Buy into the practice? Or stay an associate?

[iono101]

I just finished my first year out of a GPR as an associate for a private practice in a suburban area. I took home 230k pretax. I produce about 70k per month doing basic dentistry and a decent amount of oral surgery but no implants. Soon I’ll be placing my own implants and expect my production to increase.

Recently the owner has been pressuring me to “get some skin in the game” and buy in. He suggested as little as 5%. The practice has one other associate with 5 hygienists and produces about 280-300k per month.

I like the staff and get along well with the owner and other associate. I’m comfortable as an associate and have no plans on leaving. However I always imagined myself starting my own practice someday and I am afraid of committing to my first associate position out of training.

I’m honestly not good at the business side of dentistry and wanted to focus on being better clinician my first couple years out. I don’t want to pass on a good opportunity but also don’t want to get screwed.

Any thoughts from more experienced dentists? Should I buy in for even 5%?

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[Pablo Sanchez]

I personally wouldn’t buy in. It gets you tangled up in his mess. As a minority owner you won’t have much say in how things are done. Sounds like the owner just wants you to pay him to largely continue the same role. Could get messy down the line should you decide to leave and need to sell just 5% or if you guys don’t get along in the future. Do yourself a favor and get to a point where you’re comfortable owning your own practice 100%.

 

[iono101]

I personally wouldn’t buy in. It gets you tangled up in his mess. As a minority owner you won’t have much say in how things are done. Sounds like the owner just wants you to pay him to largely continue the same role. Could get messy down the line should you decide to leave and need to sell just 5% or if you guys don’t get along in the future. Do yourself a favor and get to a point where you’re comfortable owning your own practice 100%.

Is it really worth it to own 100%?

 

[Pablo Sanchez]

Is it really worth it to own 100%?

There’s pluses and minuses to everything. There is certainly more responsibility when you own 100%, but you also have total freedom. I think that freedom is totally worth it.

 

[DocMon16]

Not a practice owner but 5% doesn’t do much for me. If you’re not excited about the practice and don’t see a future there, why get involved financially? Keep it simple and stay on as an associate.

I’m starting as an associate this year, there is buy in potential in the future; however, 5% wouldn’t cut it for me. Everyone is different so do what’s best for you.

 

[yappy]

I wouldn't do 5%. That is enough to keep you there, but not enough for you to have meaningful control, or equity, in the practice. Whatever degree you grow the practice, you will only get 5% of that growth while the others get the lion's share if you (they) sell. The offer seems predatory. You will be stuck. You want 50/50 or 100% depending on if you want to be a partner or the sole owner.

 

[Ali527]

I just finished my first year out of a GPR as an associate for a private practice in a suburban area. I took home 230k pretax. I produce about 70k per month doing basic dentistry and a decent amount of oral surgery but no implants. Soon I’ll be placing my own implants and expect my production to increase.

Recently the owner has been pressuring me to “get some skin in the game” and buy in. He suggested as little as 5%. The practice has one other associate with 5 hygienists and produces about 280-300k per month.

I like the staff and get along well with the owner and other associate. I’m comfortable as an associate and have no plans on leaving. However I always imagined myself starting my own practice someday and I am afraid of committing to my first associate position out of training.

I’m honestly not good at the business side of dentistry and wanted to focus on being better clinician my first couple years out. I don’t want to pass on a good opportunity but also don’t want to get screwed.

Any thoughts from more experienced dentists? Should I buy in for even 5%?

Hello, I am in a situation similar to yours, I am an associate, I am comfortable, my income is more or less similar, and I have in mind to buy an practice, but definitely, the day I buy I will buy the whole practice. I have a friend who "bought" a practice together with a DSO...and he is neither owner nor associate...I don't think it's a good idea.