Thursday, June 10, 2010

Working with Family Part II

Good Friday to you,

I am not crazy or anything but I went to my website and 500 more people have been to my site since Wednesday. Anyone believing this? I don't know what to think. How do I know that the 500 hits in TWO DAYS are coming from my area? I am just baffled. AND ... still no calls because of it.

Okay, on Wednesday I was giving you a picture of what my situation with my father is like. Now before we go on I want to say a couple of things...

I love my dad to death. I would do anything for him. He has been a great guy to work for and to work with. He has always treated me well and tried to be fair about most things.

But this can be a touchy subject. Dealing with money and retirement and stuff, people can get very edgy. You really see people's innards when you talk about money. Their feelings can get hurt and being related to the other person doesn't mean you are immune to that. I write these couple of blogs just to give you a taste of what it’s like working with a family member. Now, all of you who work with people that are not your family members, you can probably gather some good information to take to the negotiating table.

Okay, now that the ground work is finished lets move on. Where were we at?

I told you that I am now 50% partner and this happened after 10 years of practice. Then I told you that things were pretty even for the first 5 years of our partnership. We both got paid the same and it worked.

But since last year, this ship has turned.

He took a bunch of time off and worked a lot less. This meant I out produced him for the first time. Not just by a little but by a lot... >20%. There has not been any discussion about this yet.
So I knew it was going to be tough because, like I said before, people get possessive and feelings get hurt. I was going to wait until he was in a particularly good mood. The problem with being slow (please see previous blogs) is that there isn't any particularly good time to do something like this.

When everyone is making a lot of money all these things can wait to be talked about. We are too busy spending all of the money to talk sensibly.

But now times are tough and I am looking for a good time to talk to him about my killing him in production? Talk about kicking someone when he is down.

So I waited and did what any real man would do ... sent him an email.

Wait before you judge me. I had sent a couple of feelers out there about this talk. I started to talk to him a couple of times and it didn't go well. Also, I wanted it to be in writing. I want him to have time to marinate on all I had to say.

Here were my points:

First, I don't care about what has happened in the past. I don't want any retro money or anything. BUT I do want to talk about going forward.

I want to talk about the difference in production and what we should do in the future if the production is so different.

I want to talk about time off. I am not saying you can't have all the days off you want, but I am saying if you take a bunch of time off, what do we do going forward? You could want to go on vacation for a long time, a month-long cruise. In fact I want you to, but we should talk about what to do.

So far nothing seems too unreasonable right? Just dialoging ... its healthy.

Now one thing my father did was give up the reins on the practice administrative stuff. For a long time we had an office manager, so it was easy. But since ours retired, we never hired another one. So we had to get much more involved in the day-to-day managing of this place.

He said he wanted me to "get familiar with what it was like to manage." What I didn't know was that he wasn't going to do anything.

So I do it all.

So this means many extra hours managing and doing work that is not teeth stuff. Do you think there should be an administrative clause in our agreement? I don't know either, but I thought we should talk about it ... so I wrote that.

And lastly, and this one is a tough one...

My father's practice is slowing down a bit. Not that something like this is out of the ordinary.

He has an older clientele. They retire and move away. They move to be with their kids. They pass away. And he doesn't really market himself. He is not really putting himself out there. He is only here three days a week so those emergencies that turn into patients aren't there as much. You can see how this can happen.

Now, if you look at our patients as a whole, it is starting to be very John-heavy, probably close to 65%. So that is 65% of the patients are mine and 35% of the patients are his.

When I say his and mine, I mean they are OUR patients but 65% would prefer to be seen by me.
This is something that we never thought of 8 years ago. I mean who would? This is something we should talk about going forward, don't you think?

If there is (just giving us an easy number) $50,000 profit coming out of the hygiene department in a year, do we share this evenly or do we pay out the profits according to whose patients are getting their teeth cleaned?

I thought all this dialogue would be healthy. Yes, I knew it was going to be tough but I thought it needed to happen.

Now I can understand why my father wanted to just not talk about it. Why talk about tough things if you don't have to?

He is thinking in his head, "I only have less than 3 years to go, why do we have to do all this talking and changing if I am going to be gone soon?" And I can totally understand that. But things are dynamic. Things change.

I know with this economy his nest egg isn't as large as it used to be. People that are getting close to retirement always get a little nervous that what they saved isn't enough. He may want to work more than 3 years. He may want to work as an associate. What does that look like?

What does the buyout of the rest of the practice look like, especially if his part of it keeps dwindling? What about buying the building and the land? We need to talk about this, right?
This is getting too long for a Friday so I will tell you about our talk next week. It really hasn't gone that well. I keep wanting to get professional help but he doesn't really want to pay.

I think it is worth it and I may have to force the issue.

Have a great weekend, John

P.S. Marathon training starts tomorrow. I have already signed up to do the Chicago marathon on 10-10-10.

P.P. S. Lindsey, who was the editor of the blog for the last year or so, just had a baby boy. CONGRATS Lindsey and her husband and WELCOME HOME BABY ADAM!


Anonymous said...

Just Buy him out. Let him set the price and see what he comes up with. If it is not fair then you can pay to go get professional help.

Anonymous said...

What about all those years that your father was out producing you and you were still making 50%? Now that he is finally slowing down and taking time for himself, which is well deserved, you feel that you are entitled to a larger cut. That is the problem with this world now days "Entitlement", when things are handed to you on a silver platter and then feeling like you still deserve more. How about being grateful for what you have been given, walking into a practice that was already built up, yes you had to do some marketing of yourself but the majority of your patients come from those elderly patient's children and grandchildren which in turn tells their friends, etc. Maybe you could just suck it up and think about this as a "Thank you" for him paying for your college and dental school and for the fact that you didn't have to go out there and try to start a practice from the ground up which I guarantee you would of cost you a whole lot more.

Anonymous said...

I agree with the last post...couldn't have said it better myself!

Anonymous said...

Seems like it's probably worth calling in a non-biased third party. A professional will know details, laws, and processes you and your dad might never think about.

And... They don't have to worry about hurting anyone's feelings; they can consider gains and losses for both of you and use that to come to a mutually beneficial agreement.

This way, nobody will take it personally.

Good luck!

Anonymous said...

Sounds like some Dads posting. LOL. I agree that he should set the price and that will let you know where he is coming from.

Anonymous said...

I agree, the above posts seem to be Dad friendly posts. When I got out of dental school I worked with my dad for a year in a small town. We both came to realize this small town couldn't support both of us. My dad ended up "buying" a practice in a neighboring town for me to work. He put up the $15,000 downpmt then I worked the practice for the next 5 years solo and payed off the remaining $135,000 for the purchase of the practice. He never worked there a day. Five years later time for me to be independent of Dad. How do I break away? I was thinking $15,000 plus a fair interest rate retro active for 5 years, No, dad says thats not happening. Try $200,000 at 6%. I would have been OK somewhere in the middle, didn't happen. We have a good relationship, I just suck it up. For anyone joining Dad's practice, get it writing , now!
Goodluck John.

toothdoc said...

Family is family but business is business. Motivations don't matter in a business deal. If this was a non-family situation I don't think people would be commenting on how much time & effort dad put into the practice, or what he did for his kids. It does not matter in a business sale. I started a business because I wanted to, not because I expect to get a premium for all the "sweat equity" I put into it during its formative years. I provide for my kids because I want to, not because I expect them to repay me by, if they become a dentist, buying me out at a premium price.

Get a 3rd party involved. You both made mistakes by not separating out the business from the family from day 1. Buy him out and let him retire, hurt feelings should not be an issue.



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