You are working harder than ever before, but there does not seem to be enough hours in the day to get it all done. On top of that, you are potentially thinking about calling it a career and are looking for someone to take over your practice. Is it time to bring in an associate?
If you have a general practice and are handling more than 2,000 active patients, more than likely you need an associate to help with the load. Another way to gauge the demand is to take a look at the number of weeks you’re booked ahead. If you’re booked solid more than a month in the future, it is another good indicator need some help.
Return On Investment
However, like all business decisions regarding your practice, you must evaluate the return on investment (ROI). Working with your financial advisors, you must determine the expected financial outcome for both you and your new associate. Will they be offered the potential to invest in the practice and take partial or complete ownership? Or will you bring them in as an employee?
Consider that it is not unusual for dentists brought in as employees to leave their employment to take ownership positions in other dental offices. If you are planning out an exit strategy, it is far better to offer an ownership position to your associate. The sense of ownership will engender loyalty and prevent them from leaving on a whim. Your exit strategy will be smoother and create a better foundation for the future if you can provide an ownership opportunity for your new associate.
Meeting of the Minds
However, there are several things to keep in mind. Partnerships work well when there is a work culture and personal philosophy match. Your new associate should be reasonably like-minded with your beliefs about how the practice should be run. Major philosophical differences will not end up well. It is better to know ahead of time.
In addition, you must carefully structure the financial arrangements and options of the buy-in. The financial obligations of the new associate will directly impact their cash flow. There are several ways to structure an associate’s buy-in. You should consider the individual circumstances of your practice and adjust the payment structure and investment costs, as well as important tax matters.
Missing your kids’ baseball games and dance recitals is no fun. Don’t let an overloaded practice prevent you from leading a full life. Consider adding an associate, and work closely with your financial team to make it a win-win for everyone.
Call BWTP today to discuss your practice with one of our dental accountants. We’re happy to assist you in getting your practice finances in order!