Having worked with thousands of practices throughout my career and transitioning four practices with my husband, I can almost single-handedly trace any distress or misconception of an outcome to an owner not being entirely honest about one or all of these three questions. It would be ideal to answer these honestly before speaking with a broker, an associate, a DSO development team, or mergers and acquisitions (M&A) group.
These questions around the rules of engagement for practice transition could likely save time, energy, and possible heartache. It's no secret that you can find an answer supporting a decision to transition with a private practice sale, group, or DSO model if you are willing to look long enough or ask enough colleagues' opinions. What can be somewhat of a secret is often your own truth to these three questions.
Question 1: Do you currently regard those supporting you as your staff, team, or dental family?
The word “staff” implies a group of people who work for a person or organization—a work relationship involving subservience. In other words, the emphasis is clear that the individuals work for another, whether an individual or an organization.
What about referring to those who help you reach the desired result daily as a “team”? In this model, the emphasis is on working together, which more often aligns with the dental model. Most (although not all) dentists prefer not to confirm their appointments, perform hygiene services, or seat the patients in the treatment rooms and take their own x-rays. Instead, they rely on the team and work together with them to perform the services they most enjoy performing.
As for referring to colleagues as a "dental family," that term implies an even higher level of regard. In these instances, one thinks of a social group or a social unit or a community. Many would consider those they work with daily to be part of their community. These are often more traditional private practices; they often have social outings and celebrations beyond the 8 to 5 hours, and know one another’s families and support one another in many ways.
Now, here is the real question concerning transition. If you’re considering a change that will impact your people (and a shift will often affect your people), should you share this part of your dental journey with your staff, team, or dental family? Don't mistake or misrepresent my words, please. This does not matter to me. But it does and will matter to your people at some point, or it won’t. Perhaps you should look at these definitions again and consider that transitions can often be welcome and exciting times, or they can be times of secrecy and mystery. Keep in mind that perception is reality.
Question 2: Do you currently work with a spouse or family member who you feel is invaluable?
As the spouse of a dentist and a two-time business owner in our industry, my thoughts can be complicated. No one really wants to have this conversation, but it’s critical to your transition's success. I've worked with practices that had every member of their family and even Aunt Betty on payroll because their accountant or adviser shared how this was beneficial for taxes and such. I have also worked with doctors who relied on a sister, brother, or spouse as a trusted advisor, manager, hygienist, or treatment coordinator because they were exceptional in their role and were trusted at a high level. I've also worked in my husband's practices as the comprehensive care coordinator because I loved the work and was the most qualified for the position.
If someone is purchasing all or part of your practice, they should want the best bottom-line number to be the value and the consistency of that bottom line. This doesn't include anyone on the payroll for any reason other than having a measurable impact on the production, in which case, whoever is purchasing the practice should welcome this person to remain a part of it. At this point, it should be about the numbers and not much else. Numbers don't lie, and they don't have emotions around them.
Now, ask yourself this. If you were purchasing this practice, would the value the family member brings with their contributions to the bottom line outweigh the wages paid to them? If not, perhaps this is an excellent time to consider the value of the practice with their wages added back into your purchase price. It's a challenging exercise but a necessary one. It isn't about a broker, associate, DSO development team, or M&A group deciding or having to be the fall guy. It’s about you doing the work and answering the tough questions before they ask.
Question 3: What is motivating your transition—money, health, age, or life event?
This might be the most important question to answer in the most honest and emotionless way. These are facts that you may or may not disclose, but that can help you navigate your options and answer most honestly my previous questions. Think of how you assist a patient in navigating their treatment options. Their choices, like yours, are similarly driven by one of the factors or pain points I mentioned.
I often hear a doctor say, "I don't want anyone in my community to know I am selling." Although I understand this, my curiosity makes me want to ask them to tell me more about that. Tony Robbins said, "People will do more to avoid pain than they will ever do to gain pleasure." So have the conversation with those you trust most, feel the pain, and do it anyway! It will save you a complicated conversation later, and whomever you are working with on a transition will appreciate your honesty and self-awareness around this early. You'll be the exception to the rule for sure.
If you think about these questions and apply them to your transition hopes and dreams, you'll more completely comprehend why it is often hard to answer honestly. While it may be easy to answer them yourself, it may not be as easy to share, especially in what might be considered the "dating" phase with an associate, group, or DSO. You'll often fare well if your decision is simply transactional due to your motivation for a transition. However, when it is transformational to a practice owner (and perhaps others), this can often create real grief for both parties when not disclosed early.
Either way, I absolutely believe the right partnership for transition exists. We've had great success with someone representing our interests in a transaction. Any confusion or misunderstandings always stem from not asking enough questions. Period. Get your questions in order, write them down, and be prepared for the many opportunities that will present themselves to you when you are ready for what's next with your transition.