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Articles

Volume 64: Finding and Being a Mentor

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The transition from being an owner of a dental practice to being an associate in that same practice can be a very smooth and rewarding time in a dentist’s life. Smart buyers know that the goodwill they are purchasing, which forms a significant part of the purchase price, is transferred more effectively if the seller stays on for a while. Both buyers and sellers of dental practices find this time somewhat challenging as the roles of each are changing dramatically.

In order to enjoy a productive and successful mentor/mentee relationship, the buyer and seller must share similar philosophies of dentistry and practice management. They should have similar treatment philosophies and be open to considering the other’s ideas. This can create issues as dentistry is a very opinion based profession. If both buyer and seller are like-minded these differences of opinion will be relatively minor and the relationship will flourish. This becomes a problem when we have a “square peg/round hole” scenario. This does not bode well for a productive relationship and has the potential for extreme goodwill erosion in a short period of time. Buyers must make an honest assessment of their philosophy and goals and establish that these goals are congruent with the seller prior to entering into the arrangement.

Once the seller has determined that he or she wants to sell the practice, the next question is, “do I want to stay on”? If not, then a simple transfer of ownership takes place, you leave one day, and the buyer starts the next. When done properly this method is perfectly acceptable to many buyers and sellers and can work very well. If however you do wish to stay and the practice is large enough to support both of you for a transition period, then the next question is, “can I give up control”? Most dentists have a more difficult time with this. They are used to running the show, making all the decisions and not answering to anyone, except their spouse! I was recently involved in a sale where the vendor is staying on with a reduced schedule for at least a year. Here is an excerpt from an e-mail he wrote to the buyer just prior to closing, “We are anxious to make your transition in the office as easy as possible. More importantly, I want to introduce you to the staff and then you and I need to sit down and discuss scheduling, logistics for introducing you, web site stuff, etc. Lots to go over and perhaps you will allow me to help you through these things. It won't be easy for me to give up the reins, but I promise to work for you and not direct you.” This is an example of a seller who understands that his role is changing and who is willing to help the buyer assimilate into the practice and effectively transfer the goodwill. The buyer of this practice will enjoy a smooth transition with a mentor who will support and encourage her throughout the transition.

The situations that don’t seem to work as smoothly are those where the buyer comes in and exerts authority over the practice in a strong and forceful way. I have witnessed situations where buyers come in and terminate employees, change the equipment and re- do the leaseholds, add digital x-rays and go paperless all in very short period of time. While this may be a reasonable long term strategy, it is very disruptive to the staff in the office, concerning to the previous owner, and most importantly confusing for the patients. In the end, the result is inevitable tension between the buyer and seller which will cause the seller to leave. Then the remaining staff leave and ultimately a lot of patients leave too. The goodwill was eroded unnecessarily. The changes that were implemented should have taken place over a much longer period of time, not in the first few weeks. Clearly, this buyer did not want to be a mentee and would have been better buying a practice where the seller wanted to leave on closing.

The mentor is an important role in dentistry as it is in other aspects of life. I am fortunate to have had a few very good mentors in my life; my Dad, Tom Allen, and most recently, Graham Tuck. Sadly, Graham recently passed away very suddenly of a heart attack at 71. Many of the long time readers of the Professional Advisory will remember Graham. He was a founding member of the PA and was the founder of Professional Practice Sales. I was fortunate to have known him and to have called him a friend and mentor. He was a true gentleman who conducted himself with integrity and honesty. We had a very successful mentor/mentee relationship where I learned an immense amount from him and he was able to transition into retirement smoothly. My sympathy is with his wife Val, and his loved ones.

David Lind is a Principal and Broker of Record in Professional Practice Sales Ltd. (www.ppsales.com), which specializes in the valuation and sale of dental practices. He can be reached at (905) 472-6000 or 1-888-777-8825 or e-mail at: david.lind@ppsales.com

The Professional Advisory

  1. One Year Later

  2. Dealing with Unsolicited Offers

  3. Covid-19 Practice Sales Update

  4. When is the Right Time to Sell Your Practice and Why?

  5. Partnership Pitfalls

  6. The Real Cost of a Dental Practice Set-up

  7. Smaller Practice Realities

  8. Dental Market Update - 2019

  9. Creating Your Own Most Valuable Practice (MVP)

  10. Small Practice Economics

  11. The Market is Very Efficient

  12. How Can Dental Practice Values be Rising and Declining?

  13. Hygiene as a Value Driver

  14. The Value of a Good Team

  15. Is it Time to Move?

  16. Staging A Dental Practice

  17. The High Cost of Dying

  18. Deal-Busters

  19. Patients - Attract and Retain

  20. Should I Stay or Should I Go?

  21. Is There a Buyer for Every Practice?

  22. Good, Better, Best - The Market has Spoken

  23. Smooth-Sale-ing

  24. Buying Time

  25. Patients, Patience, Patients

  26. A Real Patient

  27. Why Do a Practice Valuation? I'm not Selling

  28. Irrational Exuberance or The New Normal?

  29. Do dental equipment and dental technology affect a practice value?

  30. Finding and Being a Mentor

  31. Bigger is Better

  32. Dave's Top Ten List for Buyers (Vendors should read this too!)

  33. How Well Do You Know Your Practice?

  34. Dave's Top Ten List for Vendors

  35. What will happen to dental practice Values in the next 10 years?

  36. Your Premises Lease is an Important Asset

  37. What are Associates Thinking?

  38. There is Life Outside the GTA

  39. When Is the Right Time to Sell My Dental Practice?

  40. Mergers are a Viable Option

  41. Is Your Associate an Asset or a Liability?

  42. Has your Practice Facility Kept Up With Your Billings?

  43. The 100 per cent of Gross Myth

  44. The Past, The Present and The Future

  45. Caveat Emptor

  46. Overpaid Long Term Staff

  47. Selling your Practice in Stages

  48. A Potential Pitfall of Selling Shares

  49. Value in Your Practice Through Balance

  50. Only Trusted Staff Can Defraud You

  51. To Own or Not to Own Practice Real Estate? That is the Question.

  52. Coping With A Large Patient Base

  53. Successful Dental Practice Transitions

  54. Taking Care of Business

  55. The Investing Dentist Phenomenon

  56. Two areas to focus upon that could negatively impact the value of your practice

  57. Organize your Debt in Order to Sell your Practice

  58. Having a Better Team

  59. How Do I Prepare My Practice For Sale

  60. How Do I Prepare My Practice For Sale? Part 3

  61. How Do I Prepare My Practice For Sale? Part 2

  62. How Do I Prepare My Practice For Sale? Part 1

  63. Advice to My Son or Daughter Graduating from Dental School

  64. Transition - What to Expect

  65. Discussion on Digital X-Rays

  66. Partnerships and Shotguns

  67. Strategic Planning - How to Get Started

  68. Calling All Vendors - Practices have Gone Up in Value

  69. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates

  70. Matrimonial Practice Valuations

  71. Purchaser's Guide to Affording a Practice

  72. Location Improvements Throughout Your Career

  73. Small Practice Valuations

  74. Partnerships – The Best and The Worst

  75. Changing Location When the Opportunity Comes Along

  76. Visual Presentation of Your Practice

  77. Presentation of Charts

  78. Your Premises Lease Can Be Your Worst Enemy

  79. How to Select an Appraiser for Your Practice

  80. How Are Your Billing Ratios?

  81. It Pays to Invest in Your Tangible Assets

  82. The Importance of Separate Financial Statements

  83. Five Time Frame Levels to Sell a Practice

  84. 12 Suggestions to Safeguard Computer Data

  85. How to Buy a Visible Practice

  86. Why is there a shortage of good practices today?

  87. The Importance of Equipment in the Purchase of a Practice

  88. The Balanced Practice

  89. Will My Practice Be Saleable in The Future?

  90. Buyer Be Aware

  91. Excess Profit - The Second Key

  92. Patients and Profits are the Keys

  93. Plan Ahead

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