Dental Practice Transitions: Is Corporate Dentistry Right for You?

Dental Practice Transitions: Is Corporate Dentistry Right for You?

Aug 16, 2019

Corporate dentistry is rapidly growing throughout most of the country and it is expected to continue growing. However, the growth is typically not in start-up practices but instead through the acquisition of existing practice purchases. Therefore, one should be fully informed and decide whether corporate dentistry is right for them or not?

How will you be compensated after the sale?

Transition contract mostly demands to work with the new entity; therefore, one should have a complete idea as to how they will be compensated for this clinical work. One might receive salary plus bonus, a percentage of collections or productions, W-2 salary or it may involve ongoing payments from their buyout.

What role and responsibility will you have after the sale?

There are some terms and conditions in the contract for retaining employment of the selling dentist for a certain number of years. This is beneficial for the buyer as his old patients will still come to him even after a brand change. But this situation can be perfect for the seller too, if the seller wants to shed some of the responsibilities of management but continue clinical work and preserve some income.

How long will you need to work?

The transition in practice will also affect the length of employment. If one has decided to sell and walk away, this might not be appealing and it can affect one emotionally and physically. But, if one has a clear financial plan, then the employment term should align with their financial goals.

How will you be paid for your equity?

The main reason why Dentists look for transition is because they want to extract the equity they have built up in their career. Corporate dentistry purchase agreements are not easy to relate to, they carry complicated payment terms, which might include delayed payment schedules, equity in the corporate entity and partial cash payments.

Are you ready to be an employee?

One should ask themselves whether they are ready to shift as an employee and continue the clinical work. They have to be ready emotionally as shifting from serving as the captain of your ship to an employee can be tedious and frustrating as it comes with lot of pressures.