Bill Blatchford, DDS
Current demographics indicate the value of a dental practice will diminish in this decade as retiring baby-boomer dentists (sellers) outnumber dental graduates (buyers). Supply and demand will dictate a much lower price than in the past. Some practice brokers are promoting the idea of "sell your practice now while it is worth more; be the associate and make the same net income as before."
Is this one plus one equals three? How can this be true? How can a single doctor's practice become a two- doctor practice and both have the income they desire? Unless something drastically changes, there is a finite amount of net. The new owner would have a large debt, large monthly payments, and, therefore, the need for a large income. The selling doctor has no debt, no monthly payments, and not as much need for money. Yet, the seller's expectation is that the net will remain the same. But with this finite amount of net, we are now dividing it in half!
Is there a position available in the practice for an associate? In most cases, the answer is no. It would be akin to hiring two receptionists because both needed jobs ... but you don't need two! A close examination of the treatment modalities offered in a practice will tell you if there is the possibility of success with an associate. Is there enough treatment available for two dentists?
What is the role of an associate? Traditionally, an associate is in a subordinate position, performing tasks and services that the owner-doctor does not do or want to do. The selling doctor's expectations of an associateship might be 1) to have the same net return and 2) to perform the larger cases on "his" patients.
Are you really associate material? As the selling doctor, ponder these questions:
• Are you willing to have the new doctor determine your schedule, your fees, the treatment you perform, and which patients you see?
• When was the last time you were employed by someone else?
• How will you react when work you diagnosed on "your" patients is in the new doctor's schedule?
• Are you emotionally prepared to be the associate after years of "running the show"?
A real example is a practice sale where the younger, purchasing doctor joined his existing practice with the new one. All was fine as long as the selling doctor was scheduled to do the higher- end procedures which, of course, are more profitable. This was treatment performed on "his" patients. Yet, the purchasing doctor had taken on greater debt and was now the owner of the practice. The selling doctor (now the associate) said he needed to make a steady income and had no intention of seeing children or doing single fillings or single crowns. He also felt that he should be performing this work on "his" patients, even though he had sold "his" patients. Emotionally and financially, he was not ready to be the associate.
There is an understandable tendency for a dentist who has spent 30 years developing relationships, a staff, and a "brand name" in the community to reluctantly sell all control of this precious and sometimes frustrating "baby." It would take coaching and counseling for the selling dentist to become a useful and gracious associate. Think about it before you leap.
Most dentists chose the profession for its independence and freedom from the control of others. They have found that independence worked well for them and, because of these characteristics, are virtually unemployable now. Could you really become a good associate?
A better choice would be to sell when you are ready to leave and not be an associate. The new doctor will never do things the same way as you. You might also decide not to sell and to continue to develop your practice in a way that allows you to "retire as you go." For most dentists, becoming an associate is not an emotionally satisfying way to leave the profession. Think long and hard before you sell. Once you sell, it is gone.
Dr. Bill Blatchford's Custom Coaching Program is now available anytime, anywhere. Utilizing 18 years of practice-management experience with over 1,100 offices, Dr. Blatchford's custom program involves minimal travel and maximum personal time with the coach, interaction with other doctors and tons of support. Leadership, systems, case presentation skills, communication, and profitability are emphasized. He can be reached at (800) 578-9155 or visit his Web site at www.blatchford.com.