Episode 84 – So, You Think You Need an Associate

So many docs make mistakes when they bring on an associate. What they need to do is take a step back, because they haven’t really evaluated their business. One of the big problems is most dentists don’t realize that when they add an associate, it usually reduces their productivity and collections. Today, I’m going to share some personal experiences that can help you avoid set backs and understand:

• Where your business needs to be before you bring in an associate
• What an associate’s mentality is
• What safeguards you need and what mindset to be in when bringing on an associate

Have a burning question or topic you want me to cover in a future episode? Send your questions to me at bruce@productivedentist.com. I really do read all my email.

EPISODE TRANSCRIPT

Hi, this is Dr. Bruce Baird, with the Productive Dentist Podcast. And the topic today is going to be okay, I need an associate. And I hear this all the time. And we watch doctors all the time that say, Well, I want to get an associate.

And first of all, let’s step back a little bit and think about where you’re at in your practice. I see this happen all too often with a practice, maybe that’s been open for five years or eight years. And I’ll give you several different scenarios but and the dentist happens to be in let’s say mid-30s, he’s just getting into his productive years. You know, they’ve been in a growth phase. And now they’re really getting into the time when productivity will be at its highest. And they decide they want to start doing more specialized dentistry.

And we’ll talk about the doc and how they look at it, let’s say in your in their third, you know, decade of practice, and they wanted to serve you but that’s a different animal. And what ends up happening a lot of times I will see a dentist that’s been in practice for 10-12 years. And they say they want an associate. So they go to the school or they go you know, to dental school, put some ads out, talk to their dental supply people, there’s a lot of different avenues, some places to find associates now and doing. But they haven’t really evaluated their business.

And you know that I talk about predictive analytics. And I talk about all that. And what I have found is that most practitioners, when they add an associate, it actually takes away from their productivity and their collections. Meaning you’re not going to be making as much money. And so what ends up happening is you end up kind of bleeding away from, you know, the associates just you don’t give them first available appointment, you don’t you know, what you’re doing is you’re trying to try and to get them to get out in the community, which they should do, and get to know patients and get to know people outside and bring them in to grow the business.

But unfortunately, they don’t have that ownership mentality. So they’re not going to do that you may think they should be doing it. But right now, they’re just in job mode. They’re just in I want to make a living mode. So that ownership mentality is very, very different than an associate mentality. And in a podcast years ago, I was teaching at, or one of the early podcasts I was teaching at Baylor to the senior dental students. And I asked this the students.

04:02

These are two scenarios of being an associate in a practice. Would you rather have 35% of what you’ve collected? Or would you rather have 25% of what you collected? And of course, the obvious answer was, they all said I want 35% of what was collected in the practice that I did. Once I brought up, okay, one, you’re going to get massive numbers of new patients, and you’re going to be able and they have great financial arrangements and they have a great team. And the other scenario is you’re going to kind of have to kind of work for your own. You know, it’s not first available appointment goes to you. It’s going to be very different. Well, I would much rather have the opportunity to see lots of people and so those are the things as an associate you need to look at.

As a doctor, bringing in an associate. You really need to be at what I call saturation. Before you bring in an associate, and there might be several reasons that you want to bring in this sociate. One again, would be to do more dentistry, say I want to do more implant dentistry, I want to do more I want to market towards certain things that I want to do. And I want to bring in an associate, I have an excellent new patient flow, I am already used to marketing at a at a good percentage.

05:30

Again, that’s the fee for service type practice. So you we look at that, and we say, okay, and I understand that, I may see a decrease in my revenue. And what I’m taking home by bringing in an associate, but it’s allowing me, and this isn’t a long term situation, but it’s going to it may last for a year, until that associate becomes established in the practice, for you to get back to your pre associate level of revenue. I always tell people, if that’s another reason you’re doing this, it’s just you want help, because you want more time off.

And I see that in the senior doctors, would that have been around for 25-30 years, and they’re saying, you know, I just want to start working three days a week, or three and a half days a week. But they’re not prepared for the reduction in revenue. So they want an associate, and want to take more time off, but I certainly don’t want to take less money. Well, you know, and it doesn’t have to be this way.

What you want to do is work with a consultant, and get your practice to maximum efficiency, get your practice to what we call saturation, meaning you’re seeing as many people as you want to see, and you’re scheduling efficiently, you don’t have 25% of your time, open during the day, or 30 or 40%. Because then all you’re going to do is have to have you with open time you want to be maximizing the productivity in your practice, then you can bring in an associate.

Now bringing in an associate, in a practice that has plenty of treatment rooms, that’s much easier than bringing in an associate where you have three or four treatment rooms, that’s when you need to start believing in Okay, I want to expand our hours does that fit? Does that fit into our practice. Is that the kind of practice that we want to have expanded hours and reaching out to, to patients across the board. So again, these are things that you have to be thinking about when you’re bringing in associates, it’s always something that causes a lot of stress.

I went through nine associates over the years, I also had probably four or five different partners over the years. And the reason associateships failed were two reasons. Number one, the associates knowledge and their dental skills, were just not what I was looking for. It was and that’s not to say anything bad. But what I will tell you is the two guys that I can remember, really became committed to education, because I had to talk to him, you got to get more experience, you got to get better at this stuff. Because you know, and so they went and spent money and they literally went through courses and they became much, much better dentists now not in my office, but not far down the street.

08:42

And that’s where contracts come in. When you start talking contracts with associates, you really need to have a contract. And I used to tell people, well, you don’t need to worry about that. Because if they’re doing something across the street, and bringing in patients that you’re not doing and something that you’re not doing well, then that’s bad on you. But what I didn’t realize is that they can run off copies of your charts run off copies of all the patients they’ve seen call patients there needs to be things in your contracts that cause a penalty and a monetary damage if they were to leave. Now let’s get away from that part of it.

But let’s get back to the dentist who brings in the associate so that they can do more specialty procedures. That is where you really want to ramp up your marketing. And get that marketing bringing in those type patients that you need so that the other patients that are coming in can be set on the associate schedule. And that’s going to allow for a happy associate a potential partner down the road. And there are many, many, many ways that you can grow your business and how you can sell your business and I’m going to have a guest on here in a few weeks. That We’ll go into kind of how you do that the equity associate model, and how how that can benefit you over over a career.

You know, when do you start thinking about an exit strategy, in my opinion, you start thinking about an exit strategy. When you begin and that becomes part of your you know, you have a, you know, this is this is the way we practice, these are the mantra, this is the things that we do. But you start to understand, I want to grow my business to this. With predictive analytics, I want to know, I’m getting to this amount of money revenue I’m making, I’d like to have another dentists I’d like to work less time, you just go through this entire process like that. And super important, super, super important to do that. Now most people don’t think about when to exit until it’s time to exit.

10:53

And having said that, working with a company like Productive Dentist Academy can make all the difference in the world in ramping up your marketing ramping up your business, increasing your productivity, bringing in an associate, it’s increasing your EBITDA, it’s increasing the valuation of your business, the time to think about selling is probably five years ahead of when you’re going to sell because you can maximize your revenue.

And for many dentists that revenue when the sale of the practice is the largest financial transaction that you’re going to have. Unfortunately, I will tell them very easily if they were using Compassionate Finance and doing it on a regular basis, they will have a significant amount of revenue that they will be able to create every five years.

So send me questions at bruce@productivedentist.com. This is a topic that I get a lot. And let’s let me help you at least come up with some ideas and thought processes. I’ve had some really, really great clinicians that have always and had been in solo practice for a long time. And now they want to bring in this, this new associate. And there are ways to do that strategically, that can help your business grow. There are ways to do it strategically that can help your associate grow and become a great potential partner. And these are all things that you need to think about before you decide just to go to the wanted section and find, find an associate and bring in so there and there are other criteria that you’re looking at too.

So hopefully this has been helpful for any of you guys looking for associates. I hope you guys stay safe and that your practices stay safe. So look forward to next week and I will talk to you soon.