Negotiating Dental Practice Contracts & Agreements
Ortho Practice – $325,000
Highly desirable Tucson location
Seller retiring-flexible transition
Real estate available (KHOT2
OralSurgery – $495,000
Beautifully updated office
Located near two major freeways (KHOT2
Perio Practice – NEW LISTING! – $385,000
NW Valley location near major freeway
Increasing collections I solid referrals
4 ops,2 equipped (KHOT2
Scottsdale – NEW LISTING! – $325,000
Loyal staff (KHOT2
Peoria – $579,000
2,700 SF with 9 ops, all equipped (KHOT217)
Sun City – PRICE REDUCED! – $279,000
Great growth potential
Convenienlly located near major freeway
Recently updated, fully digitail (KHOT235)
Peoria – $660,000
Beautifuloffice with state-of-the-art equipment
6 ops, 5 equipped (KHOT217)
West PhoeniX – SELLER MOTIVATED! – $335,000
4 ops, all equipped
Near 2 major freeways
Digital office (KHOT236)
Suprise – NEW LISTING!
Dynamic NW Valley location
Near major freeway
5 ops,3 equipped (KHOT240)
Outside Phoenix Area
Flagstaff – NEW LISTING! – $530,000
6 ops, 5 equipped plus lab (KHOT241)
An ounce of prevention is worth a pound of cure
Benjamin Franklin coined the saying “an ounce of prevention is worth a pound of cure.” In our line of work as practice transition consultants, we see many types of contracts and agreements. Some agreements do a better job than others of spelling out the critical details of a set of mutual promises. These promises between two parties define their mutual and respective rights and obligations, along with consequences in the forms of rewards and penalties.
Ideally these promises create a win-win outcome in which both parties are pleased. However, problems often occur when one or both of the parties seek only their own interests with little or no consideration for the other’s or without considering the longer term impact of their actions. Sometimes negotiations result in one party getting their ideal result, but at the expense of the other party. Unfortunately far too often we see contracts that are not designed to create win-win outcomes and end up failing miserably to meet the respective or mutual needs of the parties. Most could have been “cured” with “an ounce of prevention.”
To avoid such undesirable results, regardless of which side of the equation you are on, ask yourself the following questions before entering into any agreement:
- Does the agreement further your personal long-range goals? Does the outcome of the agreement fit into your objectives?
- Have you considered and are you attempting to meet the other party’s goals and objectives without compromising your own?
- Does the agreement fall comfortably within the goals and limits that you set for this particular negotiation?
- Does the other party feel good about and comfortable with the terms of the agreement? Has any possibility of resentment as a result of uncomfortable compromises been removed?
- Can you perform your side of the agreement to the fullest?
- Do you intend to meet your commitment?
- Based on all the information, can the other side perform the agreement to your expectations?
- Based on what you know, does the other side intend to carry out the terms of the agreement?
Obviously a best case scenario would involve answers in the affirmative to all of these questions. If you are unsure about any one of them, take some extra time and review the entire situation. Assess how the agreement could be changed in order to create a yes answer to each question.
Although it may not be found in any mainstream business management textbook, we often counsel clients to check their “gut feeling” on an issue. If it does not “feel” right, then they should seek greater understanding and obtain additional information until it does. And if they still feel uncertain about it, they should either ask for revisions to the agreement or no longer pursue the transaction.
For example, associateship contracts may seem a bit confusing to a first time doctor looking for employment. Some may assume that since others dentists before them have entered into similar arrangements, it must be acceptable for them to do the same; however, as time goes on differences may arise in the expectations of each party. Contention will result, and if not addressed and resolved, even the “best” of contracts may not be able to hold the professional relationship intact and the parties will part ways.
A contract is only as good as the person(s) entering into it. In other words, contracts do not perform, people do.
There is always an element of trust when entering into a contractual arrangement. Each party trusts that the other party will uphold their side of the agreement. When that trust is damaged, it usually takes a lot more than just a contract to restore it. The key is to get to know people and trust them to be who they are. Instead, we all have a tendency to trust people to be who we want them to be, and when they are not, we question their trustworthiness. Trust is developed based on the integrity exhibited by an individual.
Sadly, most of us have had or will have experiences in which we enter into some form of contractual agreement with the best of intentions only to end up frustrated and dismayed by the outcome due either to the performance of the other party, or our own. If you doubt your trust in yourself or the other party, seek first to build that trust. Ask questions. Seek to understand and seek to be understood. It may be wise to also seek professional guidance and counsel to assist you in communicating your position, understanding the other party’s position and building a mutual framework of trust before entering into any agreement. The axiom “an ounce of prevention is worth a pound of cure” is as true today as it was when Benjamin Franklin wrote it in the 1700’s.