Does the thought of negotiating keeping you up at night?
It’s perfectly normal to be nervous about negotiations. After all, the stakes can be high – especially when you really want something to work out.
At ADA Practice Transitions, we act as facilitators, not negotiators. That means that we help you prepare to negotiate and offer tips to protect your interests.
We have found that a bit of preparation can go a long way towards making the experience smoother and more successful. Even if you haven’t yet found your perfect match, it’s smart to start thinking about what you want achieve from your upcoming transition. If you understand what you want and what you need to move forward, you will be coming to the negotiating table with clear goals that can pave the way.
Plus, building these negotiation skills can help you in other ways. Apply the same steps whether you’re negotiating your practice transition, managing staff, encouraging patients to accept necessary treatment – or even with your own family.
1. Determine what needs negotiating
Start by evaluating the situation to clearly identify which items are negotiable. In an employment negotiation, compensation is usually the primary item requiring a conversation – but there are other things to consider like a CE allowance or vacation time. Likewise, negotiating a practice sale will go beyond the price to include handling of the accounts receivable and the real estate.
Think about tradeoffs that can make the outcome more palatable for both sides. For example, if an employer cannot provide a potential hire’s ideal guaranteed per diem, the associate may accept a lower per diem if the owner commits to covering their CE.
Look for all the negotiable terms and be creative in coming up with scenarios that will give you what you both need to be satisfied.
When you work with ADAPT, your ADA Advisor will provide guidance on which terms are worth considering in your transition scenario. They can help you explore reasonable tradeoffs before you ever get to the negotiation table.
2. Walk a mile in their shoes
After you identify which terms are up for negotiation, rank those items in order of importance to you. If you get stuck, your partner or someone who knows you well can be a great sounding board.
Think about how each item affects you and your family. In some cases, salary may take a backseat to a healthcare contribution. Likewise, the purchase price may be less important than knowing that patients and staff will be treated well. Know what you are willing to compromise on – and what you are not.
Then imagine yourself on the other side of the table. Consider how the other doctor might rank the same list of items. By doing this simple exercise, you can anticipate their reactions to your requests. This will help you balance more expensive asks (such as salary or benefits) with those that don’t cost as much (such as a certain schedule or start date).
Imagine yourself on the other side of the table.
Let’s consider a practice sale. If both dentists rank the purchase price as the number-one item, you can consider ways to make your offer more attractive to the other doctor. If you know that you are coming in well below the expected asking price, make sure to think about what the other doctor might be feeling – and develop a dialogue that respectfully communicates why your offer is fair and reasonable. Perhaps the valuation was done before the owner reduced hours and, based on the current financials, the bank will only loan up to the amount you are offering.
Owners, remember that this is likely the biggest financial commitment of the prospective buyer’s life – they need assurances that they will be successful. Telling them how great the practice is can be helpful, but showing them is more valuable. That means having all the financials ready to go and being open and honest about the income potential. The more you are willing to share, the more comfortable they will be moving forward (and perhaps increasing the offer).
3. Consider the other person’s motivations
Think about the underlying reason for the other doctor’s pursuit of this transition. Try to understand what brought them to this point.
For example, each of these doctors has very different motivations:
- An owner in a small community wants to find the perfect dentist to continue their legacy – and may compromise on the purchase price
- An owner whose previous associate left abruptly needs to act quickly to manage a packed schedule – and may offer more compensation or a relocation bonus to get the right person in sooner
- An associate who recently relocated to a new area wants to find a practice near their new home – and may accept a lower starting salary
- A happily employed associate wants to buy – and may hold out for “just the right fit” or “just the right price”
Income (or income potential) is often the top motivator, and that’s why salary negotiations can be particularly tricky. The associate who recognizes that payroll is often the practice’s single largest expense will understand why an owner would prefer to pay a straight commission-based salary. An owner who receives a lower-than-expected offer will benefit from understanding that the other dentist needs sufficient income to:
- Pay back their loans (often $3,000 per month, or more)
- Provide a reasonable amount to live on
- Save for future priorities, such as a home or starting a family
Understanding the other doctor’s motives will help you both find the right balance.
4. Keep an open mind – and listen
The other doctor may offer or ask for things you never considered. Often, our natural reaction is to immediately think about how to defend our point of view. Instead, stop. Take a breath. Listen. Consider. In fact, pausing in these situations signals to the other doctor that you are actively listening and thoughtfully considering their point of view. Don’t shut down their request without weighing whether you can live with it.
For example, associates may compromise on the salary if they are offered bonuses to meet high-quality outcomes, production goals, or new patient referrals. An owner may be willing to guarantee an associate Thursday afternoons off to coach a child’s team if the associate commits to taking responsibility for reviewing/updating the policy manuals.
If you listen carefully, you may realize you can offer something that costs you little and provides a great value to the practice.
5. Don’t leave them hanging
Take the time you need to give an offer full consideration and discuss everything with your family. However, out of respect for the other doctor, keep things moving. It’s fine to ask for 48 hours to think things over. And if a counter offer is made, the owner is well within their rights to ask for time, as well. But don’t let things drag out, and make sure you’re both clearly communicating your next steps and expectations throughout. (See how open communication can help you succeed.)
This is even more important if other candidates are in the mix.
Regardless, doing the exercises above and knowing your deal breakers will guide you. And if you decide that this isn’t the right fit for you, or if the other party won’t budge on your must-haves, be willing to walk away gracefully and respectfully.
Negotiations do not have to be fraught or nerve-wracking. If you take the time to prepare and prioritize, you can remove the stress from the process and wind up more satisfied.