Hello All - Long time reader, first time post. I know this situation is hard to explain, ill try to keep it simple.
I am currently 4 years out of residency and have been working in the same private practice since as an associate, lets call this CURRENT PRACTICE. For the past 12 months I have been in negotiations to become a 50-50 partner of the current practice with the head doc. My advisors have warned me that the deal that has been put forward/the price is 20-30% too high and is very unrealistic in terms of cash flow. The current owner is not willing to come off the price that her CPA/Retirement planner has come up with (which is around 1.3M). The owner knows that from day 1 I have been interested in owning and running my own office or with another partner. He/She is currently 55.
Fast forward to 2 weeks ago. Another very profitable practice has come up for sell in my area (a very affluent area, dental school in the area; practices like this one do not come to market often). Lets call this NEW PRACTICE. I did the legwork and had my transitions team run the numbers on the practice and it is much more attractable. They perform the same type of comprehensive dentistry, but currently do NO surgery, which is in my wheelhouse. They have entertained other offers for this practice, but want to sell to me because of my dental philosophy and personality line up with the current owner.
The dilemma: I have signed a non-compete that from what I understand is enforceable (many lawyer friends have chimed in). The agreement is a 15 mile radius and to sit out 12 months in that radius if I leave. I do not want to move cities and I do not want to sit out 12 months. I have built a significant patient base where I currently work and collect around 1.2M a year on 4 days. My current "sub-speciality" are dental implants - I've taken about every course possible and have become very efficient at placing anything from single units to full mouth reconstruction.
The current proposal: The head doc at my current practice does not want to see me leave (presumably because I collect ~35% of the overall collections), but claims she can not discount her current practice. She would like to be 50-50 partners on the new practice I found. She would like me to continue to work at the current practice 1 day a week performing dental implants and surgery and continuing to see the patient base I have built. I would work 3-4 days at the NEW PRACTICE, and 1 day at the CURRENT PRACTICE. She would work 2 days at the current practice, and 1 day at the new practice. The other days will be filled in by an associate that is currently at the new practice and staying on.
Pay: Currently the proposal is that each partner would be paid 35% of collections. We would split remaining profits, expenses, overhead 50-50.
My questions:
1) Can a 50-50 partnership work in a scenario when one partner owns another office?
2) Can a 50-50 work when one partner is working 3-4 days a week and the other is only working 1?
3) What would an agreement look like in terms of fair compensation? For example, if I am doing 80% of the hygiene checks would it be fair to split hygiene revenue down the middle?
4) Any advice would be appreciated
I am currently 4 years out of residency and have been working in the same private practice since as an associate, lets call this CURRENT PRACTICE. For the past 12 months I have been in negotiations to become a 50-50 partner of the current practice with the head doc. My advisors have warned me that the deal that has been put forward/the price is 20-30% too high and is very unrealistic in terms of cash flow. The current owner is not willing to come off the price that her CPA/Retirement planner has come up with (which is around 1.3M). The owner knows that from day 1 I have been interested in owning and running my own office or with another partner. He/She is currently 55.
Fast forward to 2 weeks ago. Another very profitable practice has come up for sell in my area (a very affluent area, dental school in the area; practices like this one do not come to market often). Lets call this NEW PRACTICE. I did the legwork and had my transitions team run the numbers on the practice and it is much more attractable. They perform the same type of comprehensive dentistry, but currently do NO surgery, which is in my wheelhouse. They have entertained other offers for this practice, but want to sell to me because of my dental philosophy and personality line up with the current owner.
The dilemma: I have signed a non-compete that from what I understand is enforceable (many lawyer friends have chimed in). The agreement is a 15 mile radius and to sit out 12 months in that radius if I leave. I do not want to move cities and I do not want to sit out 12 months. I have built a significant patient base where I currently work and collect around 1.2M a year on 4 days. My current "sub-speciality" are dental implants - I've taken about every course possible and have become very efficient at placing anything from single units to full mouth reconstruction.
The current proposal: The head doc at my current practice does not want to see me leave (presumably because I collect ~35% of the overall collections), but claims she can not discount her current practice. She would like to be 50-50 partners on the new practice I found. She would like me to continue to work at the current practice 1 day a week performing dental implants and surgery and continuing to see the patient base I have built. I would work 3-4 days at the NEW PRACTICE, and 1 day at the CURRENT PRACTICE. She would work 2 days at the current practice, and 1 day at the new practice. The other days will be filled in by an associate that is currently at the new practice and staying on.
Pay: Currently the proposal is that each partner would be paid 35% of collections. We would split remaining profits, expenses, overhead 50-50.
My questions:
1) Can a 50-50 partnership work in a scenario when one partner owns another office?
2) Can a 50-50 work when one partner is working 3-4 days a week and the other is only working 1?
3) What would an agreement look like in terms of fair compensation? For example, if I am doing 80% of the hygiene checks would it be fair to split hygiene revenue down the middle?
4) Any advice would be appreciated
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