Episode #369: Tips When Adding a Dentist, with Paul Sletten

 Transitions are like marriages. They’re difficult, stressful, and shouldn't be rushed. But they're worthwhile when you find your ideal partner! And there are steps and processes you can take to ensure you find the right partner for your practice. To help you with that process, Kirk Behrendt brings back Paul Sletten from The Sletten Group to share expert planning advice for smooth transitions. Remember to be patient — the right candidate is out there! For more of Paul’s advice and to learn how he can help you transition, listen to Episode 369 of The Best Practices Show!

Main Takeaways:

• Have two transition plans: an ideal plan and a crisis plan.
• Appraise your practice’s capacity to add another dentist.
• Know the attributes of your ideal candidate.
• Identifying an ideal candidate is a team-based process.
• Choose someone who is coachable.
• Take time to get to know the person you’re interviewing.
• Be patient. The right candidate is out there.

Quotes:

• “What I've noticed is that some people [add associates or dentists] very haphazardly like it’s going to be easy. And it isn't. It’s far more complex than it would seem at first blush. People do add dentists and get lucky. They found the right one and it ends up working. But I'd like to bring them today a model for how to do that and the steps involved and the importance of the steps.” (5:09—5:45)
• “I think you can add a dentist when your practice is robust, when it’s growing, when it’s healthy, when it’s trending in a positive direction and, in a general practice, when you have enough active patients to be able to handle another dentist. So, one of the first steps in the transition process is to appraise your practice’s capacity to add another dentist.” (6:07—6:37)
• “If [your practice] is large enough, or if you're cutting your role back to allow patients to move over to the incoming doctor, that certainly can work. If somebody has 900 active patients, they're not ready to add another dentist. If somebody has 2,000, they may be ready or they may not be ready. But it’s important to appraise that and to talk about that.” (6:45—7:18)
• “I think when you're considering adding another dentist, you want to add somebody who can make you better, who can make the practice better, more accessible to patients, and someone that fits with the culture of the practice. So, you need to really look for talent. If you have an exceptional practice, you have got to find an exceptional young dentist.” (10:47—11:13)
• “This is really a team-based process. When we’re working with a client, we involve the team in the process of identifying what an ideal candidate profile would look like. So, when you're going out to recruit or to find somebody to bring into your practice, you have to make some determinations as to who would fit in your practice and who wouldn't.” (11:50—12:17)
• “Clinical skills are extremely important, of course. But it’s really a list of intangibles. It’s a list of core values that need to be in link with the core values of the practice. You need to talk about work ethic. You need to talk about what does this person, without learning anything about the opportunity, at first, but just being interviewed and screened, what are they looking to do, ideally, with their future? What are they looking for? What have they been exposed to?” (12:48—13:25)
• “Coachable means, are you hungry to learn? Are you, on a daily basis, looking for new skills and new services you can bring to that patient? Are you looking to grow and develop yourself? Because if somebody’s going to be exceptional, they're going to have to do an awful lot of work on themselves in terms of their own personal growth and development.” (14:21—14:46)
• “We don't want to tell [candidates] all about the practice opportunity that we’re advertising for and, thus, coach them on how to interview.” (16:20—16:29)
• “If you're not finding the [candidate] you want, be patient. Be patient, because the right one is out there.” (24:13—24:20)
• “If you're bringing them in with any potential to become a partner, eventually, after and only after a highly successful initial employment phase where they're a non-owner [is a good path]. So, it’s not automatic that they're going to buy-in in two years regardless of how they fit or anything else. It’s got to be really successful. Then, right at the beginning, you also have to talk about a pathway to partnership and define what a highly successful initial employment phase would look like. In other words, what are your expectations and what are the expectations of the incoming doctor?” (24:59—25:41)
• “Upfront, we like to talk about how the partnership will function once formed. What will the roles of the doctors be? If it’s a solo practice, you're going into a shared leadership model, and what will that look like and how will that function? And what's the estimated value of the practice right today, and how will we readdress the value at the time of the buy-in?” (25:43—26:15)
• “The hungriest ones and, by far, the best candidates out there, want ownership. They're the ones with the fire in their bellies. They're the ones who aspire to get better every year. They're the ones who are more likely to match the culture of the practice they're coming into. And so, you need to talk about how the partnership is going to function once formed. How will the partners share the practice overhead expenses and doctor income? What will that look like? And what defines a trigger point, which is the moment when the incoming doctor will be ready to buy in because they're in a viable condition, financially and productivity wise?” (27:14—28:10)
• “The only way somebody’s going to ever be able to buy into a practice is if the practice is healthy and growing, and if it will cash flow, and the buyer will be able to pay their share of the overhead expenses and their note payment from school loans and have a good living income once they’ve done that, and not being an indentured servant while they're paying off their note. So, there are a lot of components. When you do an interviewing process, you really have to take time to get to know the people that you're interviewing, not just one or two interviews. You've got to get to know them, and the personal profile that we’ve put together really gives insights into that.” (29:32—30:27)
• “We’re not asking questions, ‘If somehow it was possible, what would you aspire to?’ That is a question that doesn't take you anywhere. But if you ask them to time travel 10 years out and write their answers in the present tense, you get amazing feedback and input from them, and you get wonderful insights into what they're all about.” (33:10—33:35)
• “It’s not a 30-page questionnaire [when interviewing family members]. Then, it’s a 50-page questionnaire. They have to do so much more work than Smith and Jones would because they have so much more at stake. And you can't make assumptions, ‘Hey, we’re family. We have the same values. We aspire to the same things.’ Baloney. That's not true. Within families, if you have four kids, no two of them are alike. They're all different. They all look at things differently and experience things differently. And so, you want those insights.” (34:53—35:34)
• “We don't always recommend 50/50. But I do like equal ownership when the parties have proven that they work together effectively, they’ve gone through a highly successful initial employment phase, and so on. I think 50/50 works well there. Even if you're 50/50, one of the partners can be designated as the managing partner, contractually, and I strongly recommend that. And the managing partner would be compensated for being the managing partner. You would still discuss everything, all purchases, all major investments in new technology and things like that together, of course, but the managing partner carries the influence as a tiebreaker.” (40:16—41:17)
• “One of my biases, and I certainly admit it’s a bias, is that if you have two people in a partnership and it’s really, really working well, I can't make much of a case as to why somebody should own 49 instead of 50.” (42:26—42:49)
• “People in solo practice need to have a transition plan — everybody needs to have a transition plan. But people in solo practice need to have two transition plans. They need to have one for selling their practice, eventually, under ideal conditions where the practice is strong, they're healthy, they're still in the practice, it’s growing. Those are ideal conditions. That's your ideal plan. But they also need a crisis plan. Because when you're practicing solo and something happens to you, you still have a business there that's really viable and valuable, but unless it’s getting covered quickly, and unless somebody is being recruited to come in and buy it, the value will erode and shrink to nothing pretty quickly.” (45:26—46:21)
• “We’ve had more than 40 dentists die suddenly where we got involved in selling the practice. We've had a couple hundred clients who had to retire because they couldn't do it anymore. They were physically disabled. And so, you’ve got to have a plan.” (47:26—47:48)
• “Adding another dentist or adding an associate can be a wonderful experience with great outcomes. It can be. You just have to be patient. You have to have your own plan together. You've got to learn everything you possibly can about them. In the initial phase, you have to compensate them well. But you don't want to create somebody who just sits back and waits to be fed. You want that incoming dentist to come in as though they're doing a scratch start within your practice and come with that sense of urgency. And these things could work out wonderfully well. And we see evidence of that all the time.” (52:11—52:56)

Snippets:

• 0:00 Introduction.
• 3:28 Paul’s background.
• 4:42 Why this is an important conversation.
• 5:45 The first step in adding a dentist.  
• 7:55 Add a dentist who can make your practice better.
• 11:23 How to find your ideal dentist.
• 12:35 Attributes of ideal dentists.
• 14:08 What being coachable means.
• 15:18 Learn what candidates want out of their dental career.
• 16:30 Core values need to match up.
• 19:20 Partnerships are harder than marriage.
• 22:33 Be patient when finding the right candidate.
• 24:36 A good, healthy path to adding a dentist.
• 26:16 The best candidates want ownership.
• 28:12 Take time in getting to know your candidates.
• 31:26 The 10-year visualization.
• 34:35 The interview process for family members.
• 35:34 Personality profiles.
• 39:01 What to know about the 50/50.
• 42:51 Buying sections of equity.
• 46:21 Have two transition plans.
• 49:03 Practice value declines after a death or disability event.
• 51:56 Last thoughts on adding a dentist.
• 52:56 Paul’s contact information.

Reach Out to Paul:

Paul’s business phone number: (303) 699-0990

Paul’s email: [email protected] 

Paul’s Facebook: https://www.facebook.com/paul.sletten.3

The Sletten Group website: https://theslettengroup.com/

Paul Sletten Bio:

Paul D. Sletten founded The Sletten Group, Inc. in 1975 in Denver, Colorado. We are now celebrating our 35th anniversary! We continue to exclusively work with fee-for-service dentists and their teams around the country.

The Sletten Group, Inc. was originally founded as Paul Sletten and Associates, Inc. The primary focus of the business in 1975 was offering practice management services. The focus was to teach dentists how to operate their dental practices as a business. We helped clients become effective managers and leaders. By the end of the 1970s, we began helping dentists place values on their practices, and offered services for creating successful transitions.

We have a large number of clients who have been working with us for over 20 years and still have future dental practice transition events on the horizon. It is exciting to see both people and practices grow, and to know we have had a hand in it.

The Sletten Group has developed an international clientele. We have worked with clients in 46 states in the U.S., four provinces in Canada, and two states in Australia. Our wide-ranging experiences allow us to bring what we have learned to each new client situation. It helps us know how to tailor our services to the unique needs of each client and to be able to offer multiple options to almost any client situation.

Paul has spoken at more than 200 dental meetings around the country. This includes almost all of the major dental meetings and numerous study clubs. The topics focus on all aspects of Practice Transitions — including buying a dental practice, selling a dental practice, and much more — as well as personal growth and development for dentists and team members.

Ruth Sletten and Pam Sletten work in the business and are very involved in helping our clients. They all make very important contributions to our clients and to the success of our business.

The next decade will be full of more opportunities and will require that we change with the needs of the profession and our clients. We continue to expand our range of services for young dentists and prospective buyers. We help them evaluate practice opportunities and set a proper course for their professional lives. All of us at The Sletten Group continue to focus on our own personal growth each year. We come to the world with a sense of wonder and are constantly on a quest to learn more and apply that learning to the benefit of our clients.