When—and how—should dentists tell their team that they’re selling the practice?
A MAJOR CONCERN of dentists when they sell their practice is when and how to tell their staff. I struggled with this myself, and the answer isn’t absolute. My best advice is a firm, hearty “well, it depends.”
The ideal time, I think, is when the contract and lease have been signed by the buyer and the financing is in place—ideally two to three weeks before the close. Many times these pieces aren’t assembled until just before closing, making the conundrum of how best to tell one’s team all the more difficult.
The staff, after all, is of great significance to the sale of a practice, whose value usually consists of some 80 to 85 percent goodwill. Personnel are a key component of that goodwill, built up over many years—and fear of the unknown is naturally employees’ top concern. They worry the new owner will cut their pay and benefits, alter their schedule . . . or fire them. What kind of person is the buyer, mean-while? Ethical? Unethical? Hard to work with?
A team’s fears should be addressed by the seller as soon as possible, in part by telling them how important they are in the context of the practice’s accumulated goodwill. Their long-term job security typically increases with a younger, more energetic buyer. One who would fire employees after closing, or cut pay and benefits, would soon face mutiny: The staff would likely quit and goodwill would plummet.
If possible, the seller—with the broker’s help—should vet the buyer’s character as best they can. Complete certainty is never possible, of course, but red flags during research can be a useful warning.
What about the possibility that staffers will tell patients, causing word to spread that the dentist is selling? When patients hear this they might immediately begin looking for someone else before giving the buyer a chance to earn their trust—potentially a big revenue hit to the practice.
There’s also what’s just plain right to do with respect to the team. Many dentists have been with their staff for 20 years or more, and making sure they’re taken care of (along with their patients) is among the most important factors in a sale. Some dentists will choose to have all, or at least key members, involved from the beginning. This can be beneficial if, say, one needs to retrieve important information from practice software.
If some or most of the team has been with the practice fewer than five years, though, the seller might feel no particular obligation to inform them. This poses a potential confidentiali-ty problem and is therefore a delicate situation to navigate.
The bottom line, again, is that it all depends. The ideal time to tell the staff might be just before the sale goes through, but not every doctor/staff re-lationship is alike. There are risks and benefits to all possible tactics. Gauge your situation, and proceed wisely. n
JAMES M. CLARK, DMD has filled many roles in clinical dentistry for more than 30 years. Now the head of Practice Transitions at Benco Dental, he can be reached at firstname.lastname@example.org.