You’ve Closed … Now What?

Part One: Staffing

“But we’ve always done it this way.” Really, is there a more dreaded phrase for the new owner of a dental practice?

Like it or not, chances are good you can expect to hear just that when you take over an existing practice. That’s because when the business is sold, often the staff is the last to know. And most people just don’t like change.

Acquiring a practice also means acquiring the people who come along with it. Since the doctor selling her practice wants to put everything in a positive light to make the sale, she may over exaggerate the staff’s experience, competence or satisfaction – promising you a well-oiled machine that patients adore. 

Whatever the reason a dentist sells their practice, you won’t get to meet the staff until the sale is final and they introduce you as the new owner/boss. I like it best when they do this immediately after dropping the bombshell that they are moving on, before too much behind-the-scenes gossip and speculation can occur. It’s only natural that people will want to know how this will affect them – will they get fired? Suffer a pay cut? Lose their benefits? 

It’s important to greet each new staff member with an open mind and to remember that while you have known about this sale for a while, it’s still quite new to them. I always start out by complimenting the dentist who is leaving and expressing how much I want to continue their legacy of excellent patient care. I am sincere, enthusiastic and speak from the heart. 

I also let the staff know that I am poised for growth and that I welcome their participation on this journey. Things will change, of course; as opposed to winding down and retiring, I am looking to expand the practice and do more with it. 

After acquiring nine practices, I can always tell, pretty much right off the bat, who will stay and who will go. I’d say about 25 to 50 percent of staff members end up quitting. Some don’t want the increased hours I often require, some don’t like working for a woman, and sometimes it’s just not a good fit. And yes, I brace myself for complaints that, “we’ve never done it this way before — we’ve always done it this way.” I will pull that person aside and respectfully let them know I just don’t want to hear it. I am now part of the we, and this is our new approach. 

I will most likely be offering a different health plan than they’re used to, but in the case of senior staff members I want to keep, I grandfather in their co-pay deal. And I strive to make their hourly jobs feel like a career by offering a more structured benefits package, performance-based bonuses, perks like a 401(K) and incentives to those who recommend a successful new hire.

Sometimes there is absolutely nothing you can do to win over a staffer and it quickly becomes obvious that it’s to both your benefit to part ways. I’ve come to learn that the last thing I want is an unhappy employee who may be badmouthing me to the patients, and that my practice will always grow, even when I am temporarily understaffed. That’s something I wish I could have taught my younger self, who took every resignation personally — and almost tragically.

1. I can’t afford it.
2. Corporations will buy all the best practices.
3. Owners have a less flexible lifestyle.
4. As an associate, “it’s not my problem.”
5. You’re on your own.

At the age of 15, I knew that I wanted to be a dentist and own my practice. This goal spurred me through dental school and impacted all of my decisions. I saw owning a practice as achievable and desirable. But the more that I mentor young dentists, the more I find that many believe owning their own practice is an unattainable goal, or at best, a long way off in the future. In the face of significant debt, lack of business experience, and limited funds, many new dentists believe that working as an associate is the only viable option. There are some myths about owning a dental practice that is widely believed. I want to take a moment and address the five most common misconceptions that might just be keeping you from stepping into success as a dental entrepreneur.

1.  I can’t afford it.

When you graduate from dental school with debt in the six-figure range taking on more debt to own a business can seem counter-intuitive. Who would give me financing to buy a practice? According to Dental Economics (The Case for Private Practice, Jan. 2019) banks are currently willing to loan money to those purchasing a dental practice, and small business loans are very attainable, even for those carrying large debt. This new debt is the kind that will enable the dentist to pay back their student loans and make a more significant profit.

Let’s look at some numbers. As an associate, your income is limited. You are an employee and earn a salary. Any personal expenses you incur cannot be legally written off on your taxes (i.e., meals, travel, car mileage). According to the Bureau of Labor Statistics, the average salary of a dentist as of May 2018 was $175,840. Of this, a large portion will go towards taxes and paying off student loans.

Fast-forwarding ten years, and a dentist working as an associate may have her student debt paid off.

If the dentist were to purchase a practice however, she can make significantly more. The MDA estimates that 49% of Michigan dental practices have incomes of a million or higher.

Instead of believing that you can’t afford to own dental practice, maybe the reality is, you can’t afford not to!

2. Corporations will buy all the best practices

So, you have your small business loan, and you’re ready to purchase a practice.  Aren’t you going to have to compete with large corporations who can write a check and buy a practice?

In actuality, the fact that you are NOT a corporation will play in your favor. Many retiring dentists would rather sell their business to one owner who will care for their patients and respect the character and culture of the practice.

3. Owners have a less flexible lifestyle

Many believe that owning a practice increases your level of responsibility, and the hours you must work to keep the business running. While some business owners feel the need to micro-manage, this does not have to be the case!

I currently own and operate eight dental practices. I built teams in each office and then empower them to work for my success. As an owner, I create my schedule and choose the hours and days that I want to work.

As an associate, there is less flexibility. You will always be at the mercy of the practice owner and the days and hours they want you to work. Taking time off to travel and enjoy personal pursuits will be limited to a narrow window.

So, in reality, the practice owner will always enjoy more flexibility and freedom than a hired associate.

4. It’s not my problem

It’s easy to assume that as an associate, you would bear less responsibility, both legally and within the organization. The prevailing thought is, “it’s not my problem!” As a respected member of the medical community, an associate is just as vulnerable to malpractice lawsuits.

In this age of social media, associates are just as susceptible to bad reviews on Twitter, Yelp, or Instagram in addition to online rating services like ratemds.com.

As an employee, it may not be your problem if the technology, systems, or equipment are not up to par, but it will affect your level of excellence.
And you will not be in a position to effect changes.

The business owner is empowered to solve problems and pursue the highest level of service.

5. You’re on your own

If I purchase a practice, don’t I have to be ready to run every aspect of the business? “I’ve never done payroll or purchased software or managed an office,” you might say.

You have just spent several year studying dentistry and preparing to be a medical professional and may feel at a loss when it comes to the realities of running and owning a business.

The good news is, you don’t have to do it all by yourself!

I can help coach you through the details and share what I have learned on my journey. Let’s talk!