Why Hiring An Associate Chiropractor During Your Practice Sale is Rarely a Good Idea

We occasionally are asked if hiring an Associate while your practice is on the market is a good idea.

The thought is generally that you as Seller are looking for ways to increase income, decrease your workload or find the best buyer for their practice.

After many years of working with Sellers who have attempted this, my general observations are that if you hire an associate while your practice is on the market, it has more potential to do harm, than good.

Here's more than a few reasons why:

A) Why Hiring the Associate While Your Practice is On the Market Makes Things WORSE, Not Better

1. A green, unproven, not yet profitable associate, will certainly not increase the value of your practice for many months (if ever)
2. Training an associate typically provides a distraction to the owner that generally results in the Owner's decreased production
3. If expenses to pay an associate coupled with decreased Owner production both exist, the negative impact on profits and value can be significant
4. An Associate is another personality the buyer will have to consider -- they are most concerned with aligning with the Seller's personality, technique and style; an Associate just adds another personality to their list of concerns
5. Just because you perceive the need for an associate at your volume, does not mean the buyer will have the same volume mindset.  A Seller who is used to seeing 100 visits/wk will perceive the need for an associate when they hit the 80 mark.  But if the Buyer is used to seeing 150/wk, an associate is an unnecessary expense to them.  The key here is that you do NOT YET KNOW who your buyer is!
6. At the most basic level, a new associate is a change to the business that is going to be followed by another change in the ownership. That can be too much to handle for some patients and/or staff

B) The Most Common Objections -- What About the  "Great" Associate?

1. First, let's go with numbers.  Great associates are probably 5% of the marketplace.  If we're generous, maybe 10-20%.  So why would you do something that ignores the rule and only works if you find the exception? Bad move.
2. EVEN IF you hire an associate who is great out of the box, with little training needed, they will need to stay and be profitable for a long time before it has any positive impact on the practice
3. EVEN a good associate, who is only been with the clinic a short time, will NOT be perceived as much of an asset because the professional lifespan of an associate is approx 1.5 yrs.  So if they're great for you for 6 months, then the buyer will perceive they have maybe a year left before that associate leaves them to move on to another practce or to start their own
4. Many sellers believe a great associate will make a great buyer.  Our experience is the opposite.  Most DCs who even take an associate job are not ready to buy for at least 2 years.
5. Worse -- Buyers do not understand the previous point.  A buyer's perception is WHAT IS WRONG with the practice that makes the associate not want to buy?  Sure you can maybe explain your way around it, but the question will be asked.

ALTERNATIVES

1. If you feel committed to the route of getting an associate out of personal necessity, then my suggestion is you temporarily take your practice off the market.  Focus on getting an associate. Train them, Work with them for a couple years and then put the practice on the market with increased profits and attractiveness (or sell it to them).
2. If you just need more breaks or time away to reduce the physical strain, hire a vacation doctor every 6 weeks and go on vacation for a long weekend.  You'll be busier when you're in the office and at a 6 week pace, the stress will be reduced. And you can keep going at a sane pace that will allow you to thrive in and out of practice
3. If you ignore all the above, hire the associate, be prepared that in a few months, your profits may sink and we may need to lower the price of the practice to get it sold.