No matter what the profession, working with spouses or romantic partners has its highs and lows. The dental industry is no exception.
The dynamic can be attractive to some colleagues and dental practices and give pause to others. In most cases, when relationships are going well, the situation works. When it doesn't, that's another story.
Also, there are all those unknowns. What if the husband of a dentist wants to increase volume by extending hours on the weekend? Will the wife just agree without getting input from other team members? If one half of the couple does something questionable, will the other half just turn a blind eye? If they divorce or consciously uncouple, how will it affect morale or the practice's finances?
These are all valid questions and concerns, so let's sift through the right and wrong ways to forge ahead if you want to be in a relationship and work side by side.
The good part
One of the most difficult personnel choices for a dental practice is hiring licensed dentists who are reliable, hardworking, competent, and trustworthy. Spouses and couples who practice dentistry together will take solace in the fact that they are attempting to achieve the same goals. They likely will be accountable for each other, and both will want to make sure they are contributing to the income and growth of the practice since they are on the same page at work and at home.
The not-so-good part
Typically, managing the practice, including training employees and hiring and firing personnel, often just happens. One of the dentists likely makes the move when it's required with little help or advice from the other or any other employees at the practice. Once a decision is made to hire a new person or to implement a new strategy at the office, that process usually continues without it ever be written down, discussed further, or reviewed in the future. Both dentists are likely so busy handling the day-to-day operations that they continue to do whatever they have to to keep the practice going.
This is a problem.
What should happen
Most dentists who decide to enter into partnerships with colleagues whom they are not in romantic relationships with will not forge ahead without preparing and executing operating agreements. These written agreements require lengthy preparation and are completed with input from advisors and attorneys. The partnering dentists also should provide feedback when executing these agreements.
Typically, independent dentists discuss, review, and amend written agreements whenever required or whenever one of the partners wants to add something new. This doesn't occur when couples run dental practices. They often don't seek any outside assistance, and they don't formally change what they are doing unless required.
A bad move
Operating a dental practice without a written agreement is bad business. It can lead many dental partnerships to incur unnecessary legal and expert fees, lost time and revenue, and hard feelings. Situations where there are only verbal understandings become dreams for attorneys and nightmares for dentists.
If litigation occurs and there's no documentation, expect to waste a lot of time and money to get it resolved. Unfortunately, dentists with prenuptial agreements usually are the only ones who think this way.
A lack of a written agreement is also a recipe for disaster if the couple working together breaks up. Divorces are expensive, specifically ones without business contacts and prenuptial agreements. In the end, dental practice revenue suffers, as do the patients and the staff who can see the tension the situation causes.
Making it work
Dentists who work with their other halves need to find a way to move ahead while limiting the problems in the future. When partners in life want to be partners in business, they should put a written contract together under the idea that an agreement should be in place if they want the practice to grow. Creating an agreement that specifies a formula for a practice's valuation will make it much easier and faster to allow another dentist to join the partnership. Additionally, the agreement will include the methodology for acquisition and the responsibilities of all parties involved.
Any dentist who wants to become a partner will be able to read the contract, ask questions, and quickly decide. If this agreement isn't available, you are giving your potential partner time to look for another practice to join. A lack of a written contract also may give the perception that your practice is unorganized. A potential partner may not find that attractive.
Being in a committed relationship is tough. Staying in one while you work together can be even tougher. However, when you plan and document your arrangement, you can limit heartache for everyone involved.
Bruce Bryen, CPA, CVA, is a certified public accountant and a certified valuation analyst with more than 45 years of experience. Learn more about him and his services.
The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.