Now that you have psychoanalyzed yourself, let’s look at the common warning signs, detours, and red flags that you are guaranteed to run into. Remember, as we look for a practice, that there are no perfect jobs. You will never be able to check all the boxes on this list. I will try to highlight the “can’t do without” items. Remember, we are trying to help you see through the distractions in order to understand the reality of your situation. Knowing this, let me add one more salient fact: 70% to 80% of the dental practices looking for an associate are not ready, have no clue on how to run a multiple doctor office, and few, if any, will even come close on this list of things you need to have. Instead, they will check most of the red flags. Most young doctors are naïve enough to think that if an owner doctor is looking for an associate, they must really need one. Nothing could be further from the truth if you see 3 or 4 of these red flags pop up. Having an associate is rarely instigated just because of high patient demand and excess capacity. Instead, it often times is a check in a box that doctors think they must have to “feel successful”. The reality is that success comes first and then the associate is added. If you are an owner doctor dreading this (that was a typing error that I left in, but should have been “reading” this and most owner doctors can’t handle the truth), keep in mind that successful transitions with an associate require you to have the space, staff, twice the new patients you currently have, great systems, and an overhead no higher than about 64%. Fudge on any of these and you are guaranteed to have a failed associateship on your hands within 6 months of hiring a doctor. This list cuts both ways.
THE DREADED RED FLAGS OF ASSOCIATESHIPS
“WARNING”: As you read this list, keep in mind that there are no perfect jobs or perfect transitions. There are good, better, and bad, but never perfect. The second thing to remember is that you should never ever “fall in love with the practice you are looking at”. Doing this creates a “halo” effect that can blind you to the reality of the job. Be pragmatic and work the numbers and the actual reality of what this office looks like before you get excited about the job offer.
What follows is a concentrated dose of reality in the form of word pictures that each and every one who is reading this should take to heart and commit to analyzing each practice before considering working in the practice.
- Doctors first associate. Like a first child, the first associate is generally a trial-and-error game that usually ends up with an equal mix of good and horrible. Few doctors are actually poised for growth, have the facility, and sufficient new patients to keep an associate doctor busy. If this is a virgin office when it comes to associates, I would be very, very careful and selective about even considering this. On the other hand, there are diamonds in the rough out there. Sometimes you see this type of practice check 90% of the boxes. One of the things that comes up is the schedule. These first timers like their schedule and are usually not up for adding days or expanding hours or changing it in any way. This is something that must be discussed. In fact, you might want to share this list of red flags with them and let them do their own soul searching. The last thing is that if, while speaking to the team and doctor, they seemed surprised when you ask obvious logical questions, take a pass.
- The offices’ last associate and why it didn’t work out. This is a great point of inquiry. Check with the team: Why did the last person leave? Was he or she fired? Did something wrong? How long did they work there? What did they produce monthly? You get the idea. Source out the story from the office. Secondly, find out how to contact this past associate and do the same thing with them: ask the same questions. While this may not be a deal breaker, I would rather know why the last associate failed to stay. It’s just like asking a new patient why they left their last dentist. Make sure the stories match and, if not, delve deeper. You will want to know how many new patients the previous dentist saw per month, their production, how they liked the team and owner, etc. Is the reputation of the practice good? Whether you are an owner or someone looking for a job, remember that associates do not cure problems in a practice. They multiply them.
- High turnover rate of staff. One of the obvious symptoms of a poor culture and broken business model is high staff turnover. Not being able to keep or even find good team members is a clue that “you” won’t last long either. Find out what you can from the team and ask what they like about the office and job. If possible, find out why people left. If you get a lot of comments like “the office is ok”, take a pass. You will not be the one to transform this office. It either has a great culture, consistent growth, and a committed team or it doesn’t. I would look for teams that are excited about the practice and about the owner doctor and about the future growth of the office.
- The owner doctor’s ability to handle the day-to-day challenges in the office. Basically, when you are visiting the office take the pulse of how the doctor interacts with the team and with patients. Keep in mind that they are on their best behavior when you are there for an interview. It will not get any better than that first impression they make on you. Is the doctor respected and do they communicate well? Make sure they pass the sniff test.
- Facility capacity and overall atmosphere. When you first drive up, does the office look inviting? Is there adequate parking? How about a great sign? Lawn and landscaping up-to-date and well taken care of? When you walk through the door, does the office smell like a dental office? (That would be a bad thing.) Do you see fingerprints on the door glass, a bloody 2×2 in the landscaping, faded parking lines, overgrown trees blocking the signage, etc? Anything that would not inspire a consumer is a red flag and an office that is blind to the arena they work in. Not a good sign. The president of American Airlines made this analogy when he said this about their passenger’s opinion of his company: “Coffee stains on our seat trays mean we don’t do good engine maintenance”. That is exactly how a consumer sees your office. How were you addressed at the front desk? Did things look cluttered? Is the flooring clean and new looking? Are walls decorated and clean? Is the décor tasteful? As you tour the office, did the ops, sterilization area, staff area, and front desk look tidy, organized, and well thought out? Be very discerning about your first opinion on the facility and those that work there. Are they a cohesive team, or just a random group of people that happen to work together?
- Take the time to look at and read all of their on-line reviews. If the reviews average 3.8 or less, you are probably in the wrong office. Don’t limit your search to Google. Look at all of them you can find. What did they say? Did you notice the same thing in the office? Are they current? Are there at least 50 or so reviews if it is a solo office, or hundreds in a group practice? Reviews go hand in hand with their ability to ramp up their new patients. Few or no reviews means it is unlikely that the office has the bandwidth to get more new patients for the associate doctor.
- Do a State Dental Board search for the owner doctor. You need to know about any State Board actions taken against the office or doctor. Their goodwill can be crushed by lawsuits and Board actions. You just need to know what you are getting into. NOTE: Before I go into any business meeting, I always run a $75 background check on the person I am about to sit down with and possibly do business with. How much more important would this be if you are looking at this job for a potential partnership or buy-out in this dental office? It just seems to create more transparency in the discussions and gives me the peace of mind when I am about to invest time and money in a deal. Just saying, you can’t be too prepared.
- Review the schedule. Look for production per day, cancellations and no shows on doctor and hygiene schedule, and the number of appointments booked in hygiene 3-4 months out (hygiene recall should be 85%). If you look out 3-4 months and only see half the day booked for hygiene, it’s a 50% recall and the office is not ready to have an associate. Also look at types of appointments, appointment schedule intervals, how long to get a new patient into the office, how booked out are they, and the number of new patients per month. Is this practice poised for growth or is it plateaued? Even worse: Is it declining in numerous areas?
- Take a long hard look at the demographics within a five-mile radius of the office. Go to www.zipwho.com or www.unitedstateszipcodes.org and see if this office is in an area that would be ideal for practice growth. Income levels should be over $45,000 to about $80,000 for a family. Cost of living can destroy good incomes so look at this carefully. Places that are 80% higher than average for cost of living should be avoided. Educational level will indicate dental need and likely consumer interest in dentistry. Higher education indicates an educated consumer that feels their teeth are important. The negative is that higher education means that they have always gone to the dentist twice a year, had their teeth cleaned, and anything needing treatment is usually already done. Bottom line is that higher incomes don’t mean the need for more dentistry. In fact, comprehensive dentistry for young, educated, highly paid individuals is often just a cleaning and a bleaching tray. In demographics like this, you might need twice the number of new patients to do half of the production. Median age needs to be greater than 32 years old. There should be household numbers greater than 2 indicating a growing community with both kids and adults. Race demographics and unemployment as well as area growth will indicate the ability to increase new patients. These demographic indicators will also suggest opening practices that might include Monday through Saturday. Be critical and tactical about seeing the details of your audience before signing up for a job. If you are going for an associate job, take on an ownership mentality as if you were buying or owned the practice and wanted it to grow 15% plus a year consistently. Then ask yourself what you would do differently.
- Find the ratio of dentist to population. You can buy the data from a “list broker” or if it is an “open records” state, go to the State Board site and look up the dentists in that zip code. Ideal would be about one dentist per 2000 people, or 1:2,000. If it dips below this, say, 1 dentist per 1,200 people, the practice will struggle to get an adequate number of new patients for the addition of an associate. Poor ratios indicate a poor location for future growth. Walk away if the numbers are not good.
- Death by numbers. There will be numbers that would really help you find a great job but are hard to uncover in a normal visit to the office or interview. Let me list a few and then see what you can find without being too intrusive with your search or questions. Find the average collections a month and then do a little math. Divide the total number of full-time employees (this includes the associate and only leaves out the owner doctor) and divide it into the average monthly collections. The average practice will be about $13,000 per employee per month. This will never work to bring in an associate and indicates a poor office, poor performance, poor systems, and definitely not ready for an associate. Ideal would be in the $20,000-$25,000/employee/month. Next, do the same thing with the number of ops. Divide the number of ops into the average monthly collections. Ideal would be in the $25,000-$30,000/month/op. Average will be in the $14,000 range and this office will never be able to support an associate. One thing to consider is just the opposite situation where the office is killing these numbers but only 6 ops. The question there is: How can they increase the number of new patients for you, or have the physical capacity in the form of ops for you to work and grow? This office must have solid plans for expansion, or you will never succeed here.
Those first two numbers would be easy to get. The rest of these will be unlikely for you to get access to. But from the point of understanding what a practice ready for an associate will look like, I will list them anyway. A practice with one doctor and 2 full time hygienists should be collecting about $100,000 to $120,000 a month. One third will be hygiene (or about $40,000 in this example) and the doctor would be doing $80,000. Ideally those numbers would be higher, but these are doable. Lower than this indicates insufficient new patient numbers, low case acceptance, and poor production. Practices that are poised for growth and an additional dentist will have these higher numbers and will also have learned the essence of high-level practice management, consistent growth, and the ability to increase new patients.
- Call the office as if you are a new patient shopping for a dentist. Before the call, explore their website along with any photos of the office. Go to Google Earth and check out the curb appeal and surrounding area for number of homes and location from the perspective of roads and destinations for the population living within five miles of the office. Now make the call. How many rings did it take for them to answer? Did they put you on hold? Ask some questions about the practice: How many days until you could get an appointment for a cleaning and even ask if you can bring the whole family to the office. See if they ask the right questions, seem knowledgeable, and come across as caring and compassionate. Then, after you hang up, ask yourself if you would want to schedule an appointment with this office. All of your potential patients will have to navigate this process. Would they be impressed, or would they be put on hold for 5 minutes and the person that finally answers comes off less than remarkable? Your future will depend on these team members.
Let’s break away here and I will finish up next week. Create yourself a check list and try to find out at least 75% of these numbers and situations to consider before taking a job. There are times that you have to settle for what you can get, but never stop searching to improve your odds of moving from employee to owner. You are the future of independent dentistry. I know you can do this. Read and reread this information and then give me a call with any questions. Some, or even most, of the answers can be found in The Super General Dental Practice. Get yourself a free digital copy at www.supergeneralpractice.com.
Michael Abernathy DDS
972.523.4660 cell
[email protected]