This is part of the Transition Tales & Truths series in which we discuss practice transitions with real dentists.
Today’s Transition Tale comes from our friend and 2020 New Dentist Committee Vice Chair Dr. Daniel Hall. He wants to share his learnings with other dentists so hopefully they can find the right fit, the first time.
Dr. Hall got in touch with ADA Practice Transitions because he believes that ADAPT, a service created by the ADA, could have helped alleviate many of the obstacles he found during his journey to practice ownership. After dental school at the Medical University of South Carolina, Dr. Hall completed a general practice residency. Between his residency and a business minor in college, he felt ready to launch his career and hoped to eventually buy a practice.
Practice #1: Not enough patients
He joined a small practice in his hometown as an associate – but quickly found that there wasn’t enough work to go around. “Some owners don’t understand what it really means to have an associate,” he explained. In order to pay an associate’s salary without growing the business, the owner would need to “give up” part of his collections.
There simply weren’t enough patients to make the numbers work.
In order to pay an associate’s salary, an owner must either grow the business or "give up" part of his collections.
Dr. Hall shared some sample numbers to illustrate the point: if an associate is to be paid 30% of collections, and has a target salary of $120,000, that dentist needs $400,000 worth of collections. Those collections need to come from somewhere. Either the owner dentist has to be willing to scale back his own hours – which can be ideal if he is ready to transition towards retirement – or the practice needs to invest in recruiting new patients.
After a time, Dr. Hall and the owner mutually decided to part ways.
Practice #2: Rewarding rural work, but differing goals
Next, Dr. Hall went to a rural practice where he could fully use all the skills he had learned in his GPR. As another dentist recently shared, rural practices can be a great place to apply a full range of skills – and Dr. Hall readily agrees. After all, people in a small town appreciate the convenience of nearby dental services. Plus, with less competition and lower overhead, the profit potential can be quite a bit higher.
While the work was very rewarding, Dr. Hall realized he and the practice owner wanted different things.
The owner was still many years away from retirement and wanted to remain the boss until he sold. Dr. Hall had hoped to take some of the practice ownership responsibilities, and even a share of the ownership, sooner rather than later.
But they had never put their timelines or goals in writing. When they realized they weren’t aligned, they parted on good terms. (See how contracts can make sure you aren’t disappointed by miscommunications.)
Practice #3: Finally, the “just right” practice
The third practice turned out to be the perfect place. In summer 2018, Dr. Hall purchased a practice where he has been busy implementing his vision. He has expanded the team and developed new governance measures that reflect his business background. His practice is thriving and he enjoys being able to practice a wide range of dentistry while managing a growing business in a welcoming small South Carolina town.
Advice to young dentists
Dr. Hall wishes that ADAPT had been around when he was graduating to help him ask the right questions and choose the right practice for his needs. “Honest to goodness, I was not ready to own a practice straight out of school,” he said. “But if someone had helped me think through my options, I would have realized that an associate-to-owner situation was ideal. I could have started by trying to find an owner who shared my timeline and goals instead of feeling frustrated along the way.”
Think about the whole picture: which types of procedures you want to do, whether you want to own someday, and how interested you are in the business of dentistry.
He urges young dentists to think about the whole picture: which types of procedures they want to do, whether they want to own someday, and how interested they are in the business of dentistry. He also recommends thinking about how non-dentistry goals – such as having a family – fit into the picture.
Finally, Dr. Hall suggests carefully reviewing and negotiating any non-compete clause. His early contracts included restrictive covenants that limited his career movement, blocking him from working in nearby towns. (Read more about negotiating a non-compete that allows for career growth.)
Ready to find the right practice for your goals? If you are considering a change in the next 12-18 months, we recommend creating an ADA Practice Transitions profile today. Once you submit your profile, you receive access to the ADA Advisor who helps you think through your own goals and guides you through each step of the process.