Having a properly staffed office is essential when buying or selling a dental practice. PMA Practice Transitions consultants, Matt Scherer and Joe Gordon, discuss the ins and outs of who you need, how much personnel you need and where you need staff.
Transcript
| Matt Scherer: | Hello, everyone. Thanks for joining us today. My name’s Matt Sherer with PMA Practice Transitions, and I cover the Ohio and western Pennsylvania area. I assist dental professionals with buying and selling practices, and my colleague is… |
| Joe Gordon: | Hi, I’m Joe Gordon. I do exactly what Matt does, I just do it in Indiana and northern Kentucky. Today we’re going to talk about staffing as it relates to buying and selling practices. Years ago when I first got into the accounting business, I learned a phrase that you could not say the word personnel without the word problem associated with it, and that still holds true today. But when we talk about staffing, we need to look at what we have in place when we’re going to sell a practice. |
| Matt Scherer: | Somewhere between 22% and 28%, as it relates to your collection, should be your percentage of wages for your staff, wouldn’t you agree? |
| Joe Gordon: | I would absolutely agree. |
| Matt Scherer: | Are you overstaffed? Are you understaffed? Because that could play in a factor in a buyer getting a loan as well. |
| Joe Gordon: | Oh, without a doubt. We run into situations where either a practice has cut back their hours, cut back their days, but has not cut back the cost of staffing, and it causes that percentage as a percentage gross revenue to creep up exorbitantly. And we’ve also ran into practices that have trouble attracting people. Some of the urban practices today have a hard time finding qualified people to fill positions, so we see it in both sides. |
| Then if you’re thinking about selling a practice, it’s a good time to go through your staffing and see if you have the appropriate people in your appropriate places. The two most important people in practice are your receptionist- | |
| Matt Scherer: | Without a doubt. |
| Joe Gordon: | Without a doubt. They’re the first person usually somebody sees, and the last person. They know everything about your patients probably more than you do. And the other are the hygienists, because they spend so much time and have so much conversation with the patients. You want to make sure that those are two great positions there. If there are an instance your spouse would be the first point of contact for someone coming in the office, then when you retire, they’re retiring with you. It may be a good idea to get somebody else in to make that transition work a little better for a buyer. |
| Matt Scherer: | That’s a fantastic point. In fact, I had a dentist who I spoke to, and his front desk person wasn’t his wife, but she said, “I’m retiring when you retire.” So my suggestion was, “Listen, it might be a hit on your personal cash flow for a little bit in the next year, but go out and hire somebody. Get them in there, train them so that the patients see that face.” It’s a familiar face, so that way when you do sell and your front desk person does retire with you, the other person could step in. And that extra expense is going to be added back into the cash flow anyway, so it doesn’t hurt the deal or the value of your practice, per se. |
| Joe Gordon: | No. |
| Matt Scherer: | I think another big thing is taking a look at associates. Many people, when you talk about staff, think about front desk, hygienists, and assistants, right? They don’t look at the associate, if there is one. The most important thing when you have an associate or you’re going to hire an associate, is to have an employment contract, number one. And in that employment contract, you should really have a non-compete, so that way if you sell the practice and the current buyer does not need that associate to help out in the practice, they don’t go down the street, open up a practice and start taking patients. |
| Joe Gordon: | It’s a great time to make sure whatever attorney you’re working with is familiar with those and can do that. Matt might work with a number of them across the Midwest, and he’d be happy to help you find one. |
| Matt Scherer: | We could on for probably another hour talking about staff, but certainly if you have questions or want to have a conversation, give Joe or I a call. We’d be happy to discuss it. And if you like today’s segment, give us the thumbs up and be sure to share with your colleagues and friends. Thank you. |
| Oh, without a doubt. We run into situations where either a practice has cut back their hours, cut back their days, but has not cut back the cost of staffing, and it causes that percentage as a percentage gross revenue to creep up exorbitantly. And we’ve also ran into practices that have trouble attracting people. Some of the urban practices today have a hard time finding qualified people to fill positions, so we see it in both sides. | |
| Then if you’re thinking about selling a practice, it’s a good time to go through your staffing and see if you have the appropriate people in your appropriate places. The two most important people in practice are your receptionist- | |
| Matt Scherer: | Without a doubt. |
| Joe Gordon: | Without a doubt. They’re the first person usually somebody sees, and the last person. They know everything about your patients probably more than you do. And the other are the hygienists, because they spend so much time and have so much conversation with the patients. You want to make sure that those are two great positions there. If there are an instance your spouse would be the first point of contact for someone coming in the office, then when you retire, they’re retiring with you. It may be a good idea to get somebody else in to make that transition work a little better for a buyer. |
| Matt Scherer: | That’s a fantastic point. In fact, I had a dentist who I spoke to, and his front desk person wasn’t his wife, but she said, “I’m retiring when you retire.” So my suggestion was, “Listen, it might be a hit on your personal cash flow for a little bit in the next year, but go out and hire somebody. Get them in there, train them so that the patients see that face.” It’s a familiar face, so that way when you do sell and your front desk person does retire with you, the other person could step in. And that extra expense is going to be added back into the cash flow anyway, so it doesn’t hurt the deal or the value of your practice, per se. |
| Joe Gordon: | No. |
| Matt Scherer: | I think another big thing is taking a look at associates. Many people, when you talk about staff, think about front desk, hygienists, and assistants, right? They don’t look at the associate, if there is one. The most important thing when you have an associate or you’re going to hire an associate, is to have an employment contract, number one. And in that employment contract, you should really have a non-compete, so that way if you sell the practice and the current buyer does not need that associate to help out in the practice, they don’t go down the street, open up a practice and start taking patients. |
| Joe Gordon: | It’s a great time to make sure whatever attorney you’re working with is familiar with those and can do that. Matt might work with a number of them across the Midwest, and he’d be happy to help you find one. |
| Matt Scherer: | We could on for probably another hour talking about staff, but certainly if you have questions or want to have a conversation, give Joe or I a call. We’d be happy to discuss it. And if you like today’s segment, give us the thumbs up and be sure to share with your colleagues and friends. Thank you. |