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- Feb 20, 2013
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Little Buddy
I think we may be off kilter. When you have partners in the entrepreneurial model I discussed, they are not partnered in the hub, just in the practice they do dentistry in. So Dr B only owns half of AB Corp which is the practice A and B bought 50/50. A continues to fully own the hub. B's purpose is to have an owner dentist on site in the AB practice so A can basically ignore 90% of the operations issues that B handles and 9% is handled by his management staff and then A's involvement is minimal.
Here's the picture:
A fully owns the hub
A owns half of each AB,AC,AD,Aetc with B,C,D,and etc owning the other half.
B,C,D, and etc don't have anything in common with each other except they each share their practice with A. Each practice is a separate corp with a separate tax return. That's very important (you may need to use LLCs, ask your attorney). It's my understanding there has been a problem with single member LLCs not having liability protection, ask your attorney.
When you have an owner dentist in each practice, you don't need a bonus structure. Growing his/her practice for increased income and equity is the bonus. Buying out A at some point is the carrot.
I don't know what bringing on a DT is. You will need to clarify.
I don't post anywhere else.
We do have examples, but our clients are confidential. One of our EDs (entrepreneurial dentists) graduated in 2004, bought practice 1 in 2006, Has owned 16 practices, and still owns 11. He does dentistry one day per week and has hired an operations manager to help him with acquisitions and associate/partner selection. He markets and grows new practices aggressively and when Dr B buys him out he invests outside of dentistry and keeps fully leveraged in his practices with bank financing.
There are other ways to do ED. This one is simple and requires minimal oversight.
I think we may be off kilter. When you have partners in the entrepreneurial model I discussed, they are not partnered in the hub, just in the practice they do dentistry in. So Dr B only owns half of AB Corp which is the practice A and B bought 50/50. A continues to fully own the hub. B's purpose is to have an owner dentist on site in the AB practice so A can basically ignore 90% of the operations issues that B handles and 9% is handled by his management staff and then A's involvement is minimal.
Here's the picture:
A fully owns the hub
A owns half of each AB,AC,AD,Aetc with B,C,D,and etc owning the other half.
B,C,D, and etc don't have anything in common with each other except they each share their practice with A. Each practice is a separate corp with a separate tax return. That's very important (you may need to use LLCs, ask your attorney). It's my understanding there has been a problem with single member LLCs not having liability protection, ask your attorney.
When you have an owner dentist in each practice, you don't need a bonus structure. Growing his/her practice for increased income and equity is the bonus. Buying out A at some point is the carrot.
I don't know what bringing on a DT is. You will need to clarify.
I don't post anywhere else.
We do have examples, but our clients are confidential. One of our EDs (entrepreneurial dentists) graduated in 2004, bought practice 1 in 2006, Has owned 16 practices, and still owns 11. He does dentistry one day per week and has hired an operations manager to help him with acquisitions and associate/partner selection. He markets and grows new practices aggressively and when Dr B buys him out he invests outside of dentistry and keeps fully leveraged in his practices with bank financing.
There are other ways to do ED. This one is simple and requires minimal oversight.