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Ontario Dentist - March 2002
by Timothy A. Brown, A.L.A.
I have just finished reading several interesting articles published in a national Canadian dental magazine. The various experts each have their own unique view of transitions, and most of them are providing advice about how and why you should consider "transiting" or "exiting" out of your practice over time, not suddenly. I also have a view to share with you and hope this article may further stimulate the debate about the perceived need for a "transition" of a dental practice. My associate Tom Schramm first wrote about this topic in the May 1998 issue of Ontario Dentist.
"The concept of phasing-out of your practice slowly is being compared to the "old-fashioned" model of selling your practice outright and then making an immediate departure from the practice."
Any time that a dental practice is sold, in part or in whole, it is obvious that some type of transition of ownership has occurred. This is an obvious definition of a transition and no debate should be required. Where the real challenge begins is with the question: What is the best type of transition? Does the previous owner need to stay to help the buyer with introduction to patients? If so, how long does it take? What happens when there is no transition at all, as in the case of sudden death? What pitfalls are there to having both a past and new owner working together? Is a partnership the best method to effect a transition?
In my view, it is not necessary for a selling dentist to continue to work with the buyer in most dental practice sales in order to effect a smooth transition of the patients and staff.
This statement may surprise many of you, especially some of the more mature readers. I am sorry to say this, but in my opinion, you are not as valuable to the buyer of your practice as you think you are. Dentists have a terrible habit of over-appraising themselves and often think they cannot be replaced.
Patients are loyal to you; this is true. However, they are not going to be your patient forever and may have already changed dentists once or twice in their lifetime. They will accept that you have retired, perhaps reluctantly, but accept it they will. As a patient myself, I don't want to see my dentist retire, but when she does, I will survive the change and will return to the same practice for many reasons. My June 2000 Ontario Dentist column, "Why Do Patients Return to a Practice When The Owner Retires?" clearly set out the reasons for this.
As well, many dentists mistake their patient's expression of trust and friendship as a permanent loyalty that cannot be broken. This is a false assessment of your position. Unfortunately, we can all be replaced, often within weeks; something that's been proven many times over the past years, in many different dental practice transaction scenarios.
"It is not necessary for a selling dentist to continue to work with the buyer in most dental practice sales in order to effect a smooth transition of the patients and staff."
We have managed many recent sales across Canada where the selling dentist never spent a single day in the office with the new owner. In most instances, the seller was healthy and able to associate with the new owner, yet the buyer stated they were more than capable of managing the practice. In other instances, the seller simply wanted to make a clean break and did not wish to work many long days, while explaining their decision to sell to the patients and being witness to the emotional "goodbyes" that some will make if you continue to practice after a sale. Sometimes a clean break is best.
A survey of "clean break" transactions produces commentary from buyers such as "I thought I would lose many of the patients because the previous dentist was not here, but I am surprised how many patients were happy to stay with the practice.ä" On the other side, sellers often say they wish they had not stayed on, as the new owner is too different in their style and it hurts them to watch the practice be changed so drastically.
Are you ready to let go?
In other instances, dentists tell us they have great difficulty letting go. This can create a serious problem, with the staff often becoming conflicted between an old loyalty and the new authority. It is unfair when staff become torn between the two dentists. It's also a situation capable of causing resignations that are entirely preventable.
Some young dentists have difficulty managing other dentists. It is unfair to expect a young dentist to handle every ownership issue with ease in their first year. Staff, patients, suppliers, labs, along with the past owner working as their associate in the practice, will present multiple challenges to the new owner. Some decisions will be made with little or no thought, as is common among young business owners. Unfortunately, the one area they tend to give the least thought to is the emotions and pride of the previous owner. New owners are primarily focused on meeting the patients and are highly motivated by the large debts incurred to buy the practice. They are also nervous and will make some honest mistakes. The result is that the past owner (now an associate) may receive the least amount of thought, as the new owner knows they are only there for a brief time. In short, if you work for the buyer of your practice, expect the least and hope for the best.
Patients often demand to see the old dentist again if they know he or she is still available, even if it's only part-time. Following such requests, the new dentist has been heard to complain that they have paid for the business, yet the past dentist is still holding on too much and preventing the new owner from implementing their practice philosophy.
For example, many young buyers have different views about preventative programs, while some of the older generation of dentists do not want the patients subjected to this type of modern treatment planning. While this generation gap will always be present in dentistry, it is wise to remember that the buyer paid for the business and it is their right to modify the practice policies as they see fit. Resistance by the previous owner will only lead to serious conflicts that damage the staff's confidence and enthusiasm for the transition.
Conclusion
Every dentist can be replaced - every single one of you. I can also be replaced; very easily I'm sure, within days if necessary. As professionals, we must recognize that though we are very valuable while practising, once we decide to let go there will be someone else to take our place. Today's young buyers are eager, willing and full of energy. They will do just fine without us; they will do just fine.
Part II of this article will appear in the April issue.
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