More dentists are approaching retirement with a different mindset. It’s no longer all or nothing: you can give up total control of running your practice but remain in the game, and on your terms. When you’re ready to step back but not actually ready to sell, there are two transition scenarios that many dentists have found to be successful:
- Selling and becoming the associate
The Associate Agreement
When you’ve already done the due diligence and have the right contracts in place, and you found the right person to take over your practice, selling to an associate is a great way to gradually ease out of dentistry. The new owner benefits from keeping you on in a part-time capacity; they can learn from your experience and your patients and staff benefit from your endorsement of the new owner.
Before you sign on the dotted line, ask yourself:
- Is there enough treatment available for two dentists?
- What is the new associate’s – your – role?
- Are you associate material?
You can’t expect to make the same amount of money or be guaranteed to perform the most profitable procedures. You also need to respect and honor the decisions of the new owner, who up until recently, was your subordinate. Clearly communicate your expectations and wishes for your new role. Keep in mind that going from the boss to the employee is harder for some dentists.
And, get everything in writing. What would happen if issues with scheduling come up after you sell the practice?
What’s Mine Is Yours
In an office-sharing agreement, you operate in the beginning like a merger: find a local dentist who has the same or similar type of practice as yours, who perhaps also wants to work less. You merge practices, including your patient base and staff, but share one office. This scenario is ideal if your patient base is decreasing and you don’t want to put the time into reinvigorating it. You each work on opposite days, share the workload, and share the management duties. Over time, if you want, you can begin transferring your patients and selling your practice.
If there are complementary dental practices, say a pediatric dentist and a general dentist, this option can work well, too.
Additionally, creating a partnership is another way to ease out of dentistry over time. We talked about it in this post, and it bears repeating here because it could be a great way to stay involved, split costs, and maybe only go into the practice one or two days a week. Have clearly documented partnership agreements, however; it can be a problem if one partner wants more control, either clinically or financially. Also be aware of the tax implications of forming a dental partnership. Your CPA is a good place to start, along with your dental broker.
Contact N/L Transitions for more information about these and other transition options.