Jan 24, 2025
Should I Bring on an Associate?
Written By: Nate Williams
This question may be one of the most important you’ll answer in your career. Many dentists who decide to bring on an associate do so for the wrong reasons, expecting outcomes that don’t materialize. They often end up with more responsibility and stress while earning less than they did when practicing alone.
This article aims to bring clarity to this complex decision. Adding an associate—or choosing not to—is one of the most significant “procedures” you’ll ever perform on your business. You should approach this decision with the help of competent advisors who understands your unique circumstances.
Myth: Bigger is Better
Fact: Bigger often means more overhead, more management, more stress—and less money.
In America, we’re conditioned to believe that bigger is better. Bigger trucks, bigger buildings, bigger burgers, bigger gas stations (um, Buc-ees!). For many, that extends to bigger dental practices. To grow, you’ll need more employees, doctors, and space. But is BIGGER really better?
Start by defining what “better” means to you. Why are you in practice? What does your ideal practice look like? How important is profitability to you?
The business of dentistry is surprisingly simple:
- A patient needs care and comes to you.
- You diagnose, present a treatment plan, and perform the treatment.
- The patient pays you.
That’s it. Dentistry might be one of the simplest business models in the universe. Now ask yourself: of the revenue you receive, how much do you want to take home? If profitability matters, smaller may be better.
To maintain a profitable practice, you’ll need to resist the “bigger is better” mindset. Bigger isn’t always better—especially in dentistry.
Myth: You’ll Make a Lot of Money Off an Associate
Fact: This is sometimes true; however, adding an associate often leads to higher costs and less income for the older doctor.
When you bring on an associate, you’re not just feeding another family—you’re also taking on these additional expenses:
- More staff. A two-doctor practice typically needs twice the staff.
- More space. You’ll need more treatment rooms, hygiene rooms, and possibly a larger break room for the bigger team.
While it’s true you can share some fixed costs, the reality is that total costs often rise significantly when a second doctor joins.
Here’s an example from real 2023 numbers for three practices, all owned by a single doctor:
- A one-doctor, fee-for-service practice.
- A one-doctor, PPO practice.
- A three-doctor (one owner, two associates), two-location PPO practice.
Ask yourself:
- Who is likely working the hardest?
- Who likely has the most stress?
- Which practice would you prefer to own?
Myth: Selling 50% to an Associate Simplifies Your Transition
Fact: Adding an associate makes selling your practice more complex.
When you’re the sole owner, your practice is inherently a one-doctor operation (only one set of hands). If you add an associate, your practice must grow to support the added fixed costs and two families. It becomes a two-doctor practice.
Let’s say you sell 50% to your associate. When you’re ready to retire, the associate may not want to buy the remaining 50%. Why? Upon your departure, the practice will revert to a one-doctor operation, but the value of a two-doctor practice was baked into the original price.
If your associate buys you out, they lose money by overpaying for a smaller operation. If they don’t buy, you lose the value of your remaining equity. To solve this, you’d need to find a third doctor to replace you—which adds more complexity. You not only need to find someone to buy your practice, but also someone who is compatible as a partner with the original associate.
This is possible, but it’s hard. You’re dealing with two “roosters” and a lot of moving parts.
In summary of the above, here are three busted myths around bringing on an associate:
- A bigger practice brings more cost, responsibility, and stress. Bigger is often not better.
- Part of the “bigger” will be a significantly bigger overhead, often leading the owners of multi-doctor practices to make less money.
- Adding another doctor will change the DNA of the practice forever, making your transition to retirement much more difficult and complicated.
Key Takeaways
- A bigger practice often brings higher costs, more stress, and less profit.
- Adding an associate can lead to lower income for the owner.
- A multi-doctor practice will complicate your eventual transition to retirement.
Are There Reasons to Bring on an Associate?
Let’s examine the common reasons we hear to bring on an associate; and if I may, let me share some commentary about each of these reasons.
- Patient demand.
There are more patients than you can handle alone. Do you want to yield control of your business and life to your patients? If you have too many patients, be grateful, but don’t change your business just to accommodate them.
- Making more money.
You hope to profit from another doctor’s work. Please reread the first many paragraphs of this article for more on this topic.
- You want to grow.
You want to expand your practice. I would ask, why? I have learned that doctors who want to grow for growth’s sake, never get “there.” Happiness is always in the future.
- Vacation coverage.
You need someone to see patients while you’re away. I get the argument; the truth is that vacation time comes from planning and setting boundaries, not from having another doctor.
- Partnership.
You want a colleague to share responsibilities and decision-making. This is the best reason to bring on an associate – you want a partner, for a partner’s sake.
- Career change from dentist to manager.
You’d rather manage dentists than practice dentistry yourself. Dentistry is hard and isn’t for everyone. Just know that you’ll likely take a pay cut as you move from dentist into a manager role.
In my opinion, the only rational reason to bring on an associate are the last two: you want another doctor in your building. You want someone to help manage the team and help you make decisions. You’re not in it for the money, but you want to share your career with someone—you want a partner.
Conclusion
Bringing on an associate is a decision that will fundamentally change your practice. It’s not just about adding another doctor; it’s about increasing complexity, costs, and responsibility. While a larger practice may seem appealing on the surface, the reality is that “bigger” doesn’t always mean “better”—and it certainly doesn’t guarantee higher profits or a smoother exit strategy.
If you’re considering an associate, take the time to reflect on your goals and your motives. What does success look like for you? Do you want a partner to share your career and responsibilities, or are you chasing growth for growth’s sake?
Ultimately, the decision to add an associate should align with your vision for your practice, your lifestyle, and your future. Approach it carefully, with clarity and the right advisors at your side. When you do, you’ll make a choice that truly supports your goals—not someone else’s idea of success.
And of course, we’re here to help you work through this decision!