Should I Hire an Associate?

“I’d like to retire. Should I hire an associate? 

I get this question a lot. And it really depends. The time to start planning your exit strategy starts way before the time you’re ready to retire. I was able to grow a practice by using a strategy of bringing in associates, but that’s not the only way. So today, I’m going to talk about some things you need to think about as you’re looking to the future and considering bringing on an associate:

• Overall business philosophy and goals
• What is your plan to fill your – and your associate’s – schedule
• Good – and bad – reasons for bringing in an associate

EPISODE TRANSCRIPT

Hi, this is Dr. Bruce Baird with The Productive Dentist Podcast. And today, we’re going to continue to go over some Q&A some questions that I’ve been getting for the readers. And by the way, if you’re listening to this, and you have a question, please send the questions to bruce@productivedentist.com. You know, one of this this question I get a lot, you know, how do I how do I have a strategy to retire? Do I hire an associate, a partner? Or is it better to sell the practice and walk away? What you know, that is a wide open question. It really depends. It depends on how much longer you want to practice, it depends on it depends on not only on how long you want to practice, if you’re done and you’re ready to go, well, then you can start thinking about selling a practice. But I think the time to start beginning your exit strategy starts way beyond the time you’re ready to retire, I was able to grow a practice that that was valued, you know, we were doing over $5 million in in collections.

By using a strategy of bringing in associates. I’ve had nine different associates in the office, probably more than that, actually. And then, specifically, as I grew my business, as I grew my business as which means if I had a furniture store, as I grew my business, it means my revenues kept increasing. And as I saw my schedule become tighter. And I’m going to use the word saturated, my practice became saturated. My revenue was very consistent. I was doing all the things I needed to do. When I hear somebody say Should I bring in an Associates? Should I bring in a partner? What I do know is you better have your practice at saturation, meaning your business is is clipping on all cylinders bringing in an associate, I would do that first before I ever brought in a partner and their equity associate ships that you can, you know, there’s their strategies for that their strategies for just a straight sale. But my thought process and again, it’s just mine is not the only way to do it.

I wanted to have a partnership arrangement and in a group practice environment. That was always my goal. I started out of dental school, I went in the US Army, I love to have another dentists around. I love to ask him questions. I love answering questions. I just like the camaraderie of having more than one dentist. So I’ve never practice and more than just maybe a couple of years total by myself. So, again, if I had a furniture store, what what determines if I’m growing that business? Well, my revenues growing. And so I want to come up with a strategy that helped grow my business.

Now what I see happen a lot of times is a dentist will say Oh, yeah, yeah, I want to get an associate. Like, Oh, really? Why? Well, you know, I’m just working all the time. And, you know, I’m so busy. And I think I could start doing more of my, the procedures I like to do so. So what you’re saying is you’re going to let the associate do all the little piddly things and you want to do the bigger things. Exactly. And I hear this all the time. I said okay, let me first of all ask you. What are you doing on YouTube? Patient flow, you know, how is your new patient? Oh, we have great new patient, we’re seeing 50 new patients a month. Okay.

So what is your strategy to grow your associate? Are you going to begin marketing for the associate? Are you just expecting them to go out and hand out cards and bring their bring people in themselves? Which I like that? I do. But I think you have to have a combined strategy of saying, we’re going to market and we’re going to do this because here’s the problem. here’s the rub, when they start seeing your, what considered your new patients, and why is it considered? Well, I always said next available appointment. If they don’t ask specifically for me, it’s next available, it goes straight to the associate. Now, some people say, Well, I don’t want to do that, you know, I don’t know what kind of benefit well, then you’re not ready, you’re not saturated.

Because what you also have to be ready for is if you bring in an associate, you may see a dip in your revenue. Initially, you know, you may start to change the way you treat my plan. Now, I’m going to begin treatment planning, for instance, more implant dentistry. I want to do more all on fours, and I want to have an associate that does all of the other things. Fine. I you know, and and an associate, I will tell you what Dr. Buski and I did.

When Dr. Buski came in, he was first of all, he was extremely talented. A great clinician did not know a lot about the business of dentistry. But he was a great clinician. And I realized that early on, I realized that, you know, as I’m going in and do I check preps do I check stuff? You damn right? I do my names, my name is associated with this business. So you damn right, I’m gonna look at those things, I want to I want to make sure that the dentistry that we’re putting out is at the highest level, if it’s not, as an associate in the practice, I would begin to work with them saying, look, you’d really want to clean this up, you aren’t, you know, and, and if somebody has a huge ego, and can’t take that, well, they’re not around the office very long, they’re gone. Why?

Because I want it to be a place where we have like minded people, were all have an interest in taking great care of the patient. And we all have an interest in reaching our goals being efficient. And that doesn’t mean working fast. It just means working smart. And so that question of do I bring an associate do I bring in a partner, my suggestion is, you bring in an associate, you work with him for a couple of years, let’s just say two years, and then you begin the process of either selling the practice to that associate, so that they become an owner, part of the practice, I mean, you can look at the lean and mean philosophy of you know, bringing in three or four partners and building the business and building the business, you may not like that at all, you may just say, look, I’d like to build my business.

So my value increases. More. Remember what we talked about a few weeks ago, the investment grade practice is one that has a great team, great training, great productivity, great production per hour, great overall esprit de corps, everybody’s having fun, they’re all having fun, they’re all doing things that they want to do. And to me, then you really can bring in an associate and things can can happen. But way too often I see somebody says I’m going to bring in an associate, the associate doesn’t get any of the new patients.

The associate is, is is bummed out they thought it was going to be X and that turned out to be why I when I was teaching at Baylor University to the senior dental students, I asked him a question, which would you rather have as an associate 30% of your collections, or 25% of your collections? And I said 30% of course everybody in the room raised their hand 25%. And nobody. I was like, Okay, well, let me let me answer. Let me ask you this question a different way. How would you like it if you got 30% a collection, and you were responsible for finding all your own new patients. And the new patient flow was okay, but it wasn’t great.

Or we’ve got somebody who’s gonna market the new the growth of the practice, there’s a healthy new patient flow above what the senior doctor can see. And they’ve got all the sim all of the systems in place and everything else now, which do you want? Well, we got a little bit different answers. And, and that’s what you have to ask that question. You know, what’s my strategy for retiring? What’s my exit strategy? Well, there’s going to be, there’s 100 different exit strategies. I’m just trying to share with you a thought process because when you bring an associate in and your production goes down, people start getting really protective and they start almost resenting the associate because now they’re taking some of your money away.

We you weren’t saturated. In other words, you know, you’re building that internal referrals from the people that you’re already working on, there’s no way you can see all the people that want to come see you. Because you built that practice that way. But maybe you were just a practitioner, we just happen to see the new patients was doing some of the dentistry not all of it wasn’t committed to two comprehensive treatment planning. When you see that, and in particular, in the PPO environment, you just hope well, let’s just sign up for 10 more PP o ‘s, and hopefully you’ll take the first available appointment Come on in. Those are, those are entirely different thought processes.

And what I can tell you is that we’re going to do a podcast on to PPO or not, you know, and my, my philosophy on that is, if you don’t have to don’t, but I also have a philosophy that says if you have to, it’s okay, but have a strategy to get rid of them when the time’s right? Because what you don’t want to be doing is giving away 40% of your value 40% to a PPO, and that that, again, is an entirely different, you know, different conversation. And what about the doctor just says, I just want to sell my practice, I want to walk away, well, hopefully, one of two things has happened, you’ve invested in real estate, you’ve taken your money and invested in the stock market, and it’s done well, for the last 12 years, you’re doing things, you’ve been fiscally responsible, and you could retire without the revenue you have in the practice. If you’re that person, and you just you’re tired, and you don’t want to do dentistry anymore, then you can sell your practice and walk away most of the DSOs now, when they buy you, they want you to stay at least a couple years, three years, two years, some five years. So that has to be part of your strategy, too.

So it’s, it’s if you’re done, then and you want to walk away and you’re financially independent, you can do anything you want to do. But get it if you’re financially independent and you’ve taken care of business, then you can do whatever it is you want to do. It’s when guys get backed into a corner, they get backed into a situation where golly, I’m so tired and burned out on dentistry I want to sell. That’s not the time to sell, you know I’m burned out on dentistry is not the time to sell because more than likely your productivity is much less than it could be.

And so what you need to do is have an attitude of that abundance attitude that says, Okay, I want to build my practice as an investment grade business. And by doing that we’re doing our we’re doing our foundations course with PDA, it’s online, you get to ask questions with your own peers, plus, we have coaches available we have our team is all there. And you go through a curriculum for eight weeks, two months, to become the kind of practice leader that you need to be what I will tell anybody is give us five years, give PDA five years to help your business, not only will you benefit, but you’re going to benefit big time, when it does come time for you to transition when you do make the decision.

You know what, I’m ready to sell my practice, but I’m not selling it at $750,000 worth of production and collections of you know, 620 and I’m selling the whole thing for 300. Now Now you’re selling a $3 million practice for two and a half. So you’re gonna make so much more money by having your exit strategy be an intentional activity. Now certainly there are things that happened back injuries, you know, we I’ve seen it a heart transplant private, I went in and help to God buddy of mine that had a heart transplant. So yes, sometimes things getting away, what I will tell you is there’s no time like the present, to begin to build your investment grade business, to take great care of your practice to have to make sure your patients are being taken care of to potentially bring in an associate if you’re at saturation, to turn that associate into a partner. And if your business is continuing to grow, and you’re in the right area, these things can all just snowball.

And so what you do is that when it does come time that you want to walk away, then you have a choice. You don’t even have to walk away, you could grandfather into the practice and say look, I’m I’m going to, what I’m going to do is I’m going to take 35% I’m going to work just one day a week or two days a week. I don’t want to keep my fingers wet. But you’ll have partners there that take care of the rest. So lots of different ways to do this. I probably covered 10% of them. But hopefully this has been interesting for you. And I really look forward to our next our next podcast so take care guys love you guys.