04 Apr Career Crossroads
You’ve worked very hard during the GROWTH phase of your practice cycle and successfully built a practice that is running smoothly and profitably. You are now in the very busy MATURITY phase of the practice cycle (no significant growth or decline of the practice production from year to year). You feel like you are doing all you can do. You are very busy and it is even hard to work new patients into the practice. But still there seems like there should be more. You soon realize that another feeling begins to enter into your career routine… BOREDOM. And you find yourself frequently inquiring, “What’s next?”
Boredom is a common phenomenon with mature practitioners. You expended so much energy while you were building your practice that the long awaited MATURITY phase has you feeling somewhat unfulfilled. You really need a new frontier to keep your interest level high! You just can’t get the feeling out of your system that there must be something more fulfilling than this!
You will be glad to know that there is absolutely nothing wrong with you. These feelings are expected! And there is a significant reason why… SOLO ECONOMIC DEPENDENCY!
Dentistry is basically a “do it yourself” business. And that is the problem! You are producing the bulk of the income in your practice. If you were to accept the fact that you can’t do any more production than you currently produce, then you are also accepting the fact that you can’t make any more money than you currently earn. That’s an unpleasant thought. So you seek out alternatives. Maybe you could take some courses and learn how to work more efficiently and possibly shave some valuable seconds from a procedure. You may be able to learn how to manage time, staff and patients a little better. This continued education may increase gross revenues somewhat, but the truth is you’ve peaked, topped out. You have reached your SOLO ECONOMIC THRESHOLD! You are at the point in your career where either physically or mentally you are doing all that you can possibly do. You are about as successful as you can possibly be going it alone!
Dentists are typically very hard workers and tremendous over-achievers. The more they accomplish, the more they want to accomplish. Hence, once a dentist reaches his SOLO ECONOMIC THRESHOLD he begins to wonder what is next. He wonders how he can increase his income without increasing his already busy workload. He wonders what it would be like to have income in the practice that is not directly attributable to his personal efforts. He has seen how a hygiene department can provide passive income (income that is derived from the efforts of others) and now he begins to wonder if there are other ways to reap the benefits of passive income.
And then it happens! The bulb lights up brightly! Almost every dentist begins to wonder what his practice would be like if he takes in an ASSOCIATE.
Associateships are indeed popular alternatives for the dental profession. In fact, it’s the most common approach or solution for mature dentists seeking more from their careers. It’s a natural thought pattern! After all, most practitioners started their careers as an associate.
But unfortunately, the vast majority of associateship relationships don’t work out as a long-term solution… and in fact, it is estimated that only about 10% of all associateships work out at all!
Why? Not enough patients!
It should be noted that there are basically only two reasons to bring an associate into a practice. Either you are ready to significantly back down on your personal production (and personal income) thus providing a sufficient patient flow for your new associate to be instantly busy OR your practice has a much larger patient pool than you can possibly service.
NOTE: Don’t have the unrealistic expectation of expecting your associate to build a practice within your practice. New patients aren’t likely to come out of the woodwork just because you bring in another doctor. And even if they do, your chances of putting a long-term relationship together will be slim at best. The associate that builds a practice within a practice will likely NEVER see the benefit of purchasing your practice. He already knows he can build a practice… and why would he agree to purchase from you the patient goodwill the associate has developed?
In addition to a large enough patient pool, you also need to have a formal succession plan. A good associate does not want to be an employee forever, and you don’t want your office to become a revolving door for associates. You need to develop a long-term plan for equity participation. You will want to establish a method of compensation that rewards productivity and provides for a return on investment. Then you provide for a mandatory order of succession. When you want to sell (either all or part of your practice), the associate must buy… that’s security.
If you do have a large enough patient base OR if you are willing to back down on your personal production enough to support an associate, you are probably ready for the associateship step. BUT if your practice is like most practices and you are like most practitioners at this stage in your career, you are not ready for an associate!
“But I want more and I still think an associate can help me develop more income. Is there nothing I can do to increase my personal income and improve my “Quality of Life”?
CONSIDER A PRACTICE MERGER: Possibly the absolute best option available to the mature practitioner who is seeking more and considering an associate is a practice merger. A practice merger occurs when one practice owner acquires a competitor’s practice and “merges” the two practices together into a single practice. The financial results of a merger are simply incredible! It is quite common for a practitioner who acquires a practice for merger to increase his passive income by $50,000 to $100,000 a year… with the increased earnings occurring in the very first year of the merger!
“Are you nuts? I can’t acquire another practice; I already have a practice that is working me so hard I don’t have enough personal time for the other things that are important to me!
Not only can you acquire a practice for merger… in order to dramatically improve your “Quality of Life”, substantially enhance your personal income and significantly accelerate your retirement options, you SHOULD acquire another practice!
Aside from the immediate increase in YOUR personal income, think about the options that a merger creates for you. The seller in a merger will either want to work for you as your associate or sell and immediately retire. If the seller wants to continue to work after the sale, you will gain a great “associate” that is providing you with excellent passive income. This seller-associate needs no supervision; he has a long-term relationship with the patients; he is experienced which allows you to take some well-deserved time off; and he is definitely not a danger to develop a practice-threatening relationship with YOUR patients. And one day the seller will want to begin phasing out of dentistry… you will then have a legitimate reason and need to replace the seller with a younger associate who will be your buyer one day.
What if the seller wants to retire immediately? That’s OK! You then have a legitimate reason to bring your “heir apparent” into the practice. You will enjoy the immediate profits from the merger, you will be able to select which of the seller’s patients you wish to serve personally and you can direct the other patients (the seller’s patients you don’t want and some of your own, if you wish) to your associate. Your associate is instantly busy and you are instantly wealthier.
Contact PARAGON today to explore your many lucrative options. You will be very glad you did!
