Selling Your Practice
Picture the following scene: Susie has worked with Dr. Smith for 15 years. She is a skilled and loyal dental hygienist. Her goal is to remain with the practice for a minimum of 10 years. She thinks highly of Dr. Smith and the others on the team. They have all been together for a long time and Susie feels they really function as a team. On Thursday afternoon, Dr. Smith annouces a staff meeting for the next day. All of the team members are curious as to what the topic will be. Imagine their shock when Dr. Smith tells them he is selling the practice, relocating to Arizona and Dr. Jones will take over the practice on Monday.
This scene occurs every day all over the United States. Dr. Smith is a well-intended person who got bad advice from advisors who still work with an old paradigm regarding Practice Transitions. I’m sure he heard “You definitely don’t want to tell the staff until the very last minute, as you don’t want anyone to find out about this until your closing has taken place. We don’t want anyone jumping ship prior to the sale. After the sale has been completed, the problems will belong to the buyer.”
This doesn’t sound like a plan for success does it? At least not for the team, the patients and the new owner. Probably not for Dr. Smith in the long run, especially if he is participating in the financing of the purchase.
Including the team in the implementation of your transition plan is essential. Their presence post-closing will greatly influence patient retention. They will have to live with the new owner into the future. They know best what kind of person will be effective in the practice because they know what their patients expect.
Schematic 1(a) illustrates the process that I call a “practice TRANSACTION” (Old Model). In this model, the practice owner seeks and receives advice from outside sources when considering a practice change. The dentist may receive a variety of advice adn end up with a confusing plan or approach that doesn’t serve his/her needs. The reason is many involved in selling practices use this old model. Most decisions are made by the dentist and his/her advisors. The spouse is rarely involved in the process. Once in a while, the dentist may seek input from a long-term employee but will probably be discouraged from involving any staff members.
Patient retention is of primary importance when a change in ownership occurs. A lack of team involvement invites unnecessary risks in effecting a smooth transition and the long-term success of the new owner.
In this type of scenario, the team members will feel betrayed. It may send them scurrying about seeking other employment as they do not feel a concern for their welfare was shown during the sale. This might occur before they even give the new owner a chance. Introduction and endorsement of the buyer by the seller is very important in a practice transition. EVEN MORE IMPORTANT is the introduction and endorsement of the team members as the patients come into the practice to see the new owner. “Susie, tell me honestly, what do you think of the new dentist?” When Susie is able to say, “We really miss having Dr. Smith around, but you know, Dr. Jones is just as nice as he was. We are really proud to have him here. We searched for quite a while before we found someone we felt comfortable with in taking over the practice and your care.” The patient audibly breathes a sigh of relief and feels good about staying with the practice.
If Susie says, “Well, to tell you the truth, it was such a shock that I haven’t really gotten over it. I’m thinking of looking around for a new job”, you can be sure the patient won’t be far behind in making an exit. They will probably end up going where Susie goes, and the practice will suffer unnecessarily.
You will notice a great deal of difference in this “practice TRANSITION” model. (Schematic 1(b)) The process begins with personal clarification on the part of the dentist – well in advance of the actual event. “Where do I want to go from here and in what timeframe?” are some of the questions that need answers prior to beginning the transition. A clarified dentist can speak clearly to advisors and personally coordinate action plans that will assure achievement of preferred outcomes.
When we consult with clients who are contemplating a future practice transition, we spend a great deal of time in this initial planning process. The dentist must clarify his/her vision of the future. All decisions made regarding a future practice transition must be congruent with that vision. The decisions are then shared by the dentist with both stakeholders and advisors.
The spouse of the dentist also plays an important role in the initial planning process. They must both be in agreement as to when and how the practice transition will take place.
The team should be involved in creating a “Profile of the Ideal Candidate” before you ever take the practice opportunity to the marketplace. Team members have particular insights into the qualities the new owner needs to have in order to be successful in the seller’s practice. The team members are instrumental in acting out the owner’s clarified vision. When the team is invited to participate and they feel a part of the process, the chances for success improve greatly.
The team also has the responsibility to be open and flexible with a new owner. This is a tremendous opportunity to get out of ruts that might have developed with the seller. When you have practiced dentistry for a number of years and have a successful practice in place, it is very easy to get complacent and just keep doing things the same old way.
New owners bring new ideas. They will not be impressed with hearing “We always did it this way before”. Keep an open mind and enjoy this new lease on professional life!