Being a business partner is a lot like a marriage. If you do not fully understand the relationship, roles, values, goals, and such, it sets you up for disappointments. No one wants to regret their relationship or decisions. Let’s minimize your frustration, help lay down a great foundation for your business and put some safeguards in place.
Significance and Essentials of a Dental Partnership Agreements:
- Establish successful collaboration with your colleague.
- Define how you come to decisions or voting rights, protocols, and deadlock resolution procedures for practice management.
- Defines your obligations of who is responsible for what.
- Listing the workload and dividing it equally with deadlines to finish.
- Decision making and authority to minimize conflict.
- Ownership meetings.
- Dealing with human resources, team meetings, bills, etc.
- Identifies your strengths, talents and non-strengths and comes up with a plan to resolve potential issues.
- Protect your financial interests.
- Defines the profit sharing, capital contributions and expense handling.
- Outlines retirement, disability, partner departure, and items that ensure smooth transitions so the business can go on.
- Survivorship, Death, trusts, valuation, heirs, or some form of a death clause action steps.
- Corporation and partnership (LLP or PC) development.
- Income and defined how it’s paid out.
- Non-compete and non-solicitation clauses.
- Including provisions to protect goodwill, patient base, and confidential information.
- Dispute resolution when it comes to needing mediation or arbitration.
- Steps to take to preserve the relationship as professionally as possible.
- Exit strategies and options.
The key is to save time, think ahead, and avoid costly mistakes.
Many dentists want to divorce their partners and it becomes a nightmare. They want out so bad, they are willing to lose hundreds of thousands of dollars to do it. Sometimes people aren’t a “man of their word” or the handshake doesn’t mean what it used to. Get it in writing and think of protecting assets.
I recommend understanding the different personalities too. Imagine, if you have the same fun personality, the analytical things that need to happen may get ignored. You may need to hire out some tasks or learn some new things. To avoid frustration, be sure you know what you are getting into.
Be sure to use an attorney and do your due diligence.
Sincerely, Heidi Mount
