Partway through a lecture at UNLV’s dental school last month, right before I said what I was about to say, I joked to the room that I’d probably never get invited back.
Then I said it anyway, because I believed it, and because nobody warned me before I learned it the expensive way through other people’s deals.
I think there are only three true ownership percentages in dentistry: zero, 50, and 100.
A resident in the second row summed up the room’s reaction perfectly: “You’re insane, Brian. Brian, you’re a moron. That’s what I think I heard you say.” Biggest laugh of the morning, including from me. And then we spent the next ten minutes on the math, and by the end, nobody was laughing at the argument. Here it is.
The math of being outvoted
Say you buy into a practice as a 49 percent partner. On paper, you’re an owner. You have equity, you share profits, your buy-in check certainly cleared like an owner’s. But the day comes when you want to buy the CBCT and your partner doesn’t. What happens? You lose, because you’re a 49 percent owner. The day comes when you want to drop a low-paying insurance plan and your partner wants to keep it. You lose again. The schedule, the hires, the fee increases, the remodel. Every single decision that makes ownership worth having runs through a vote you cannot win.
Now ask yourself what you actually bought. You bought the economics of ownership without the control of ownership. And in my experience sitting next to dentists through these decisions, control is most of what ownership is for. The hours, the team, the payer mix, the treatment philosophy, the exit timing. Take the control away and what’s left is a very expensive profit-sharing plan with extra liability.
That’s why my list has three numbers on it. At zero percent, you’re an associate, and that’s an honest position with honest tradeoffs. At 100 percent, every decision is yours, for better and worse. And at exactly 50, you and a partner are true equals, which can work beautifully when the partnership agreement is built by people who planned for disagreement, because equals have to negotiate rather than outvote.
Everything between those numbers is where dentists get hurt.
The fine print I’ll grant
If three dentists split a practice into thirds, that can function, because no single partner controls the outcome and every decision requires building a coalition. It’s the two-person split that isn’t a split, the 51-49 and the 60-40 and the 70-30, where one dentist holds every card and the other holds a payment book, that I want you to walk into with your eyes open.
And I’ll grant something else. Minority buy-ins are sometimes offered with real warmth, by senior dentists who like you and want to reward you. The offer can be sincere and could either be a bad structure, or a structured plan to get to 50% over time. Kindness is not governance.
The questions to ask before any buy-in
If a partnership or buy-in is on the table for you, here is where I’d point your attention before anyone signs anything. Who decides, and what exactly requires both signatures? What happens when you disagree, not if? What does the buy-sell agreement say about how either of you exits, at what price, decided by whom? And the biggest one: does this structure give you actual authority over the things you’re buying ownership to control, or does it give you a percentage of someone else’s decisions?
If the honest answers put you at the mercy of a vote you can’t win, you haven’t found ownership yet. You’ve found a very committed way to stay an associate.
Zero, 50, or 100. Pick a real one.
If someone has offered you a buy-in and you’re trying to figure out what you’d actually be getting, that’s exactly the kind of thing to think through with someone who has read a few hundred of these agreements. Let’s look at it together before you sign.
[Set up a complimentary strategy call with the Dental Buyer Advocates team today.]
Not quite ready for a conversation? Start with the free chapter of How to Buy a Dental Practice. It covers the first steps most dentists get wrong.
