Friday, July 13, 2012

When Should Dental Associate Give Notice to Employer when Buying a Practice?

I have an associate position that I can leave around November. I’m looking around for a practice to purchase and wanted to get an approximate timeline on how long it takes from start to finish for a practice purchase, or any tips on making transition from associate to owner (in regards to when to tell employer, when I should make an offer, if I find a great office to purchase-being that I can leave in November).

 Thank you in advance.

1. The search can take anywhere from 1 month to 3 years.
2. Now, when you've found ONE practice you'd like to focus on, the process should take no more than 90 days from the day you inquire to settlement. Obviously there are exceptions.
3. Timing on employer notice? That’s a delicate subject. There's the notice clause in your contract of course and you'll have to try and time that notice accordingly.

As you can imagine, if the process can take 90 days and you have to give 90 days notice, it won't be prudent to give notice the day you inquire about the practice since you have no idea how negotiations will go. So, there's no right or wrong answer; however, here's what I would advise (and have advised), once you're fairly certain that the deal will get done, that's when you give notice (don't tell the seller though then they'll know you HAVE to settle most likely and the leverage shifts to them in my opinion). Typically that's when the main points of the LOI have been agreed to and it goes to the attorneys for drafting and negotiating. At that point you likely have 15-30 days until settlement date. If that settlement date falls within the time period where you're still committed to your employer, even if you have a 90 day notice clause, sometimes the employer will want you gone as soon as they can find another associate so they may let you leave early. If they don't, ask them if you can mutually agree to leave early. If they won't, you can either push out the settlement date (which is probably the best strategy) and still get the documents signed with a prospective take over date, or, settle and take ownership now if the seller is willing to stay and work until you can leave your employer.
Good luck.

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