Working for and with family members

[cdmOMR]

So I was wondering if there are fellow SDNers out there who graduated dental school to work for a family member (notably and uncle, aunt, cousin, etc)? Is your situation successful? Are both members benefiting?

This is a synopsis of my situation if people are interested in reading, but not necessary to answer the above Q:

I graduated dental school in May and set up to work with my uncle as an associate. He owns a practice at which he is the sole practitioner with two hygienists. The practice is in a well established suburban area of Chicago, hes been here for 20 years or so and has built up a pretty successful PPO practice. Nice new equipment, all digital, CEREC, etc. Although he has taken a hit in the last few years, he still manages to do pretty well. He works 3.5 days a week. Going into dental school I felt this was a great situation to walk into (of course this was in 2008 before the economy nosedived). And after discussing practicing with him, he was nice enough to expand his office and add a very nice new chair for me to be an associate.

Then the problems started. Long story short, I am responsible to find 100% of my own patients, and I only get paid 30% of collections (although very recently he upped it to 35%). I don't have an assistant (kills my efficiency when I am seeing patients), and any sort of equipment that I would like to help me (Isolite for example) is my responsibility to buy. I pay for all my own advertising and marketing. As a result I was forced to get a part time corporate job, which is absolutely terrible, in order to pay my ridiculous student loans. I understand paying my dues as a new grad, on the idea that I would be able to buy out the practice in the near future (5-7 years) for a reasonable cost when he decides to retire. Unfortunately, I found out through my parents, that he will be asking in the neighborhood of $1 million to sell it (a ridiculous number).

So I've come to the point where my benefit of staying in General Dentistry is essentially gone. I've considered specializing (the main reason I didn't is I thought I had a good situation to walk into), not that it will be that much better for me financially but at least I can focus something I might enjoy more. I wish I did a little more research on the economic status of the profession during school so I could have predicted some of these problems coming out of school... but I was too busy learning dentistry I suppose haha.

Any advice out there?

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[2011gp]

First and foremost, I don't know if you were just casually using the term, but, you are NOT an associate. You are an independent contractor. This makes a difference in the way that taxes are paid and withheld, i.e. you are entirely responsible for them. Your situation is kind of opposite of the way it usually plays out, in that employers will classify you a 1099 independent contractor so they're off the hook for your taxes, but in every other way, they treat you like an associate employee. Either way, it's important that you make sure the paperwork is correct. Here's a link to the IRS website that may be able to give you more guidance as it pertains to taxes:

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-%28Self-Employed%29-or-Employee%3F

Moving on, I hope this isn't your favorite uncle, because it really doesn't sound like he's setting you up for any chance of success in his practice But, if you are even slightly considering buying his practice, you need to have it appraised immediately. The longer you work there without an appraisal, the more value you're adding to the practice, which is just driving up the purchase price for you later.

As for specializing, that's a complex issue that I struggled with myself. I graduated in 2011, in most aspects have a great associateship, but ultimately decided to go back to specialize in ortho (at UIC, coincidentally!)

Finally, I'm reminded of a principle that I learned in dental school, and I hope to never forget: Never hire someone you can't fire. I certainly don't know your entire personal situation, but it sounds like you might want to think about 'firing' your uncle and moving on. You just graduated, you haven't put down roots yet; go see what else it out there! And if you're willing to move a little further south in Illinois I promise you there are good jobs to be had!

 

[cdmOMR]

Yes, I am actually set up as an Independant contractor with the contract wording and tax situation... I just used associate originally because that is what I thought I was going to be doing originally. Turned out very different.

Well he is probably my closest uncle, however you are right he has not set me up for much success. Again I wasnt looking for handouts, I was/am willing to work hard, but I dont feel like he wants to take any of the risk in terms of spending money bring in patients for me. And in a fairly saturated market, and starting from almost nothing, its been tough for me to establish a patient base.

I cant help but bring up a quote I read in another thread a minute ago "Dentistry is eating its own young." I found this particularly accurate and disturbing at the same time.

 

[CMistry]

Sounds like your uncle wasn't really ready or interested in adding a dentist to his practice. For you, it's an average deal at best. Not having an assistant and not advertising surely make your life pretty bad.

If I was you I would look into that specialty you were interested in, or at least find another full-time job.

 

[bsp1013]

Hire a part time assistant?

 

[djeffreyt]

Really sounds like he's just giving you space in the practice and that's all. Other than having the same front desk staff, everything else is up to you. I agree that if you have any plan to buy, you should appraise prior to adding value unless as part of your contract, the patients you bring into the practice belong to you and not to the practice.

 

[beannaithe]

Ouch, that's a pretty tough situation to be in, especially since it's family. I'd ask him to bump up your collections so you can hire your own part-time assistant. I think you'd need to form a corporation for yourself and hire the employee through that. Realistically, he should be able to do that since you really aren't costing him anything other than supplies.

Make sure that if you're doing marketing like Facebook or a website that your patients know how to find/follow you when you leave the office, unless your uncle keeps them. If you're paying to bring them in, you should be able to retain them and take them to your next office.

If you're actually planning on buying the office, you need to have it valuated by an accountant now. You don't want to pay any extra money for the value that you'll bring into the office. You also would want a structured buy-in agreement with a value drawn up. Though I wouldn't plan on buying the office.

How's the job market in your area? If I were you, I'd keep the corporate job and stay with your uncle until you can find a better offer. If it's fulltime, great then quit the corporate job. If it's parttime, see how it works out and then look for something to replace the corporate job.

Honestly, if your uncle did some marketing, punted you some new patients and hired you an assistant (even a bad one), I'd say hold out and keep plugging away. Since it doesn't sound like he's particularly interested in your professional growth, I'd advise you to start looking and move on when you find it. Make sure to contact your patients and take them with you to your new place!

 

[cdmOMR]

Sounds like your uncle wasn't really ready or interested in adding a dentist to his practice. For you, it's an average deal at best. Not having an assistant and not advertising surely make your life pretty bad.

If I was you I would look into that specialty you were interested in, or at least find another full-time job.

I guess simply put, that is true. I have started to look into these other avenues, but again its family, I don't want to make any brash decisions.

Hire a part time assistant?

I think my problems here are deeper than that... I am not busy at all, I have to bring all my own patients in. Ive brought, friends, family, and others in but that only gets you so far. I cant hire an assistant seeing one patient a day... or none sometimes.

Really sounds like he's just giving you space in the practice and that's all. Other than having the same front desk staff, everything else is up to you. I agree that if you have any plan to buy, you should appraise prior to adding value unless as part of your contract, the patients you bring into the practice belong to you and not to the practice.

Yea agreed, an appraisal would be smart... But again its not my office and my uncle is a bit stubborn when it comes to these things.

Ouch, that's a pretty tough situation to be in, especially since it's family. I'd ask him to bump up your collections so you can hire your own part-time assistant. I think you'd need to form a corporation for yourself and hire the employee through that. Realistically, he should be able to do that since you really aren't costing him anything other than supplies.

Make sure that if you're doing marketing like Facebook or a website that your patients know how to find/follow you when you leave the office, unless your uncle keeps them. If you're paying to bring them in, you should be able to retain them and take them to your next office.

If you're actually planning on buying the office, you need to have it valuated by an accountant now. You don't want to pay any extra money for the value that you'll bring into the office. You also would want a structured buy-in agreement with a value drawn up. Though I wouldn't plan on buying the office.

How's the job market in your area? If I were you, I'd keep the corporate job and stay with your uncle until you can find a better offer. If it's fulltime, great then quit the corporate job. If it's parttime, see how it works out and then look for something to replace the corporate job.

Honestly, if your uncle did some marketing, punted you some new patients and hired you an assistant (even a bad one), I'd say hold out and keep plugging away. Since it doesn't sound like he's particularly interested in your professional growth, I'd advise you to start looking and move on when you find it. Make sure to contact your patients and take them with you to your new place!

I do have a website, its actually run by a local dental marketing company... The lady I am working with is a young (my generation) entrepreneur who started her own dental marketing business and gave me some heavy discounts because I am new... she even is sending some of her family members to me so I can keep a little busy at least. They are doing all the SEO and all that trying to get my name out there. But plainly put it, I am in a saturated area with lots of old established dentists that aren't retiring because most of em probably threw all their money into tech stocks or housing and now have to make up for it. My uncle gets a decent chunk of new patients per month, but I dont see those patients. At most I get a couple fillings to do if hes busy, which happens pretty rarely.

Luckily I do have it stated in the contract, that any patients I bring to the practice are my patients and I can take them with me freely if I end up somewhere else. But as its looking now, specializing seems more and more like an option, even though I dont want to rack up any more interest on the student loans.

 

[gryffindor]

Yea agreed, an appraisal would be smart... But again its not my office and my uncle is a bit stubborn when it comes to these things.

You absolutely must get an appraisal before even considering a million dollar purchase price. Just because he thinks it is worth $1 million does not mean anything. It is only worth what someone will pay. If it really is worth that much and you actually do buy it, make sure your restrictive covenant is iron clad so there is no chance he will open nearby, poach the patients back and keep the gig going.

Or exit yourself from this situation, chalk it up to experience, and continue on with your career. Find yourself other associateship positions where you will actually be busy or prepare to apply for specializing. The handful of patients you have will probably stay with you if you ask nicely and have an associate position nearby where you can still see them.

 

[djeffreyt]

Hi,

Your uncle really isn't treating you like someone who will eventually partner and buy the practice, so if you don't feel ready to talk to him about an appraisal, do yourself a favor and look into what other options you have. Go on interviews, talk to other people about jobs, look at other practices you could associate at.

Then, if it looks like you have options, have the tough conversation with your uncle. Ask him how he sees your particular working relationship. Are you his associate? Are you just a dentist getting space in the practice rent free? Are your patients now patients of the practice or do they belong to you? It's never easy but tell him you need to understand how things are to figure out if this is a long term fit for both of you. If it comes down to it, you might have to work there to help him pay off the chair he put in for you just so you are even (you are family after all) and then say goodbye to this relationship.

I would probably try to get more integrated if he is saying he wants you to associate and then take over. I'd ask to have an appraisal, share some marketing costs together, and get a 3rd assistant. That's just me though...and I have no family in the biz so I don't have to worry about hurt feelings.