Bringing in an Associate as a Co-owner
Steps for a successful transition
Only one out of 10 associateships end in a partnership.
Here are five “must-do” steps to make sure your planned transition is successful.
- Plan ahead.
Ask yourself:
- Why would I want to bring somebody into my practice and under what circumstances?
- Would I like to expand the practice, or am I too busy to keep up with the increasing patient volume and I need somebody else to give me relief?
- Do I want to slow down but the practice demands do not allow me to ease off?
or
- Do I want to take some equity out of the practice?
It is important to assess what your objectives really are.
- Select the suitable candidate.
You must be prepared to create a mentoring relationship with the new dentist and show him or her how to become a successful partner in your practice. Determine the new dentist’s value system, work ethic, integrity and desire to look after the patients’ well-being. Obtain references to determine how the new dentist treats the staff, whether he or she has any personality quirks, and whether he or she is a hard-working, quality practitioner.
- A written agreement up front.
A verbal agreement is not worth the paper it’s (not) written on. Make sure that there is a written agreement in place before the new dentist sees any patients. The agreement should cover the initial associate period and address all phases of the transition process.
- A good faith deposit.
The fact that the new dentist is committed to the practice means nothing unless the commitment is backed up by cash. If the issue of the deposit becomes a deal breaker, break the deal! Never enter into a transition arrangement without receiving an initial deposit of at least 10% of the purchase price upfront.
- Assist in developing the patient base.
Do whatever you can to assist the new dentist in building production and help him or her to become successful.
