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Dental Practice Transition: “Increasers” vs “ Decreasers”

A+ A- Dental Practice Transition: “Increasers” vs “ Decreasers”

By Larry Chatterley and Randon Jenson, CTC Associates

Doctors are natural born achievers. Pursuing goals gives meaning to their lives. As a goal-oriented person, you probably spend much of your life focusing on professional goals. Early in your career, the responsibilities tied to these goals seem secondary. Once the essential goals have been reached, the responsibility to maintain them becomes the heavier focus, and as goals are achieved, more responsibilities are incurred.

That shift, when goals become responsibilities, indicates an important transition in your career. That maintenance stage lasts a different length of time for each doctor. Some doctors decide to grow their practice further and set larger professional goals. Others end up feeling like their practice runs their lives. It often starts with the Sunday night blues. Unrecognized, they begin to feel trapped by professional responsibilities; what they need is a light at the end of the tunnel.

If you can’t wait to get back to the office Monday morning, if you continue to enjoy managing and motivating staff, or if you are constantly looking for ways to expand your practice and see more patients, you are probably an “increaser.” However, if you find your body is at the practice while your mind is on the golf course, if you regularly entertain thoughts of cutting back your time at the office, or if you are bored with the practice and are just marking time, you may be a “decreaser.” Both are natural stages in a career, but you need to know which way you are heading in order to be satisfied.

Growing the dental practice is not likely to help decreasers find satisfaction, when what they really want is to cut back. When decreasers start looking for ways of keeping the practice going while taking some of the pressure off, the most common route is to hire an associate. This may help the symptoms, but doesn’t always address the true problem. We sometimes refer to such arrangements as “ambiguity-ships” because they have either no contract or a one-sided contract. Typically, these have no financial commitment from the associate and offer little incentive from in return. However, hiring an associate can be a viable option for a decreaser, as long as it is handled correctly and both the host and associate define their expectations in an equitable arrangement.

So how can a decreaser enhance his or her quality of life? On the other side, what opportunities can an increaser utilize to achieve his or her professional goals? There are viable, time-tested solutions to each challenge and different dental practice transition options. If structured properly, these options can give you more time and freedom without sacrificing your income needs.

Structuring the right dental practice transition to meet the goals of each professional can enhance the quality of life for both. A practice merger transition is one option that can meet the needs of both an increaser and a decreaser. For example, Doctor A, a decreaser, merged his practice with a younger dentist, Doctor B, an increaser. Doctor A sold his practice to Doctor B for $400,000 and put the proceeds from the sale in his pension, while working back for Doctor B for three 6-hour days. Doctor A was now able to give up administrative and management responsibilities. Due to lower stress, his production jumped from $250 to $350 per hour and he was able to take home $3,000 per week. He was also able to take longer vacations without worrying about the drop in production or overhead expenses. Before the merger, Doctor B was doing $400,000 in his own practice and taking home $160,000 a year. After the merger, Doctor B takes home $225,000 (after all overhead expenses and debt service of the practice purchase) and still has the same work load as before the merger. Other options could include basic office sharing arrangements, earned-equity buy-ins, associateships with deferred buy-outs, and more, with each dental practice transition customized to meet the needs of both parties.

Decreasers rarely become increasers, no matter how hard they try to talk themselves into it. The longer they wait, the worse it will become. However, once the burdens of ownership are taken off their backs, we have seen many decreasers really begin to enjoy dentistry again, and the more they enjoy it, the more relaxed and productive they become.

Posted on Aug 13, 2012
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