Climbing the Partner Ladder?
view from the top
Climbing the Partner Ladder?
In some instances, the ascent to partner isn't necessarily a promotion.
GARY GERBER, O.D.
We commonly receive calls from doctors asking, "How do I become a partner in the practice I work in." On the surface, making the ascent from associate to partner may seem like a promotion. In some cases, however, it can be a demotion.
For instance, salaried associates have a guaranteed paycheck with none of the risks associated with ownership, such as soft business. When business is soft, a practice owner may not pay himself or do so last.
As a result, it's essential you evaluate the actual price you might pay to "buy your way in" to a practice. The terms of the deal demand critical, non-emotional observation.
Here are some other aspects of partnership you should consider.
There is certainly some financial risk and somewhat of a gamble when becoming a partner. The goal of buying in to a practice isn't to buy a job or prestige. It's to buy a piece of a business, presumably a profitable one. Therefore, don't seek a partnership for the ability to weigh in on practice decisions or have your own parking space.
Of equal importance: Recognize that with risk can come rewards. Translation: Generally, through the long haul, partners earn more than associates.
Associates typically leave the practice behind when they go home. Staff issues and cash-flow headaches get in the car with owners and follow them home. These problems visit them on vacation and in their dreams. If you don't feel comfortable with this scenario, remaining an associate may be best for you.
|Staff issues and cash-flow headaches get in the car with owners and follow them home.|
Production and job security
Associates have fewer worries about productivity. Practice owners often lament that their associates don't produce as much money as they do, yet few ever fire associates. Rather, they tolerate the lesser-production. Decreased production usually has little bearing on job security.
Circumstances do exist, however, in which young associates become partners with an older doctor, who's nearing retirement, and, as a result, has agreed to the partnership with the goal of working less and coasting into retirement.
The drive and desire for producing high revenues can wane in senior optometrists who might have amassed considerable savings through the years and are now more motivated by time off than increased profits. Therefore, a practice that has been historically performing well financially because of the contributions of the senior partner can experience a decrease in profitability when the young associate becomes a partner.
Business savvy required
Once an associate becomes a partner, concerns about long-term risks and rewards become critical to practice success. Partners must be well versed in upcoming market conditions, new competition, pending changes in fee reimbursement and a seemingly never ending list of administrative challenges, such as staffing.
I've always believed that if you don't have the "eye of the business tiger," then being an associate will be a better long-term decision. If you do have the eye (no pun intended), you have no choice but to pursue a partnership. OM
DR. GERBER IS THE PRESIDENT OF THE POWER PRACTICE, A COMPANY THAT SPECIALIZES IN MAKING OPTOMETRISTS MORE PROFITABLE. LEARN MORE AT POWERPRACTICE.COM OR CALL DR. GERBER AT (800) 867-9303.
Optometric Management, Issue: May 2008