Please read PART 1 of this post first.
In this part, we will cover the situation where you as the owner, continue work as an associate, elsewhere and hire a dentist to work in your startup.
The primary reason to do this is if you feel your associateship is earning you good money and your startup is quieter. Some people do this for a few of the days and others hire an associate full time for their startup.
Consider that during the startup phase, enhancing the reputation of your surgery in the community is paramount. This has two major implications. You CANNOT hire a grad to work at your practice thinking you can get away with paying them less and therefore make it profitable for yourself to work elsewhere. It amazes me the number of owners that think this is a reasonable strategy. Other than the fact they can’t do lots of the work that will come in and have to refer it (revenue walks out the door), they also don’t yet have the patient management skills (communication and technical), to give your surgery the best shot at making a great impression.
Consider also, what kind of associate are you gonna get, even experienced ones, who will willingly sit there and wait for patients while it is quiet. You yourself as the owner, do not think it is worth your time building up your own practice. Will an excellent associate do it without a significantly large retainer?
Which brings me to my next point. A retainer. How much is a good retainer? Well, instead of looking at the retainer first, find a great candidate and see what retainer they need to make it work. Then balance that with your financial situation to see if it works out having the associate on.
Let’s run some quick numbers. Let’s say you bill $10,000 a week in your associate position and you earn $4000. Let’s say your associate demands $3000 weekly retainer, this means that your surgery needs to be billing a minimum of $7500 for you to not be losing out. Anything less than that and you are paying them an effective commission greater than 40% and you will be paying them from your own pocket as the rest of the money will be needed for running of the surgery. In this scenario, it may be more beneficial for you to work there yourself. Even though it will work out slightly worse for you financially, there is something to be said for having the peace of mind that your patients are looked after as well as they could be from someone with significant skin in the game.
Consider also the fact that if you don’t work at the surgery yourself and have an associate on, all the goodwill at the startup is locked with the associate. If they leave and do a dodgy, setting up close by after say building up their books at your location for two years, this would be catastrophic for your surgery. Unfortunately, associates stealing goodwill is becoming more and more common!