How An Associate Can Hurt Your Transition Plans

For many dental practice owners, hiring an associate feels like a logical first step toward retirement. The plan sounds simple: bring in a dentist, gradually reduce your workload, and eventually sell the practice to that associate.

Unfortunately, this strategy rarely works. In many cases, the associate leaves before a transition occurs, or remains in the practice only to complicate a future sale.

The Income Problem

An associate needs enough income to earn a competitive living. That is especially important when the average educational debt of graduating dental students is nearly $300,000, according to the American Dental Association. Many associates also have mortgages, growing families, and other financial obligations.

The owner may say that the associate will receive enough patients, but following through can be difficult. Giving an associate the production needed to succeed may require the owner surrendering approximately $14,000 or more in monthly income. For an owner who has spent decades building a practice, that can be a difficult adjustment, especially if retirement is still a few years away.

Staff scheduling habits can make matters worse. Even after an owner has instructed their staff to fill an associate’s schedule, team members frequently continue filling the owner’s schedule first. Patients may also insist on seeing the established dentist. The result is a full schedule for the owner and openings for the associate, who eventually begins looking elsewhere.

Experienced Associates Usually Want Ownership

Most owners would prefer an experienced associate rather than a dentist who is still developing clinical speed, treatment-planning skills, and confidence. The problem is that strong, experienced associates often want an ownership opportunity, not an indefinite employee position. We previously wrote about this in “Who Will Your Buyer Be?”

If a qualified associate believes ownership will not be available within a year or two, that dentist may pursue another opportunity. This is particularly true in a competitive employment market where dental service organizations and other large groups can offer attractive compensation, benefits, predictable hours, and established support systems.

Associates are also understandably cautious about verbal promises. Many have accepted positions after being told they would eventually be able to purchase the practice, only to discover several years later that the owner is not ready to sell, or will not even discuss terms. A serious transition opportunity should therefore be documented in writing, with clear expectations, milestones, and a realistic timeline.

The Owner Faces a Commitment
Problem, Too

The hesitation is not one-sided. An owner cannot responsibly promise to sell a practice to someone whose work has never been observed.

Before considering an associate as a successor, the owner needs to evaluate the dentist’s clinical proficiency, quality of care, treatment-planning philosophy, patient communication, work ethic, and ability to lead the team. Those qualities take time to assess.

This creates a difficult cycle: the associate may not commit without a credible path to ownership, while the owner cannot offer that path without first evaluating the associate. If either party delays the conversation, frustration and mistrust can grow.

Agreeing On a Practice Sale Price

Even when both parties agree that the associate will purchase the practice, determining the sale price can become contentious. Associate-buyers often believe a practice should be valued based on its performance before they arrived, reasoning that any subsequent growth in production and collections resulted partly from their own clinical work. Sellers, however, typically paid the associate compensation for that production while continuing to provide the facility, staff, equipment, patient base, marketing, management, and financial risk necessary to support it. From the seller’s perspective, the practice should therefore be valued according to its actual performance at the time of sale. These competing viewpoints can create resentment, delay negotiations, or prevent the sale altogether.

When An Associate Can Help a
Practice Sale

A productive, committed associate may add value when the intended buyer already owns multiple locations, wants to build a group practice, or is a DSO. In those transactions, maintaining provider capacity and reducing dependence on the selling doctor can be important.

Building an Exit Plan

Adding an associate to your practice can work as part of your exit strategy, but it shouldn’t be considered a dependable strategy unless selling to corporate. Practice owners should develop a transition plan that preserves multiple options, establishes realistic timing, and evaluates potential buyers independently of employment decisions.

Protect Your Practice Exit