Most dentists decide they’d like to run their own practice, be the full owner and have full control. They want to steer the business – it’s their vehicle. Most dentists think that means they can’t have another doctor in the practice. Nope. Too many cooks in the kitchen, right?
Not Having An Associate Might Spell Trouble
The economics of choosing not to hire associates aren’t very pretty. There’s a significantly smaller profit margin in professional practices today as opposed to 30 – 50 years ago. The insurance industry is grossly decreasing the revenue reimbursements for dentists – and especially affects those who are dependent on insurance companies for bringing patients to their practice. Allowing those insurance companies to dictate fees has decreased the profit in those practices.
Adding insult to injury, the corporate dental clinics are making great headway in many markets, even beyond the major metropolitan areas – creating more competition for the solo practitioner.
Competing with Corporate
A solo practitioner often cannot provide consumer driven hours of operation. People today want and demand convenience and options to fit their busy schedules and those of their children. The businesses and practices that don’t provide convenient hours are going the way of the dinosaurs.
Corporate dental clinics are open at least six days a week and have extended hours in the evenings and early morning. I know of orthodontic practices who do the same so that their young patients don’t have to miss school. Providing hours in the early morning, into the evening and on Saturdays isn’t sustainable flying solo.
How can you compete with the corporate clinics? Regularly, you are pressed to accept less reimbursement from the insurance companies, to have higher efficiencies all while expanding hours to serve the many patients demanding them.
If you want to compete and grow, you must open the door to having associates or partners.
Systems Take the Scary Out
Succeeding with associates in your practice will require some established infrastructure. Having infrastructure doesn’t mean that you won’t need an empowered staff – that will always be important. Systems and processes will need to be developed and documented. You need a marketing funnel and proper front office sales and conversion – each touch point for new patients or existing patients must have a process that’s scripted and followed by every staff member so that a consistent, quality experience is given.
With those success tools in place, the patients (feeling cared for on many levels) will become loyal and drive more patients by referral to that practice.
If those systems aren’t in place, bringing in an associate will only magnify the existing problems or dysfunction of the practice.
The correct infrastructure will make everything run with higher efficiency and set the framework for bringing in the right associate or partner(s).
Partner Or Associate?
Choosing your associate or partner depends on your goals.
Running a practice with an associate has many benefits. The potential downside is that the associate model can be a revolving door. Associates will come, and associates will go. I believe it’s best for the owner/doctor to consider bringing in an associate who has the intention to become a partner/owner in the practice at some point in the future. Someone with a vested interest is going to provide a different level of care and representation. Before the associate comes into the practice, expectations, conditions and a timeline can be set for that associate to become a partner.
If after six, nine or 12 months you and the associate are happy, then you move forward. The contracts for this would be set up on the front end. Also, the practice must be evaluated before any associate begins. This creates the opportunity for a successful associate to easily purchase a fraction of the practice in the future. This model can be very lucrative for both parties. Remember, there must be commonality in core values and culture. This process is best done with experience, practice, transition and expert advice.
Keep Your Hair, Copy Others’ Successes
Commonly, the senior doctor and the junior doctor have no experience with this process. Understandably, they know very little about what variables and points must be considered when creating the contract and calculating the formula to make a successful transition or fractional sale possible.
In the Freedom Founders group, we are helping many doctors with this renaissance. Using our network and our connections, we ensure that the practice is prepared to support an associate. We make sure the marketing is there and the infrastructure is in place. Finally, we facilitate the communication and negotiation and help address the expectations for both parties.
If you’d like to visit with me about this proven method that can increase the value of your practice and buy your precious time back, jump over to Freedom Step #1 and fill out the brief survey. I can’t wait to talk to you!