<![CDATA[OMNI Practice Group - BLOG]]>Wed, 21 Feb 2018 06:01:30 -0800Weebly<![CDATA[The Perfect Transition Storm]]>Wed, 21 Feb 2018 05:38:02 GMThttp://omni-pg.com/blog/the-perfect-transition-stormFor those of you that have been around for a few years, you have probably noticed that the economy is cyclical.  Factors such as interest rates, employment levels, consumer spending and even retirement rates ebb and flow.  This flux creates optimal opportunities to buy and optimal opportunities to sell. 
Currently, the market for a practice transition is a seller’s market.   This means there are more buyers looking to acquire a practice than there are sellers looking to sell a practice.  It has been this way for a number of years.  But there are a number of factors that make the current market a perfect storm.  These factors are as follows:
  1. There are not a lot of practices on the market.  Low supply and high demand equate to higher practice values.
  2. Interest rates are still relatively low.  This makes note payments more affordable, so buyers are looking to take advantage of lower rates by purchasing a practice. 
  3. The economy is strong.  Patients are getting their dentistry done.  They are employed and have insurance, or can afford to pay cash and get work done.
  4. There are more buyers than sellers. Doctors have been holding on to their practices and delaying the sale of their practice in part because of the down market in 2008 to 2010.  The average retirement age for dentists was 62 in 2000 – it’s now closer to 67.
Just as perfect storms at some point break, so will the perfect storm for a transition.  Interest rates are already starting to increase.  Over 50% of doctors are now over the age of 55 and getting older.  They are beginning to sell either to retire or, unfortunately, because of health reasons.  Seller's markets are flipping to buyers markets in other parts of the country with older populations.  It will eventually happen where you are as well.  If you are thinking about a transition within the next few years, we would be happy to meet with you and answer your questions and put help formulate your transition plan.  Just give us a call at 877.866.6053 or send us an email at info@omni-pg.com.]]>
<![CDATA[KEY ITEMS BUYERS LOOK FOR IN A PRACTICE]]>Sat, 03 Feb 2018 01:05:02 GMThttp://omni-pg.com/blog/key-items-buyers-look-for-in-a-practiceIt’s probably been a while since you bought or started your practice.  You may have just found a location and put up a sign, or bought the practice that you went to as a kid.  You did not have a plethora of practices to look at, different practice management systems, new technology, or even a wide variety of practices or procedures to choose from the way graduates do today.  Dentists who are shopping for practices now days have all those things to think about in addition to financing, websites, marketing, and more.  So, what are the hot spots a buyer wants to see in a practice?  Here are a few of those items:
 
  1. Collections – Most buyers want a good base amount of collections.  The average practice produces around $500,000 per year.  If you’re below this amount, expect your practice to take longer to sell as there are few dentists who want a small practice that they can grow.  Most want to buy it, move in and get cash flow from the very start.
  2. Cash Flow – Buyers want to be able to pay the debt service on the practice and also pay themselves a decent paycheck.  If you have an average size practice, your overhead should be at or below the national average of 65%.  This is after the “add-backs” that are done on your tax returns which “add-back” those expenses you are running through your practice which are really not operational to the practice.
  3. Hygiene Recall – A solid recall program should be in place.  Approximately 30% of the collections in the practice should be from hygiene for a stable practice.  A little less is okay, but the lower you get, the closer you are to running an emergency clinic than a stable dental practice.  Not that there is anything wrong with that, you just reduce your pool of buyers if you have lower hygiene production.  At the same time, if you have really high hygiene – 40% or higher, that either means your hygienists are awesome and so is your patient retention, or, you’re not doing much in the way of procedures and doing a lot of “watches”, fillings instead of crowns, etc.,
  4. Digital Technology – While this isn’t a must, most buyers want to see digital x-rays at a minimum.  You can still sell your practice without digital x-rays, but expect the price to be slightly lower.  Panoramic x-rays are great as the machines are less and less expensive.  Digital charts are also nice to have.
  5. Decent Lease – With the commercial real estate market going crazy, you never know what you’re going to get.  It’s good to have a lease term of at least 5 years out with a 3-year option on top.  Problematic leases with tear down clauses, little parking, or those with short-term leases and the landlord not willing to extend the lease will cause a formidable problem in the sale of the practice.
  6. Updated equipment and décor – If you have older chairs, be sure and at least have the coverings in good shape.   Older chairs are fine, but torn dental chair covers are not.  Dental chair covers are inexpensive.  Get new ones if yours are not in good shape.  Old carpet, paint and outdated countertops are also a turn-off.  A bit of new carpet, paint, and countertops go a long way in making a practice feel fresh and new for not very much money.
  7. Poor Bookkeeping and Accounting – Have I got stories in this area!  However, I’ve been sworn to secrecy.  If you’re running your Porsche lease, spouses’ dermatologist appointments, vacations to Italy, or doing anything remotely grey in the accounting world through your practice, STOP!  We have had practices we could not sell due to too much funny business going on in the books.  Bank credit departments look at the numbers and ask a lot of questions which leads to buyers getting very scared and running away.  I’m sure if you have a good accountant, they are following generally accepted accounting principles for your practice and there will not be a problem.
These are just some of the hot items that can quickly turn off a buyer and will give you the best chance of selling your practice.  Not being able to check off the box for each of these items does not mean you cannot sell your practice, it just means your buyer pool will be smaller and it will take longer to sell.  If you’re two to three years away from selling you can use this as a guideline to prepare your practice to sell over the next couple of years.]]>
<![CDATA[Make 2018 Your Best Year Ever!]]>Mon, 01 Jan 2018 08:00:00 GMThttp://omni-pg.com/blog/make-2018-your-best-year-everAs we all close out on 2017 we reflect on the year’s accomplishments and successes.  For Omni, we had a record year helping doctors buy existing practices finding new locations for their startup practices.  This enabled us to give to various dental related charities and also towards our annual Thanksgiving Basket Brigade.  We helped feed over 1,000 people at Thanksgiving time. 
How about you?  How did you do compared to your goals?  Was one of your goals that you missed to own or startup a practice? 
We can help you with accomplishing that goal in 2018.  Here are some steps that will help you check this one off the list by the end of 2018:
  1. Decide if you want to do a startup practice or look for an existing practice.   My advice is to first look to see if there is a practice available in the location you desire.  If there is not and you have exhausted your research, consider a startup.  Do demographic research to make sure there is room for another location.  Contact us and we can help with your research.
  2. If you want to buy an existing practice, get the word out.   Contact all of the brokers to make sure you are on their mailing list and let them know you are actively looking and want to buy a practice in 2018.
  3. Contact a bank that specializes in financing practices.  If you need a list of a few, let us know and we can hook you up with a bank that will do a good job for you.
  4. Don’t be a tire kicker.  The likelihood of finding a perfect practice located on the busiest corner property in a stand-alone building with a huge sign, hygiene at 30% of production or higher, annual collections over $1 million, staff that is paid below market wages, brand new equipment, fully digital with a cone beam and a CEREC, and a patient base that needs a ton of work with a price of 60% collections is zero.  So, don’t waste your banker’s, spouse’s, consultant’s, broker’s or your own time by continually looking for the unicorn of a practice – it doesn’t exist.  Instead, look for a practice that fits most of what you desire, but if it doesn’t have everything, you can put some work into it and make it a good practice.
  5. When you find a practice you like, don’t low-ball the offer.  If you have looked at a few practices, you know what the price should be.  Brokers should be pricing the practices they list at the market price.  Yes, you can offer a little lower if you feel you need to negotiate the price.   But, if a practice price is at $500,000 and it’s a good practice, don’t go offering $200,000 because you’re trying to get the best deal possible.  The seller will be offended and tell the broker to not entertain anymore offers from you as a buyer. 
  6. Buy the real estate if it’s available for sale.  With interest rates where they are right now, it makes sense to lock in at a low rate versus paying rent with a 3% increase every year.   Even if you pay slightly above market for the property, it can still make sense, as you own the building and you’re not throwing money down the toilet by paying rent.
  7. Once you have made the offer, continue to push towards the closing and do your work.  Complete your due diligence in the practice.  Hire a consultant to help you if needed.  Continue to work with your bank to get them everything they need.
  8. Upon closing, keep the practice the way it’s been running if it’s being run well, and don’t make too many changes in the beginning.  Let the patients see you a few times before you make drastic changes.  If it’s a dog of a practice, yes, make changes; but if it’s doing well, why change what’s not broken?
  9. Work hard and be present.  As soon as you can, quit your associate job and be in the office as much as you can.  Chip in and help the staff if it’s slow.   Call patients yourself to get them in the door.  Do what you need to do in order to be successful.
All too often, we see doctors who want to be practice owners, but they just can’t seem to pull the trigger.  They can find something wrong and a reason not to buy any practice that is shown to them.   We want you to be immensely successful in your practice and are here to help you in any way we can. 
We wish you a Happy New Year and cheers to much success in 2018! 
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<![CDATA[Portland MidWinter Transitions Seminar]]>Fri, 29 Dec 2017 00:38:04 GMThttp://omni-pg.com/blog/portland-midwinter-transitions-seminarFriday, January 26, 2018 
Multnomah Athletic Club, Portland, OR

Program Description:In this course, you will learn about the legal, financial, logistical, and emotional aspects of transitioning out of your full-time dental practice. Our team of experts will lecture and conduct Q&A sessions on:
  • Sequence of a Dental Practice Transition for Both Buyers and Sellers
  • How to Maximize the Value of Your Practice
  • The Importance of the Allocation of Assests in the Practice Sale for Both Buyers and Sellers
  • Advanced Tax & Financial Planning Strategies Before, During, and After Transition for Both Buyers and Sellers
  • Legal Issues in Practice Transition for Both Buyers and Sellers
  • Helping your Buyer Get Bank Financing
  • Real Estate Issues in a Practice Transition
Schedule:
7:30am Check-In with Hosted Breakfast
8:00am Sequence of Dental Practice Transition 
Buck Reasor, DMD - Practice Transition Broker
8:50am Legal Issues in Practice Transitions 
Doug Alexander, Attorney
9:40am Advanced Tax & Financial Planning Strategies 
Doug Fettig CPA, MBA
10:30am Trends in Dentistry: The good, the bad and the ugly 
Rod Johnston, MBA, CMA - Practice Transition Broker
11:30am Helping Your Buyer Get Bank Financing 
Chris Kane, Commercial Banking Manager
12:00am Online Marketing and Communication Strategies to Grow Your Practice 
Ian McNickle, MBA Partner and Co-founder, WEO Media
12:30pmLunch
1:30pm to 5:00pm Roundtable Group Symposium

Cost to Attend:For only $295, you and your spouse will attend a seminar on Friday
including: continental breakfast, lunch and other relevant materials
that may be provided.

In case of cancellation by registrant, refunds will be made if received no later than three weeks prior to program date
Register Online
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<![CDATA[Seattle MidWinter Practice Transitions Seminar]]>Fri, 29 Dec 2017 00:28:53 GMThttp://omni-pg.com/blog/seattle-midwinter-practice-transitions-seminarSeattle MidWinter Practice Transitions Seminar 
Friday, February 2, 2018 
The Bellevue Club, Bellevue, WA

Program Description:
In this course, you will learn about the legal, financial, logistical, and emotional aspects of transitioning out of your full-time dental practice. Our team of experts will lecture and conduct Q&A sessions on:
  • Sequence of a Dental Practice Transition for Both Buyers and Sellers
  • How to Maximize the Value of Your Practice
  • The Importance of the Allocation of Assests in the Practice Sale for Both Buyers and Sellers
  • Advanced Tax & Financial Planning Strategies Before, During, and After Transition for Both Buyers and Sellers
  • Legal Issues in Practice Transition for Both Buyers and Sellers
  • Helping your Buyer Get Bank Financing
  • Real Estate Issues in a Practice Transition

For only $295, you and your spouse will attend a seminar on Friday including: continental breakfast, lunch and other relevant materials that may be provided.

Schedule:
7:30am Check-In with Hosted Breakfast
8:00am Sequence of Dental Practice Transition 
Buck Reasor, DMD - Practice Transition Broker
8:50am Legal Issues in Practice Transitions 
Doug Alexander, Attorney
9:40am Advanced Tax & Financial Planning Strategies 
Doug Fettig CPA, MBA
10:30am Trends in Dentistry: The good, the bad and the ugly 
Rod Johnston, MBA, CMA - Practice Transition Broker
11:30am Helping Your Buyer Get Bank Financing 
Andrew McKechnie, SVP/Regoinal Manger, Columbia Bank
12:00am Online Marketing and Communication Strategies to Grow Your Practice 
Stewart Bartlett, Senior Marketing Consultant, WEO Media
12:30pm Lunch
1:30pm to 5:00pm Roundtable Group Symposium

In case of cancellation by registrant, refunds will be made if received no later than three weeks prior to program date

For overnight accommodations, please call Hotel Bellevue at 425-454-4424. 

The Hotel Bellevue and the Bellevue Club are located at 11200 Southeast Sixth Street, Bellevue, WA 98004.
Register Online
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<![CDATA[2017 - It's a Wrap]]>Fri, 15 Dec 2017 22:23:17 GMThttp://omni-pg.com/blog/2017-its-a-wrapThe holidays are an interesting time of year.  Whether you celebrate Christmas, Hanukah, Kwanzaa, Rohatsu (look it up) or another holiday, we all are wrapping up the current year and beginning to think about the new year on or before January 1.  You may have a process or a traditional way of doing this.  Reviewing your 2017 goals versus what you actually accomplished and then setting new goals for 2018 is a typical way of viewing things.
As I look back at 2017, I go through the names of the doctors whose practices I sold and understand a bit more about them.  I look at the doctors’ names of the practices and, amongst other things, I think about why they sold their practices.  I see names of doctors who sold their practice because they are ready to retire - this is the typical reason for selling.  But I also see the names of doctors who sold their practice because they were diagnosed with cancer and could no longer practice.  I sold four such doctors’ practices this past year.  I also see the names of two doctors, both under the age of 42 who were planning to practice dentistry into retirement, whose practices I sold because they got nerve damage in their hands and wrists.  There are also several doctors who sold because they were tired of managing a practice - dealing with insurance companies, staff management and managing their landlords. 
Not long ago, I had a conversation with two doctors in their late fifties who both had recent health scares and had family members and friends who passed away from cancer at early ages.  This hit home as my Dad passed away in July of 2017 from non-Hodgkin’s lymphoma and my brother was just diagnosed with pancreatic cancer.  And as these doctors ask me questions about selling their practices, I remind them that just because you sell does not mean you’re done with dentistry.  You can still work as an associate dentist in another practice, teach at the dental school, or volunteer at a clinic.  I let them know that I’ve never had a dentist tell me that they sold too early.  In fact, many have come back and said I wish I would have sold several years ago because they are loving their freedom of being able to come and go as they please, fill in for vacationing friends, or work in a clinic when they get the itch to do dentistry. 
As you celebrate your holidays, try not to think too much about work.  Also, as you set your goals for 2018 and do an assessment of your career and life, don’t forget to think about what’s important to you.  For some, it may be that dentistry takes priority over everything and it’s your passion.   For others, maybe it’s time to turn to the next chapter and enjoy what you have – family, friends, time, giving back, etc. Whatever direction you go, know that we are here for you and happy to provide a free consultation anytime you would like.  We’ll even buy the coffee!
OMNI would like to wish you and your family Merry Christmas, Happy Hanukkah, Kwanza yen iwe ha heri, Happy Rohatsu, and CHEERS to the New Year and best wishes for everything you desire in 2018! 
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<![CDATA[Selling your dental practice? It's not as easy as it looks]]>Thu, 16 Nov 2017 05:35:21 GMThttp://omni-pg.com/blog/selling-your-dental-practice-its-not-as-easy-as-it-looksI’m sure many of you have sold a car, boat, or a house by yourself.  For the most part, cars and boats are pretty simple to sell. Even selling a house only involves a couple of pieces of paper, an escrow agent, and a few other steps.  But selling your practice is another ballgame.  Emotions get involved as you are attached to your patients, staff, and heck, you built this baby!  There is a valuation to do - how do you do that?  Additionally, there is due diligence, lease assignment, document preparation, letter of intent, renegotiating after due diligence, closing process, CPA’s and on and on.  It’s hundreds of hours of doing a lot of different things.
 
ARE YOU READY?
You might be saying, “This practice has been my baby and my life for many years,” Or, “I still want to treat patients a couple of days a week after I sell my practice.” Before you make any decisions, ask yourself some questions:
  1. Am I emotionally and financially ready to step away from the practice where I’ve invested so much of my time and resources?
  2. What do I want to do after I sell? Will I retire from dentistry, work part-time, or volunteer my services?
  3. How do I want to sell my practice? For example, should I sell to an associate and immediately retire, or should I transition to another dentist and gradually step aside?  Should I sell to a corporate?
It’s understandable you want to preserve your practice legacy while ensuring the ongoing care of your patients and staff meets your high standards. That’s why it’s important you find the right buyer to entrust your “baby.” It’s one thing to be financially prepared for retirement. It’s a whole other ballgame to emotionally handle walking away from your practice.
 
READY, SET... GO!
After taking stock of your personal finances, retirement, and practice transition goals, it’s time to call in the experts to help you prepare for the sale. Your team of professionals should include a CPA, wealth management advisor, practice transition specialist, and an attorney.
 
Certified Public Accountant (CPA): A CPA will compile and review all your financials. Be upfront about anything that might be considered outside the normal scope of dental practice business, i.e., expenses above industry averages, any non-cash benefits, or family members on the payroll who don’t work in the office. This allows your CPA to do a thorough analysis and advise any necessary adjustments.
 
Wealth management advisor: The sale of your practice could be the single biggest contribution to your retirement fund. Consult an expert wealth management advisor to help you plan for any related tax consequences and long-term investment strategies.
 
Practice transition specialist: A good practice transition specialist will review market prices in your area, establish a practice sale timeline, conduct a comprehensive practice analysis, and have a pool of financially viable buyers. Get recommendations from colleagues and interview each one to find the best match for your needs.
 
Attorney: Attorneys provide much-needed protection and attention to practice sale transaction details. Due diligence and sound legal advice benefits you, your practice transition specialist, and the buyer. Find an attorney who is well-versed in dental practice transitions. This will save you time and money, and potentially add tens of thousands of dollars to the purchase price of your practice.
 
FINANCIAL PREPAREDNESS
Be sure to have all of your financial statements in order to accurately show the fiscal health of your practice. Make sure you prepare and review monthly and quarterly profit and loss statements with your accountant. If you have not done that, start doing so immediately. Review each line item to manage revenue fluctuations, expenses, and ancillary accounting issues.

The ADA, a member of the Academy of Dental CPAs, or a transition specialist can give you current industry averages for revenues, expenses, new patient flow, fee schedules, and much more.

Buyers will look at your profit and loss statements to compare each line item to industry averages. Make sure your CPA explains any noted differences upfront, otherwise you could lose significant value to your practice. It also puts to question the integrity of your practice financial information.
 
Due diligence: Potential buyers will want to review your production against industry averages. Carefully analyze the following key reports generated by your practice management system:
 
Provider summary report: This report actualizes productivity by provider and type of procedure. When reviewing this report, make sure your hygiene production numbers are within industry averages. Also, if you offer specialties such as orthodontics or sleep apnea, you need to make sure any potential buyer can replicate those procedures. If they can’t, it could negatively impact the purchase price of your practice because that revenue would be deducted from the valuation.

Accounts receivable report: Buyers pay close attention to the percentage of receivables based on the delinquency bucket. Be forewarned: most buyers will not pay for balances over 90 days. Large account receivable balances are a red flag for any potential buyer. It usually signifies a lack of controls for effective practice collections and cash flow management. Carefully analyze each account and make necessary adjustments to non-collectables.

Fee schedules: Review your current fee schedule and adjust fees to the minimum 80th percentile for your area. 
 
FINAL INSIGHTS
  • Carefully vet all potential buyers. If they don’t have a clear understanding of the market and how it relates to the value of your practice, move on.
  • Establish relationships with industry professionals. Their expertise and support will be an invaluable resource.
  • Determine a specific date of sale with a realistic timeline. Communicate clearly when you want to stop practicing dentistry.
  • Plan early and anticipate delays. Your location, mix of procedures, and practice revenue trends can impact the pace of your practice sale.
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<![CDATA[Patient Insurance - Use It or Lose It]]>Fri, 10 Nov 2017 05:51:00 GMThttp://omni-pg.com/blog/patient-insurance-use-it-or-lose-itAs we approach the end of the year, you should contact your patients and let them know that they should look at their insurance to see if they have available funds to complete procedures, or fit another cleaning in before the end of the year.  There are standard patient letters that many consultants use to send out to patients.  Or, you can use one of the internet based patient notification systems to let your patients know to use their insurance.  We also have a letter template for insurance notification.  Send us an email ​and we’ll send you a copy of the letter. ​]]><![CDATA[Why Now is the Time to Buy a Practice]]>Fri, 10 Nov 2017 05:49:35 GMThttp://omni-pg.com/blog/why-now-is-the-time-to-buy-a-practiceI remember when I bought my first house.  I wasn’t sure if the timing was right, whether the house the real estate agent recommended I buy was the right house or if I could afford the house payments.  At the ripe age of 26, I took the plunge and bought the house.  It turned out that years later, those trepidations I had were irrelevant.  This wasn’t the perfect house, but I remodeled it and made it near perfect to me at that time.  The value grew and I built equity.  I made adjustments to afford the payments and the timing really didn’t matter. 

The same goes for buying a practice.  The practice you buy does not have to be perfect and the last practice you buy.   You buy a practice that fits your needs at your current time in your life.  You put sweat equity and hard work into the practice to make it profitable.  You do a bit of remodeling to make it fit your personality and style.  You work in the practice building equity and you hone your skills as a practice owner and a business manager.  In the end, timing is not as important as you think.  I know many doctors who bought their first practice when interest rates were 15%.  Also, keep in mind that practice owners earn 20% more than associates who are employees.  (Read Rich Dad, Poor Dad if you want to understand why you should own and not be an employee).

The moral of the story is if you feel you might be ready but are not quite sure, you’re ready.  Interest rates continue to be low.  The economy is doing well.  There are great resources that can help you own and run a practice.  If you would like to discuss whether or not you are ready to own, feel free to reach out to any of us at Omni to discuss your individual situation. Send us an email or give us a call at 877-866-6053 today!]]>
<![CDATA[WHEN IS IT TIME TO SELL?]]>Thu, 19 Oct 2017 07:00:00 GMThttp://omni-pg.com/blog/when-is-it-time-to-sellThere are a number of reasons that doctors sell their practices.  Some are good reasons, like when you have reached a point where you have enough money to live comfortably the rest of your life while you are still healthy.  Other situations may not be good.  Those can include failed health, a practice that is quickly losing production, or the worst-case scenario -- you suddenly pass away.

If you are still in good health but are not sure if you are in a good financial position to be able to live comfortably the rest of your life without working, we recommend you speak with your financial planner.  They can analyze your situation and see how much more you may need to work.  Or, if you can sell your practice, put the money into a retirement account and work at a practice and continue to make an income while harvesting the equity you have in your practice.  This is one of our favorite transition strategies.  It’s like selling your house, but you get to continue to live in it.  Just because you sell your practice does not mean you need to stop working or retire.   You can still work clinically if you still enjoy dentistry but don’t enjoy the management or dealing with insurance companies continuing to lower reimbursements.

Another time to consider selling is when your practice is continuing to go down in collections or net income.  We have numerous examples of when a doctor could have sold two or three years prior and made another $200,000, $300,000, or even $400,000 more if they would have sold at the height of their practice production.  Instead, they watch the production numbers and patients go down year after year after year.  Even though the owners knew they were getting tired, referring more work out, or simply seeing fewer patients, they continued to hold onto their practice thinking they can sell it based on what the numbers were at the height of production. 

The worst time to sell is when you have to sell, say when you or a family member have failed health, or you suddenly pass away.  In this scenario, you or your family are left trying to quickly get the practice sold before all of the patients leave and there’s a skeleton of a practice left to sell.  That can be a devastating situation, especially when the funds from the sale of the practice were counted on as a source of future retirement income.  At a minimum, you should keep an emergency contact list for your family in your office that includes your attorney, accountant, practice broker, supply company, etc., that can alleviate some of the burdens on your family.

Whether you are 20 years from retirement or 2 years from retirement, you should be always be prepared and have an exit plan.  We are always available at no charge for either a phone call or a meeting over a cup of coffee to help you put together that plan.]]>