5 tips for a successful dental partnership
Co-owning a dental practice is a popular way to have your own business without taking on the full brunt of financial responsibility.
Along with sharing expenses, there are other benefits to co-owning a practice:
- It’s easier to take time off. Your partner can manage the practice and cover some of your patients while you’re away. You can also take turns covering emergency calls.
- Teaming up allows you to seek out a partner who might be stronger in areas you aren’t and vice-versa.
- Partners can rely on each other for advice on complex cases or to brainstorm ideas for managing the practice.
- Partners tend to motivate each other to grow the practice faster than a solo dentist.
Here are five tips to help successfully navigate potential challenges to running a business with another person.
1. Find a partner with a similar fiscal philosophy
Money management can cause a rift between partners. Find someone with a similar fiscal philosophy to your own, or else the issue could become a constant irritant.
2. Make sure you have the same long-term goal
Some practice owners want to work as hard as possible to maximize profits. Others dream of a four-day work week and living comfortably without stress. It’s important to find a partner who shares the same vision and long-term growth strategy as you.
3. Get it in writing
No matter how well you get along, always write up a formal partnership agreement. At minimum, the agreement should cover:
- Each partner’s rights, responsibilities and obligations
- An outline of the basic structure for how the practice will be run
- Guidelines on how the practice will be valued if one partner wishes to exit and how the patient list will be divided in such a case
- How disputes will be resolved
- An indemnity provision to limit each partner’s liability for the other’s actions
- Specifics for how profits and losses will be divided
4. Form your own professional corporation
Protect yourself by forming a professional corporation to shield your personal assets from the liabilities of the practice.
5. Make duties and responsibilities clear
It’s risky to assume that your partner will share the same devotion to the practice that you will. Define specific amounts of time that each partner is required to dedicate to the practice and their management responsibilities. It’s a good idea to list business decisions that require unanimous consent of all partners, including any major purchases.
Countless dental partnerships are overwhelmingly successful. But know what you’re getting into before making the decision to form a partnership, and plan accordingly when you’re ready to take the leap.