I want to wish Karen Gougeon of Auburn, MI the best in her retirement. Traveling was her goal. I am happy that Karl Hogue and Legacy Practice Transitions could make her retirement plans come true. Best WishesKaren.
You just graduated, you just bought your first practice, you have created a nice practice for the last 25 years – NOW WHAT? This seminar “Where Do I Go From … Continue reading Stay, Grow, or Go
Twenty years of practicing dentistry and Dr. Smith was tired. Tired of managing a practice with $750,000 of annual production, and tired of all the other responsibilities of practice ownership. He was tired of working hard and not getting ahead financially. He saw no way out because, with his lifestyle, he was spending more than he was making and the longer he kept this up, the further behind he was getting.
He still enjoyed dentistry and he loved his patients, or at least most of them. He had to in order to do as much dentistry as he did, and he knew it. New patients were harder to get, and at his pace, he felt he would soon be running out of work to do on his current patient base. The stress of maintaining his rate of production, and his current lifestyle was beginning to take its toll, and his health was beginning to suffer.
Then he heard about Legacy Practice Transitions’ PreSale Retirement Funding Program, and he knew he’d found his answer. Up to this point and time, pension funding was a joke. He could barely keep ahead of his current expenditures and debt service, much less even think about retirement planning. Until Legacy Practice Transitions came along, he was certain that he would have to continue practicing dentistry until he either died at the chair or became disabled. Once he became aware of the benefits of the PreSale Program, he knew that this was his salvation.
The one major issue was his staff. He had a well-trained, but somewhat over-paid staff that had been with him for many years. He did not want to lose those staff members no matter what. “These people are loyal to me, and I feel a strong commitment to them. I don’t want them to lose their job as a result of this practice transition. I want them to be happy”.
I assured Dr. Smith that his staff’s ability and performance was enough to provide them with job security. Staff compensation would commensurate with performance. Any purchaser wants a good, highly-trained and motivated staff since that would allow the practice to be more productive. The important consideration, however, was that the staff had to support Dr. Smith’s decision to sell, and be willing to facilitate a successful practice transition. The seller could not expect the purchaser to continue to employ staff members who were not cooperative.
Dr. Smith felt confident that the staff, out of loyalty to him, would understand and fully support his selling the practice because it would improve his health, allow him to fund his pension plan, eliminate stress and allow him more time off.
The sale took place as planned, and the practice was relocated to the purchaser’s office. Now the test of staff loyalty was about to be tried. Making a move like this was critical, and adapting to a three-day work schedule required some coordination and cooperation by everyone involved. Here is what transpired.
The chairside assistants complained to Dr. Smith that when the purchaser’s staff used a treatment room, the instruments were not put back the way Dr. Smith’s staff liked them to be. The music was too loud, or too soft, or the wrong kind. They did not like coming in early to prepare the office for patients, they did not like the other doctor and staff. They complained that they did not like all the changes and that they were not happy. They threatened to leave because they did not like the changes.
Dr. Smith’s hygienists did not like the other doctor checking “their” patients, and they complained to Dr. Smith every day. They cried and whined and told him that his patients were “leaving in droves” (actually about 20 patients left in the first 6 months, mostly as a result of being annoyed at listening to the hygienist’s complaints). They said Dr. Smith’s patients only wanted him to check them when they came in for a hygiene appointment (instead of supporting the changes, the hygienist complained). Dr. Smith actually began to come into the office on his day off to check hygiene patients instead of enjoying his new, three-day workweek lifestyle.
Well, Dr. Smith discovered that his “loyal” staff did little to nothing to support his move. His most loyal office manager of 14 years quit before two months were up (so much for wanting to help Dr. Smith with the transition). It was obvious that she had started her new job search shortly after hearing about the sale (she has quit and moved to two other offices since that time). In fairness, one chairside assistant stayed with Dr. Smith throughout the transition, and she too was appalled by the disloyalty of the other staff.
The old adage “familiarity breeds contempt” really applied to his staff. Dr. Smith realized that his relationship with his staff had become too familiar over the years, and they forgot who was working for whom. The staff treated him more as an equal than a boss. If he did not do what they wanted him to do, then they treated him with contempt. So much for loyalty, thought Dr. Smith.
Dr. Smith realized that, in most cases staff loyalty existed only as long as the staff got their way. As soon as they did not agree with him, they were gone in a flash. He was determined not to let his staff ruin his practice transition. As his staff left, Dr. Smith actually found it more enjoyable working with the new staff hired by the purchaser. They at least treated him with respect and did not complain day in and day out. They did their jobs with no complaints, and that was refreshing. Dr. Smith had gotten used to listening to his staff complain and accepted it as part of the price of running a practice. Now that they were gone, he actually found his practice days more enjoyable because he no longer had to listen to all those staff complaints. Life was good again.
NOTE: We appreciate and understand a seller’s concern about staff employment issues following a practice transition. However, you should understand that when a purchaser buys a practice, part of that practice value is having a well-trained staff ready to go to work. Purchasers don’t fire productive staff, and they don’t cut salaries for productive staff. We obviously cannot recommend keeping unproductive, lazy or discontented staff.
Job security comes from job performance, not from tenure in a practice. Your staff will have more than ample opportunity to prove their value to the purchaser. If they do so, job security is not an issue. If your staff really is loyal to you, they will cooperate and continue to work with you after the sale. If your staff leave because you sold, they were never loyal to you in the first place. You have lost nothing. Staff loyalty is just a matter of perception… that sometimes proves to be a misconception.
Congratulations to Scott T Smith and Abe Jarjoura on their Practice Transitions. Gentlemen, you were a pleasure to work with and know that both of your futures will be bright.
Want to be near the Lake Michigan? We have a great 5 op office ready for a new owner. Practice is producing $500K+. This practice has great potential to grow. You will have the ability to add a 6th operatory. Real estate can be a lease or option to buy. Contact Phil Cole @ 989-233-4200 or firstname.lastname@example.org
We all get emails from people wondering who they are and what the email is about. Here is a quick Red Flag flyer from Worksighted.
Please take a look at what Bank of America has for financing! Ends October 31st!