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A Strategy Too Far

I’m sure this has happened to you. Someone asks you a question and you answer it, then over the next 24 hours you get the same question about the same topic that you really did not expect to hear. I have had 6 calls in two days all relating to associates and partners in a dental practice. What was weird was that even though a couple of doctors were just out of school a few years, a couple were out 10-15, and the last two were over 55. None of them were ready for an experience with an associate. It was almost like having an associate was going to fulfill some random goal that they simply needed to check off their bucket list. In each case it was rather black and white, because following through with any of them would have doubled their overhead and probably ruined them financially. Tangentially to the decision to hire these doctors was the investment in staff, equipment, and expanding their facilities to make it happen. What they forgot was that transitions, done poorly, always end in disaster.

Associates/Partners are not the next step unless they are. In these cases it is as if these dentists didn’t feel like they were successful or had “arrived” unless they had a second doctor working in the practice. A lot has to happen before anyone should consider bringing in an additional doctor. Regardless of the reasoning behind this move, you need to take a hard look at where you are before taking on the responsibility of another mouth to feed. Marginal practices should never consider this strategy. It will not end well.

The Young Doctors: Each of these two had purchased practices 2-3 years ago, seen some growth, and felt like they were overwhelmed and needed to bring in another doctor. Huge mistake because they still had crushing school debts, practice debts, overheads over 70%, not that many new patients, and poor staff retention with marginal systems.

The Mature Practices: Both of these doctors were doing about $100,000/month and felt like adding the associate was the only way to increase and break out of their production plateau. Both offices were overstaffed, had just average collection rates, only a 42% recall rate, and poor consumer hours and systems.

The Exit Strategy Practices: I can’t be sure, but both seemed a little burned out, had come to the realization that divorce, lack of savings, spending more than they made, with mortality coming quickly, while having a poor attitude about change and work ethic meant they would never be able to retire, and this was their last great opportunity to turn around a career filled with poor choices.

Regardless of the age of the doctor, maturity of the practice, or skill of the doctor, bringing in associates can be a strategy too far. It is all about “staging” this in a particular way. Here is a quick, down and dirty, must have list of what is necessary before considering an associate:
1. Owner doctor’s production (not the entire office) needs to be in the $600-$800/hour range.
2. Overhead must be below 65% and preferably below 60%.
3. Hygiene: Twice the number of hygiene hours compared to doctor’s hours, with the hygiene department producing about 33% of the total office production.
4. At least 50% of all new patients come from direct referrals from existing patients.
5. New patients need to be at least, and preferably more than, 40 new patients per doctor per month (50-75 is ideal).
6. Production per employee should be close to $20,000 per employee per month.
7. Production per operatory needs to be close to $25,000 per operatory per month.
8. Collection rate should be at least 98% of net production (after write-offs).
9. Hygiene recall or continuing care needs to be over 60% (80% is ideal).
10. Little or no debt on the practice. Financial captivity can hamper and/or destroy this strategy if you are not careful.
11. The senior doctor has to be poised for growth: Staff, facility, financially, energy, engagement, and physically. Coasting should be the last thing on your mind. Associates don’t eliminate problems. They create and/or magnify them.

That’s it in a nutshell. As you can see, a lot has to happen for you to consider this as a growth strategy. If you would like the quintessential guide to adding associates, partners, or any form of transition, just call us at 800-252-0955.
The book is called THE ROADMAP to Wealth & Security: Your Complete Guide to Dental Transitions. Also available to order online at:

This is how you Summit.

Michael Abernathy, DDS
[email protected]
972-523-4660 cell