Dental Associateships

How to Know When to Add a Dental Associate

Adding a dental associateship to your office is probably something you’ve thought about at one time or another. The real question isn’t really whether to add an associate. Its how to know when to add a dental associate. From your point of view, this might seem like an unanswerable question. But for those with experience in adding associates, it really all comes down to your numbers and knowing what they say about the capacity of your practice.  The problem is that many dentists don’t know what indicators to look for or how to bring an associate on properly. This creates a lot of problems in a lot of offices.

How Busy is Your Practice?

First, the key driver is, how busy is your practice? If your practice is so busy that you can’t handle the patient load on your own, then you may be ready for an associate. If that is not the case, then you are definitely not ready to add an associate. If you are intent on growing your practice, but aren’t yet that busy, your focus should be on new patient growth, not adding an associate. Get your practice to where you literally cannot do any more, then reconsider a dental associateship.

Dentists add associates for all kinds of dubious reasons: your peers are adding associates; to have a colleague in the office; to cover patients while the dentist goes on vacations; to impress your dental classmates at your ten year reunion; so a male doctor will have another male team member. These are all unsound reasons, because none of them indicate whether the practice can support an associate, which is the only reason to start the process.

Indicators of When to Add a Dental Associate

First, your practice must be so busy that you cannot physically handle your patient load. Once you reach that point, you need to carefully review your practice records and look for the indicators that your practice can support another doctor in the office. These include your number of active patients, your office production, your referrals, and your case acceptance rates. Taken together, these numbers will give you a good idea of the health of your practice and whether it can bear a second doctor.

Number of Patients

The number of patients will tell you if your practice is busy enough to keep an associate occupied (and producing). The generally accepted rule is that a general dental practice needs to have a minimum of 2,000 patients before considering an associate. This can vary depending on the practice—pediatric practices should have 4,000; orthodontic practices only need about 250 active cases.

Also, look at your schedule. Patients and hygiene should be booked out four-to-six weeks. Importantly, when looking at your booking schedule, you are considering next appointments only, not booked treatment plans.

Finally, look at the number of new patients you are adding each month. The new patients are largely what will feed your new associate. If you are planning to continue working full time, you should be adding 30 to 40 new patients per month.

As you can see, this is a fairly straightforward assessment of numbers. It’s not about what you feel like your practice ought to do, it’s a clear-eyed view of what it is in fact doing as a business.

Office Production

The office production will tell you if your practice is earning enough to pay for a new associate (and additional hygienists). What you are looking for is a consistent total production at least $140,000 each month. While this may vary by market, keep in mind that this is a floor, not a ceiling. It basically works out to about $90,000 for the new doctor and $50,000 for the hygienists.

Another way to come at this is to consider what is produced in each of your treatment rooms. If you are producing at least $25,000 to $30,000 each month in each room, you are likely hitting your capacity. This is a good indicator of when to add a dental associate.

Referrals

Your referral rates are an indicator of your cost per new patient. Strong referral numbers, in the 40-50% range, mean that you are doing well at keeping patients and their satisfaction with the quality of care and service is bringing in new patients by word of mouth. If your referral numbers are low, it may mean that you have other systemic problems that need to be solved before you think too much about a dental associateship. If you adding another doctor while your referral numbers are low, you could make the problem worse.

Case Acceptance Rates

Your case acceptance rates are an indicator of what percentage of your patients are completing their recommended treatments. It’s related to your referral numbers, in that it’s an indicator of the strength of your patient base. It may also show whether your practice is providing a consistent satisfactory level of care and service (although pricing and other factors may also impact these numbers). Your case acceptance rate should be at least 80%.

Low acceptance rates reduce your profitability. Given that associate case acceptance rates tend to be lower than those of the senior doctor, bringing on an associate when your case acceptance rates are not where they should be will likely only make the problem worse. If you are under 80%, take a look at why its happening and focus on resolving those issues.

Capital Sufficient to Carry You Through Until You Get a Return on Investment

If you have 2,000 patients, are booked six weeks out, have a 45% referral rate, and an 80% case acceptance rate, you are well on your way to a strong associateship strategy.  However, you have one more question to answer: do you have the capital to pay the dental associate’s salary until they are producing enough to cover it themselves?

There are two facts that you need to know in order to answer this question. First, most practices can expect to take a financial hit after hiring an associate. After all, you have to pay them regardless of what they are producing in those first days, weeks, and months. Second, an associate typically will need to produce about three times their salary before your practice breaks even on the compensation package you’re offering.

You need to carefully consider what the costs will be—not just in salary, but in benefits and other overhead costs—and whether your practice can bear those costs for six-to-twelve months. If not, adding an associate should be a disaster for you, for the associate, and for your practice.

If you don’t think your practice can bear the financial burden of a dental associateship, then step back from the idea and consider what you can do to resolve this issue. Most dental practices need to ramp up, both in terms of patients and cash, before they are really ready to take that next step.

Other Considerations

Even if your practice is busy and financially healthy enough to bring on an associate, you still have to consider a few things about your office in order to make sure you’re really ready. The first is whether you have the physical space for another doctor. You should have at least five doctor chairs (two for each doctor and one for shared overflow) and four hygiene chairs (two for each doctor). If you can’t fit this number of treatment rooms in your office space, you can consider other options such as keeping the office for longer hours, allowing for split shifts (e.g. the office is open for 12 hours, with each doctor working six hour shifts). This might be a better option than immediately taking on the expense of extensive remodels or expansions.

You also need to look at your office procedures. Are they smooth? Or do you have problems with things not be done properly or staff not being clear on what the procedures are? The best case for success in a dental associateship is to have well-defined office systems and procedures, ideally, written out in an employee manual, that is being consistently followed. If you lack any of these qualities, take the time to build them up before bringing in a new employee. Again, if your office doesn’t run smoothly, a new associate will likely only make it worse.

Don’t Be Discouraged!

If you’ve read this far and are feeling like adding a dental associateship is too daunting, don’t be discouraged! What you have now is an opportunity to improve your practice and avoid common pitfalls that have ensnared too many other dentists.

Adding an associate sounds like a great idea because it can be a great addition to your office, both in terms of profitability, and to have a colleague that can improve and expand your practice. But it requires a lot of thought, planning, and work. That’s where most of the mistakes are made. Take the time to properly consider your choices, carefully make a plan, and put in the work, and you will come out much better than you would have otherwise. Also, remember, you don’t have to do this all by yourself.

ddsmatch Southwest Can Help You Know When to Add a Dental Associate

As a dental broker, ddsmatch Southwest specializes in dental practice transitions, whether buying, selling, or adding a dental associateship. If you are thinking about adding a dental associate, you can take advantage of our Associate Intelligence Quotient (AIQ). This service involves the experts at ddsmatch Southwest, along with their dental CPA affiliates at Blue & Co., examining your practice and providing a detailed report that will show the impacts of hiring an associate. Why guess when you can know?

Contact ddsmatch Southwest today to find out your AIQ!

Take the Guesswork Out of Adding a Dental Associate

If you are like most dentists, you want to get as much out of your practice as you can. When looking to increase production, most doctors will consider adding a dental associate, as another doctor in the office appears to be an easy way to boost production and revenue. Bringing on an associate can be good for a practice, especially as the owner-doctor begins considering transitioning the practice (read more about that here). However, it can be anything but easy. Before you get to the challenge of how to find and bring on the right associate, you first have to determine whether your practice can really support another doctor. Below, we discuss how you can be more certain about what your practice can handle before you decide.

Have Your Practice Evaluated

The first thing you should do is have your practice evaluated by an outside consultant, like a dental CPA. While you may have a sense of how strong your practice is, this is not an area where you want to guess or take chances. Hiring a doctor will be a strain on any practice—not only financially, but also in terms of the time to find, place, and train the associate; the impact on your staff in having to adjust to another doctor; and the added responsibility of managing another doctor, who will likely have less experience, but will have their own ideas about how to practice. Before taking all that on, you need to make sure that you, your staff, and your practice are ready for it.

An outside consultant will be in the best position to evaluate and report on whether your practice can bear the financial burden. Without this step, you can’t really be certain that an associate won’t create a drag on your practice. This could be disastrous for you and for the associate, who will definitely be worse off if you hire them without being able to afford them or if they are a bad fit for your office.  

Here at ddsmatch Southwest, we work with our excellent partner dental CPAs on our proprietary Associate Intelligence Quotient (AIQ) process, which is invaluable in making this decision. More on that below.

But it’s not all on the word of the outside consultant. You should also look closely at your numbers and see what they tell you. Which brings us to the next step.

Know Your Patient Flow

A rule of thumb is that the average dental practice needs about one new patient for every $4,500 of total practice collections to maintain its current level of busyness. A caveat here, this number appears to be the one that generally works for this scenario, but this is only a broad guide, not an exact formula.  And every practice is a bit different.

But for an initial consideration, you can determine your new patient flow by looking at how many new patients you’ve added in the last year and dividing your total practice collections by that number.  For instance, if you collected $900,000 last year and added 180 patients, your collections are at about $5,000 per new patient. Using the $4,500 number, however, you would need to be adding about 200 new patients a year to maintain your current level of busyness. While 180 new patients is not far from 200 new patients, this exercise shows that, with these numbers, the practice does not have a surplus of new patients to support another doctor. Without some other factor that would increase production, a practice with this new patient flow would be unlikely to be able to comfortably add a dental associate.

What Does Your Schedule Look Like?

This question here is about how long it takes for a patient to get in to been seen at your office. Again, there is a rule of thumb in this case, but is only broadly accurate—your market may be different. The typical rule is that if a patient can schedule an appointment about 10 to 14 days out, your practice is at an equilibrium. If, periodically, your office is having to book patients 21 days out, you probably have a slight surplus of patients, but not likely enough to support an associate. If you are consistently scheduling patients 21 to 28 days out, that is an indicator that you don’t have the time to complete all the work that your office is attracting.

If you are in between equilibrium and a steady surplus, you may want to consider what you can do to increase your patient flow. This can be tricky, however, because when patients have to wait more than 28 days to book an appointment, chances are they will look for another dentist. But, until your practice has a steady stream of patients booking in the 21 to 28 day range, adding an associate will most likely have a negative impact on your level of busyness. The goal is to get your practice busy enough where you don’t experience any gaps in your schedule when the associate comes on.

How’s Your Hygiene?

How busy a practice is can be determined by two factors: new patient flow, discussed above, and the size of your hygiene department. The rule of thumb here is that for every $116,000 of doctor production, your practice will need one full day of hygiene per week. So, if your practice had a doctor production of $900,000 (not total collections) you would need about eight days of hygiene each week. If you already have two hygienists working four days a week, you are right where you should be. That’s good for your practice right now, but if you bring an associate and raise your doctor production, you may need to add a hygienist as well. That’s a big factor to be considered.

Consider Your Procedure Mix

Think about which procedures you perform, and which ones you refer out. Hiring an associate that is able to perform some of the procedures you now refer out can be a simple way to increase your overall production while not taking as much from your schedule. The principle here, as with the above considerations, is creating an excess: an excess of patients, of hygienists, and of services that can be done in-house. When you have those excesses, an associate can be a great asset to your practice. Remember, you don’t want an associate doing production that you could have done on your own.

Also, don’t limit yourself to only considering full-time associates. Depending on your practice and your market, maybe a part-time associate is a better choice. It doesn’t have to be all or nothing. Overreach in adding an associate will only bring dissatisfaction to all parties and less money in your pocket.

ddsmatch Southwest Can Help You In Adding a Dental Associate

As a dental broker, ddsmatch Southwest specializes in dental practice transitions, whether buying, selling, or expanding into new associates or new markets. Whether you are considering transitioning your practice or not, if you are thinking about adding a dental associate, you can take advantage of our Associate Intelligence Quotient (AIQ). This service involves the experts at ddsmatch Southwest, along with their dental CPA affiliates at Blue & Co., examining your practice and providing a detailed report  that will show the impacts of hiring an associate. Why guess when you can know? Call ddsmatch Southwest today to find out your AIQ!

 

Dental Associateships: Reduce Your Risk Before Buying a Dental Practice

You didn’t go to dental school with a dream of being an employee. But before you are in a strong position to consider buying a dental practice, you may need to put in time as an associate. A generation ago, starting up your own practice right out of dental school, or soon after, was a more common trend. These days, however, the marketplace has changed. More and more, dental graduates are putting in time working with another dentist, whether as a stepping stone to an independent practice, or with an eye to buying-in down the road.  The mentorship experience is also valuable, to train under an experienced guide.

This first step in your career can be critical, and the more care you take when deciding where and how to start practicing dentistry, the better off you will be long-term. The question is, how do you know which practice is right for you? Without being able to see the future, there will always be some risk. The good news is, that there are good ways to reduce that risk, and increase your chances of security and success over time.

Here are a few items to consider.

Location, Location, Location

First, think carefully about where you want to practice. You’re young, you’ve worked hard, you’re on the brink of a successful career, and you want to enjoy this stage of your life while setting the stage for your next step. Living in a cool city where you can take advantage of what urban life has to offer may appeal to you. Or, maybe you’d like to live near a coast, or near the mountains.

However, these preferences come at a cost, both literal and figurative. Cities and other popular areas are expensive. Also, they are competitive. You’ll have to work harder to get hired as a dental associate, to get a decent and affordable place to live (as you’re not earning as much yet), and to attract patients. While rural areas and smaller towns may not be your first choice, they have a lot to offer.

For more on this, read our post about the benefits of dentistry in rural areas. You can let your classmates slug it out for a small apartment and a practice with lower profit margins in the big city, while you get ready for buying a dental practice sooner than you probably could otherwise. You can save your earnings for trips to the city, or weekends at the coast where you can enjoy what it offers with less stress.

Job Interviews are Two-Way Streets

The process of locating a dental associateship is not just about you wooing established dentists. You are young, energetic, well-educated with up-to-date training, and well versed in new technology. You will be an asset to any practice you join. Getting a dental associateship is not just about getting an offer. It’s about finding the right fit. You are kicking the tires on the hiring dentist and their practice, as much as they are vetting you.

Here are some things you can do to make sure you have the data you need to make an informed choice about where to start your career.

The More You Know, the Better

  • Call the practice. Your experience with the front desk personnel can tell you a lot about how the practice operates. Do they answer the phone quickly? Are they courteous? Do they sound professional and organized? Also, call after hours to hear their outgoing message. Do they provide emergency information? Do they provide a professional impression of the practice and reflect a sound business operation? If a practice can’t manage their phones well, what does that say for the rest of their services?
  • Arrive early. Just like calling the practice, you will be able to see the front office staff in motion: what happens when patients arrive, how they are checked in, how long they wait, the culture of the office, and other things that may be glossed over in a formal interview. The front office operations are essential to a successful and healthy practice, and first hand experience is really the only way to see it for yourself. Are they properly scheduling follow ups for additional work? Are they on top of collecting payments and getting insurance information? And while it may seem awkward to sit in the waiting room, you can easily devise an excuse (being cautious about time, for instance, especially if you’ve come a long way) and the information you gather may be invaluable.
  • Don’t just talk. It’s not hard for either party in a job interview to impress the other. But talk is cheap. If it’s not offered as part of the interview process, ask for a “working interview” where you can work with the hiring dentist, perhaps acting as an assistant. This will give you the chance to impress with your skill, but, more importantly, you’ll get to see something you never would have otherwise until after you’ve began your associateship; you’ll get to see how the doctor and their practice actually function. This will tell you more than anything they can say in an interview. Also, when it goes well, you’ve given the staff something good to relay to patients as they start scheduling appointments for you.

Remember, the more information you have, the better positioned you are to make a good decision, reducing your risk.

Dental Associateships Prepare You for Buying a Dental Practice

Dental associates perform a variety of functions for an owner dentist. But, for you, this is your path to prepare for your likely career goal of owning your own practice. It’s a time when you have lower risks and less at stake, so you can figure out how to work within a practice setting, learn managerial skills, and understand what your role is—and, importantly, what it is not.

When you get your diploma, you are a doctor. You are not staff. A well-run practice, like any business, is one where the manager (here, the doctor) hires able staff members, provides them with proper training, direction, and support, and then gives them the independence to do their jobs. This model empowers staff and communicates to them that they are trusted. These qualities in a business encourage staff to do their best, build loyalty, and generally the staff will reflect trust back to the doctor. Organizations with these qualities are better suited to weather tough situations.  

This is important to remember as a dental associate, because, while you are not the manager, you are a doctor, with a supervisory role over staff. If there is an unfortunate circumstance where you need to align yourself with one side or the other, you are best aligned with the other doctor(s). If there is an issue that you think needs to be addressed, address it in private with the other doctor(s), not in front of staff. This can be difficult—we want to be fair, and we want to be liked. But remember, your job is not to befriend the receptionist, as much to provide the best dental care you can to your patients, and work with the practice members to facilitate that. By always knowing your role and being professional at all times, it will be easier for you to navigate the difficult personnel issues that will inevitably arise sooner or later over the course of your career.

You may be someone who loves to attend to all of the details. You may be someone who is independent and self-sufficient, and takes pride in those qualities. Both are positive qualities, but you will need to learn to let some of that go and stay flexible as a member of a larger team. Think about the times you’ve spent in a well-run doctor’s office. Is the doctor at the front desk? Is the doctor looking at the schedule? Is the doctor asking questions about billing and insurance?

No, because the doctor is doing their job, attending to patients. That’s your focus. Let the staff do their job. After all, that’s why they are there (and getting paid and receiving benefits). If you are looking over their shoulder, they will be self-conscious, feel second-guessed, question your trust in them, and it can create an uncomfortable work environment. If there are problems with staff, they can be addressed in private or in staff meetings, whichever is most appropriate.

Finally, while on the topic of meetings, beware of any practice that does not have staff meetings. Efficient, organized staff meetings are essential to a smoothly-running operation. Regularly scheduled meetings allow for open communication and a forum for questions, clarification, and addressing issues. An organization that only holds a meeting when there is a problem is like trying to build a boat after you’ve already launched the hull. A little extra time at the dock saves a lot of hassle out at sea. These meetings don’t need to be long, but they should be regular and always have a clear agenda to keep all staff members headed in the same direction.

If you pay close attention during your dental associateship, learning both what to do and, just as important, what not to do, you will be much better prepared for buying a dental practice when the time comes.

ddsmatch Southwest Can Help Reduce the Risk

One of the things we do at ddsmatch Southwest is place dental associates. Many dentists are thinking of transitioning their practices, but are not quite ready to go into full retirement. They may want an associate who will buy-in and perhaps, eventually take over and buy them out. They may want an associate who will expand their practice, increasing its value. They may want to stay involved, but reduce their personal workload.

We have a variety of options for new dentists looking to begin their career. Let us help match you with the right practice. Give us a call today.

Expert Advice on Dental Associate Opportunities

A associateship offers new dentists a great opportunity to expand and refine their skills, get familiar with the business side of practicing dentristy, and develop patient relationships without the burden of owning the practice and all of the responsibilities that go with it. But how do you know if dental associate opportunities are right for you?  And how can you know which dental associate opportunities will be the best fit and offer the most opportunity for career growth?

The answers to these questions are found with preparation and information. Before you can decide about whether to pursue a dental associateship, you need to know what is being offered.  That is, you need to know enough about dental associateships to be able to ask the right questions and get the information that will be critical to this important stage in your career. And while you might not (yet) be an expert in the details of dental associateships, here at ddsmatch Southwest, we are, and we can help.

What You Need to Know About Dental Associate Opportunities

One way of approaching the situation is to think of two levels of inquiry.  The first question is whether the associateship is with a good practice. That is, is it a well-organized office that is doing well and running smoothly?  The ADA has identified a good list of questions that can help you figure this out:

  • What type of condition is the equipment in?
  • Are the treatment rooms set up as left or right handed? (Can they be switched if necessary?)
  • Is the practice in good financial standing?
  • What type of patient flow does the practice have?
  • Are you responsible for filling your schedule, or will the front office provide you with patients?
  • What is the collection rate?
  • Do the other dentists in the practice have a similar philosophy of care?
  • What type of technology does the practice implement?
  • Are the patient files in good order?
  • Is the staff knowledgeable and friendly?
  • Are their opportunities for growth with this practice?
  • Check online to see if the practice has a social media presence and carefully read online reviews of the practice on Google, Facebook, Yelp, YP, BBB, etc.
  • How is compensation calculated?

These are excellent questions that should be asked about all dental associate opportunities. But there is a second level of inquiry that is equally important, yet more difficult to figure out: is this practice a good fit for you personally? It’s in answering this question where ddsmatch Southwest can really help.

When we assist dentists with either associateships or buying or selling their practices, we put our experience with these transactions to work for you, helping you identify opportunities and potential problems so you can make the most informed decision.  Some of the things you should consider are:

  • Is the practice prepared for an associate? An associate can impact every aspect of a practice, and, especially if a practice hasn’t had an associate before, requires a lot of consideration and planning.  You want to make sure the owner dentist has thoroughly considered the impact on the staff and practice and has prepared for it.
  • Is the owner dentist considering your unique personality and how it will fit? Even if the owner dentist appears to be making this consideration, you should be carefully considering it as well. Is the owner dentist easy to talk to? Do you feel comfortable with them? What about office staff? If you haven’t been offered the opportunity to speak with the office staff, ask to do so, preferably without the owner dentist present. Any refusal to accommodate this request should be cause for concern.
  • What are the owner dentist’s goals for their practice? For a lot of new associates, this is the first step on their career path and it can set direction for several years.  Make sure that the owner dentist has a clear vision for their practice that is compatible with your career goals.
  • Do you have realistic financial expectations? What you can expect to earn will vary widely depending on where you practice and what type of practice you work in. Additionally, there are a variety of ways to structure associate compensation. You need to know what options are available and what is typical for the area in which the associateship is located. This will help you have a reasonable expectation for compensation. Also, in every instance, make sure your agreement is in writing.
  • How are patients assigned? This is especially important where compensation based on a percentage of collections, which is increasingly common. If the owner dentist takes the fee-for-service patients and assigns managed care patients to the associate, you will have a much lower collection to production ratio, impacting your compensation.

We Can Place You in the Right Dental Associate Opportunities

With ddsmatch Southwest, our experience in successfully matching associates with practices, along with the right buyers and sellers of dental practices, can work for you in getting placed with the best practice for your career. Our proven processes will make sure associates and owner dentists are well matched in terms of complimenting skill sets, compatible personalities, and much more. Of course, it’s natural to be nervous starting a new position and change is always hard for everyone. But by making sure you think through all the details, you will avoid common mistakes and begin your career one step ahead.

Don’t take chances with something so important as your career.  Contact us today and find out what we can do for you.

How to Know When Dental Associateships are Right for Your Practice

Are you considering adding a dental associate to your practice?  Are you wondering whether your practice can financially support an associate?  Do you know what the real cost will be? How will it impact your office? Do you need to change anything about your practice to make it more attractive to a new associate? How do you find out what you don’t yet know about the reality of undertaking dental associateships?

Chances are, you went into dentistry in order to be a dentist first and foremost. But when you own your practice, you end up wearing many more hats. You’re operating a business, which means that on top of treating your patients you have to run your office, supervise the staff, deal with equipment and inventory, handle tricky human resource issues, manage the finances, along with many other things they don’t always teach in dental school.

Now you are considering adding an associate, either to grow your practice or to prepare for retirement, how can you know if this is the right move?

A New Tool for Assessing Dental Associateships: The Associate Intelligence Quotient

It’s a tricky question, one that involves a lot of considerations, many of which you may not have even thought about.  That’s why ddsmatch Southwest has developed the Associate Intelligence Quotient (AIQ). This is a new service where the experts at ddsmatch Southwest, along with their dental CPA affiliate at Blue & Co., examine your practice and prepare a detailed report  that will show the impacts of hiring an associate.

Each practice is unique, and there are a variety of associateship options. With ddsmatch Southwest’s expertise in helping dentists successfully buy, sell, and add associateships to their practice, we can assist you in evaluating your practice to identify its distinctive advantages and potential difficulties when pursuing an associate. This way, you can consider how good of a match you are for an associate and the different options that may be available to you.

Here are just a few of the things the AIQ takes into account:

  • Seller’s Goals – Why are you considering bring on an associate? To grow the practice?  Manage scheduling issues? Prepare for retirement? If you are retiring, you should consider your time commitment: do you want to start spending less time in the office, and what is the role you want to play in the practice after the sale? These are all separate concerns and each will impact what kind of associateship is right for your practice.
  • Associate Feasibility – What are you looking for in an associate and what do you have to offer them? Again, how you answer these questions will determine whether and what kind of association is the best fit. These details are very specific to your practice. To learn more about how business-side expertise can be invaluable in answering these questions, read our recent blog post where our partner dental CPA answers questions about adding associates.
  • Type of Dentistry – What kind of practice do you have? The mix of services you offer may significantly impact what kind of dental associations you should consider.  Based on the new associate’s skill set, you may be able to expand or add services that will strengthen the overall value of the practice. Look for skills that are advantageous and may complement your own strengths when evaluating the type of association you want.
  • Overhead – You may have a handle on your practice’s costs and profitability.  But if you’ve not had an associate before, you may not be able to accurately gauge the impact of this decision on your finances.  Before you go too far down this path, get an expert advisor to review your practice and discuss what the true impact will be, as well as how to prepare for it.
  • Compensation – This includes compensation for you, if you are going to sell your practice to an associate now or down the road; it also includes compensation for the associate, whether short term in the run-up to a final sale. One of the trickiest areas is placing fair and proper value on your practice (including any real estate, buildings, equipment, and inventory it leases or owns) and structuring a payment package for an associate that motivates them to add value to the practice and not just draw a salary. This requires expert evaluation and input from outside advisors such as CPAs, lawyers, and real estate agents. ddsmatch Southwest has a network of experienced dental professionals who advise our clients in these critical areas.

Don’t Guess When You Can Know

Your expertise in dentistry, the practice you’ve built, and the fact that you’re considering an associate all indicate you’re pretty good at what you do.  At ddsmatch Southwest, our expertise is buying and selling dental practices, including finding matches for dental associateships. With the Associate Intelligence Quotient, you can take the guesswork out of whether you should add an associate and what kind of associateship is right for your practice. The report you get will be objective, comprehensive, data-based, and will leverage the wisdom of a panel of experts and the experience of many other dentists dentists like you around the country.  Save yourself the trouble and avoid commonly overlooked concerns that can cost you time and money, along with grief and disappointment.

To come out ahead, you need experience in your corner. With ddsmatch Southwest and our dental accounting partners at Blue & Co., you get the experienced help you need. Contact us today to schedule your Associate Intelligence Quotient.

Common Pitfalls with Dental Associates—and How to Avoid Them

The key to avoiding the most common mistakes related to bringing on dental associates is to properly plan for the transition and take measures to manage expectations. You might be looking forward to how it will impact you and your practice–handling fewer patients, offloading some administrative work, possibly enjoying the proceeds of a final sale eventually—but this is a major change that will not only impact you.  

Your new associate has their own expectations—about income, the practical day-to-day reality of dental work, and making the practice their own.  And don’t forget your staff—this decision will impact every aspect of your practice. That’s why there are few details too small to overlook.

Here are some of the most common pitfalls, and how you can avoid them.

  • The practice isn’t prepared for the associate.  Bringing in an associate requires planning, from setting up a workspace to preparing staff for the new addition.  If the logistics are not managed properly in advance, it’ll make it much harder on everyone (even your patients), and may cause regrets. Take the time to think through what it will take to organize your practice for the new associate and make sure the details are taken care of before they start.  Include your office staff in these plans and encourage their input.
  • The office staff views the new associate as a problem. Your office staff has been carefully selected and trained to work together.  Bringing in a new associate is a big change. Now your staff with have twice as many dentists to support, one of whom they’ve never worked with before.  This is a significant change to your office dynamic and culture. Talk through your plans with your office staff, encourage their feedback, listen closely to their concerns, and take these into consideration as you make your decisions.
  • The established dentist and staff assume the new associate will fit right in. No two dentists practice in the same way.  Your new associate will have their own personality and approach to dentistry. While your practice may be running smoothly, it will have to adjust to accommodate a new associate. And although change can be daunting, it is also an opportunity to get a fresh perspective and potentially improve your office culture, procedures, and overall practice as you can draw on the strengths of the associate.
  • The practice lacks a clear direction. If you don’t know where you are going, it’s more difficult to bring another along with you, and you may struggle to choose a clear path to follow. Think back to when you started your practice.  What was your vision? Have you achieved it? Consider how dental associates may help get you closer to that vision. Use those considerations to guide your decisions about who to bring on, as well as when and how to bring them on.
  • The associate feels they are not adequately compensated for their contribution. Nothing will make an associateship sour faster than someone feeling they are being taken advantage of.  Consider what the practice can bear to pay a new associate. Consult with your accountant about establishing a fair pay scale that won’t harm your practice while providing a motivating incentive to have a positive impact.  Have frank and open discussions with the new associate about the realities of the practice. And of course, the compensation package you agree on should be in writing and signed by both parties.
  • The associate has unrealistic financial expectations. When meeting with potential associates, ask about their expectations in the first year, second year, and so forth, to get a sense of whether they are prepared for the realities of practicing generally, as well as assessing their fit into your practice specifically. Consider these expectations along with the skills they bring to your practice; they could significantly impact the success of the overall business for years to come.
  • The owner dentist doesn’t deliver on a verbal agreement with the associate. If an owner dentist fails to adequately plan for the associate—either because they don’t have a good sense of what the practice can afford to pay, haven’t consulted with an accountant, or haven’t created a written agreement—the owner may not be able to follow through on the offer. The failure to deliver will create bad feelings on all sides and may cause the associate to leave the practice.
  • The associate wasn’t aware the managed care patients would be their responsibility. The role the associate will take on in the practice must be clearly discussed and understood before any agreements can be reached. Especially if the associate is inexperienced, they may not know the realities of beginning a dental career. If handling less lucrative or more mundane cases will be part of their responsibility, make sure this is understood up front.
  • The owner dentist changes their mind about the selling price. We’ve all heard about buyer’s remorse, but sellers can regret the deal also.  Too often, a price has been verbally agreed to when second thoughts creep in and threaten to spoil the deal. This can be avoid by a careful accounting of the value of the practice, such as through a third-party accounting firm.  ddsmatch Southwest has partnered with the dental accountants at Blue & Co. to perform this valuable service for our clients..  Be clear about the value of your practice and what is a fair market price before you talk about the sale price with any potential buyers.
  • Parties cannot come to an agreement on price and terms of buy‐in or sale.  Following on the last point, having an independent valuation of your practice will help both parties come to terms on what the practice is worth and what are fair terms for a buy-in or sale. The seller has a lot invested in the practice—it’s the culmination of a lifetime of work. And of course the buyer has an incentive to keep the buy-in terms or sale price low.  An objective evaluation of the worth of the practice can help bring the parties together.

 

 

 

 

ddsmatch Southwest Can Help You Avoid Potential Problems with Dental Associates

The recurring theme through all of these issues is the need to be thorough in your preparation for a new associate: know the value of your practice; think through your expectations and discuss them openly with your new associate, making sure you each agree on the terms in writing, and thoroughly prepare your office staff and office space.  When you understand some of these pitfalls on the front‐end, it can help your practice to avoid an unsuccessful associateship and regrets down the road.

In the end, it takes a team to make a successful associateship and transition. At ddsmatch Southwest, we partner with the dental accounting experts at Blue & Co. to provide you The Associate Intelligence Quotient (AIQ).™ This detailed report is based on the individual circumstances of your current practice and can give you a clear, unbiased look at whether dental associates are right for your practice.  Contact us today to get the expert answers you’ve been looking for.

Adding a Dental Associate: Experienced Dental Accountant Answers Questions

Adding a dental associate is a decision most solo practitioners will consider in their career. You may be wondering when is the right time to add an associate or what an associate can offer. To answer these questions, we asked Matt Howard, a dental CPA, accredited business valuator, and certified valuation analyst from Blue & Co. for help.

Adding a Dental Associate: Costs and Benefits

Your practice can benefit greatly from adding an associate at the right time. Remember that by adding an associate you are redirecting some of your revenue stream, which may impact your take-home pay. Matt explains “there’s a lot of variables at play here, typically we like to see over a million dollar collection practice, in general, that way that there’s plenty of room from associate to come in and inherit some of that revenue stream.” (See the full webinar below on this page.) Dentists who want to scale back their hours or take care of patient backlog before it becomes a customer service issue should consider adding a dental associate to keep their revenue steady and grow the practice. An associate can fill in the gaps and allow the owner to either take a step back or focus on other parts of the practice. Meet with a professional dental CPA and a dental broker to talk over your specific numbers and decide if you and your practice will benefit from an associate.

How an Associate Figures Into Retirement

As a solo practitioner, you have spent years building your practice and should be able to sell it for an amount that reflects that work. When retirement is five or more years away, adding a dental associate can be a right decision. According to Matt Howard, “A decreasing revenue stream in the valuation world is not exactly ideal. What we like to see is [the practice] either consistently growing by inflation or at least steady in the collection perspective.” This means growing your practice in the years before retirement is a good strategy and will allow you to sell your practice for a higher price. But what if you want to ease out of practice and into retirement by cutting back on your hours now? That is where adding an associate can benefit you. Your associate can keep up with current patients and even bring in new business while you scale back. Another option we often see is to bring in a new doctor as an associate a few years before you plan to sell the practice to them. Dental Economics posted an article explaining that these few years will provide “time to increase the associate doctor’s productivity and practice management skills necessary for a successful transition.” If you are nearing retirement, especially if it is five or more years away, talk to a ddsmatch Southwest broker now so you can decide which path to choose and start planning now.

How Much Will an Associate Cost?

It goes without saying that bringing in an associate will redirect your revenue stream. As a business owner, you need to decide where that will come from. Matt Howard suggests collections of over $1 million, so you have plenty of revenue to work with before hiring an associate. Compensation can vary, but Matt explains that commonly, “[the associate] might get some sort of guarantee the first year [then] move into some sort of production or collection-based compensation after the first couple of months or even maybe after a year at the most.” A dental CPA can help you look at your practice’s finances and decide if you are ready to add an associate and what type of compensation deal is right.

Adding a Dental Associate for Customer Service

Dentists who have built a thriving practice and as a result have patients booked out months in advance should consider the customer service implications of how long a patient has to wait for their appointment. If your practice is booked for weeks or months, your patients might not be willing to wait around and instead will choose another practice. According to Matt, “if you’re booked two to three months out that’s not very good patient service quality for your patient, so you need to come up with a constructive way to service them quicker” which will result in a better experience. An associate can help address a backlog of patients and shorten wait time for new patients wanting to make their first appointment.

How to Find an Associate

If you’re thinking about adding a dental associate, whether you need to address the backlog, reduce your hours, or are preparing for retirement, talk to the professional dental brokers at ddsmatch Southwest. We can help you decide what is the best path forward for your specific needs and wants. When you’re ready to add someone to your practice, we will find you the perfect match and ensure a smooth transition. ddsmatch Southwest specializes in dental practice transitions including buying, selling, and adding an associate, so schedule your consultation today.