” There’s a very good argument that if you want to, one day, sell your business, you’re far better off either building a business to 10 million, rolling up other businesses around you to hitting 10 million, or being part of a roll up. This is not just coordinating it, but choosing someone who’s doing a roll up and join their roll-up is not a bad option as well. There’s a lot that goes wrong though, with roll ups. Probably the first one is what we were just talking about, which is the cultural shift.
If you’re rolling up a bunch of businesses that are … Let’s say you pick a bunch of businesses that have 20 people each. Fundamentally, their culture is already struggling at the breaking point. Because they’ve got 20 people in the business, they’re too big to be small, too small to be big. They’re having dramas, they’re going to need a lot of work as far as the development and the integration of their business into a bigger business. What’s going to have to happen is you’re going to have to start very carefully putting a different culture through the whole organization, and it’s a culture where people … We do develop roles, and people, and it’s a culture where we can share some resources, and you start slowly so that people don’t lose trust, or don’t feel threatened, and just allow some of the sharing of resources, and you start looking for a fit.
You almost have to let the new culture emerge out, with a little bit of guidance, as opposed to trying to impose a new culture on people, because you’ll end up with a lot of people who just … Who get pissed off with that. It’s a delicate balance, you know? You sort of bring things in and get buy-in from all the key stakeholders, you might need 2 or 3 months to get that buy-in from key stakeholders. When you’ve bolted a number of companies together, you have to almost view it as the way you’d get something done within a corporate now. You allow 3 months to get anything done, and you have to get buy-in from all the different people who you need buy-in from, and you have to have several meetings and several discussions, and create some documents. …. necessary, do you think anything else needs to be considered, all of that stuff that leadership, good management is about, and you have to create a culture of sharing of best practices so that people can feel that they can share within the group.
Gently, gently. It might only take you 9 months to put together the roll up, and it might take 18 months to integrate the teams into one culture.
As you’ve gone through your process of scaling your particular business, and again, I’m just looking for lessons that we can take from your experience and apply to dentistry in general. As you look back on that, were there any key points, I suppose, turning points, when you’ve kind of been at a decision point and you’ve thought, “Okay, I could zig or I could zag, and depending on which way I go I could get a different outcome.” Were there any key moments in there that you kind of thought, “Well okay, this could go one way or the other.”
There was a key moment that I had where yeah, I’ve had many precarious moments for sure, as most people in business have. One of the key learnings that I got was just an unbelievably good learning called Income Follows Assets, and Income Follows Assets means that in order to get rent, first you need a house, right? That’s the example we’re all familiar with. You can’t go off and try to get some rent if you don’t have a house? It just doesn’t work like that. In business, in order to get more money you need more assets, and you need to develop a business from the assets out. What most business owners do is they develop activities, and they develop a hustle. They think that for sure, the thing that got them their first million dollars’ worth of revenue was hustle, there’s no question. Picking up the phone, bit of sales, bit of marketing, bit of hustle, and you go from zero to a million dollars.
The thing that’s going to get you to $10 million is not hustle, because you just don’t have enough hustle in you to get to $10 million. You can’t employ people who are going to put all their hustle into your business, if they have that level of hustle they’ll be out there doing it themselves.
Doing it themselves, yeah.
What you need is assets, and one of the things … Just basic things, like, really well-designed documents. For example, a great document might be the brochures that your practice has, another document might be the brand vision and values document that you give to all the people who work there. Another document might be your website, and your blog, and how that’s optimized and how that attracts leads, and how that gets people to inquire. Another document might be a system or a page that you give to clients that helps them to schedule their revisits. Another one might be an automatic texting system that reminds people that they’re due to come back. These are all what I call soft assets, and there’s a system of best practices around documents and systems that help people to re-book, and help employees to feel good, and rewarded, that help customers to get excited about the brand, that help shareholders to stay engaged and happy with their investment.
There’s documents and systems that you need, and it’s those documents and systems that really make a business grow up and turn into an asset. The test that I give people is, what happens if you get hit by a bus? What happens if you’re in Tahiti? We run a little bit of an experiment, we say, “What happens in week 1 if you just don’t show up?” All you’ve got is, in one experiment that’s a little less macabre, we say, “All right, you’re in Tahiti, you’ve got terrible mobile phone reception, you can only really talk for 2 or 3 minutes at a time, a couple of times a day, that’s it, terrible phone reception. What happens in week 1, what happens in week 2, what happens by week 4, what happens by week 12? How much of this business is still going, and why? What most people discover is that their business is pretty much done and dusted by week 12, so the goal is that with minimal touch, your business is running on its assets as opposed to running on your hustle.
Just on that asset point too Dan, one of the things I found is when we sold previous dental practices in the past, one of the reasons we’re able to sell them for a fairly handy profit was those assets, because what we found as well is that if someone wants to buy that business, they’re assessing a whole lot of things. One of those things is risk. What I’ve observed in my own experience, and again, I’d be very open to hearing what your experience has been, is that all those assets reduce the risk for the incoming buyer. They can essentially go into your practice on the next day and continue to earn and have it operate as you had it earning and operating as well. It just adds a lot of value to your business as well.
One of the reasons the big companies love to buy $10 million plus businesses is because they’ve hit that point where it’s about assets, not personalities. Big companies, they want to improve their balance sheet. It’s funny, when I talk to small business owners, lifestyle businesses, they talk about the PNL all the time. “How many sales did we make, how much did it cost?” It’s all about PNL, PNL, PNL. If I go all the way up to big businesses, especially publicly traded companies, they hardly talk about PNL, they talk about balance sheet, all the time. “What assets are we buying, what assets are we developing, what assets do we need in the future?” They’re always talking about the assets, and then they say, “Well, we have a team of leaders and managers who [sweat 00:36:01] the assets and make those assets work.” At a very top level, we just talk about what assets we need to buy or develop. That’s the top end of town, there’s a reason for that.
Just again, thinking about those assets for a moment Daniel, when you look at your balance sheet and you’re thinking, “Okay, what assets do I have on my balance sheet?” You listed a couple of those things before, but, if you were to categorize those assets … What I’m trying to think about here is, for the guys listening, thinking about, “Okay, what assets do I have here?” I just want to give them some top level categories, obviously there’s the HR assets, the people and so on and so forth, there’d be the systems and operations and all the rest of it. In your experience, what other categories would you see, IP and all those other things. What sort of things …
There’s the brand, and how well-developed the brand is. Does it have vision, values, does it have ambassadors and recorded case studies? Does it have a brand guidelines book, so does it have a consistent look and feel? There’s things like the intellectual property, do you have registered intellectual property, do you have case studies, methodologies? Do you have a content library? That’s your intellectual property. There’s things like products, do you have free products, do you have cheap products, do you have a full and remarkable core product? Do you have something that you can sell to your clients, or making sure that they stay with you? Do you have all of that productized? You’ve got your systems assets, have you got great systems in place that run the business from an operations perspective, from a sales and marketing perspective? HR assets is an interesting one, because when most people think about HR assets they think of people, as you said.
We think about the roles, so we sort of say … Rather than thinking about Tom as a great sales guy, we actually say, “Do we have a script, do we have a on-boarding process? Do we have a training video? Do we have a job description, do we have prerequisites that we’re looking for? Do we have hiring guidelines around that role? If you’ve got all that stuff then yes, Tom’s a great sales person. If Tom left, we can get another Tom, because we have the assets. When we think about marketing, we want repeatable marketing strategies. Do we have a handle that we can crank that just generates more leads and inquiries. For some businesses, that’s their key word on Google, but that’s a pretty low level one. For some businesses, they’ve got a really phenomenal Instagram page, no-one else in the area has an Instagram page, and it brings in 16 people a week very cheaply, just through Instagram.
It’s the interesting and creative sales and marketing strategy that no-one else is doing that becomes really valuable.
Ladies and gentlemen, welcome back to the show. Sadly, our interview with Daniel was cut off, and that’s due to the vagaries of the internet, the connection between here and London was sadly cut short, for some particular reason, I’m not quite sure why that it failed, but it did. I was very fortunate enough to catch up with Daniel on his most recent trip to Australia, and we did get to have a conversation and pick up a little bit from where we left off, and I wanted to share some of the insights that came out of that conversation with you, and really pick up the thread from where we left off. We spoke with Daniel about creating a remarkable budget, and the reason we spoke about this is because most businesses, when it comes to their marketing, are really competing in a sea of sameness, in a sea of beige, what I call it. There’s no great way for one business, or in this instance, for one dental practice to stand out from the others.
When a patient is thinking about considering a dental practice, really, there’s no compelling reason for them to walk past other practices, to pick yours. It turns out that over the years, when Daniel first got into marketing, their first marketing efforts were really around newspapers, and they were spending hundreds of thousands of dollars a month promoting various events in the newspapers, and in the early 2000s they were getting a return on that. Certainly as the years progressed and definitely by 2008, that return, he says, had fallen off a cliff. He got to the point, the same point that we had gotten to with our practice as well, where we realized that it was all about creating a remarkable patient experience, and we discovered that rather than having a marketing budget per se, we needed to actually have a remarkable budget. Rather than spending money to attract a lead, we spent money basically creating an experience for our patients.
So that they’d be willing to talk about us. I know that there are other people out there that talk about this, but there is so much that goes into creating a remarkable experience, and we’re aiming for the patients to walk away where they’re saying, “My dentist is phenomenal, my dentist is amazing, no-one does things like my dentist does.” In practical terms, how does one do that? It really comes down to understanding that patient journey from the beginning to the end, and what I call touch points, which are those moments of interaction that a patient can have with your practice, or indeed, when it comes to general business, any of us as customers would have with other general businesses as well. Understanding that patient journey and crafting a truly remarkable experience does require a lot of creative energy. These days, if you think about it, you could spend a lot of money, say you spend a thousand dollars on a newspaper ad, and you’re trying to attract a lead.
You might pick up 3 or 4 leads through that advertising, but I can guarantee you that if you spend a thousand dollars creating a remarkable experience for your existing patients, then you’re going to get a much greater return on that investment. The key thing there is, as I said earlier, is to know exactly what it is you’re trying to create, and that’s going to require some creative energy, and in our practice, the way we do that is by having a team retreat, certainly annually, or even more frequently if you think that’s appropriate. It does require an off-site where you get away from the day to day stuff with the practice, you get away from the phone ringing, you get away from everything, and you put some really good creative energy into that process. That’s where the remarkability comes into it. The biggest challenge as well is to be able to resource patients to give them the material that they can then take and spread your word or your message for them, for you.
I was telling Dan about this story, about a dentist I know in Sydney, who’s just a fanatical follower of a particular football club in Sydney. I won’t mention which club, because that will probably identify her. What she’s done so well in this is, she’s resourced her patients brilliantly, because she’s known as the fanatical dentist that follows this particular footy club. Her surgery is in the team color, she often goes to work in the jerseys, near Grand Final time and Semi Final time, she’s really into the whole footy thing, which is great, and it’s truly authentic, and it’s absolutely who she is and what she stands for. Interestingly enough, a lot of her patients come in, and want to have a selfie taken with that particular dentist, and because she’s so unique and she’s doing it so well, what is actually happening is those selfies are being beamed out to the various friends of her patients on Facebook, Instagram and the like.
Rather than spending a thousand dollars on ads, this particular dentist, what she’s done so cleverly is … I think it’s just organic, I don’t think there’s a great strategy here, but she’s just stumbled across it brilliantly. She’s now allowing her patients to spread the word via their own social media, in which she’s tagged and the friends and the patients, of which there’s at least about 3 or 400 friends per person on Facebook, that photo’s being beamed out to those 3 or 400 people. She has now effectively resourced her patients to be able to spread the message about her practice. Coupled with that, she’s got a very clever hashtag, and I think she does that really, really well, and again, that hashtag gets beamed out along the way. The thing that follows up around remarkability and creating that experience that is truly remarkable, as well as resourcing your patients to talk about it, is the concept of capacity.
Again, when we speak to most practices, most dental practice owners, we say, “How many patients is enough?” There’s never enough, the answer’s more and more and more patients, which is why I wrote the book around retention, because retaining patients is absolutely critical to your marketing, because there’s clearly no point pouring new patients into the top of the funnel only to be leaking existing patients out the bottom of the funnel. The key thing to understand is around capacity as it relates to remarkability, and again, we were talking to Dan about his favourite restaurants in London, he’s a big fan of Grangers, which is in Notting Hill. I think it’s Bill Granger who runs that one. The concept is around capacity, and understanding that you need to protect that patient experience. When you take on more and more and more customers, or in this case more and more patients, there is the propensity for that experience to be eroded.
The thing is, if you have the capacity to genuinely serve a finite number of patients so that you are delivering a full and remarkable solution consistently to each of those patients, then if you start to take on more and more patients the risk is that that experience becomes diluted, and instead of having your patients walking out saying, “My dentist is awesome, no-one does things like my dentist, he or she is just the bees’ knees,” then the patients will walk out thinking, “Well, my dentist is okay.” Of course, dentistry becomes commoditized, and your practice then slips into that same sea of beigeness as everyone else’s. Understand capacity, how many patients can you surprise, how many patients can you delight, and how many can you really handle before taking on more patients will start to erode that experience? I know that there’s people listening to this going, “Yeah, but I need more patients, I need to have through put and so on and so forth.”
Understand who it is you’re trying to create the experience for. Who is your ideal patient, what do they need, what do they stand for? It goes right back to those marketing basics, and again, when Dan was here we spoke a lot about the fundamental mistake that most businesses make when it comes to their marketing, is not starting those foundations, not understanding very clearly who their ideal patient is, and what is the remarkable experience that you need to create for that ideal patient? Your ideal patient, if you’re looking at marketing, really, represents the bullseye on a dartboard. All your marketing, all your efforts, everything is geared towards hitting the bullseye with your marketing. Of course, if you happen to attract some people from, let’s say, the 25 ring on the dart board, then that’s okay too. Just make sure your marketing is geared towards your ideal patients.
That the experience is geared for that ideal patient. We had a great conversation with Dan, it was wonderful, and those were some of the lessons that came out of the conversation. I just wanted to take a moment to share them with you, looking forward to seeing all you guys around the trap soon. Please, if you like the show, send us a rating on iTunes, we’d love to get that feedback, and look forward to talking to you soon. Bye for now.