POOR TRANSITIONS ARE ALWAYS PREDICTABLE
I have gotten so many calls in the last three months about bringing in associates that I’ve lost count. I thought I would point out a few of the “can’t win strategies” that I have seen. Before we start, let me assure you that I am whole heartedly for growing your practice to the point that you need another doctor, so that you can expand your hours and services to compete with corporate dental practices. For you to survive as an independent dental practice you will need to consistently grow, alter your practice strategies to stay ahead of the new dental economy, and continue to over-deliver the services and consumerism that we find in any Super General Dental Practice.
Here are the top 8 “can’t win strategies” that I get called to fix, after the fact.
- Not keeping the end in mind. Why do you want to add an associate/partner? I hope it’s not just a bucket list item to check off before you die. This should be a carefully thought out strategy with perfect timing. In fact, adding another location falls into this same category. Both can create stress and financial disaster to those who don’t know what they are doing. The “end in mind” here should be to lower overhead, increase production, add more services, hours, and satisfy any unmet consumer need you can think of.
- No advice or knowledge. How many of you would step into a ring with a world champion MMA fighter because it looks neat on the TV? You are pretty much guaranteed having your head handed to you. Transitions are fraught with far more dangers. Get an attorney and a CPA who have experience in healthcare law and tax strategies. You need the best advice you can get. If the general consensus from all advisors is that this is poor timing, then don’t do it. If you are looking for a place to start, go to our web site (www.summitpracticesolutions.com/products) and order my book: THE ROADMAP to Wealth & Security – Your Complete Guide to Dental Transitions. Also on the web site you can find access to recorded radio shows covering transitions (Dental Doc Talk Radio).
- Poor or no contract. Probably two in ten doctors that I speak with have no contract with their associates or partners. If they do, another three of ten have not had an attorney review the contract or write it in the first place. Contracts are designed to deal with any problems in the relationship. The contract creates legal remedy to insure that you don’t put yourself, your heirs, or your practice at jeopardy. This is not an expense. It is an investment.
- Hiring a doctor just like you. In a business sense, you don’t want to find a doctor that wants to do exactly what you do unless you are exiting the practice. For those hiring associates or transitioning to partnerships, you want to make sure that the new doctor wants to do and can competently do all of the things that you can’t, won’t, or don’t do. In this way you increase the range of clients you can attract, not dividing an already poor new patient load between two doctors.
- Keeping the same hours. Before you ever consider hiring another doctor, consider the need for expanding your hours to include all day Friday and Saturday. Keeping the same hours guarantees that you will hit the wall in increasing new patients and having enough operatories to service the hours and staff you have added. You’ve taken a poor strategy to start with and compounded its negative effect on your bottom line.
- Taking too long to train. I am mortified when I hear a doctor tell me that their associate is coming along but is a little slow in adapting to the existing office routine. In this same example, the younger doctor isn’t producing over $20,000 a month and the amount he or she is producing has actually reduced what the older doctor could have done without them. I would expect the young doctor to be producing in the $50,000 per month range within 6 months, or you have a real problem to deal with. Usually when we see an under-producing associate, the blame lies equally on the owner doctor who was not poised for growth, and the associate’s inability to mitigate the challenges they find themselves in. Giving the associate a reasonable expectation of performance is fair and necessary. Knowing what those expectations should be is just the starting point in a successful transition.
- Not having an unlimited supply of new patients. I have never seen a transition succeed when the senior doctor expected the new associate or partner to just come in and “build their own practice” within the existing practice. How silly. The senior doctor is responsible for marketing, expanding hours, adding and training staff, and acquiring the needed new patients to make this transition work. You will need at least 40 new patients per doctor per month to grow this practice. As it grows you will also need to have twice the number of hygiene hours as doctor’s hours.
- Not doing whatever it takes. This is a tough one. It requires patience, patients, money, systems, and an informed, fully engaged staff. The lack of any one of these will spell failure.
Learning the ins and outs of consistent growth through a transition is how every dentist will be measured in the future. This is how you Summit.
Michael Abernathy, DDS