Don’t Make This Common Transition Mistake
As most of my readers know, I’m a big believer in a well-timed transition where an associate is brought in at a crucial stage in the practice’s evolution to help capture excess value that’s going untapped. When done right this process represents a tremendous win-win for both dentists and patients.
But one of the most common transition myths among established dentists is the belief that by bringing in an associate you can quickly reduce your chairside hours while maintaining your income. After all, the thinking goes, the new dentist can pick up those hours and the revenue will still be coming in.
The reality is a little different. Unless you have a lot of patients lined up and an associate who is ready to hit the ground running and produce at a high level right from the start, you’re going to have to accept some realities.
First of all, that initial year of transition brings with it a number of costs: the associate’s compensation, the cost of an extra assistant, additional staffing expenditures, marketing, and legal fees, to name a few. Then there are the intangible costs such as the time and effort you’re going to spend on training and integrating the new dentist and determining the ideal patient allocation.
Add to all this the simple fact that if the associate is a new dentist they simply won’t have the skills and experience to produce at the level you do, and it all adds up in most cases to a fairly slim profit margin in those first several months. If you run the numbers and do a detailed analysis, you’ll understand why now is probably not the time to decrease your presence in the practice.
I’m not saying you should reconsider a transition if you have surplus value in the practice. On the contrary, this is usually the best way to ensure the long-term success of the practice. It’s just that you should probably be looking at that crucial first year as an investment year. If you do you everything right, the rewards—reliable growth, improved patient care, and the ability to take more time away from the practice—will come along soon enough.