Plan an Exit Route
If I Had to Do It Over
Plan an Exit Route
Practice partnerships are like marriage — two good people can't always make it work. Write an exit plan, just in case.
By Randall C. Paul, O.D.,
For most of my 25 years in private practice, I made all of the decisions. As either a sole proprietor or president of my own P.C., I grew accustomed to being the boss and doing everything in line with my preferences and goals. That changed 4 years ago, when two colleagues and I decided to open an optical franchise. Through the ups and downs of this professional change, I'd do only one thing differently: plan ahead for problems in writing.
What Could Go Wrong?
Overall, my experience has been positive. The practice is successful, and we've grown from one franchise to two.
Although I no longer do everything my way, I don't miss it much. I get to share the responsibilities of practice management, hiring personnel, training and firing, and financial functions, such as borrowing and investing. Managing by committee gives us more points of view and highly productive discussions, and by dividing labor and projects, we can grow the business together very efficiently.
However, even though my partners and I had worked together in other capacities for 20 years, sharing the group practice showed us that we had some fundamental differences. We gradually realized that two of us saw things as differently as night and day, and the third partner fell somewhere in between.
No one was right or wrong. We just had very different styles. Our different ideas about running the business and dealing with employees made the committee approach difficult. And our differing approaches to scheduling, patient care and staff interaction put the employees in the middle of the problem.
What could go wrong with a group practice? The truth is, you never know. But you can plan for the unknown.
Fix it Now or Fix it Later
After long discussions over many months, my partners and I came to the conclusion that a buyout was in order. Two of us bought out our third partner.
Unfortunately, we didn't put an exit plan in place from the start. We were advised to include a written buy/sell agreement in our business model, but in the all-consuming effort to open our new practice, we never got around to it.
The model should include instructions for how to handle problems between partners that may arise down the road. This prearranged agreement can include a formula for a buyout, how to vote, agreement on what advisors you'll use or whose opinions you'll follow. A practice consultant can ensure that all bases are covered up front.
Without this written agreement, you could find yourself in a situation like mine: embroiled in a long, draining, expensive process with appraisers, attorneys and consultants determining how to divide assets fairly. Trust me, it's far better to fix things now than to struggle to fix them later.
Before You Say, "I do"…
Marriage is altogether different from dating. There are things you just can't know about a person until you're married. A practice is a bit like that. My partners and I knew each other for years, and we like and respect each other. But business partnerships are complicated. You might encounter problems in the future or you might not. The smart move is to plan on it, just in case. nOD
|Dr. Paul is a graduate of Southern California College of Optometry. He's been in private practice in Phoenix for 25 years. You can reach him at email@example.com.|
Optometric Management, Issue: September 2008