Making a Dental Associate A 50/50 Equity Partner

Lately we have been hearing from dentists and associates about the feasibility of creating a 50/50 partnership. Before this is contemplated there are some questions to be answered and considerations to be weighed.

Here are a few that we feel are important:

•   Is your practice large enough patient base wise for two full-time doctors?
•  Is the physical space larger enough for two doctors to work at the same time or will you be doing a split schedule?
• Is your business house (the practice systems, processes, etc.) in order?
• Is your personal house (any legal issues with either party such as pending divorce) in order?
• How long has the associate worked with you and are you comfortable with his/her practice style?
• Why did you hire the associate in the first place? Was it simply for coverage so you could cut back, or was it to have an in-house buyer when you are ready to retire?
• How does the associate’s patient base compare to yours? In other words has the associate been given insurance based patients and smaller/routine cases compared to your fee for service bigger ticket cases.
• Is the associate going to be a 50% owner immediately or over a period of years?
• As the original owner allowing a 50/50 partnership, are you willing to give up or share control of the practice you built?
• Is the associate capable or willing to take over any administrative duties you currently perform?
• Does the associate get along well with your staff and patients?
• Has the associate added to the growth of your practice?
• How will you share the new patients?
• Does the new doctor perform any procedures that the seller doesn’t and vice-versa?

For further information, please contact our friendly and wise Dental CPAs at (800) 772-1065 or info@dentalcpas.com