Like most dentists nearing the end of their professional career, you may be trying to cut back on hours. Working fewer days per week or less each day is a great way to avoid burnout and still practice dentistry, but on your terms. Problems can arise when those hours aren’t being used to see patients, however. Over time, a practice that was once thriving and seeing well over 1,000 patients each month could dwindle. And a part-time practice will either be seen as an opportunity – or a liability.
Read up on how to maintain cash flow before the sale of your dental practice.
One solution that has worked for many dentists on both sides of the fence is sharing the office space. In these arrangements, typically a younger dentist or a dentist who wants to expand his or her own practice uses your practice a certain number of hours or days each week. They save on the cost of buying or leasing a space of their own, you get income from underutilized space, and everybody wins. Right?
To make sure a shared space agreement benefits both parties, follow these guidelines and talk to an experienced dental practice management consultant.
The contract – and there needs to be one, in writing – should spell out a number of items about how the office, staff, and materials will be split up. Here are a few key areas to specify in the agreement.
- Conflict Resolution
- Lease Termination
The schedule should specify what hours or days each dentist will work. Some agreements have doctors working on the same day, but one works the morning hours. Other split up the day entirely. How will materials be shared, and will they? As the leasing dentist, you can reasonably expect the other dentist to use your equipment and office supplies, but what about things like gloves, instruments, even goodie bags for patients? Decide how everything will be split up and paid for, and how maintenance or repair costs for equipment will be split. Also look at shared use of the phone, internet, and practice management software. Usually, but not always, the other dentist will have his or her own patients and will want to keep things separate. But each situation is different.
The staff will need to be factored into any shared space agreement. Dentists who use the space at the same time may end up sharing staff, but if the office will be used at different times, it’s more likely to keep them separate. When sharing staff, decides who makes the call on hiring or firing and other staff discipline, and how staff compensation is worked out. And please, do communicate these details to your staff!
Does the lessee dentist have his or her own insurance? Or are you splitting the cost, and if so, by how much? Decide in advance how inevitable conflicts will be resolved. Maybe it’s that one person – you, likely – has the ultimate say, or that a mediation service or other third party will be involved if necessary.
Finally, include language that specifies how long the agreement is in place and what measures need to be in place to terminate it. Usually a non-compete must be included. Most agreements have an end date, at which point the agreement can be renegotiated, renewed, or terminated. And many include a 30-90-day notice before substantial changes will take effect.
For some dentists wanting to reduce their hours in the years leading up to retirement, a shared space agreement can be the ideal solution. Your practice continues to maintain (or grow) and you get to enjoy more downtime. But make sure to enter into these agreements carefully and with the help of dental practice management consultants. Contact N/L Transitions for questions on these and other topics related to the sale or closing of your dental practice.