Maybe COVID was the last straw. Perhaps you’re tired of spending sunny days at the office rather than on the golf course. Maybe a health concern now makes practicing difficult, or even impossible.
No matter what the reason, you’re ready to retire ASAP, but you don’t want to leave your patients in the lurch.
And you don’t quite want to sell, not yet. You might need the health insurance until you qualify for Medicare. Or maybe you still want to consult and train your replacement, but simply can’t do the hands-on work any longer.
The Mentorship-to-Ownership path
ADA Practice Transitions’ Mentorship-to-Ownership path might be perfect for you. In this pathway, an established practice owner mentors someone new for a set period, with an agreement to sell the practice to the incoming doctor at the end of the contract.
This can be the perfect scenario for an owner who is just about ready to sell, but not quite there yet.
Such owners should:
- Welcome the opportunity to mentor and train their replacement to ensure continuity of care for patients and staff
- Want an immediate exit from clinical dentistry
- Be financially solvent
- Be willing to be onsite as needed
Let’s look at what type of practice is best suited for a Mentorship-to-Ownership Pathway.
Are you near retirement and looking to step away from clinical work? Let an ADA Advisor find you a practice buyer looking for mentorship.
Busy enough, but not TOO busy
Ideally, the practice should be busy enough that the incoming doctor can make a living, but not so busy that they drown before they can get established. Remember that in this case, the incoming doctor is typically less experienced – perhaps even just out of dental school. They will not be as fast and efficient as someone with decades of experience. It will take them some time to gain speed and efficiency while they polish their skills. (And remember, they are simultaneously trying to learn how to run a business!)
A solo practice with two to four operatories, currently operating no more than 3.5 days per week, is about right. The local market should not be saturated with other dentists. This gives the incoming dentist latitude to expand to five days a week to meet their pace without sacrificing quality or production. You don’t want them to come into a fully booked practice where they end up working every night and weekend just to keep up. That can lead to eventual burnout, which isn’t good for the doctor or patients.
Focus on general dentistry
The ideal practice for a Mentorship-to-Ownership path is dedicated to general dentistry, as that is where recent graduates’ skills are strongest. If the practice’s production relies on some specialty procedures, you need to commit to handling those cases for a while. Ideally, the incoming doctor will be interested in learning the skills so they can continue to offer the service. But even then, it will take some time and coaching before they are able to do it themselves.
Ready to give up control
Some long-time owners can’t wait to give up all the day-to-day decisions. For others, giving up control is the hardest part of the transition. Before you bring someone in, make sure that you are prepared to let someone else be in charge.
How can you do this?
During your discussions with potential buyers, review a few cases together. Listen to how the other doctor would handle things – and make sure you can respect their decision-making process. You may not agree 100% with the methods or pathway, but you need to be confident enough in their abilities that you can comfortably allow them to work on your patients without interfering.
That’s not to say the incoming doctor is flying completely blind. One of the best ways to let the new doctor learn without being overbearing is to frequently discuss upcoming cases and review completed cases. Keep these meetings to just the two doctors. That way, the newer dentist can more freely ask questions without staff pressure.
After all, staff are a major part of this transition, too – but they will typically take your lead. If they see you stepping back, they will feel confident trusting their new boss. Let the incoming dentist lead a few joint treatment planning sessions with the entire staff so they can see that you have confidence in their work. (See more advice on involving staff in your practice transition.)
Agree to the details, right from the beginning
Finally, for a successful Mentorship-to-Ownership transition, you must agree to several things right up front and write them into your contracts. These agreements will give you a roadmap to build a successful mentorship relationship that’s rewarding for you, the incoming doctor, and your patients.
When you work with ADA Practice Transitions, we will provide toolkits and worksheets to help you through the particulars. But in general, make sure you are discussing and agreeing to these items:
The junior doctor will perform/supervise all clinical dentistry/hygiene in the office. Establish from the beginning that this new doctor will be in charge of all of the clinical responsibilities. Specify any exceptions, such as whether the selling doctor will continue to perform specialty procedures. The junior doctor might also ask for assistance due to schedule management. Discuss these circumstances and decide how to handle them, before making the final commitment.
How much the associate will make. Most often, the incoming doctor will take home the higher of either a set base pay or a percentage of production.
Financial penalties if either doctor backs out. Even the best intentioned agreements occasionally fall through. But setting financial penalties will indicate that you’re both serious about your plans.
The sale price. Do all the necessary practice valuations upfront and come to a price.
Having these conversations upfront will help you think through your plans while establishing the foundation for a successful relationship.
Is Mentorship-to-Ownership right for your practice? Learn more while you prepare for the next step.