The Team’s Role in Transitioning Your Practice
Episode #400 with Paul Sletten
You've spent a lifetime building a great team. But one day, your time will come to leave them. And if you care about your team, you need to involve them in the transition process. To help you leave your practice in good hands, Kirk Behrendt brings back Paul Sletten from The Sletten Group with expert advice on how and why your team should be involved. Your greatest asset is your team — don't betray them with a sudden exit! To make your transition less difficult and challenging, listen to Episode 400 of The Best Practices Show!
Main Takeaways:
Have a plan — no matter where you are in life.
Link your business plans with your life plans.
Involve your team in the transition process.
Choose an associate that your team loves.
Sell when you are financially healthy.
Be patient. The right buyer is out there.
Quotes:
“Most people focus on — and I've done this myself early in my career — financial things, on steps in a transition, and things like that, timetables. And what you also need to do is you need to coordinate and tie your practice transition plan with your life plan. I've seen people put business plans together, and then have their life plans sabotage the business plan because they were never connected, or never discussed, or never processed. So, the life planning is of huge importance in terms of success in transitions.” (2:26—3:09)
“We’re all in transition all the time, aren't we? I mean, personally, professionally, and everything else. And we need to build skills at becoming successful in transitions. And that absolutely has to involve putting your life plan together.” (3:09—3:27)
“If you're going to go find someone to join the practice, and with you staying, or if you're going to go find someone to take over the practice as you exit, you need to include the team.” (7:05—7:17)
“Which would you rather have, a team that finds out on the day of the closing what a monster event that is, and then have the new owner have to deal with their response? And you're much more likely to lose people doing it that way than you are if you bring them into your confidence and ask them to be confidential with patients, and with everything else, and involve them.” (7:37—8:12)
“You know the old deal, ‘If the doctor’s not there, the practice is worthless and will sell for nothing’? That’s absolutely true, in some cases. But in this case, it wasn't even close to true because the team was there. And the patients stayed. It took four-and-a-half months to sell that practice, which was agonizing because we wanted to do it in two weeks. But it took four-and-a-half months. And after that period of time, the attrition in terms of active patients was something like they lost 11 people, who left the practice. And everyone else stayed. And one of the huge reasons why the doctor who now owns it and is thriving in that practice was chosen is because the team loved him.” (13:19—14:14)
“It’s really almost impossible if the seller comes to the table in a needy financial position to have a win-win outcome, because they have to get every penny out of the sale. And they often drive off the buyer because that clearly is the number-one issue. If the person who’s done a good job with financial planning and been disciplined over their career comes to the table in a very different way, they're going to get the same amount of money at the closing, but they're looking to put it together in a real winning fashion for the successor as well, because that kind of practice is what you call a legacy practice. And that's a practice that can continue serving that community for many, many decades after the exit of the founder.” (15:09—16:07)
“If you have a hierarchical structure with your staff, that’s probably not a good idea to tell them and involve them in the process, because they're not going to want to be involved in the process because you haven't worked on building those relationships and all of that trust. So, that would be more dangerous.” (16:36—17:02)
“[Partners and associates are] a little bit of a different situation. For example, if you're going to move an associate into partnership and that's an objective, the team’s going to have to support that. They're all living together, and so I think they need to have awareness.” (19:27—19:48)
“If you have somebody there who’s an associate, you've already got a partner and now you have an associate, if the team doesn't believe in that associate but, somehow, they're going to become an owner, you're going to really have an issue there. They see that, and they’ll find it really difficult and challenging to support that person as an owner.” (20:05—20:32)
“My core belief is that there's always somebody out there who would love to be in your practice and love to live in your community, no matter where you're at.” (23:59—24:12)
“If you have a core team of believers, if you will, and people dedicated to what you're doing together, and they love being there, and it’s an arrangement of mutual respect, those people need to be involved. You do not need to [involve] the entire team, at first. Eventually, that will happen. But you can begin with the core team.” (25:06—25:33)
“When the patients start asking you, ‘How much longer are you going to practice?’ they're really asking two questions. They're asking you how much longer are you going to practice, but they're also asking you, ‘Am I going to have to find another practice when you aren't here anymore?’ So, what you want to do is you want to anticipate the second question and you want to let them know that, ‘Well before I actually retire, we will go find a great dentist to come in here and work with me and take over the practice so that you and your family and your friends will be able to continue to call this your dental home.’” (29:43—30:29)
“Identify — and very carefully identify — what kind of practice environment [you] would thrive in and feel great about and want to be part of. And get really specific about it. And that will influence you on the importance of the team or how to put a team together. You can't do that all by yourself. You just can't do that. You need help.” (31:45—32:10)
Snippets:
0:00 Introduction.
1:17 Paul’s background.
2:21 Why your practice transition plans and life plans need to be linked.
4:15 Why a team-based transition is important.
10:56 A case example for the value of a team.
14:24 Selling when you need money versus not needing money.
16:09 Potential downsides of including your team.
19:04 Do the same rules apply with partners and associates?
20:38 Paul’s process for engaging a seller and potential buyer.
23:20 Be patient, and you will find the right buyer.
24:35 Do you involve every team member in the process?
26:30 Tempering the conversation with your team.
29:38 The transition conversation with your patients.
31:22 Other pitfalls and things to consider in transitions.
32:38 Dual representation.
34:08 Last thoughts on the team’s role in transitions.
35:58 Paul’s contact information.
Reach Out to Paul:
Paul’s cell phone number: (303) 902-9953
Paul’s email: paul@lifetransitions.com
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.
