In order to achieve the healthiest transition solution for the solo practice, why not begin preparing for this change now? The time to begin the transition of a solo practice is now. This can occur at any age or stage of a practice. Some of the symptoms to alert the solo practitioner that the time is here are:
- Increase in stress
- Taking or needing more time off
- Decrease in motivation and passion for your work
- Problems related to leadership, management, and staff development
- Physically unable
- Feeling isolated
- Wanting a change
When we think of transitioning a solo practice, the norm is for a 60 – 65 year-old to sell his/her practice and leave within six months. This is the most common exit strategy. This event will be a successful one when handled in a healthy manner. However, waiting too long prevents taking advantage of other positive strategies.
The following are strategies suggested for the solo practitioner to implement at the earliest age or when the preceding symptoms are present:
Strategy #1: Add an associate with a presale agreement to buy in or buy out the practice. I’ve heard hundreds of stories that pertain to failed associateships during my 35 years of serving dentists. Both owners and associates relate to me their failure to complete a transition after years of working together. The most common problem is the lack of communication and agreement relative to timing and purchase price of a future buy-in or buy-out.
When an associate is added to a solo practice that has a growth plan, an employment agreement and a clear method to buy in or buy out, then the associate likely will remain and become the successor.
Strategy #2: Merging practices with a younger solo dentist. I often observe the solo dentist experiencing the unhealthy symptoms discussed, and, in the same area, younger, bright, and talented colleagues with untapped potential. An opportunity exists for these two practices to merge into one location. Many of the problems that both experience are solved by merging their practices. Agreements before the eventual sale of the practice are required before the merger.
Strategy #3: Merging into a solo or group practice. Many solo and group practices have identified the current dental market as the most exciting time in dentistry. The training, technology, and business opportunities available have created a growth environment for them. Merging and moving the existing solo practice into one of these practices is a win-win solution for all. This strategy allows for the sale of the practice and the likelihood of the seller remaining with the practice for an extended period.
Strategy #4: Time-share with another solo or group practice. In each market area, you will find solo practices with unused space and hours of operation. By joining in a time-share, a significant reduction of fixed and variable expenses is realized. Combined with a presale agreement and transition plan, this strategy offers many advantages.
Benefits of these strategies to the solo practice owner are:
- Ensures the sale of the solo practice at a higher price
- Increases the likelihood that you will remain with the practice after the sale at a reduced schedule if you choose
- The responsibilities of leadership, management, and team-building are shared and passed on
- Increases your ability to purchase or use new technology
- Allows for emergency, vacation, and sickness coverage
- Talents and information are shared and expanded
- Patient service and availability are improved
- In the event of death, disability, or interruption, your practice is transitioned or remains alive
- Fixed and variable expenses are reduced and profits increase
This is a healthy way to compete privately with corporate consolidators.
Planning your future exit from private practice now can bring peace of mind, financial reward, and a renewed commitment to the practice of dentistry.
John McDonnell is founder of The McNor Group, a dental broker, appraiser, and dental practice-management firm. He is a member of American Dental Sales, the largest group of dental brokers, appraisers, and consultants in the U. S. For more information, contact John McDonnell at (888) 273-1014, firstname.lastname@example.org, or write to The McNor Group, 810 Gleneagles Ct., Suite 207, Towson, MD 21286. See ADS Classified ads for names and phone numbers of other ADS members.