Bringing a partner into your dental office is a big decision. Not only do you want to be sure that a partner is really what you want before you move forward, you need to know that you're choosing the right partner for your practice. Before opening your dental practice to a partner, make sure you carefully consider these key elements of partnership and how they can impact your practice.
The Benefits of Partnership
Opening your practice with a partner, whether you're opening it for the first time or expanding your practice to include another dentist, has a number of key benefits, many of which can help shape your practice and your patients' appreciation for the better.
You'll have more than one dentist to see your patients. This can make it easier to schedule vacations and other days off without shutting down the entire office. By working slightly different hours, you can also extend the hours you're able to offer service to your patients without substantially extending your work day.
You'll be able to see more patients. Thanks to the availability of two or more dentists, you'll be able to more easily accommodate a larger number of patients--particularly important if you're trying to expand your patient base or if you've recently discovered that you have more patients than you're able to easily see.
You'll have more people to share expenses. This can both make it easier to get a business loan in the early days of your practice and make it easier to handle unexpected expenses that may require some out-of-pocket investment on your part.
You'll have your combined experience on hand. That means double the eyes to take a look at problem patients or unfamiliar issues. You can also expand your practice to include your partner's specialties.
The Drawbacks of Entering Into Partnership
While there are a number of clear benefits, there are also some drawbacks to bringing a partner into your dental practice. Before you decide to make partnership your solution, make sure you're carefully considering how those drawbacks can impact your practice long-term.
You'll have to make decisions together. When it's your practice, you're the one with the final say in all major decisions. As part of a partnership, you'll have to come to an agreement even when you don't see eye-to-eye. Disputes can cause serious problems for both your partnership and your practice--so it's important to be sure that you're able to reach an agreement with your potential partners as often as possible.
You might be in trouble if one partner decides to sell. A partnership is a big commitment to your practice--for both of you! When one partner is ready to move on or retire, selling can be more difficult. Your partnership agreement should include a clause for what to do when the time comes to sell or retire.
Having a former partner join a competing practice could destroy your patient base. If you have a patients who strongly prefer one partner over the other, they may follow them when the partnership ends--and it could leave you struggling to rebuild your practice.
Before You Start Your Partnership
Before you start your partnership, it's important that you do your due diligence to make sure that it's the right choice for you. There are several key pieces of information you'll want to cover before deciding that a specific partner is your best choice.
Agree on a purchase price. It does you no good to bring someone into your practice, talk to them about partnership, and then have them back away due to sticker shock just when you think they're about to join you formally. Before you start talking about partnership, make sure you agree on a purchase price and draft an agreement that you can both abide by.
Consider what you both bring to the table. When you consider a partner, what do they have to offer your practice? Do both of you have specialties or experience that will help enhance the practice?
Examine your personalities. No two people agree all the time, but you don't want to find yourselves constantly bickering, either. Make sure that your future partner is someone you can work well with every day.
Are both partners comfortable with the same type of culture? Are you looking for the same type of arrangement in your practice? If one partner already has a practice that the other is buying into, are they comfortable working in the existing environment?
What are your long-term goals? If your long-term goals don't mesh, you may struggle to develop a strong working relationship and maintain your partnership.
Setting Up the Partnership Agreement
No matter how well you know your future business partner, you still need a carefully drafted partnership agreement that will protect you both legally in the event that things don't go according to plan. A strong partnership agreement contains a number of critical elements that will ensure your legal protection and your partner's.
- Spending authority: How much is each partner authorized to spend from the business account without consulting the other?
- Dissolution arrangements: What are the arrangements if one partner wants to leave the partnership? How will you handle things if one partner is ready to retire before the other?
- Income split: How will practice income be split between you? What percentage of that income goes back into the practice?
- Assets: What assets are considered part of the practice--often as opposed to personal assets that belong to one member of the partnership? What percentage of the practice is the original partner selling?
- Handling issues: What happens if one partner's license is revoked? What about when a partner dies? Does one partner have the "majority" vote over the other?
Deciding in favor of a partnership can have a number of benefits for your dental practice, but it can also have a number of drawbacks. Carefully considering all sides of the issue will ensure that when you do choose a partner for your practice, you'll end up with a partner who is highly qualified and who will work well with you long-term as you pursue your career goals.