When to Tell Your Staff Your Practice is for Sale
Congratulations, you just accepted an offer on your practice! With all the emotions associated with the transition, when to notify your staff is surely at the top of your “to-do” list. Telling employees that you are selling your practice is an extremely delicate process. Breaking the news too early can come with many risks, so best to wait until all final closing documents are signed by both parties and no more than one week before the new owner takes over.
So, what are some potential risks?
One of the primary risks is that employees will naturally be worried about their job security the moment you make your announcement. Oftentimes if they have too much of an advanced notice they may start searching for other opportunities. Staff leaving could negatively impact the transition and patient experience because of how instrumental they can be in helping the buyer and the patients adjust to new ownership.
The other major risk is that nothing is final until it’s final. Dental practice sales are extremely complex and can be delayed for a multitude of reasons or fall through completely. Making the announcement before the sale is complete will cause stress and heartache amongst your staff during a time that you will be preoccupied with navigating a significant professional milestone. If the staff were to find out before closing was final, you wouldn’t be able to offer any reassuring answers because of unforeseen changes to the closing timeline.
Finally, regardless of your views of your staff’s maturity level, gossip will ensue. I have seen it countless times where a dentist tries to provide honest reasons on why they are selling, only to have their words misconstrued. Comments such as, “I’m selling my practice to focus on my health” can quickly morph into, “S/he is selling because the practice is going under,” or lead to unfounded conclusions such as, “After the new guy starts, we will all be replaced.” This kind of fear and uncertainty will have a profound impact on staff morale during a time where they will be needed to ensure a great patient experience during the transition process.
In the end, you probably have a deep and meaningful relationship with your staff. They deserve to know about ownership changes as they will be impacted, but it is best for them (and for you) that they be kept out of the loop until you have concrete answers to provide them.
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Exit Planning in the COVID Era
Are you ready to transition?
Is your practice ready to transition?
What is the market like?
These are all key questions to ask yourself. When is a good time to start thinking about all of this? The real answer is as soon as you buy or start your practice, but the more practical answer is dependent on you. If there any chance you will want to transition in the next five years, you should start working on your transition today.
Personal readiness and practice readiness are both more important than current market conditions; however, considering the COVID crisis, I am going to focus on market timing.
If any of the following sounds even slightly familiar, raise your hand:
I was ready personally, and my practice was ready in August 2019. I choose to wait because (pick one or more):
- I have a kid with one year left in college
- I have one year until I can draw Medicare
- There is one more room in the house I would like to finish
- My spouse retires in a year
- I pay off my house in a year
- I turn (insert round number like 60 or 70) next year and I would like to wait until then
- Etc. …
Now, for those of you that raised your hand, consider the reality of August 2020. How does that August 2019 decision to wait look? Questionable at best.
My intent is not to beat up on those of you that this struck a chord. Rather, I want to emphasize the need for starting early and getting help.
Transitioning is a difficult process. Do not go it alone. Contact an experienced, qualified transition specialist and get the ball rolling. We are here to help.
Do you have more questions? Attend our Practice Transition webinar on Thursday, 10/1 at 6pm ET/ 3pm PT, presented by Corey Young, DDS, MBA, and Katie Collins, CFP. Reserve your spot today at omni-pg.com/register.
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