2. Why Consider an Associateship?
• Not ready for practice ownership
• Waiting for the right opportunity
• Time to improve skills/hand speed
• No initial financial risk
• Immediate income
• Share patient coverage
• Learn from the senior dentist
- How to be a clinician and a business owner
3. Where to Start: Identify your needs
• Map out a long-term plan
- Where do you want to live?
- Do you want to be an owner?
- What kind of patients do you want to see?
- What type of dentistry do you want to do?
• Select your “team”
- Accountant - Other
- Attorney
4. Your Approach to Due Diligence
• Weighing available opportunities with the level
of due diligence you would perform
• Fewer opportunities = Less Leverage
• Requesting items to perform your due
diligence: when is the right time?
5. Due Diligence: Identify your long-term
objective
• What do you want to accomplish out of your
Associateship?
• How long do you want to be an Associate?
• What type of compensation do you need to make
based on your personal budget? How long will you
be okay with making that salary?
6. Due Diligence: Know the Senior Dentist
• Why do they want to bring in an Associate?
• When do they plan on retiring?
• Are they a dentist you foresee yourself working
with long-term?
• Do you feel you will be able to learn from
him/her?
• What is his/her style of patient care and
treatment?
• Do all of these items match up with you and how
you foresee yourself in practice?
7. Due Diligence: Know the practice
• How does the current team feel about an Associate
coming in?
• Has the practice had other Associates in the past?
- If yes, what happened?
8. Understanding the Entire Contract
• Contract should be reviewed and negotiated prior to the
Associate starting at the practice
• There is no such thing as a “standard” contract
- “Entire Agreement”
• Start Date
9. Due Diligence: The Contract
Employee vs. Independent Contractor
- Who determines what you are?
- Tax implications – W2 vs. 1099
- Legal implications – Employment vs. I/C Contract
- Benefits
- Expenses to be covered
- Paid time off
10. Due Diligence: The Contract
• How will new patients and recall patients be allocated?
• Compensation
- How frequently will you be paid?
- Daily base pay
- Bonus incentives
- % of production vs. collections
- Lab Fees
11. Associate Compensation Formulas
Formula with Lab Fees #1 Formula with Lab Fees #2 Formula without Lab Fees
Associate Production: $40,000 Associate Production: $40,000 Associate Production: $40,000
Associate Collections: $38,000 Associate Collections: $38,000 Associate Collections: $38,000
Associate Lab Fees: (2,600) Collection %: 35%
Net Collections: $35,400 Net Collections: $13,300 Associate Lab Fees: -0-
Collection %: 35% Associate Lab Fees: (2,600) Net Collections: $38,000
Monthly Salary: $12,390 Monthly Salary: $10,700 Collection %: 30%
Monthly Salary: $11,400
13. Understand Your Contract
Liability insurance and indemnification
Allowance for uniforms
Expected work hours
Exclusivity
- Are you able to work at another practice while Associating with
the current practice?
14. Understand Your Contract
Expenses to be covered (uniforms, dues, malpractice, licenses,
continuing education, etc.)
Term and Termination of Contract
Right-of-first-refusal to purchase the practice
15. Understand Your Contract: Buy-In Opportunity
Is there a buy-in provision in the contract?
Do you want the opportunity to buy-in?
Understand the expectations of both parties
-What % will you be buying in?
-When will you have the opportunity to buy-in?
16. Understand Your Contract: Buy-In Opportunity
Will you be financially ready to buy-in down the road?
Will the senior dentist provide seller financing?
Are you emotionally ready to be a practice owner?
17. Buy-In Opportunity: Additional Items to
Consider
Do you foresee yourself making mutual decisions with this
doctor?
Similar treatment philosophies?
How long before you own 100%?
Staff open to the idea of working with a multi-doctor practice?
18. Understanding the Buy-In Process
VERY DETAILED!
Process to expect...
Value of practice
Cash flow projections
Future compensation structure – senior Dr. and new Dr.
Assignment of patients
How will profit be split?
Discretionary costs – how will this be handled?
Structure of buy-in (asset vs. stock sale)
19. Questions?
Contact: Amber Banks, Consultant
amber@verosdental.com
317-452-4580 ext. 762
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