Smile Brands Partner Case Study

Dr. Steve Johnson and Johnson Family Dental

How Johnson Family Dental Achieved a Path to Faster Growth

“Any dentist in my position—a sole owner with multiple practices—will struggle to expand from a financial viewpoint,” observes Dr. Steve Johnson. “By joining Smile Brands, we are able to keep our brand and culture, grow our business, and draw on their company’s industry knowledge and financial strength to achieve the rapid growth we envision.”—Steve Johnson, D.D.S., Owner, Johnson Family Dental

Profile

Dr. Gary Johnson founded the first Johnson Family Dental (“JFD”) office in 1963. In 2000, his son, Dr. Steve Johnson, acquired and expanded the practice from a single location to six locations in Central California providing comprehensive, general and specialty dental care with a staff of 104 including 12 general practitioners and 5 specialists. The business is aligned around the belief that “A smile can change your life”, and this believe drives their culture of outstanding service and excellent value.

Challenges

Steve Johnson fell in love with dentistry while working in his father’s dental practice, throughout high school. The discipline suited his passion for serving people, his love of working with his hands and his growing interest in business. After doing all he could to rapidly get through dental school, he spent seven years as an associate in his dad’s practice. In 2001, he bought the struggling practice at fair market value and quickly boosted its new patient numbers and revenues to stellar new heights.

Over the next several years, Steve added three locations to his practice. He had his sights set on a promising fourth when his funding stalled. Unconvinced the new office would generate sufficient revenue, Steve’s bank moved at glacial speed on approving a loan for the acquisition. Steve’s “full speed ahead” approach was defeated by the bank’s “wait and see” attitude. Frustrated, Steve had to put his expansion on hold for a year and a half.

In the interim, Johnson Family Dental had hired a consultant who, instead of helping grow the business, robbed it of its family-like corporate culture—a culture which meant the world to Steve.

Solution

During this time, Smile Brands approached Dr. Johnson to discuss a partnership. Intrigued, the doctor was eager to proceed, but knew he had to get his house in order first. After firing his consultant and sorting out the damage done, he resumed talks with the Smile Brands team. Two aspects of the partnership cinched the deal for him. First, JFD would have access to the private funding needed to achieve its expansion goals. Second, Steve’s core values aligned perfectly with those of Smile Brands CEO, Steve Bilt — both men believed in nurturing staff to reach higher positions of responsibility and leadership. In June 2017, JFD enthusiastically joined Smile Brands to expand the Johnson Family Dental brand.

“I have been approached before by other companies and have worked with different consultants,” Dr. Johnson explains. “They tried to undermine our culture and tell me what I was doing didn’t work. That actually cost me some revenue and staff. With Smile Brands, it’s the opposite. We share very similar philosophies on caring for patients, staff and the community. And, of course, they want me to expand and are actively helping me do just that.”

As a Smile Brands partner, Johnson Family Dental has implemented the following changes:

New Acquisitions Through Private Funding: Moving at a snail’s pace, conservative commercial banks had held up much needed funding for JFD’s growth. No longer forced to deal with these lenders, Dr. Johnson accessed private funding through Smile Brands and not only added the location he’d hoped for, but acquired a second one, as well.

Revitalized Corporate Culture: JFD is all about its people, staff and patients being well-served and cared for. After a bad experience with an inept management consultant, Steve set to work reestablishing the core values which were the hallmark of his practice. Smile Brands’ corporate culture meshed so well with JFD’s, he was able to quickly rebuild the type of environment he envisioned for his practice.

Reduced Supplies Costs by 50% Through Smile Brands Purchasing: To combat the rising cost of supplies, JFD moved to Smile Brand’s purchasing program and realized an immediate and ongoing 50% savings.

More Efficient Use of Staff / Reduced Personnel Costs: Free of labor-intensive accounting, billing and human resources tasks which were passed to Smile Brands, JFD has been able to put qualified staff in more productive roles. A JFD employee formerly in the accounting area, for example, is now slated to be an office manager at one of the new offices, saving JFD the expense and training of a new hire.

Faster Management Trouble-Shooting with Timely, Accurate P&Ls: Previously, JFD would receive financials 30 to 45 days after month-end which prevented it from quickly identifying and addressing unprofitable practice areas. With Smile Brands as its accounting arm, JFD now receives its P&Ls quickly after month-end, allowing executives to rapidly identify and remedy nonviable areas of the practice.

Stronger Benefits for Staff Hiring and Retention: Availing itself of Smile Brands’ employee benefits package, JFD is better positioned to retain its quality staff as well as attract new talent.

Quantifiable Results

As a Smile Brands partner, JFD has achieved the following results:

  • Two new locations acquired with several more in the works
  • A corporate culture where staff can thrive
  • 50% reduction of supplies costs

Looking Ahead

JFD has already lined up another three to four practices for acquisition.

“With Smile Brands, I can do what I love which is expand my brand and its core values in the central California region and still have equity—I feel like a true partner,” Steve observes. “I am also completely free of bank debt and demands, which has taken a huge monkey off my back. It’s a win-win situation.”

About Smile Brands

Based in Irvine California, Smile Brands Inc. is one of the largest providers of support services to dental groups in the United States. Smile Brands Inc. provides comprehensive business support services through exclusive long-term agreements with affiliate dental groups, so dentists can spend more time caring for their patients and less time on the administrative, marketing, and financial aspects of operating a dental practice. Smile Brands supports 360+ Bright Now!® Dental, Monarch Dental®, Castle Dental®, A+ Dental Care, OneSmile Dental, and Johnson Family Dental offices in 16 states, including Arizona, Arkansas, California, Colorado, Florida, Indiana, Maryland, New Mexico, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, and Washington. Smile Brands is a portfolio company of Gryphon Investors (“Gryphon”), a leading middle-market private equity firm based in San Francisco, CA. For more information, visit smilebrands.com.