Sponsored Content: Skytale Group
By the Skytale Group
Choosing the Right Partner
As our businesses develop and add more locations, scaling culture, work ethic, and patient care can be difficult. When we can’t be everywhere at the same time, we wish to duplicate aspects of ourselves. It’s in these situations where we consider including someone else as a partner.
A partnership should be considered a tool for long-term investment into the growth of your business. You’ll need time to evaluate the personality, professionalism, and patient care that can help you retain value in your practice when you are not there. While partnership can be a retention tool to keep a valuable doctor in your business, you want to be sure you retain the right individual.
Mitigating Risk in Your Partnership
Partners will want a seat at the table and a sense of control. Be proactive and set the boundaries at the genesis of the partnership.
Define a partner’s limits of control, responsibility, and financial commitment. All will impact the quality of your partnership. If imbalance is felt by either party, it will deteriorate the relationship. Ask yourself: Is this someone I can work with, depend on, and respect for years to come?
Duties & Responsibilities
When providing an opportunity for someone to share in the profitability of your organization, consider an increase of their obligations.
Permitting input from the partner on all topics will help them feel fully invested in the direction and growth of the organization. The new partner can be used as a fantastic ally to implement change when a leader beside the office manager is required.
There are several choices available when instituting a program to keep a provider vested in the business. Some are equity-based, while others are focused on increased compensation rates, with or without a buy-in.
Collection Rate Partner
Award a higher rate of compensation in exchange for a buy-in. The amount paid by the prospective partner would not be refundable, but in exchange would be guaranteed a higher compensation rate. Since the break-even of the payment vs. the pay-out would extend over multiple years, this binds the partner to the practice.
Profit Sharing Partner
Gift a share of profits realized by the business. This method states a baseline profitability percentage or dollar amount and pays a portion of the practice’s profits over the stated amount.
Consider debt obligations when configuring this method. Debt reduces the profits of the business, reducing the payout a new partner would receive. You want to be sure the partnership is equitable.
Sell shares of your practice. Typically limited to the single location where the partner would operate. This is a “forever” deal and requires the long-term commitment of energy, time, and financial resources to be successful. A fully vested partner can be a major asset, but all assets have corresponding liabilities. Consider with care – it can provide a huge incentive, but also create major headaches.
If you would like assistance re-thinking your strategy to partnering doctors in your organization, can benefit from strategic operational consulting, or outsourced CFO services, contact the team at Skytale at [email protected].