If there is a time when it is more important to pursue the assistance of a a good dental practice broker, it is when an unexpected death or a career-changing disability occurs.
If there is a time when it is more important to pursue the assistance of a a good dental practice broker, it is when an unexpected death or a career-changing disability occurs. When we have been chosen as the practice broker in these cases, mutual-assistance groups have played an important role and have been greatly appreciated.
I have worked with several mutual-assistance groups. With this in mind, I would like to share some ideas with you so that your group will be more effective in the case of an emergency.
Each practitioner should advise the group concerning his or her choice of practice-transition agents. Occasionally invite an experienced, local, and active practice broker to visit with your group. Some groups invite spouses and/or estate advisers to organizational meetings. The best brokers for crisis incidents are those who maintain a database of purchasers who have previously signed confidentiality forms and are eager to purchase if the right opportunity presents itself. The broker should be capable of advising you about the transition process and giving the group some idea about practice values and timing expectations in the case of emergency.
Select a group leader
Choose one group leader for each practice that will be supported. The contact person can be a source of comfort and communication for the practice staff, the family, and the practice agents - i.e,. attorneys, accountants, and, of course, the broker. Some mutual-assistance groups delineate one doctor who will be the director in the event of any crisis. Other groups choose a different doctor for each practice, because he or she is a personal friend or confidant of that particular family.
Set realistic group expectations
Most assistance groups agree to work gratuitously in the practice for two or three months. The group should not be expected to manage the practice for an unrealistic length of time. The practice schedule is usually reduced so that each group member can satisfy his or her obligation by visiting the practice a minimum of one time per week. The practitioner’s estate should be advised before the commencement of professional effort that reasonable compensation will be a requirement after that amount of time.
Write down directions
Advise the members of the group to leave directions so that their respective practices will be priced competitively and attractively. When a professional career-ending crisis occurs, the practice needs to be sold or discontinued in a timely manner. Some purchasers expect or are advised by inexperienced agents that the goodwill of the practice is always greatly diminished immediately after the owner is missing. However, if a competent and stable staff is present, the operating systems are up-to-date, the location is attractive, and the leasehold improvements are modern, the practice value may continue for an extended period of time. Unfortunately, it is probably wise to be somewhat compromising about the value of the practice in a crisis- motivated sale. The assistance group intermediary can assist the estate or surviving spouse in making realistic decisions about his or her practice-sale expectations.
Establishing performance expectations
Discuss the group’s professional performance expectations. Some group members may prefer not to perform particular operative disciplines. The group leader should define the responsibilities of the group’s members, both collectively and individually. Additionally, in order to preserve practice goodwill, the group or its individual members should not communicate with the recall or referral base about the group’s collective or individual professional abilities. Of course, the practice staff or family may want to write to the patients and/or the referral base in order to satisfy expectations for continued care.
Address specialty practice issues
Specialty groups should be prepared to consider the possibility of more travel time for the assisting members and the preservation of the practice goodwill territory.
Mutual-assistance groups are invaluable in facilitating the initiation of the transition process, while the family is addressing other crisis issues.
After practicing dentistry for 30 years, Dr. Rich Seims now specializes in dental practice mergers and acquisitions. Seims & Associates, Inc. provides management-consulting and brokerage services for dental practices in the Pacific Northwest and Alaska. Dr. Seims can be reached at (866) 348-3800, or by e-mail at firstname.lastname@example.org.