2019/11/04 – Soins Dentaires Retter
La technologie est au premier plan dans de nombreuses cliniques médicales et cela n’est pas différent pour un cabinet dentaire. Warren et Jason Retter nous feront part des défis à relever pour rester d’actualité dans leur domaine, des avantages de donner en retour à la communauté, et des mécanismes et du choix d’acheter et de vendre une pratique.
Speaker: For professional advice with a personal touch, consult FL Fuller Landau chartered professional accountants and business advisers. Click on flmontreal.com.
Dan Delmar: Good evening, welcome. Today’s Entrepreneur presented by FL Montreal, a program about the entrepreneurial spirit that drives Quebec business. My name is Dan Delmar, along with FL Montreal‘s Josh Miller. Good evening, sir.
Josh Miller: Hello Dan
Dan Delmar: And this evening on the program, we’re going to the dentist.
Josh Miller: Well, I think the dentist is coming to us this time.
Dan Delmar: That sounds actually more pleasant than how urgently. Yes.
Josh Miller: No traumatic. No, no trauma for you. You don’t have to relive anything.
Dan Delmar: The dentists are coming to us. Indeed. Warren and Jason Retter of Retter Dental Care going to be with us. Later in the program, we’re going to talk about family businesses and transitioning. Peter Moraitis will be joining us to talk about that on the program. I thought, we would start, Josh, on that note, actually and I don’t have an advice question to start this week because things are all right. I got no work stress today in particular for some reason.
Josh Miller: For a Monday, that’s not so bad.
Dan Delmar: It’s pretty rare. But I did marathon the show succession over the weekend. Among midway through the second season now and perfect timing to talk about succession tonight on the program. It’s literally one of the most popular shows on TV right now and I would say one of the smartest as well. So, you’ve got to check it out. But basically, it involves this this media company, this family, and it’s the dad who’s obviously going to retire soon. And then the three siblings, four siblings, I think are going to fight over her, fight over the job to see who takes over. And so right now, because there’s so much doubt about what the succession plan is or who the successor is going to be, there is nervousness among the investors. There is rebelling among the employees. There’s infighting and power grabbing among the senior executives. What happens if the leader.
Josh Miller: It sounds like every other day?
Dan Delmar: Right. We’ve talked about these scenarios before and it’s interesting to see them on a fun TV show. But what are some of the consequences if a succession plan isn’t in place with a family business like this.
Josh Miller: The business could fail or could go in the wrong direction or people could lose a lot of money or all the above. There’s so much that has to be taken into consideration. I haven’t seen the program. It would be interesting to see, but definitely have lived many of those circumstances over time with many family businesses, with even businesses without family, but that have those senior executives that feel like they’re family or have been portrayed to be part of a group and part of the succession. Yeah, but you’ve got a plan, you know. And if there’s no plan and there’s no communication because he starts middles and ends with communication, you know, if there’s no real communication and properly delivered. Know your audience. Because you don’t want. You don’t people to feel threatened. You want them to feel included. But they also need to have enough knowledge to be able to help make the decision. There are so many aspects. Are you talking to someone? It’s been in the business for 20 years or two years. Are you talking about the you know, the next generation that is? Is has been there and working for a long time or you’re talking about the next generation that just started there. A sense of entitlement is there? There are so many aspects that come into play. It can be very Hairy, and it wouldn’t surprise me if succession went on for another 10 seasons because there’s so many things that can that can that can go well and so many things that can go sideways. And if there’s no communication, then, you know, not so good.
Dan Delmar: In this case, the kids are all kind of screw ups in their own special way. And so now the debate is, well, do we go to an outside source and maybe find a CEO or someone from outside the family? How would you would advice would you give to the Roy family of succession? If you’re if you’re going to bring in this outside influence but navigating all these complicated family matters?
Josh Miller: Well, for all those PHD kids, i.e. the Poppa has dough. You know, they there’s the goal at the end of the day is to maximize value for the family. You know, that should be the goal. It’s yes, you may step on some egos and ego is a four-letter word in many families. The goal is to maximize the value at the end of the day, because no kid wants to be left with zero or next to it. They want to have their trust funds or forget trust funds. They want to have enough to live out their life relatively comfortably, or at least enough to live and survive and don’t have to be on the street. And if the best solution is parachuting in an outside party that has better knowledge and a better track record or a track record and knows how to work things, and that’s in the best interests of the family as a whole, well, then that should be what happens. But as we all know, humans are humans, egos are egos and families are families. And sometimes they don’t mix so well together.
Dan Delmar: All right. If you want to check it out, Succession is on HBO Canada and crave. Oh, this is interesting. Investors pouring billions into prop tech. So, first, what is prop tech?
Josh Miller: Property technology like we’ve spoken a lot about fintech. You know, there’s the all the apps online that, you know, to help save money and invest your funds and all that, prop tech is exactly the, you know, the AirBB’s of the world that that’s a prop tech. And there’s a lot of money that going into it. I mean, open door buys homes directly from sellers in exchange for cash. And, you know, they, you know, is 300 million that went into that. You have compass that that host real estate listings on an easy to use online platform. There’s almost 400 million that went into that. You have next door that keeps people up to date on events in their neighborhood. There was, you know, 170 million that went into that. So, there’s so many aspects about that touch’s real estate. So that’s the prop tech, the property technology that’s out there. And we haven’t you know, we’ve seen a lot of it, but I’m sure there’s a lot more to come as you talk about communities and real estate. And I mean, not block parties necessarily, but maybe a little bit of that, too.
Dan Delmar: I think this next topic may have come up in a recent show, but it’s interesting from entrepreneur.com how a VC wants to be pitched. So how does a venture capital firm want to be pitched versus, say, a bank?
Josh Miller: Well, you know, I think the bank really needs its numbers. They have to make a story, but they also have to believe in who’s behind it. The VC is really buying into a story. They’re buying into an experience. Make the pitch an experience, make the pitch something that, you know, that the ultimate consumer just needs to be a part of. Use imagery, show image, you know, just talking about it and showing numbers isn’t necessarily what the VC will get connected to. Yes, important. At the end of the day. But use the imagery, use the pictures, certainly be open to questions. But that’s kind of a given. I would say also be keep things pretty concise. If you ramble on too much, you might lose that interest of that VC or anybody for that matter. And I guess always have enough of your own backstory. I always have enough of your experience that comes into play, because not only are they buying into a story of what the next great product or services, but they’re buying into you or they’re buying into the management team or the talent that’s behind it. So, I always have that backstory as to why and have that part of their experience as well, so they get to understand more.
Dan Delmar: From Inc.com top three things you should have a recruiter help you with.
Josh Miller: And this one, you know, it’s less about the top three things you can have a recruiter help you with and more about using outside parties. I was reading this article and, yes, you know, it basically says hire a third party, outsource for the things that you don’t do well and keep what you do well. And I think that’s the crux behind this. Regardless whether it’s a human resource, whether it’s another professional, doesn’t really matter what it is. It’s really if you can do it really well and it doesn’t take up time or there’s no opportunity costs for you doing it, well, then do it because you know yourself and your product and your culture and your service the best. But if you don’t know what you’re doing, leave it to the expert. Don’t waste your time. Don’t spin your wheels. There’s an opportunity cost for you taking that time and effort, energy, and it won’t necessarily pan out. So, while the article talks specifically about human resources and recruiting, I say it really applies to any third party, any outsource person. Do what you do well, hire what you don’t do well and make sure you don’t lose that opportunity cost.
Dan Delmar: Today’s entrepreneur on CJAD 800. We’re not going to the dentist, but we’ll have dentists come to us next to talk about the business of dental care with Warren and Jason Retter of Retter Dental care and they are next.
Dan Delmar: Welcome back to today’s entrepreneur, inspiring stories, some outstanding businesspeople, Dan del Mar and FL Montreal‘s Josh Miller with you. And this evening, we welcome a father and son team, Warren and Jason Retter of Retter Dental Care. Welcome, guys.
Warren & Jason Retter: Hi. Thanks for having us.
Dan Delmar: Thanks for coming.
Josh Miller: And the toughest question of the week, very first question that we ask. And while everybody or a lot of people should have a good understanding what a dental practice does, we will ask you what is Retter dental care. What do you guys do specifically?
Warren Retter: We practice dentistry. It’s me and Jason, as he says with a smile showing off the pearly whites and Lindsey and actually Retter dental care got named when Jason joined the practice before it was just Dr. Warren Retter and now, we’re Retter Dental care.
Josh Miller: And is it all the typical services? Like, do you, is there basic, like maybe you could just describe all the services that kind of come into play?
Warren Retter: Well, we do basic dentistry. Jason does a lot of implants, a lot of surgery. We do tons of cosmetics. I’ve been doing cosmetics, dentistry for almost 40 years and a lot of crown and bridge. We basically do all kinds of dentistry and we do what we like to do best and what we can produce best.
Josh Miller: Maybe it’s easier to ask what you don’t do because it sounds like there’s a lot of stuff that happens under one roof. What don’t you really do, as a dental practice?
Jason Retter: So, we don’t do orthodontics. You don’t straighten teeth. We’re pretty much, we do a lot of the other fields of the other disciplines of dentistry. I would say that’s the only one we pretty much refer out about 100 percent of the time otherwise. I mean, when I first started out, I went on a continuing education binge where I was out of town doing three to four-day courses, week in, week out for various years. And I mean, that hasn’t stopped. But it’s less now as life evolves. And, you know, I have a family now and things like that. I can just take off all the time. But my wife, Hi, Lindsey. Hi Jackson, Victoria and Annabelle. I promise I’d say hello to them. In any case, I would go around figuring out what I love and even when I was a resident, I was really turned on to surgery and so I spent a lot of time studying for that and I ended up getting two fellowships in implantology and we used to do a lot of that. To answer the question that you asked, we basically do you specialize in that specifically? I mean, I’m not a specialist. I’m a general dentist. I do, we do cosmetics. I do crown and bridge and stuff like that. But I’ve taken the time and energy to make sure that I’m practicing at the standard of care in implantology and I do a lot of it.
Warren Retter: Jason does a lot of the implants of the office. I’d say he does 80 percent of the patients who require implants in the office. He does a great job.
Josh Miller: Is it tough to stay up to date? I mean, there’s you know, with whatever, occurred over the years and you certainly go to school for a long time. It is a lot of professional development that happens throughout the year.
Warren Retter: Yeah there always is. Where we’re always going to courses. It’s the only way you can maintain and learn, and we take our staff. I mean, we took our staff to Vegas for of course, I mean, we spend a lot, of course it was in dentistry, of course, in Vegas and everything that happened in Vegas. We can bring it up. We can bring it back now. But we spend a lot of time in continuing education and we spend a lot of time with our staff going to continue education. That’s how you maintain a cutting edge in dentistry.
Jason Retter: I think one of the hardest aspects of dentistry, to stay current, is to make sure that you know what works and what doesn’t work, right? And because there’s obviously, you know, were exposed to marketing like any other industry is and trying to sift through what has potential, what doesn’t. Looking at studies, things like that. So, there’s, no shortage of evolution in the field and you just have to pick and choose. But if you’re not staying current and if you’re not up to date and if you’re not investing in technology, it becomes boring, becomes just a job. Right. It’s really, we’re very passionate about what we do. We love it. We wake up in the morning and I’m always excited to go to work.
Josh Miller: So, let’s talk technology. I mean, you raise it, you know, and technology is certainly it affects, you know, in all the businesses and entrepreneurs that we spoken with Dan, it’s rare that it doesn’t have some effect. I would imagine certainly in the dental practice; it also can have a major effect. What have you done to stay current with technology and thinking back, Warren, to 1980 when I started just going to say no and growing from there.
Warren Retter: If you would told me 10 years ago or 15 years ago I’d be doing dentistry like this, I would’ve told you, you’re crazy. I mean, basically, we don’t take impressions. We take digital impressions. We design teeth on computers. We mill the teeth in the office, we stain and glaze them. The patient comes once, one freezing, no temps and they go home with their teeth. It’s just remarkable. I mean, I can tell you a quick story. I had a patient in Florida last year who called me, who broke her front tooth and she says I’m getting on a plane I’m coming you’ve got to see me tomorrow. And I said to her, wait a second, didn’t we do this with the computer? She said yes. So, I go into the computer, I have the tooth milled out the tooth, Fed-Exed it to her overnight. She got her tooth, got a dentist to put it in in Florida and saved her a flight and saved her money. She’d have to pay anything. I mean, that’s the technology we have.
Josh Miller: That’s amazing.
Dan Delmar: Well, you just celebrated your 40th class anniversary. Congratulations. What pieces of equipment? What’s the next big breakthrough in dentistry that you’re looking at?
Warren Retter: Well, that’s a very good question. I was just telling a patient today; I don’t know what’s going to happen next because I can’t imagine things. I mean, everything is so accurate that we’re doing and done on computers and our treatment planning. I mean, like when Jason does surgery, he used to spend three hours to three, four hours on these on these surgeries. Now, if he spends 45 minutes to an hour, because before he goes in, it’s all done. He knows exactly where he’s going. It’s all done by a C.T. scan, which we have in the office as well.
Josh Miller: There’s so much equipment that’s out there. How do you choose, how do you know which one is the right one?
Warren Retter: Jason knows everything. We have everything. Money’s no object here.
Jason Retter: I mean, I’m on different forums that have like literally about 10,000 dentists on there. And so, you can kind of see what other people are doing and what works, what doesn’t work. It’s a pretty open and honest discussion. That’s more for materials that we use for technology as well and then obviously, you just have to look at what’s coming down the pipeline as far as lectures, what’s being advertised. I would say, you know, you’re asking about the future of technology, things I’ve heard of. You know, now when we’re doing a crown in-house, we have a milling machine. So essentially, we have this ceramic block and we have a machine that cuts the ceramic block down into a tooth. I think lasers are down the pipeline with that. I think eventually we’ll be doing it with lasers, 3D printers. We have a 3-D printer in the office. I use it now to when I plan my surgeries digitally using our 3-D X-ray. I have something made on a 3-D printer that essentially is worn during surgery. And it just, it makes everything much more precise and you see everything going on beforehand. So it is, it’s less surgical time. Often, it’s less recovery because you know what you are doing, you know, what you’re getting into. So that’s, I think 3D printing will eventually, once the speed catches up with the technology will probably be 3D printing stuff, too, rather than just surgical guys, dental models, things like that. And then like further down the road, I mean, there’s a richer research in stem cells and stuff like that. So, I mean, who knows what the potential is for that going down the road.
Josh Miller: So, it’s interesting, you’re saving a lot of time, with all the equipment, but the equipment costs something. So, does one offset the other, so that your rates don’t get too affected?
Warren Retter: Our rates have not changed because we keep upgrading, new computers and new C.T. scans. Our rates are the same. It costs a lot of money.
Josh Miller: But you’re gaining efficiencies.
Warren Retter: Exactly. Efficiency and your quality of work and patients are happy. Everyone’s happy and like Jason said, I get up, it’s 40 years, I’m doing this. I get up every morning and I’m happy to go to work.
Josh Miller: So, working with your son, hanging on, Jason, you say the same thing, getting up to go work with dad?
Jason Retter: We get along very well. It’s a pleasure working within a dental pod.
Josh Miller: And we’re going to explore that, too. Yeah. You’re working relationship. When we come back shortly.
Dan Delmar: Warren and Jason Retter of Retter Dental Care on today’s entrepreneur. Coming up, we’ll talk about transitioning family businesses. That’s all on the way.
Dan Delmar: Welcome back to today’s Entrepreneur, a program about the entrepreneurial spirit, that drives Quebec business. Dan Del Mar and Josh Miller with you. Josh is from FL Montreal, of course, and this evening we’re talking with Warren and Jason Retter of Retter Dental Care. And guys, we’re going to talk a bit about the marketing, perhaps. Yeah, let’s go there first. So, professionals, this is all I do all day long as I nag professionals. You have to market. You have to do social media. You have to do blogging. You have to do advertising. What do you guys do to get your word, to get the word out there?
Jason Retter: So, I think the best way to build a practice, I think, is to build it organically. Making sure your patients are happy and through word of mouth. But as you alluded to before, the reality these days is that you need to have some sort of media presence. So, pretty much I started doing social media by myself. I was the one doing it when we first, when I first started, which was about twelve years ago. And then it evolved into a website, and now, I think we’re on version four of our website. We also, we market online. I make sure that we’re doing SCO, keyword stuff like that. We work with other professionals. We do ad wear as I said on Google and now we actually have a team who works with us where we discuss what we want to talk about and they create social media posts for us and stuff like that.
Josh Miller: Is it worth it? Dan, you’re not allowed to answer.
Jason Retter: So, I mean, I feel the necessity to have a presence on social media. I mean, it’s everywhere. It’s only going to get bigger. I think the platforms may change. You know, I think for the younger people, it’s more an Instagram versus for the older people, it’s more Facebook these days.
Warren Retter: Talking about me.
Josh Miller: You’re pre-Facebook Warren. Your paper flyers on windshields.
Jason Retter: Nobody walks into the office and says, hey, I saw this amazing post on Facebook. But it does get them into the funnel going towards our website, and then once we get to our website, I think it pretty much makes it very clear what kind of practice we run, things like that. And so, yeah, we definitely get patients that do not come from other patients, who come from the Internet. But as for is it worth it? I mean, I think it’s necessary. You know, whether or not I get back the money we spend on ads, let’s say, per say on Facebook. I don’t know. But it’s there and we’re doing it and we’re committed to it.
Josh Miller: No question. So, but, that’s not the only marketing you do. I mean, there’s community give back, I think, you have that. How does that play into your practice?
Warren Retter: We’re involved in a lot of charities and a couple times a year, we basically close our office for the whole day, and we have all our hygienists, we have three or four hygienists. Jason, me and Lindsay, we’re working on patients all day, for all our assistants we have, 13 girls in our office and basically, we do dentistry for free. For this for these underprivileged people for a whole day, we bang out a lot of work.
Josh Miller: So have you been doing that for a long time?
Jason Retter: That we’ve been doing for a couple years now and the purpose of that wasn’t so much like we did. I didn’t have marketing in mind when it did that. I just I’m very grateful for my life, my profession to be able to practice with my father all day. And I really felt like I wanted to give back in some capacity and so we started talking about it and the coolest thing about doing the work on people who are unfortunately in a circumstance where they can’t afford it, they don’t have access to care, is that, you know, life changes for everyone. So, a lot of these people eventually will get back on their feet and then they come to see us as regular patients. You know, I had one person, who we work with an agency specifically to screen the patients and just to make sure that when we do have an appointment that day where we do it and it goes smoothly. I had one girl, one woman who broke her front tooth and she couldn’t get a job because she had no front tooth. She was too embarrassed to go get dental care and then with the technology we have, I made her a brand new front tooth on the spot and then a couple of weeks later, I got an e-mail from her just thanking me so much, you know, for helping her and she actually got a job. So, I mean, what better validation for what we’re doing than that? You know.
Josh Miller: I think it’s great.
Warren Retter: Oh, it feels great.
Josh Miller: I think the players could use you. I would love to see that. You know, you mentioned the hygienists, the other people in your care, in the dental care clinic. You’re how many altogether. Approximately.
Warren Retter: Thirteen.
Jason Retter: Twelve. Twelve. Thirteen. I stopped counting.
Josh Miller: Depending on the day.
Jason Retter: They also know, they don’t work full time. So, like every time I count, it’s depends on the day.
Josh Miller: Has it been difficult to find people like, you know, or is it constant? Like you know, how do you retain your talent?
Warren Retter: We have, right now, we have a fantastic team. We have some girls in our office who’ve been in the office for 35 years, 34 years. I mean, me personally, I’ve had three hygienists in 40 years. They don’t leave. We treat them well. Everyone works really hard, but we have a really good team and one, if you have one bad person, it can ruin the whole team.
Josh Miller: Have you had that experience?
Warren Retter: Yes, we have, and then you work out and interview. I mean it doesn’t take.
Josh Miller: It’s a powerful lesson. Yeah. Because as soon as you make the change.
Warren Retter: When we look after someone, it’s easy for us to find, people know our office. OK. I mean, if we put an ad in, that we’re looking for someone, we’ve gotten a lot of calls.
Jason Retter: Having said that, there is, from what I hear, there is a shortage of hygienists. We have wonderful hygienists. Our whole team is amazing. Hi guys, I know a lot of you are listening, so thank you so much for all your dedication and hard work. But, you know, we train them and they kind of feed off of us because they know that we’re passionate about what we do and then it’s really a fun place to work and so everyone is, I think, grateful ultimately, you know, it takes a few months to get comfortable. We do like team building style.
Warren Retter: Yeah, next Tuesday, we’re taking the day off and we’re taking the girls for lunch and we’re going to do some sports stuff.
Josh Miller: Excellent.
Dan Delmar: I ask this question sometimes for people in insensitive businesses. You deal with people that are very stressed out. Have you developed techniques to calm them? What’s your advice and how do you make sure that they leave happy?
Jason Retter: I think they feed off you. So, you have to make sure that they’re confident in you. They trust you. Talk to them.
Josh Miller: Make sure you give a gentle needle, because most of the time it’s about that.
Warren Retter: Let’s be honest, things don’t hurt anymore. Years ago, they did so. There’s no reason for anything third in the dental office. I mean, it’s not comfortable sitting with your mouth open for a couple of hours. But I mean, in terms of pain.
Jason Retter: I have a stress ball with a picture of my face on it. So, I give it to patients.
Josh Miller: You bring it in from home. So, let’s switch gears a little bit. Just our last couple of moments. I want to talk about the buying and selling of a dental practice over the years, I don’t know if you’ve purchased many practices or maybe you’ve been approached to sell. What are some of the things that you would consider or what are the things that you do consider when you’re looking to buy a dental practice? Some specific things.
Jason Retter: I think it comes down to the relationship we have with the clinician, because we’re obviously at this point, we’ve bought a practice together, when I first started out after about 18 months, I felt like I was comfortable enough to be able to run my own practice fully, and so, I think about 2009, I ended up buying a practice. You want the transition to be seamless. You want patients to be able to trust you and so a lot of it comes down to the personality of the dentists that you’re purchasing from. You have to make sure that your practice philosophy is the same way. I mean, I tend to kind of look at it as like I leave my family at home and I go to my family at work and that includes my patients and my team and so if I see that, then then I’m willing to start looking at, you know, more financial aspects.
Warren Retter: It has to work with our office.
Josh Miller: Of course. Are you valuing the dentists, the associates, the future business? The same today as you used to. Are you paying in the same way? Is it based on the same? Based on the revenue? Is it based on the bottom line? What do you what do you typically base it on?
Warren Retter: It’s based on revenue. It’s based on numbers and revenue, numbers of patients. I mean, when you’re buying a practice, but like the practice that Jason just talking about that we bought, he was after us. He kept calling and calling because he wanted his patients to be properly taken care of and he knew that they would fit in perfectly in our office and he was right.
Jason Retter: For them, it’s a legacy issue, too, right. They want to make sure that their patients are going somewhere where they’re comfortable and when they see them later on, Oh, how’s it going? Oh, you’re happy. Good.
Josh Miller: And if you’ve been approached to sell, what would your feelings be about that?
Warren Retter: We’ve been approached many times in the last two years. There’s corporate dentistry was just trying to buy every big practice in Canada. It’s been going on in the states for at least 10 years already. The answer is no. We’re not interested. We do our own thing.
Jason Retter: So, I think, there is an interesting market shift. It’s changed the way practices are evaluated and things like that. I think for some people, it’s a good idea. For us, I enjoy, because when you’re doing that, you’re essentially just working and then you leave, as you are as an employee. I like the creative aspect of it. I like the planning. I like the thinking ahead. I like, you know, checking out new technologies and going to courses and stuff like that and so, I’m not really willing to kind of hand the keys to the operation over to anyone.
Josh Miller: You like running business and not just being an employee.
Jason Retter: It’s fun. It’s exciting. I mean, it’s all part of the same passion, you know, so I can’t imagine not having that.
Josh Miller: Life as an entrepreneur. Thanks very much.
Dan Delmar: We’ll have the one piece of advice for today’s entrepreneur on the way from Warren and Jason Retter of Retter Dental Care. And up next, we’ll talk about transitioning a family business with Peter Moraitis, tax partner at F.L. Inspiring stories from outstanding businesspeople. Dan Delmar and Josh Miller for today’s entrepreneur and we have dentists in studio with us. Warren and Jason Retter. And we’ll have their one piece of advice for today’s entrepreneur. Coming up. But first, welcome back to the show. Peter Moraitis, tax partner at FL to talk about transitioning family businesses. Welcome back Peter.
Peter Moraitis: Thanks, Dan.
Dan Delmar: So, Josh, we talked about, we spoke about succession earlier in the show.
Josh Miller: We did. You’re obsessed with this show’s succession.
Dan Delmar: Great show. Glad you guys have caught it as well. But it is a serious issue. So, we have to plan these things out and also present a public face that inspires some confidence in the organization and investors as well.
Josh Miller: There’s no question. This is really quite a long topic and we only have a few moments to go through it. And I know, Peter, you deal with this day in, day out, no question with clients and passing the torch. But what are the first, maybe some recent items or what are the first few things that come to mind when we’re talking about transition to the next generation?
Peter Moraitis: So unlike, in succession, which is based more on the American U.S. estate rules on the show. In Canada, one of our main pillars or policies in Canada its advantageous to entrepreneurs and small businesses, is the capital gains exemption, which is essentially where each individual is able to sell a business and can have a gain of up to $870,000 now and is essentially tax free. It’s there to motivate entrepreneurs to try and have more people try and grow a business and sell it. And for a long time now, there’s been rules in place that do not allow this same capital gains exemption to be available when there’s transfers of businesses between family members. So, Josh you were saying, like, what was one of the things, whenever we see a situation where there’s father and son or father or mother and daughter on a transition is, it becomes more expensive when a child wants to purchase a business.
Josh Miller: How so? Like all what are the what is the difference in the rules?
Peter Moraitis: So essentially there would only able to be, to utilize a capital gains rate so that the capital gains exemption, which makes the capital gains tax free is not available. So right now, it’s $870,000. it’s supposed to move up with inflation up to a million dollars. So eventually we’re talking about a tax rate of 25 percent on a million dollars, which is $250,000.
Josh Miller: Tax savings, potential.
Peter Moraitis: Exactly and there was one of the good things that came out of the July 2017 which any small business people know where they stopped a lot of the rules on income splitting was that there was a lot of noise in the media that came out about this specific issue and since then the government, the liberal party themselves were saying they were going to try an address it through new policy.
Dan Delmar: If you are in a business and there’s going to be a transition plan and the family transition, is a family trust the way to go to organize that?
Peter Moraitis: So, a family trust is a way that we utilize it to be able to multiply the exemptions so to have many more different family members benefit from this tax free amount of up to $870,000 but we’re still not in a position where a child can actually use a corporation to purchase the shares of let say the founder and the founder gets the capital gains exemption on the proceeds. So, the family trust might help from an estate planning and maybe growing a business but in terms of …
Josh Miller: And some creditor proofing
Peter Moraitis: Yes, but in terms of getting dollars into the hands of the founder at a lower tax rate is currently not available.
Josh Miller: So, with, like you mentioned earlier, you can still split, if the family of the trust has been around a long time, you can still split the capital gains exemption. You sell to a third party you can still share that under the right circumstances.
Peter Moraitis: Oh definitely. That’s something that from the policy proposals in 2017 that the government actually backed off on because there was probably a lot of people that already have these structures in place and but in a situation like for example like the Retters where Warren is maybe not going to be in the business forever, he is going to want maybe retire although it sounds like he wants to keep working forever and hard but at some point like families change and the ability to work and when you’re not able to benefit when especially when we think of how many corporate conglomerates grow and maybe how some of these companies end up being swallowed up by larger companies outside, this is like a policy that we actually should thrive to want because its keeps our small business community within the family which have been the ones who have run the business, the best overall, and actually one of the things that I am a bit worried about is a part of the budget proposal from the Liberals that came out, they have been talking about that they were going to revise these rules to allow us to be eligible for small businesses and farmers and in the recent proposals, the budget proposals, they seem to kind of mention the farmers but they kind of eliminated in their final print anything about other small businesses so I am really curious to see.
Josh Miller: Better headlines
Peter Moraitis: Exactly
Josh Miller: So that can continue to change as each government comes in, there’s no question about it. Thanks very much Pete, I know it’s a big topic to digest in just a short while. And as we approach the last moment of the show, as we do each week, we look at both generations here in the studio with Warren and Jason Retter, we will ask you guys, what would be your one piece of advice for Today’s Entrepreneur and we will respect our elders, and start with Warren.
Warren Retter: Thank you. Basically, be passionate in what you do. You have to love what you are doing, because if you don’t, its just work. For me its not work. I enjoy what I do, and I think really that’s the most important thing is to be happy what you do and then life great, because a third of your life is working, third sleeping and third is home.
Josh Miller: I am glad at least he said there is home. Thanks very much Warren and Jason how about you, what would be your one piece of advice?
Jason Retter: Believe in yourself. Be relentless in your goals. Work hard. Make sure your passionate about it and uphold your morals as you do so.
Josh Miller: Excellent! Thank you very much. Dan, my quick take away is technology is your friend and if you can embrace it and invest in it will help you. You know we heard more at the top of the hour, that entrepreneurs should absolutely embrace going forward.
Dan Delmar: Warren and Jason Retter of Retter Dental Care, thanks guys, and congratulations on your 40 plus years on your practice.
Jason Retter: Thank you, I smell podcast. Any chance?
Dan Delmar: You never know.
Warren and Jason Retter: Thank you very much for having us, it was fun. It was enjoyable.
Dan Delmar: Thank you Peter Moraitis, tax partner at FL as well. Next week, we are sticking with professionals, I believe Josh.
Josh Miller: We are. Next week, it is a law firm, the De Grandpré Chait.
Dan Delmar: 7 pm next Monday night. Don’t forget Today’s Entrepreneur.org for over a decade worth of inspiring entrepreneur profiles. We’ll see you back here next Monday night. Goodnight.