No Buy-in option?

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Dec 15, 2012
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I received an associate offer with no buy-in option. Why would anyone agree to this? What should I ask during negotiation?

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I received an associate offer with no buy-in option. Why would anyone agree to this? What should I ask during negotiation?

Sounds like the owner has no intentions of retiring anytime soon, and wants to keep the bulk of the profits to him/herself and is looking for an associate to take some of the volume off of them.

I would personally be very wary of an agreement like that, as chances are you'll be seeing only certain types of patients that the owner may not really want to see, and not have much autonomy in the practice.

If you do choose to work in that practice, I would make sure that you get as many things written into your contract as possible, from pay, potential bonus clauses, benefits such as CE, who's paying lab fees, and even a right of first refusal should the owner decide to see in the future with some specific wording about your effects on the practice production and how that figures into any potential selling price. Heck, I would even try and get something on paper that should the owner sell to someone else, that if you want, and are still employed by the practice, that you have the option to continue on with that practice and any potential future owner, should you want to.

If the owner balks at things like that, then IMHO you're looking at a situation where the likelihood is you're probably not going to be satisfied with the work arrangements you'll be walking into
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Unless something has changed ... there is usually no contractual buy in during the 1st 6 months of associating. Consider the 1st 6 months as a trial period for both you and the owner dentist to see if the relationship is viable. After this trial period (maybe longer than 6 months) and if the owner dentist is willing .... then a contractual agreement can be made. If the owner dentist shows interest in a future partnership, buy out .... then the owner dentist will start contractual negotiations with you shortly after that 6-12 month associating period. If the owner dentist keeps stalling after 6-12 months to discuss a partnership, etc .... then chances are the situation is not for you.

The worst thing you can do is to continue to associate for years "assuming" there is a future partnership awaiting you. All those years you are helping to build the practice, increase the value of the practice, but with no prior contract in place regarding buy-in price.

A suggestion. Plan on associating with any dental office, or DSO for the 1st 6 months to give you an opportunity to do some local research on available associateships leading to partnerships/buyouts.
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Because you'll be an employee you will need to optimize your pay. Make sure you will get enough volume and that the percentage of collections/production is at or above market rate. IMO, if you cannot get more pay, educational opportunities (clinical or business), perfect location, etc. then you might as well entertain other offers including DSO.
The vast majority of associate positions do not have an option to buy-in.
For the associate contracts that do have an option to buy-in, the vast majority fail.

I wouldn’t worry about it. If you want the job, take it. If you don’t want the job, don’t take it. If this is your first job, it won’t be your last - most associateships last about 12-18 months. If you found a good one, more power to you.
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Great post alldat.

Ownership is never guaranteed at the outset. I would never offer that.

The associate has to show some leadership and take some stress of the practice off of the owner(s).

Moreover, what if the associate ends up being a knucklehead?