The Dentist's Network #48


	Advice Before You Sell Prepare Before You Hire Color in Marketing

Thomas L. Snyder, DMD, MBA
Managing Partner
The Snyder Group, LLC
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Top Ten Things to Do Before Selling Your Practice

For those of you who are thinking about selling your practice in the next few years, here are some key points to consider when getting ready for that big event. Failure to do so may result in you getting a lower value or not being able to get a transaction that you can live with!

Meet with your financial advisor. Can you really afford to sell your practice? You may be surprised. If you have never had a financial plan prepared, now is the time to have one done. Often we speak to potential sellers who are emotionally ready to sell, but financially unable to do so. You may find that you’ll have to put your plans on hold for a few more years or, conversely, feel quite confident that the practice sale proceeds will only enhance your retirement lifestyle.

Discuss the tax ramifications of a sale with your accountant. If you are a “C” Corporation, for example, there are some obstacles that must be overcome. How will you allocate goodwill between the corporation and yourself? How tax efficient is the future sale? Getting answers from your accountant regarding what you’ll retain after a sale is critical when you make a decision to sell.

Make sure you get a comprehensive Practice Valuation. If you use a broker, retain one who will prepare a formal valuation. Most brokers who prepare formal valuations will credit the valuation fee against the sales commission. Getting a free valuation is not serving your best interest. In our experience, just having a number appear on a financial spreadsheet does not do you justice when potential purchasers are trying to determine if they want to make the commitment to purchase your practice.

Do not slow down or work fewer days. When you do this, often times you stop accepting new patients as well. This will hurt your practice’s value and make a purchaser less interested in buying a practice that is in a decline.

If you have an associate, be sure that they have an EmploymentAgreement containing a restrictive covenant and non-solicitation clause. If you do not have an existing agreement, consult with your attorney; you may have the associate sign an Employment Agreement for additional compensation known as “consideration.” This will protect your practice’s value. Selling your practice without a covenant will be very detrimental.

Take an honest look at your facility. You do not necessarily have to make any large capital expenditures, especially if you want to sell within a few years. However, you should make some cosmetic enhancements, if needed, such as fresh paint on the walls, new carpet, tile, new landscaping, etc. In other words, make the practice look more aesthetically appealing. First impressions are always critical to a purchaser.

Purge any uncollectible accounts receivable and make every effort to collect those accounts that are past due over 90 days. If you fail to do this, it will become a sticking point in your negotiations.

Fee increases. We suggest you get a fee analysis to determine where you stand within the fee percentile range in your area. If you are well below average and you still have a year or so to go before sale, do yourself a favor and increase your fees. Chances are your patients will accept the fee increase; you will increase your income, and possibly enhance the value of your practice.

Hire an attorney who has dental experience. It can save you and the purchaser thousands of dollars. Ask your accountant or broker for referrals, because they work often with attorneys who have considerable dental experience.

Finally, be realistic in your timing. Sometimes we get calls from doctors who want to sell their practice in six months or less! This is an almost impossible task for any broker. We tell prospective sellers to give a broker 9 to 12 months to sell a practice.

So in the end, a good deal of planning is necessary for you to really get your practice ready to be put on the market. Careful planning will give you the highest return and, most important, peace of mind.

Dr. Thomas L. Snyder, is Managing Partner of The Snyder Group, LLC, a nationwide practice transition and financial management consulting firm. With more than 75 years of experience in the field, The Snyder Group can provide you a full range of services relating to practice transition matters and retirement planning. They can be reached directly at 1-800-988-5674.

If you would like additional help, email Dr. Snyder at drsnyder@thedentistsnetwork.net.

Interested in having Dr. Snyder speak to your dental society or study club? Click Here

Michael Moore, Esq.
Director McKenzie
HR Solutions
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Hiring Keys to Good Employment Relationships

An effective hiring practice establishes the employment relationship from inception to separation and beyond. There should be two major goals in the process, outside the objective of performance:

(1) Eliminating problem individuals as candidates, and
(2) Protecting the practice from unforeseeable events, perhaps still years down the road.

Documentation
Everything begins and ends with a document. Hiring is a process that must be documented and placed in a file. In that file you will put copies of any advertisements, all applications, records of all interviews, copies of rejection letters and your final offer and acceptance. Maintain the file at least two (2) years

Finding Candidates
If you advertise for staff positions, a couple of pointers are in order. First, stick to the basics and the needs of the practice. Use position descriptions—specific duties. Stay away from “catchy” phrases; these can often be misconstrued as ageist or otherwise biased. “Looking for energetic recent grad” might be considered as stereotyping that discourages older applicants.

Interviewing
Applications follow the advertisement. In our practice, the application is a multi-purpose document (to which we’ll return). Once you have identified potential hires from the applications, interviewing is absolutely necessary.

It is important to use a checklist that will keep you from straying into hazards. There are a number of questions you may not ask in today’s litigation environment. The interviewee may volunteer information, which is fine, but never ask about any medical problems, disabilities, medication usage, age, marital status or the number of children (and how the applicant would handle day care). Prior work-related injuries are also out of bounds.

Once you have reviewed the job duties, you may certainly ask if the applicant has any need of accommodation to fulfill the responsibilities. A “yes” answer then requires you to engage more fully in what specific accommodations may be needed. This area is beyond the scope of this piece, but the key point to remember is that any person with a disability must be able to perform essential functions of the job—with or without accommodations. Stick to the job duties, office procedures and the candidate’s educational and employment background, and you’ll be on safe ground. A written job description adds to your interviewing process, and can reduce the time necessary to conduct an interview. A copy must go into the hiring file, and should designate the essential functions of the position—including the need to be punctual. Your checklist should have a place in which the interviewer can jot down impressions of the interview, and document significant points of interest or concern.

Rejection and Offer Letters
Once you choose the best candidate, you should send rejection letters to each of the applicants you interviewed. This letter need only thank the applicant, but also inform him or her that you have decided on another candidate. Invite another application should a position come open. Copies of rejection letters should be stapled to the applicant’s application and kept in the hiring file.

Your offer letter to the top pick should (1) reference the job description, (2) state the salary, (3) state the start date and (4) make clear the offer is conditional upon satisfactory results of a background investigation and any other requirements you may have. If you require a physical examination and/or drug screen of all hires, you may include that requirement. The letter should have a place for the candidate to sign and return, and a date by which that must be done. If you send it by mail, include a self-addressed, stamped envelope.

Background Check
I recommend to all our clients that a background check be done on each new hire. There are companies we recommend that can accomplish the check in a quick turnaround for a modest cost. The check should include not only a criminal background screen, but credit history and direct contact with prior employers.

If you opt to do this, your offer letter will enclose an authorization/release for the check; you could also have the applicant sign one at the interview. We have such forms, or the company you choose to perform this check can supply them to you. This allows individuals with background issues to “self-select” themselves out of consideration or for employers to learn something from the background check that disqualifies a candidate from your consideration.

Should something in the financial aspect of the background screen be the disqualifying factor, federal law requires that you notify the applicant of it before you make a final decision, so that the applicant has the chance to correct the information.

The Application
We come back now to this important document. The application serves the function of not only obtaining information, but of obtaining commitments from the applicant should he or she be hired.
There are three key commitments.

First, the document should contain an authorization and release: the authorization for you to obtain information from past employers, and the release of liability to those employers who do provide information to you. Most employers are reluctant to provide negative information without a release.
Second, the applicant must acknowledge that if any information she puts down is false or misleading, she or he is subject to immediate termination.
Third, the applicant must agree that she or he will bring any legal claim against the practice within 180 days of separation.

I strongly recommend that every practice have in place a mandatory binding arbitration policy for most employee-employer claims. Although that policy is a separate document, which you will provide to the new hire as part of the orientation process and have a separate acknowledgement signed, reference to it should be included in the application as well.

Conclusion
The employment relationship, if properly handled, will go a long way towards creating an enduring relationship.

Mike Moore is ranked among the best in employment law and named one of the top 10 lawyers in Ohio. As Director of McKenzie’s HRSolutions, Mike is the creator of the Employment Policy and Handbook, geared to providing dentists who are unsophisticated in the legal arena with a step-by-step policy manual.

Click here to hear Mike present “7 Elements of an Effective Employment Policy.” Email Mike at mike@thedentistsnetwork.net.
Interested in having Mike speak to your dental society or study club? Click Here

Joel Harris, President
ADA Intelligent Dental
Marketing, Inc.
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The Psychology of Color in Dental Marketing

Whether it’s your logo, practice brochure, website, wall art or other materials, you'll be making important color choices. What colors have you chosen for your practice marketing materials? What were your reasons for making the decision? Was it because you just liked those particular colors, or did you have a particular marketing message in mind? Even though visual appeal is an important consideration, your color choices send a message to the people who view them. Hopefully, this short article will help you learn what that message might be.

Certain colors not only enhance the appearance of an item, they also influence behavior. Never underestimate the impact that the colors you use will have on your target audience. It’s no accident that Campbell's Soup has used the same four colors on labels for years and years. (Just by mentioning Campbell’s Soup, I'll bet an image of that label popped into your head!)

Have you noticed that most fast food restaurants are decorated with vivid reds and oranges? It's no accident that these colors show up so frequently. Reds and oranges encourage diners to eat quickly and leave—and that's exactly what fast food outlets want you to do. Even though market researchers have made an entire science out of identifying the effect colors have upon consumers, I’ve tried to simplify it for the purposes of dental marketing. Here goes:

Black
Black is the color of authority and power. Black clothes make people appear thinner. It's a somber color sometimes associated with evil (the cowboy in the black hat was almost always the "bad guy"). In North America, black is associated with grieving. Black is a serious color that evokes strong emotions. It’s easy to overwhelm people with too much black and in most cases black really has no place in dental marketing.

White
For most of the world this is the color associated with purity, cleanliness and elegance. White can be used to project the feeling of superiority or high-tech excellence. Because white is not technically a color but rather the lack of color, it is more of a complement to other color schemes. In dentistry, white can send a strong message of healthy teeth or cosmetic esthetics..

Gray
Gray is most associated with the practical, timeless, middle-of-the-road, solid things in life. Too much gray leads to feeling mostly nothing, but a bit of gray will add that rock-solid feeling to your product. When used improperly, gray is associated with old age, death, taxes, depression or a lost sense of direction.

Red
Red is the color of energy. It's associated with movement and excitement. People completely surrounded by red find their heart beating a little faster and often report feeling a bit out of breath. Wearing red clothes will make you appear a bit heavier and certainly more noticeable. Red is not a good color to overuse, but using a spot of red in just the right place is a smart way to underscore a message. A red tie with a navy blue suit and white shirt adds just the right amount of energy and creates attention.

Pink
Although red is used at holidays that are about love and giving, the true color of love is pink. Pink is the most calming of all colors; often, dangerous criminals are housed in pink cells because studies show that pink drains energy and calms aggression. Pink can be a very effective color in dental marketing, especially when combined with masculine colors.

Blue
Ask people to name their favorite color and a clear majority will say blue. Much of the world is blue. Seeing the color blue actually causes the body to produce chemicals that are calming. Over the ages, blue has become associated with steadfastness, dependability and loyalty. People tend to be more productive in a blue room because they are calm and focused on the task at hand. Blue is a favorite color used in dental marketing because it conveys so many important messages.

Green
The color of growth, nature and money is green. A calming color also, it is very pleasing to the senses. Dark forest green is associated with terms like conservative, masculine and wealth. Hospitals use light green rooms because that color too is found to be calming to patients. It is also the color associated with envy, good luck, generosity and fertility. It is the traditional color of peace.

Yellow
Cheerful yellow, the color of the sun, is associated with laughter, happiness and good times. It has the power to speed up our metabolism and bring out some creative thoughts. Yellow can be quickly overpowering if overused, but in sparing amounts in just the right place it can be an effective tool in marketing success. Used improperly, yellow can send the opposite message of white, healthy smiles.

Orange
The most flamboyant color on the planet! It's the color tied to fun times, happy and energetic days, warmth and organic products. It is also associated with ambition. There is nothing even remotely calm associated with this color. Orange is associated with a new dawn in attitude.

Purple
Purple is the color of robes worn by kings and queens. This royal color is associated with wealth, prosperity and rich sophistication. Purple can create an air of mystery, wisdom and respect. In combination with blues and greens, purple can be a very effective dental color.

Brown
This color is most associated with reliability, stability and friendship. More and more consumers are likely to select browns as their favorite colors. Brown is the color of the earth itself and can create a feel of well-being. Browns and earthy colors communicate a message of being non-corporate and down-to-earth. Browns combined with other subtle colors can make a great identity for certain dental practices.

Joel Harris is CEO and Co-Founder of Intelligent Dental Marketing, one of the nation’s leading Dental Marketing companies focused exclusively on dental practices. Intelligent Dental Marketing provides powerful marketing tools to help dentists grow their patient base, increase their profit and improve their image. Joel can be reached directly at 1.877.942.8855.

Interested in speaking to Joel about your marketing concerns? Email him at joel@thedentistsnetwork.net

Interested in having Joel speak to your dental society or study club? Click Here