How do you know when you are “ready” to hire an associate. This is an extremely common question these days … sometimes it’s because you are overloaded or booked out too far and losing potential new patients. Maybe it’s a case of no life/work balance at all. Or perhaps you are getting tired of practising and would like to cut back, or start the exit strategy. Consequently, the answer to “when” or “should I” has many aspects to consider.
Overloaded with patients
While many practitioners would die to have this problem of too many patients, it is not a pretty picture when it is happening to you, and you may feel like you need roller blades to move faster and faster.
In this case, the questions to consider are:
- Are your staff scheduling your day properly? We have doubled practices without the provider feeling overloaded just by getting the staff trained on booking Ideal Days. In this case, you might not need an associate yet.
- Do you have enough rooms to add in another provider?
- If you don’t, the next questions are: Can you acquire more space or make an addition to your building? Do you want to consider having the practice open more evenings and Saturdays? If you give up one of your treatment rooms to the associate, are you going to be slowed down?
- Are you sufficiently abundant in patients that you can give some to the new associate who you will be paying a percentage to and salaries for the staff that will be required with an additional provider? There is a difference between too many for you and not enough for 2 practitioners.
- If the answer was no to #4, do you have a marketing program designed in order to get the new associate busy fast?
- Do you have a proper employment contract spelling out all details of the agreement between you and the associate including a tight non-compete clause?
No Life-Work Balance
Many younger practitioners start out their own practices with a huge number of hours in an effort to cast a wide net for potential new patients. After a few years, they start to tire of this … especially if they have started a family and want to be at home more.
Questions to consider here:
- Are you fully booked for at least 32 – 35 hours per week? If yes, you can gradually take out an evening here and there until you have it down to one or two (or none if you want) and if you don’t want Saturdays, those can eventually go too if you are fully booked during the days of the week.
- If you hire an associate before you are fully booked yourself, do you realize that you are then giving away part of your net income to the associate?
Depending on how imminent your desired “exit day” is, many of the questions above will be needing answers in order to prepare. Lots of practitioners start the exit strategy anywhere from 2 – 5 years before the anticipated retirement date. This gives you the chance to beef up the practice and make it as perfect as possible (including net income to you so you top up your retirement fund) so that it sells for the best possible amount.
Retirement is a very expensive affair nowadays as we are living 20 – 30 years past the classic retirement age of 65 and, unless you want to sit at home all that time and do nothing that costs money, you may want to consider how much you are going to need with travel, excitement, fun, and … (get ready) inflation making your dollars shrink and the tax man wanting more and more.
You have two choices really:
- Make your practice be all that it can be right up to the end, then sell it and hand the keys over the buyer to step into as you walk out the door.
- Two to five years before “the day” start an associate who wants to buy the practice from you. Build yourself and them up with great marketing and run a top notch practice and sell it for top dollar.
There are probably more considerations than listed above, but it is a starting point anyway.