As a dentist, Johnny Kwanhoom Kim works in an extraordinarily confined space: people’s mouths. But as an entrepreneur, his business stretches far and wide across the sweep of sprawling Greater Los Angeles.
The affable D.D.S. owns seven L.A.-area commercial properties in which a host of other dentists—for whom he has given either partnerships or employment—practice under his California Dental Group. This profitable dental office-cum-real estate approach makes Kim his buildings’ tenant as well as the landlord.
“It’s the best way to have a retirement plan,” says the ambitious Korean-born dentist, 54.
Now he aspires to further fatten his real estate portfolio by buying up more properties and launching more offices. Problem: His background is in biology and chemistry, not business and balance sheets. He needs financial savvy to take him where he wants to go.
Solution: Kim is participating in an innovative pro bono mentoring program from UBS Wealth Management Americas that teams high-growth small business owners with select financial advisors and certain of their clients. A six-month New York pilot with 10 entrepreneurs completed last February. This past May two more projects got under way, this time in Los Angeles and Chicago.
“Elevating Entrepreneurs: Small Business Advisory Program” gives company owners one-on-one strategic financial and business advice and access to UBS senior executives, plus a smorgasbord of other UBS resources. Objective: new job creation.
The wirehouse first chooses the entrepreneurs and matches each one with an advisor. Then, from the advisor’s book, it picks a client with expertise in an area that would help the business owner most. Goal: to take the local company to the next level and in so doing, generate jobs. The program is an extension of UBS’s “Revitalizing America” initiative launched in fall 2010.
“Our financial advisors have tremendous business background and understanding of finance. The majority of UBS clients are first-generation wealth who have built their businesses from the ground up and were in the same position as many of the small business owners in our program. That combination makes a well-rounded [mentorship],” says Lori Feinsilver, who heads the program from New York City.
The advisor matched with dentist Kim is Michael J. Hatch, 34, a vice president of investments with the Feuer/Hatch/Doshi group based on tony Rodeo Drive in Beverly Hills. The team manages half-a-billion dollars in assets of primarily high-net-worth and ultrahigh-net-worth individuals.
Hatch, who joined the firm in 2003, is a certified financial planner and has the CIMA (Certified Investment Management Analyst) designation as well. Among his specialties are portfolio manager research and selection, portfolio construction and estate planning. He has a B.S. in economics and organizational communications from the University of Utah.
“It’s a neat idea and exciting to be a part of something that UBS is doing to give back,” says the eager FA. “We really need to create new jobs in this country. If there’s anything I can do, I’m more than happy to help.”
Partnering with mentor Hatch is his client, Mark Gabay, 55, owner of Charles Company, a flourishing real estate developer and investment partnership firm in West Hollywood. He has decades of experience and expertise in turning raw land and rundown properties into income-producing assets.
“Mark is very knowledgeable on the financing side, as good as any banker,” Hatch says.
At the time of this writing, the two had just begun working with Kim. Already notched was a two-hour meeting that served to draw up a fundamental game plan to boost the dentist’s presence in L.A.
“I originally wanted to grow to 10 locations. But now, after meeting with Mike and Mark, I think I can go to 20, 50, even 100! Those guys are great!” says Kim, energetic and enterprising. He came from Korea to L.A. as a child and grew up in modest means. Working his way through college, he was a gas station attendant and janitor.
“Dr. Kim is self-made. He established the dental practice and built it up to create a secure income stream. His intent is to utilize his business to create a larger real estate portfolio that he controls, which would create annuities for him,” explains Gabay, who immigrated to L.A. with his family from Iran at age 14. He too worked a series of jobs while attending school; at 25, he made his start in real estate.
The six-month UBS program, which includes training for the advisor-mentors, requires once-a-month meetings with the business owners. In New York, the FAs spent about eight to 10 hours with them monthly over the six-month period.
The pilot—with businesses located in Manhattan’s Harlem neighborhood, Brooklyn and Newark, N.J., among other areas—focused exclusively on minority-owned companies. But now, any qualifying small business owner is eligible.
Benefiting from customized one-on-one advice are nine L.A. companies in urban or middle class suburban communities, such as Compton, Corona and Woodland Hills. Average 2011 revenue for the businesses was $8.75 million. The financial advisors are based in six branches spread throughout Los Angeles.
Industrious Kim has no trouble finding dentists to join his ever-expanding group since new dental school grads face a tough L.A. job market and are heavily burdened with student loans. So low overhead and participation in group buying, marketing and advertising have obvious appeal.
Kim provides the initial capital and operates the practices under his DBA. At one point, he had 11 locations; but even after selling the practices, he still maintains ownership of the real estate.
According to Gabay, the struggling economy is an “ideal” environment for Kim to branch out. “There’s a lot of well-located real estate that’s suffering from lack of tenancy—and with his dental practice, Dr. Kim has a built-in tenancy. His intention is to purchase, say, a Blockbuster store that has gone out [of business] and start a dental practice there immediately. So right away he becomes the tenant too.”
After their initial meeting, Hatch set up an appointment for the three with non-profit agency Valley Economic Development Center (VEDC) to discuss financing.
“Things are certainly moving forward,” says the FA.
For the Los Angeles effort, UBS is partnering with Mayor Antonio Villaraigosa’s Office of Economic and Business Policy. In New York, it teamed with the William J. Clinton Foundation. Planning to hit all major markets, the firm expects to launch in Boston next year. And for smaller cities and towns nationwide, UBS hopes to introduce an online version of its business-to-business mentoring.
Advisor qualifications include an average 10 years’ financial services experience and advanced certifications. “These are successful advisors who have built their practices themselves and are performing at a level where they have time to devote to this philanthropic project,” Feinsilver says.
After the business owner and FA are selected, UBS then asks the advisor to submit the names of three clients with backgrounds similar to the entrepreneur’s and who have achieved success in the same field in which the owner needs help.
UBS provides the team with one-on-one access to its senior executives in, for example, marketing, operations and investment banking. There are workshops as well. One in New York concentrated on capital management. “Someone from UBS talked about balance sheets and the key numbers that banks look at when you go for a loan,” Feinsilver notes.
The wirehouse declined to disclose the cost of running the program but reports that this year it has added a new element: availability of $15 million in small business loans—$10 million for L.A. and $5 million for Chicago—by partnering with local not-for-profits. In L.A., that organization is VEDC, which also provides financial education. In Chicago—where UBS’s key partner is the Chicagoland Chamber of Commerce—its financing co-partner is the Chicagoland Business Opportunity Fund, now forming.
“There are very few lenders willing to make loans because small businesses are considered high risk,” Feinsilver says. “But we saw from the New York pilot that access to capital is a big component to growth. We don’t have a small business lending program at UBS. So we said, ‘What else can we do?’”
The loans are available to any qualifying small business in L.A. and Chicago, not only to program participants.
Kim has already made an application. “It would definitely help my expansion,” he says. He was accepted into “Elevating Entrepreneurs” after receiving a flier and applying.
With dentist partners in four offices and dentist employees at the three others, Kim himself works seven days a week, dividing his time among a trio of locations: four days at his own practice in L.A.’s Koreatown, four miles southeast of Hollywood; two days at his downtown L.A. office in the fancy Millennium Biltmore Hotel (where he rents space); and one day in Long Beach, about 17 miles from Koreatown.
For his real estate buys, he chiefly targets areas with sizeable Hispanic populations because they are in great need of quality dental care and are extremely loyal patients, he says.
In their first meeting, Hatch, Gabay and Kim discussed how the dentist can “capitalize within his existing operation: where his existing assets are underutilized and how he can improve them,” Gabay says.
Then Hatch emailed Kim asking him to assemble financial statements and the like so he could analyze them. Both the FA and Gabay are certain they’ll be meeting face to face with the entrepreneur more than the required once a month. And they will of course liaise often by phone and email.
“Over the next year or so, I see Dr. Kim growing quickly,” Hatch says.
The D.D.S. plans to eventually consider franchising. “That,” he says, “is where Mike comes in.”
Though the New York pilot has thus far produced only a few new jobs, the mentorships there “empowered the entrepreneurs with confidence to go out and negotiate a little more strongly, make smarter business decisions and focus more on relationships with banks,” Feinsilver says.
New Yorker Julie Azuma, founder-president of Different Roads to Learning, a retailer of educational products for children with autism, says the mentoring gave her “courage to stand up for [herself] and learn how to look at expected revenue in different ways. If I didn’t have that support [from FA Sharon Sager, along with client Amy Butte of TILE Financial], I’d probably be running around like Chicken Little!”
For Dr. Johnny Kim’s part, he says: “The greatest thing I’ll gain from this whole project is that I’m going to do the same thing [as the mentors]: Give back to the community.”