Are You Thinking of Adding an Associate? Part I
Upon developing a successful practice, many claim that the only way to make more money is to add an associate. While that can be true, some who have done so have seen disappointing results. Unlike the “field of dreams,” they built out their practice, but the patients didn’t come. Or you added an associate and your income dropped.
This article helps practitioners look before they leap.
Are You Ready?
Whether you’ve been thinking about bringing another dentist into the practice or not, there are a few signs that suggest it’s time to give expansion some serious thought:
- You are scheduling new patients out more than several days.
- You aren’t able to keep pace with periodic exams for your hygiene patients.
- You aren’t able to perform treatment in a timely fashion and/or may not have availability for referrals.
- Your patients and/or team have said your quality of service is slipping.
- You are working longer hours and left short on family time.
- You are contemplating retirement and need a strategy for the business transition that makes sense for your patients and your financial future. Having an associate with skin in the game allows you a couple of years to slow down, save more money, add extended hours for your patients, and prepare the associate for taking over.
Ideally, you’ll catch a glimpse of one or more of these thresholds and start the planning process long before you bump into them!
Preparing for Expansion
According to industry benchmarks, a full-time dentist typically serves 1,800-2,000 active patients on a sustained basis. To swell your patient ranks by that amount, consider:
- Is the local market ripe for expansion in dental services? Are the surrounding neighborhoods stable or transitory? Are new housing developments in the works? How much competition do you face? Do you have a competitor that is ready to retire and you could purchase their practice?
- Given an effective marketing campaign, what constitutes a reasonable expectation for the number of new patients that you will attract each month? How might you engage your current clientele to stimulate referral business?
- Are you prepared to transition some of your existing patients to the new associate? If so, how will you manage your relationships such that you maintain their loyalty to the practice and promote trust in the new associate? Is the associate open to working part-time as you work together to build their practice?
As you forecast revenue associated with adding a dentist, consider:
- An experienced general practitioner may collect $4,000+ per day, a new graduate could be closer to $2,500.
- If you have PPOs or Medicaid, you have to allow for the associated write off to production that is uncollectible.
- You may also need to add a dental assistant and hygienist to help the new associate and take care of the increase in patients.
- You may need to make a capital investment to expand your existing office, move to larger quarters or start up an additional location.
Seeking Professional Advice
Professional advisors can provide the guidance and analytical support to assess your business opportunities and craft a plan consistent with your unique circumstances and goals. Contact us today to find out how Aldrich can help you plan for your future.
Ready to grow your practice?
Get the rest of our 10-step guide to find out if your practice is really ready for another associate.