By Susan Spear, SAS Dental Practice Brokers
From the Spring 2015 Journal of the Colorado Dental Association
When inviting another dentist into your practice as an associate or selling your practice, the most important objective is finding the right person for your situation. This not only means a brief meeting with someone who has a nice personality, but someone who will meet your transition needs as well.
An owner dentist needs to define why he/she would consider bringing another dentist into his/her practice.
- Do I want someone to provide relief time for me? How much time do I want to give up? What are the risks to my practice when this dentist leaves? How much additional time will I need to spend training, mentoring, dealing with transition issues, etc.?
- Do I want someone to eventually purchase my practice? What is my timeline? Is this person a viable buyer? Do they want to own? Do they want to partner? Can they qualify for funding?
- Do I want someone to become a partner with me? What do I want in a partner? What is my timeline and am I prepared to make this successful for both of us? Do I understand the financial commitment, changes in the culture of my practice, and effect on my staff and patients? What if it doesn’t work out?
- Do I want someone to buy my practice now? Is this person a qualified buyer? Am I prepared for what it will take to successfully transition my staff and patients to a new owner? Does that matter to me?
Associates or buyers need to know what type of practice experience will allow them to achieve their future goals and dreams.
- Do I want an opportunity where I can learn? If there is no ownership, will I be satisfied with the experience? What if there isn’t enough dentistry to support my compensation?
- Is my objective to simply experience private practice and take what is offered or do I need a plan and commitment in place to invest my time toward ownership?
- Do I want to own my own business as a solo practitioner or a partner? (Buy-outs and buy-ins are very different.) What is my timeline?
- Do the practice opportunities I am seeking provide ownership within a two-to-three year period? How can I be sure?
- Do I want to own now and is this owner dentist really ready to sell? How can I be sure?
Many owner dentists meet new dentists who want to come into their practices. The owner dentist is flattered and opens his/her practice to the dentist based on a “successful” initial meeting. A disconnect occurs when the owner dentist is not prepared for the experience ahead. The new dentist enters the practice with a promise that someday the owner dentist will sell the practice to him/her. No structure—just “let’s see how it goes and then decide how we want to move forward.” The most common result is the associate becoming unhappy and eventually leaving. In so many of these situations, the owner dentist changes his/her mind about providing ownership to the associate. They simply didn’t understand the ramifications of their promise. If the owner does want to sell, he/she commonly creates a convoluted process that the associate disagrees with, and the associate feels mistreated and betrayed.
True Case Study: Owner dentist meets a new dentist. He brings in the associate who he believes will buy his practice in a one-to-two year period. There are no formal buy-out arrangements or processes in place. The only agreement is an associate employment agreement that was written by the associate’s professor from dental school that guarantees a $10,000 income per month with benefits. The owner dentist soon learns there is not enough dentistry in his practice for two dentists. He is obligated to pay the associate under the agreement. To make it work, he transfers all of his dental treatment to the new associate and sits in his office most of the day. The new dentist was confident about his dentistry coming in, but staff starts to complain about the quality of care. The associate lacks the communication skills regarding treatment plans, is very difficult to get along with because he is frustrated, and the practice is suffering. The patient load is inappropriate for the new dentist, and the owner dentist has no idea how to mentor or guide another dentist forward. The staff threatens to quit. The result is a train wreck. Both dentists lose.
Bringing another dentist into your practice or selling your practice requires specialized planning, analysis of the “best” process for each individual practice owner, and the establishment of a transition scenario that has real potential for success. Dentists should be matched based on their goals, similar likes and dislikes, practice philosophy, financial position, and desired outcomes. A single brief meeting experience without guidance almost always ends poorly. Both owner dentists and new dentists don’t want to become a part of the negative statistics. Before shaking hands, consider investing the time and effort into “doing it right” the first time!
Susan Spear is the owner of SAS Dental Practice Brokers, www.sastransitions.com. Contact her at 303-973-2147 or firstname.lastname@example.org.