Infuse New Life In Your Practice With Dental Practice Transitions

With an increase in business a practice owner finds that the pie has increased and there is an opportunity to get a greater share of that pie. However the current structure of the practice is not equipped to handle it. Consequently, more people are needed to be infused into the practice. Similarly with age some members of the practice would want to exit handing it over to someone else.Transitions include all these aspects of infusing new members and old members exiting the practice. A structured planning is required to ensure that everything falls in lace and is in the best interests of the practice and all the stakeholders associated with the practice.

Why go for transition

Before starting a practice, anybody makes an appraisal of the opportunity at hand versus the resources at hand and makes a bets fit basis that. Structure as a sole business or a partnership may be decided upon depending on the availability of like minded people. However the business gets established and increase we often need to reset our horizons. Bringing in more people to help and get a greater revenue share that is possible is one of the first steps. Opening in a new location could be a prudent decision. This might also mean investment in terms of infrastructure, whereby part of the business may be sold to become a partnership to cover these overheads. As age catches up an exit plan needs to be worked. Proper transitions cover all of these.

Structure of partnership business

Some people may associate into a partnership at the outset but a majority set off in this journey alone. However realities of cash flow, the need to work on Sundays and holidays due to there being no backups often drive them to seeking out a partner. Dental practice transitions leading to on boarding a new partner is not just about finding a partner and starting to work together. It requires careful support from your attorney to document:

• Cost sharing
• Profit sharing
• Responsibilities
• Future exit options and plans
• Non compete on exit
• Non disclosure while in partnership and on exit
• Non solicitation of clients on exit

Details Of an associate

A fresher often enters a practice as an associate cutting his teeth on the nuances of a practice, often being groomed by the practice owner. This may be as an employee or an independent contractor. This could also be with an eventual Dental practice transitions or with the option to buy in into the practice with increased ownership until the current owner exits on retirement. Partnership involves a due diligence on the part of the practice owner bout the associate he is trying to bring in while the associate also needs to check out the efficacy of the practice in terms of his future in the perspective in all aspects like earning potential, learning potential and finally future ownership prospect. A decision on whether the associate would be joining as an employee or as an independent contractor needs to be taken. Once the same is done the compensation and benefits or commission structure needs to be documented. The owner and associate also need to decide on the deliverables such as who pays for malpractice liability insurance. A non disclosure and non solicitation agreement may also be signed for exit options.

Plan your retirement

With age catching up the priorities in life start changing. An exit plan to retire is one of the essentials on this. The planning includes at which point financial stability will be attained to offset the reduced income. Identification of whom to handover the business is one more aspect of this planning. Relevant plans off taxation also need to be put in place. All these needs to properly be put in place for the right transition mode.

Transition with experts

A structured transition often needs the help of a specialist. They help in a proper assessment and valuation of the business. A proper outreach plan to potential buyers and then their screening is also done. Following successful negotiation documentation keeping in mind cost saving for both buyer and seller is drawn. Support in terms of financing for the buyer can also be facilitated.

Peace of mind

The process of transition whether to introduce a new partner or associate or exiting from the practice are critical and needs to be planned and executed with long term ramifications in mind. An attorney is often the right aide to help you with this happen.

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Author is writing various blogs and articles on dental practice about Buying or selling a Practice. Through this article author is sharing some information about Dental practice transition.