June 23, 2025 • 22 mins
Thinking about making your associate a partner? This episode will help you decide if it’s the right move for you and what other options you have to keep associates in your practice without giving up equity.
You'll learn the must-haves of a successful partnership, the common reasons they fail, and what to look for in a potential partner. Listen now to hear the benefits of partnership and why you might want to stay solo!
Topics discussed in this episode:
- The first step to partnership
- The benefits of partnership
- Why Dr. Henry chose to stay solo
- Why partnerships fail
- How to make partnerships successful
- Alternative ways to structure partnerships
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Paul Etchison (00:02):
Are the perks of partnership worth the risks?
What if something goes wrongand you've already signed away
part of your business?
On the other side, what if yourbest associates leave you high
and dry?
Listen, there are real risks,but there also is a ton of
benefits.
So today we're gonna talk aboutwhy partnerships fail, how you
can make them work and what youcan do to keep associates happy
(00:23):
without offering partnership.
If you ever see your practicewith more than one dentist fail,
how you can make them work andwhat you can do to keep
associates happy withoutoffering partnership.
If you ever see your practicewith more than one dentist,
you're going to want to listento this one.
You are listening to the DentalPractice Heroes podcast, where
we teach dentists how to stepback from the chair, empower
their team and build a practicethat gives them their life back.
I'm your host, dr Paul Etchison, dental coach, author of two
(00:45):
books on dental practicemanagement and owner of a large
four-doctor practice that runswith ease, while I work just one
clinical day a week.
If you're ready for a practicethat supports your life instead
of consuming it, you're in theright place.
My team of legendary dentalcoaches and I are here to guide
you on your path fromoverwhelmed owner to dental
practice hero.
Let's get started.
(01:11):
Welcome back to the DentalPractice Heroes podcast.
I'm your host, dr Paul Etcheson, and I'm joined today by both
of my DPH coaches.
Dr Steve Markowitz, who's got ahuge multi-practice
organization with many, manyemployees, and when you've got
the kind of problems at yourpractice and you tell them to
Steve, he goes that's all yougot.
(01:32):
That's all you got.
And he's like I will raise youthis much with the problems at
my huge organization, sixpractices in his group, boston
area.
And then we got Dr Henry Ernst,living in South Carolina,
practicing in North Carolina.
He's only allowed to NorthCarolina to practice and then he
has to get back to SouthCarolina or his bracelet goes
(01:54):
off.
So welcome back guys.
How are you doing?
You crushed?
Stephen Markowitz (01:57):
that intro.
Paul Etchison (01:58):
Good job.
Stephen Markowitz (01:59):
Yeah, it's like you wrote it out and we
practice it.
Henry Ernst (02:03):
It only took five times audience out there.
That was pretty good.
Paul Etchison (02:06):
So today we're going to talk about something
that it comes up often with mycoaching clients is, like a lot
of people that listen to thispodcast, if you're a listener,
we want to do associate drivenpractices.
I mean, I'm just telling youthat's what we tend to get for
listeners, and people that reachout to me is people that want
to do something similar, thatwhat me or Henry or Steve has,
which are associate drivenpractices.
(02:27):
We're not practicing as manydays as the solo dentist, but it
comes up a lot.
I really like this associate.
I'm thinking I like them.
So the next logical step shouldbe I should partner with them,
just like when you meet asignificant other and you're
like I really like this person,I'd like to keep them around
forever.
Maybe we should get married.
So I think it's going to be agood topic to say should I take
(02:50):
on a business partner and whatdoes this really mean?
And just share some experience.
And I'm going to go to you,steve, because Steve's got the
huge, just huge, hugeorganization Jesus Paul.
It is so big organization,jesus Paul, in the Boston area.
It is so big.
I mean, didn't you show up onthat like 500 fastest growing
companies of Boston County Idon't know what county you're in
(03:11):
, 5,000.
Stephen Markowitz (03:13):
Yeah, I'm going to ignore what you just
said and just talk about whatwe're supposed to be talking
about, which is should I bring?
Henry Ernst (03:21):
on a business partner.
Stephen Markowitz (03:22):
Let's stay on point and the answer is it
depends.
I think you really need to dosome soul searching, just like
you did when you were decidingwhether or not I should propose
to this person or not.
When you have a partner, youare married to them, and it
doesn't mean that it needs tolast forever.
There are ways to get divorced,but it becomes a lot more
complicated when there arepieces of paper and legalese
(03:45):
that says you guys are connected.
So before you bring on thatpartner, it is nice to share
responsibilities with someone,but you better be a match and
you better understand whatyou're going to be responsible
for and what this person who isnow coming into your practice
has got to be responsible for.
And if you're able to reallyhave that conversation out loud
(04:07):
and talk throughresponsibilities and talk
through how this is going towork, what happens if this
doesn't work?
Then sure, I think there aremany businesses, especially in
medical and healthcare, thathave partnerships that work
great.
But it is also what I find withmy coaching clients the biggest
stressor because of the lack ofclarity that comes with
(04:31):
partnerships.
Paul Etchison (04:32):
Asking you, steve , because you've seen this
within your organization.
What are the benefits Like?
Why would anyone even want todo this?
Stephen Markowitz (04:38):
Oh, shared responsibility.
You guys know it's lonely to bea business owner, to feel like
you have to make all thedecisions and to not have
someone to share and that kindof be stuck in the mud with is
what the term that we use.
And it feels good to be able tolean on someone and talk out
through issues and know thatthey understand and are
(05:00):
responsible and benefit from thegrowth of the practice.
That can be very rewarding.
I think it is more challengingwhen you have this practice and
you have a doctor who's a greatdoctor and they're a great fit,
but that doesn't mean thatyou're an owner Because you're a
great doctor.
That means you're a greatdoctor.
(05:20):
So what does it mean to be abusiness owner?
And let's define that before weget into this legal
relationship.
And then, if we do and we'reupholding our end of our
responsibility, it candefinitely be mutually
beneficial, because now either Ican take more time off because
I have someone who cares aboutthis practice as much as I do,
(05:43):
or I can go and we can grow evenfurther, because there's one of
the John Maxwell's 21Irrefutable Laws of Leadership
is the law of the lid, and itsays that I can only go so much.
My lid is at a certain level,so if I can have someone who's
gonna be here with me, thenmaybe I can take this thing from
one practice to three practices, or maybe I can take this from
(06:05):
a $1.5 million practice to a $4million practice.
Paul Etchison (06:09):
I feel like the biggest risk of having an
associate-driven practice is theassociate leaving and I mean
you don't want to have.
It looks bad to patients whenyou just got people coming in
and now can you operate likethat?
Of course you can.
I mean you can run any kind ofbusiness you like and it's not
going to crush your practice ifyour associates leave.
It just doesn't.
But it kind of sucks when theydo, when you find somebody who
(06:31):
really gels well with the teamand they really do well with
your patients.
Stephen Markowitz (06:35):
I'm experiencing that right now.
One of our doctors, who's beenwith me for five years, is
moving across the country and ithappens.
But the path of leastresistance is not the reason to
bring on a partner.
It's because this is what youtruly want for your life, for
your business, and it's the bestthing for your team, for your
patients, for your practice andfor your life.
(06:56):
And if all of those thingscheck off, then, yes, you need a
partner.
It's not because this magicalunicorn is the reason why your
practice is successful.
Yeah, what do you think?
Henry Ernst (07:06):
Henny, I never had business partners as far as like
as the practice was ascending,so maybe I'm kind of coming at
it from a different point ofview and I had prior experiences
of not when I was an associateseeing different business
partnerships and the bad thingsabout them.
I had one group that I was withand there was four business
partner doctors and there wastwo that would always whenever
(07:27):
there was a decision.
There were two that wouldalways align this way and two
this way.
So there was never decisionsthat made, like nobody could
ever make a decision, and thatwas horrible.
That practice really was likeat a standstill.
The worst one I ever saw is Isaw this practice when I was
looking around to maybe buy apractice a long time ago.
There was this practice I don'tknow if you guys ever saw the
movie War of the Roses therewere these two doctors that had
(07:49):
been business partners foreverand they were so vehemently like
disgusted with each other thatthey basically just divided the
practice down the line.
This is your side, this is myside, this is my side of the
front desk, this is the practicewas literally, and so I've seen
those things and maybe that wasalways in my mind.
But taking it back to at onepoint where I was thinking about
it, my practice was at a pointwhere we were doing a little
(08:12):
over $5 million in collections.
We were maybe four years intothe practice.
I had four associate doctorsand, yes, you're right, paul,
the biggest risk is associatedoctors leaving.
So we had two like really greatstud doctors that were really
good and I was at a point ofinflection where I was.
Do I need to give these guyssome equity or what are my other
options?
So at that particular point Iweighed all the options.
(08:35):
I saw what the practice wasworth.
You know we were doing about35%.
Take home of that $5 million.
So part of me just said youknow what?
I built this thing and you knowI just want to keep it.
I don't think it's fair thatthey're going to take my sweat
equity.
So I kept the practice running,moving forward, and I used other
things in lieu of the businesspartnership, like EOS, and I
(08:56):
brought the doctors in to bepart of EOS.
So they, you know they feltpart of it there and maybe I
said to them hey, after you'vebeen here for a certain amount
of years, your production'sgonna go, or your amount that
you get will go up.
So I kind of did those littlethings because I just felt that
for me in my specific instantand you said it great, steve it
depends.
It depends on your personalitytype, it depends on your why At
(09:19):
that point, my why was to get abig sell and give myself
financial freedom, and doingpartners would like doing all
the financial math.
It would have been like 10 yearslonger for me to get to that
financial point.
So that was my strategy and mythinking.
I would also say, from what Ihave seen, business partnerships
work is where there arespecific parameters, like if in
(09:41):
that other business, if there'sa split decision, how do we
decide this?
Right, there has to be specificparameters on how we make
decisions, so there's not a logjam and the business can still
move forward.
Paul Etchison (09:52):
It reminds me of like.
I mean, we've all seenpartnerships fail and we all
know somebody that has a dentalpartnership that has been broken
up and it went through thecourt process and somebody had
the key.
I mean it's like breaking up afamily who's going to keep the
kids, who keeps the practice,who moves on All this stuff.
But what I've seen is that it'soften like you mentioned, steve
, you've got to say who's doingwhat.
And I see the problem where theteam comes to one person, one
(10:15):
owner, and says, hey, what doyou think about this?
And then no, no, no, no, no, no.
And then they go to the otherowner and they go, yeah, yeah,
okay, yeah, and they're not onthe same page, because who is
the team looking to forleadership?
So I think there's got to bereally drawn out roles.
I can say in my partnership thatI do because I do have a
partner in my practice.
I had brought her on.
(10:35):
She was a long-term associate,gelled well with the team.
I really loved her being thereand I asked her if she wanted
some equity.
But it was specifically likesaying hey, like I don't need
you to do anything leadershipwise except for just being a
good example.
I don't need you to deal withmanagement, I don't need you to
deal with interpersonal conflictwith anybody, you don't have to
come to our lead meetings, allthis stuff, and that was a
really good arrangement, and I'mstarting to realize that I'm
(11:01):
not at the practice barely atall anymore.
Now she is starting to step upand take a more of a leadership
role, which I like, but we hadtalked about that.
Is this something you'reinterested in?
Do you want to step up and takemore leadership role?
And she does and it helps herto be engaged.
(11:21):
But I have seen I have acoaching client right now that
might be offering partnership toan associate and it's going to
be a 50-50.
And I think the thing is is ifwe're going to build a practice
that frees us to have a lot oftime off, we need to get paid on
EBITDA, we need to get paid onpractice profit.
Otherwise, we need to keeppracticing all the time.
And when you take and do a50-50 partnership, you pretty
(11:42):
much just said let's have twicethe size of the office, I need
to make half the size of theprofits, and I don't think
there's any way that that's evermakes sense for a dental owner.
So that's going to be myposition.
I don't know if you guys wouldagree with that as well, but I
think if you're going to do a50-50, you just got a larger,
more chaotic office that makeshalf as much money.
So you might as well have justkept stayed by yourself.
(12:04):
Now, yeah, do you get to take avacation and the practice
doesn't need to close Big deal.
I don't see the benefit as muchin that.
So I mean I'll go back to you,steve.
What do you think about, likethe idea of like percentages?
Stephen Markowitz (12:15):
I would love to talk about that Also.
I wrote down a quote from DaveRamsey who says the only ship
that doesn't sail as apartnership.
So I think there are other waysyou can structure these deals
so that the person on the otherside still feels appreciated,
cared for, has financial upside,without maybe signing some of
those documents that legallybind you.
(12:36):
I think the most importantthing is there needs to be a
ultimate decision maker, and ifyou're 50-50 and you don't have
clear roles and responsibilities, then you are setting yourself
up for a real, real toughsituation at some point.
But that doesn't necessarilyneed to equate to percentage of
(12:59):
equity ownership roles.
Mark Zuckerberg owns 13% ofFacebook or Meadow, whatever
they're called today.
He owns 13%.
He is the ultimate decisionmaker on the board, so you can
have an ownership of whatever itis, but it's truly who the team
goes to, who's responsible forwhat, and if you can iron that
(13:19):
out, you can have as many cutpartnerships, whatever's going
to float your boat.
But it is really hard.
It needs to be worked onpartnership chartering, the
partnership.
It's like a workbook to gothrough If you're ever thinking
about bringing on a partner andit's you and this person.
Work through this workbooktogether, make sure you're
(13:40):
aligned on you're truly alignedon your values, make sure you're
truly aligned on your, on yourroles and your responsibilities,
and make sure you useeverything as much as talked out
before.
So then, when you go and signthe documents, it's just like
yep, we did that, we got that,we got that.
And then you need to, as a unit,communicate with the team and
(14:00):
then I would say, at leastweekly, you are having your
partner meetings, which is theowner's box, which is way
different than your leadershipmeetings, and you're having
whatever your cadence is Maybeit's monthly, maybe it's
quarterly but you're having yourowner, your owner meetings and
you're talking.
Whatever your cadence is maybeit's monthly, maybe it's
quarterly but you're having yourowner meetings and you're
talking about outside, lookingin, because you can own a
business and not work in it.
That is the unique part of whatwe're talking about here is
(14:24):
we're talking about people whoare in the weeds in the business
and owners.
But just because you're anowner of a business doesn't mean
you need to work in it.
So now you need to be able tohave those conversations out
loud.
It always, always, always, inevery one of these situations
where I see partnerships failing, it's not a lack of intentions,
it's lack of communication andmisunderstandings, and you need
(14:46):
to have all that ironed outbefore you jump in.
Paul Etchison (14:49):
But you know you say like the, there needs to be
an ultimate decision maker.
Where we I see this and if thisis way common, everybody knows
somebody that does this is ahusband and wife team in a
dental practice, and I'm notsaying the husband's always the
dentist.
I've got coaching clients wherethe female's the dentist and
the husband's the office managerand I see that often that who
(15:12):
is the decision maker here inthe team is just like it causes
tons of problems when there's noset who is making the decisions
.
Henry Ernst (15:19):
I was at a point where, again, just my decision
making process and we were alarger practice.
So I was at that decision pointwhere I said, okay, I've got
four, you know a couple guys.
I can envision maybe givingeach one 25%, but, like you said
, paul, I'm always going to bethe ultimate decision maker,
right?
So I was going that route andthen there was so many different
factors, like I wasn't going toget enough, as much money I
(15:42):
would have to get married fourtimes perfectly to make that
just work and that's just reallyhard.
It's really really hard in mysituation.
And I kind of looked at it likethis I said, you know what, I'm
going to quote the greatScarface, tony Montana If you
guys have seen that movie,hopefully where he was sitting
in the bathtub and he basicallywas saying, because I was
thinking to myself, you knowwhat?
I'm the one who took all thisrisk over all these years, I'm
(16:04):
the one who's expanded thisplace four separate times.
So, like he said in the bathtub, who put this thing together
together?
Me, who do I trust me, right?
So that ultimately I said I'mgoing to keep moving forward and
maybe in a couple years I seethis big exit and I'm going to
do all this other stuff to keepall the doctors involved,
putting them out on the doctor'steam as far as EOS having a say
(16:25):
in their workplace and a lot ofthem.
You know, you realize it thatthe associate model is broken,
but it's broken because they putassociates in you.
You know, in an office they'reon their own, they don't have
camaraderie, they're told to docertain things.
So we were always anti all ofthat.
You know we always have anotherdoc there.
There's always at least two orthree of us working every day.
Just treat the patients rightand you know, do good by the
(16:48):
patients and you know if youneed help with stuff we're here
for you.
So I kind of leveraged thatpoint of it.
So that was how I looked at thewhole partnership thing.
Paul Etchison (16:56):
I used to have a five-hour practice where we
would have an associate but wewere split shifted because we
couldn't possibly be there atthe same time and we would
overlap maybe three hours of theday.
But it does.
It's the same isolatingsituation.
You're almost like a solo docwith no help for most of the day
.
And yeah, I totally agree, Inever thought about it that way.
That makes a lot of sense.
(17:18):
The workbook you were talkingabout, Steve to do, is what it
reminds me of, is like pre-Canaclasses for the Catholics in the
world.
I remember we had to do this.
Me and my wife did this and wesat back to back and we're in a
group of like six other couplesgetting married and me and my
wife have been dating since likewe were 14 and 15 years old, so
we were dating for like 10years and everyone was like, oh,
(17:40):
I just met them two years agoand they asked how did you know
when you wanted to marry her?
And I got to go first and Isaid, well, you know, we've been
dating since high school and Ijust graduated college, I'm
going to dental school, she justgraduated hygiene school and
we're just moving away from ourcollege town.
It just seemed like the nextlogical step.
And the next person that wentafter me was like, when I saw
(18:03):
her, I knew and I just looked ather and the way she made me
feel inside and I was like Iwant to go again.
I didn't know we were going downthat road.
I was being very practical andlogical about it and my answer
was it was so freaking horrible.
It was like the worst.
It was like one of my onlystringiest moments.
It was not good, but you knowwhat?
They're probably not learningtogether?
Yeah, they didn't make it.
I know they didn't.
(18:24):
They were still infatuated witheach other.
They never made it past thatsituation.
And here we, Almost 20 years.
In the name of that book is thePartnership Charter.
The Partnership Charter, yeah,I mean, Henry, if you did four,
if you had to get married fourtimes.
That's a lot of work bookingfor you, buddy.
Henry Ernst (18:39):
Oh man, yeah, I got it perfect in my personal life.
I outkicked my coverage.
I didn't want to press my luck.
Stephen Markowitz (18:52):
Yeah, I mean, yeah, we're.
I have partners in my businessand I love them.
They allow a lot of freedom forme and I think it's really
understanding what you want, andif you can spend time and dig
on that, then there's not aright answer.
It's so dependent on what's thebest approach for you
personally.
This is such a it's liketelling someone who they should
marry it just does.
(19:12):
It's not going to work likethat.
Paul Etchison (19:13):
Yeah, if you graduate college and your
girlfriend graduates too, it'stime to get married.
That's the answer.
Stephen Markowitz (19:19):
I think that's.
The takeaway is that you'llhave the best marriage if it's
just the next logical thing todo.
Paul Etchison (19:24):
But you know what ?
There's a win-win, okay.
So, like in every partnership,there is a win-win.
Can you figure out what it is?
If you've got a doctor in yourpractice and they're acting like
an owner and they producereally well and the patients
love them, that doesn't meanthey need equity.
And if you need somebody to runyour practice, they don't need
equity either.
I mean, my leads run mypractice and none of them have
(19:45):
equity.
So there's always win-winrelationships and they get paid
a lot to do it, so.
So there's always win-wins.
It's just finding what it isand discussing it and figuring
out what's best for everybodyinvolved.
But where it's going to fail iswhen you don't discuss it and
you just run into it.
So any closing statements there?
You want to add to that, henry?
Henry Ernst (20:03):
Look at the worst things, like I did or just
happened to see.
Look at the failed partnerships.
Write some bullet points down.
How did they mess up?
How am I going to not do thatright?
Because if you're going to doit, you know, find somebody like
anything else.
Find somebody who's successfulwith it, find somebody who sucks
at it and learn from it TotallyWell.
Paul Etchison (20:21):
thank you so much for listening, and if you're
looking to have some help orsome guidance with your practice
so that you can run a betterpractice and take more time off
and make more money and possiblydiscuss a partnership with
multiple associates and walkingdown this path into wealth and
freedom and all the amazingthings that Henry and Steve have
here, and if you want a huge,huge, huge practice like Steve
(20:44):
huge then reach out to us atdentalpracticeheroescom and
think about getting yourself acoach and making this the best
year for you that you've everhad.
Thank you so much for listeningand we'll talk to you next time
.
Are the perks of partnership worth the risks?
What if something goes wrongand you've already signed away
part of your business?
On the other side, what if yourbest associates leave you high
and dry?
Listen, there are real risks,but there also is a ton of
benefits.
So today we're gonna talk aboutwhy partnerships fail, how you
can make them work and what youcan do to keep associates happy
(00:23):
without offering partnership.
If you ever see your practicewith more than one dentist fail,
how you can make them work andwhat you can do to keep
associates happy withoutoffering partnership.
If you ever see your practicewith more than one dentist,
you're going to want to listento this one.
You are listening to the DentalPractice Heroes podcast, where
we teach dentists how to stepback from the chair, empower
their team and build a practicethat gives them their life back.
I'm your host, dr Paul Etchison, dental coach, author of two
(00:45):
books on dental practicemanagement and owner of a large
four-doctor practice that runswith ease, while I work just one
clinical day a week.
If you're ready for a practicethat supports your life instead
of consuming it, you're in theright place.
My team of legendary dentalcoaches and I are here to guide
you on your path fromoverwhelmed owner to dental
practice hero.
Let's get started.
(01:11):
Welcome back to the DentalPractice Heroes podcast.
I'm your host, dr Paul Etcheson, and I'm joined today by both
of my DPH coaches.
Dr Steve Markowitz, who's got ahuge multi-practice
organization with many, manyemployees, and when you've got
the kind of problems at yourpractice and you tell them to
Steve, he goes that's all yougot.
(01:32):
That's all you got.
And he's like I will raise youthis much with the problems at
my huge organization, sixpractices in his group, boston
area.
And then we got Dr Henry Ernst,living in South Carolina,
practicing in North Carolina.
He's only allowed to NorthCarolina to practice and then he
has to get back to SouthCarolina or his bracelet goes
(01:54):
off.
So welcome back guys.
How are you doing?
You crushed?
Stephen Markowitz (01:57):
that intro.
Paul Etchison (01:58):
Good job.
Stephen Markowitz (01:59):
Yeah, it's like you wrote it out and we
practice it.
Henry Ernst (02:03):
It only took five times audience out there.
That was pretty good.
Paul Etchison (02:06):
So today we're going to talk about something
that it comes up often with mycoaching clients is, like a lot
of people that listen to thispodcast, if you're a listener,
we want to do associate drivenpractices.
I mean, I'm just telling youthat's what we tend to get for
listeners, and people that reachout to me is people that want
to do something similar, thatwhat me or Henry or Steve has,
which are associate drivenpractices.
(02:27):
We're not practicing as manydays as the solo dentist, but it
comes up a lot.
I really like this associate.
I'm thinking I like them.
So the next logical step shouldbe I should partner with them,
just like when you meet asignificant other and you're
like I really like this person,I'd like to keep them around
forever.
Maybe we should get married.
So I think it's going to be agood topic to say should I take
(02:50):
on a business partner and whatdoes this really mean?
And just share some experience.
And I'm going to go to you,steve, because Steve's got the
huge, just huge, hugeorganization Jesus Paul.
It is so big organization,jesus Paul, in the Boston area.
It is so big.
I mean, didn't you show up onthat like 500 fastest growing
companies of Boston County Idon't know what county you're in
(03:11):
, 5,000.
Stephen Markowitz (03:13):
Yeah, I'm going to ignore what you just
said and just talk about whatwe're supposed to be talking
about, which is should I bring?
Henry Ernst (03:21):
on a business partner.
Stephen Markowitz (03:22):
Let's stay on point and the answer is it
depends.
I think you really need to dosome soul searching, just like
you did when you were decidingwhether or not I should propose
to this person or not.
When you have a partner, youare married to them, and it
doesn't mean that it needs tolast forever.
There are ways to get divorced,but it becomes a lot more
complicated when there arepieces of paper and legalese
(03:45):
that says you guys are connected.
So before you bring on thatpartner, it is nice to share
responsibilities with someone,but you better be a match and
you better understand whatyou're going to be responsible
for and what this person who isnow coming into your practice
has got to be responsible for.
And if you're able to reallyhave that conversation out loud
(04:07):
and talk throughresponsibilities and talk
through how this is going towork, what happens if this
doesn't work?
Then sure, I think there aremany businesses, especially in
medical and healthcare, thathave partnerships that work
great.
But it is also what I find withmy coaching clients the biggest
stressor because of the lack ofclarity that comes with
(04:31):
partnerships.
Paul Etchison (04:32):
Asking you, steve , because you've seen this
within your organization.
What are the benefits Like?
Why would anyone even want todo this?
Stephen Markowitz (04:38):
Oh, shared responsibility.
You guys know it's lonely to bea business owner, to feel like
you have to make all thedecisions and to not have
someone to share and that kindof be stuck in the mud with is
what the term that we use.
And it feels good to be able tolean on someone and talk out
through issues and know thatthey understand and are
(05:00):
responsible and benefit from thegrowth of the practice.
That can be very rewarding.
I think it is more challengingwhen you have this practice and
you have a doctor who's a greatdoctor and they're a great fit,
but that doesn't mean thatyou're an owner Because you're a
great doctor.
That means you're a greatdoctor.
(05:20):
So what does it mean to be abusiness owner?
And let's define that before weget into this legal
relationship.
And then, if we do and we'reupholding our end of our
responsibility, it candefinitely be mutually
beneficial, because now either Ican take more time off because
I have someone who cares aboutthis practice as much as I do,
(05:43):
or I can go and we can grow evenfurther, because there's one of
the John Maxwell's 21Irrefutable Laws of Leadership
is the law of the lid, and itsays that I can only go so much.
My lid is at a certain level,so if I can have someone who's
gonna be here with me, thenmaybe I can take this thing from
one practice to three practices, or maybe I can take this from
(06:05):
a $1.5 million practice to a $4million practice.
Paul Etchison (06:09):
I feel like the biggest risk of having an
associate-driven practice is theassociate leaving and I mean
you don't want to have.
It looks bad to patients whenyou just got people coming in
and now can you operate likethat?
Of course you can.
I mean you can run any kind ofbusiness you like and it's not
going to crush your practice ifyour associates leave.
It just doesn't.
But it kind of sucks when theydo, when you find somebody who
(06:31):
really gels well with the teamand they really do well with
your patients.
Stephen Markowitz (06:35):
I'm experiencing that right now.
One of our doctors, who's beenwith me for five years, is
moving across the country and ithappens.
But the path of leastresistance is not the reason to
bring on a partner.
It's because this is what youtruly want for your life, for
your business, and it's the bestthing for your team, for your
patients, for your practice andfor your life.
(06:56):
And if all of those thingscheck off, then, yes, you need a
partner.
It's not because this magicalunicorn is the reason why your
practice is successful.
Yeah, what do you think?
Henry Ernst (07:06):
Henny, I never had business partners as far as like
as the practice was ascending,so maybe I'm kind of coming at
it from a different point ofview and I had prior experiences
of not when I was an associateseeing different business
partnerships and the bad thingsabout them.
I had one group that I was withand there was four business
partner doctors and there wastwo that would always whenever
(07:27):
there was a decision.
There were two that wouldalways align this way and two
this way.
So there was never decisionsthat made, like nobody could
ever make a decision, and thatwas horrible.
That practice really was likeat a standstill.
The worst one I ever saw is Isaw this practice when I was
looking around to maybe buy apractice a long time ago.
There was this practice I don'tknow if you guys ever saw the
movie War of the Roses therewere these two doctors that had
(07:49):
been business partners foreverand they were so vehemently like
disgusted with each other thatthey basically just divided the
practice down the line.
This is your side, this is myside, this is my side of the
front desk, this is the practicewas literally, and so I've seen
those things and maybe that wasalways in my mind.
But taking it back to at onepoint where I was thinking about
it, my practice was at a pointwhere we were doing a little
(08:12):
over $5 million in collections.
We were maybe four years intothe practice.
I had four associate doctorsand, yes, you're right, paul,
the biggest risk is associatedoctors leaving.
So we had two like really greatstud doctors that were really
good and I was at a point ofinflection where I was.
Do I need to give these guyssome equity or what are my other
options?
So at that particular point Iweighed all the options.
(08:35):
I saw what the practice wasworth.
You know we were doing about35%.
Take home of that $5 million.
So part of me just said youknow what?
I built this thing and you knowI just want to keep it.
I don't think it's fair thatthey're going to take my sweat
equity.
So I kept the practice running,moving forward, and I used other
things in lieu of the businesspartnership, like EOS, and I
(08:56):
brought the doctors in to bepart of EOS.
So they, you know they feltpart of it there and maybe I
said to them hey, after you'vebeen here for a certain amount
of years, your production'sgonna go, or your amount that
you get will go up.
So I kind of did those littlethings because I just felt that
for me in my specific instantand you said it great, steve it
depends.
It depends on your personalitytype, it depends on your why At
(09:19):
that point, my why was to get abig sell and give myself
financial freedom, and doingpartners would like doing all
the financial math.
It would have been like 10 yearslonger for me to get to that
financial point.
So that was my strategy and mythinking.
I would also say, from what Ihave seen, business partnerships
work is where there arespecific parameters, like if in
(09:41):
that other business, if there'sa split decision, how do we
decide this?
Right, there has to be specificparameters on how we make
decisions, so there's not a logjam and the business can still
move forward.
Paul Etchison (09:52):
It reminds me of like.
I mean, we've all seenpartnerships fail and we all
know somebody that has a dentalpartnership that has been broken
up and it went through thecourt process and somebody had
the key.
I mean it's like breaking up afamily who's going to keep the
kids, who keeps the practice,who moves on All this stuff.
But what I've seen is that it'soften like you mentioned, steve
, you've got to say who's doingwhat.
And I see the problem where theteam comes to one person, one
(10:15):
owner, and says, hey, what doyou think about this?
And then no, no, no, no, no, no.
And then they go to the otherowner and they go, yeah, yeah,
okay, yeah, and they're not onthe same page, because who is
the team looking to forleadership?
So I think there's got to bereally drawn out roles.
I can say in my partnership thatI do because I do have a
partner in my practice.
I had brought her on.
(10:35):
She was a long-term associate,gelled well with the team.
I really loved her being thereand I asked her if she wanted
some equity.
But it was specifically likesaying hey, like I don't need
you to do anything leadershipwise except for just being a
good example.
I don't need you to deal withmanagement, I don't need you to
deal with interpersonal conflictwith anybody, you don't have to
come to our lead meetings, allthis stuff, and that was a
really good arrangement, and I'mstarting to realize that I'm
(11:01):
not at the practice barely atall anymore.
Now she is starting to step upand take a more of a leadership
role, which I like, but we hadtalked about that.
Is this something you'reinterested in?
Do you want to step up and takemore leadership role?
And she does and it helps herto be engaged.
(11:21):
But I have seen I have acoaching client right now that
might be offering partnership toan associate and it's going to
be a 50-50.
And I think the thing is is ifwe're going to build a practice
that frees us to have a lot oftime off, we need to get paid on
EBITDA, we need to get paid onpractice profit.
Otherwise, we need to keeppracticing all the time.
And when you take and do a50-50 partnership, you pretty
(11:42):
much just said let's have twicethe size of the office, I need
to make half the size of theprofits, and I don't think
there's any way that that's evermakes sense for a dental owner.
So that's going to be myposition.
I don't know if you guys wouldagree with that as well, but I
think if you're going to do a50-50, you just got a larger,
more chaotic office that makeshalf as much money.
So you might as well have justkept stayed by yourself.
(12:04):
Now, yeah, do you get to take avacation and the practice
doesn't need to close Big deal.
I don't see the benefit as muchin that.
So I mean I'll go back to you,steve.
What do you think about, likethe idea of like percentages?
Stephen Markowitz (12:15):
I would love to talk about that Also.
I wrote down a quote from DaveRamsey who says the only ship
that doesn't sail as apartnership.
So I think there are other waysyou can structure these deals
so that the person on the otherside still feels appreciated,
cared for, has financial upside,without maybe signing some of
those documents that legallybind you.
(12:36):
I think the most importantthing is there needs to be a
ultimate decision maker, and ifyou're 50-50 and you don't have
clear roles and responsibilities, then you are setting yourself
up for a real, real toughsituation at some point.
But that doesn't necessarilyneed to equate to percentage of
(12:59):
equity ownership roles.
Mark Zuckerberg owns 13% ofFacebook or Meadow, whatever
they're called today.
He owns 13%.
He is the ultimate decisionmaker on the board, so you can
have an ownership of whatever itis, but it's truly who the team
goes to, who's responsible forwhat, and if you can iron that
(13:19):
out, you can have as many cutpartnerships, whatever's going
to float your boat.
But it is really hard.
It needs to be worked onpartnership chartering, the
partnership.
It's like a workbook to gothrough If you're ever thinking
about bringing on a partner andit's you and this person.
Work through this workbooktogether, make sure you're
(13:40):
aligned on you're truly alignedon your values, make sure you're
truly aligned on your, on yourroles and your responsibilities,
and make sure you useeverything as much as talked out
before.
So then, when you go and signthe documents, it's just like
yep, we did that, we got that,we got that.
And then you need to, as a unit,communicate with the team and
(14:00):
then I would say, at leastweekly, you are having your
partner meetings, which is theowner's box, which is way
different than your leadershipmeetings, and you're having
whatever your cadence is Maybeit's monthly, maybe it's
quarterly but you're having yourowner, your owner meetings and
you're talking.
Whatever your cadence is maybeit's monthly, maybe it's
quarterly but you're having yourowner meetings and you're
talking about outside, lookingin, because you can own a
business and not work in it.
That is the unique part of whatwe're talking about here is
(14:24):
we're talking about people whoare in the weeds in the business
and owners.
But just because you're anowner of a business doesn't mean
you need to work in it.
So now you need to be able tohave those conversations out
loud.
It always, always, always, inevery one of these situations
where I see partnerships failing, it's not a lack of intentions,
it's lack of communication andmisunderstandings, and you need
(14:46):
to have all that ironed outbefore you jump in.
Paul Etchison (14:49):
But you know you say like the, there needs to be
an ultimate decision maker.
Where we I see this and if thisis way common, everybody knows
somebody that does this is ahusband and wife team in a
dental practice, and I'm notsaying the husband's always the
dentist.
I've got coaching clients wherethe female's the dentist and
the husband's the office managerand I see that often that who
(15:12):
is the decision maker here inthe team is just like it causes
tons of problems when there's noset who is making the decisions
.
Henry Ernst (15:19):
I was at a point where, again, just my decision
making process and we were alarger practice.
So I was at that decision pointwhere I said, okay, I've got
four, you know a couple guys.
I can envision maybe givingeach one 25%, but, like you said
, paul, I'm always going to bethe ultimate decision maker,
right?
So I was going that route andthen there was so many different
factors, like I wasn't going toget enough, as much money I
(15:42):
would have to get married fourtimes perfectly to make that
just work and that's just reallyhard.
It's really really hard in mysituation.
And I kind of looked at it likethis I said, you know what, I'm
going to quote the greatScarface, tony Montana If you
guys have seen that movie,hopefully where he was sitting
in the bathtub and he basicallywas saying, because I was
thinking to myself, you knowwhat?
I'm the one who took all thisrisk over all these years, I'm
(16:04):
the one who's expanded thisplace four separate times.
So, like he said in the bathtub, who put this thing together
together?
Me, who do I trust me, right?
So that ultimately I said I'mgoing to keep moving forward and
maybe in a couple years I seethis big exit and I'm going to
do all this other stuff to keepall the doctors involved,
putting them out on the doctor'steam as far as EOS having a say
(16:25):
in their workplace and a lot ofthem.
You know, you realize it thatthe associate model is broken,
but it's broken because they putassociates in you.
You know, in an office they'reon their own, they don't have
camaraderie, they're told to docertain things.
So we were always anti all ofthat.
You know we always have anotherdoc there.
There's always at least two orthree of us working every day.
Just treat the patients rightand you know, do good by the
(16:48):
patients and you know if youneed help with stuff we're here
for you.
So I kind of leveraged thatpoint of it.
So that was how I looked at thewhole partnership thing.
Paul Etchison (16:56):
I used to have a five-hour practice where we
would have an associate but wewere split shifted because we
couldn't possibly be there atthe same time and we would
overlap maybe three hours of theday.
But it does.
It's the same isolatingsituation.
You're almost like a solo docwith no help for most of the day
.
And yeah, I totally agree, Inever thought about it that way.
That makes a lot of sense.
(17:18):
The workbook you were talkingabout, Steve to do, is what it
reminds me of, is like pre-Canaclasses for the Catholics in the
world.
I remember we had to do this.
Me and my wife did this and wesat back to back and we're in a
group of like six other couplesgetting married and me and my
wife have been dating since likewe were 14 and 15 years old, so
we were dating for like 10years and everyone was like, oh,
(17:40):
I just met them two years agoand they asked how did you know
when you wanted to marry her?
And I got to go first and Isaid, well, you know, we've been
dating since high school and Ijust graduated college, I'm
going to dental school, she justgraduated hygiene school and
we're just moving away from ourcollege town.
It just seemed like the nextlogical step.
And the next person that wentafter me was like, when I saw
(18:03):
her, I knew and I just looked ather and the way she made me
feel inside and I was like Iwant to go again.
I didn't know we were going downthat road.
I was being very practical andlogical about it and my answer
was it was so freaking horrible.
It was like the worst.
It was like one of my onlystringiest moments.
It was not good, but you knowwhat?
They're probably not learningtogether?
Yeah, they didn't make it.
I know they didn't.
(18:24):
They were still infatuated witheach other.
They never made it past thatsituation.
And here we, Almost 20 years.
In the name of that book is thePartnership Charter.
The Partnership Charter, yeah,I mean, Henry, if you did four,
if you had to get married fourtimes.
That's a lot of work bookingfor you, buddy.
Henry Ernst (18:39):
Oh man, yeah, I got it perfect in my personal life.
I outkicked my coverage.
I didn't want to press my luck.
Stephen Markowitz (18:52):
Yeah, I mean, yeah, we're.
I have partners in my businessand I love them.
They allow a lot of freedom forme and I think it's really
understanding what you want, andif you can spend time and dig
on that, then there's not aright answer.
It's so dependent on what's thebest approach for you
personally.
This is such a it's liketelling someone who they should
marry it just does.
(19:12):
It's not going to work likethat.
Paul Etchison (19:13):
Yeah, if you graduate college and your
girlfriend graduates too, it'stime to get married.
That's the answer.
Stephen Markowitz (19:19):
I think that's.
The takeaway is that you'llhave the best marriage if it's
just the next logical thing todo.
Paul Etchison (19:24):
But you know what ?
There's a win-win, okay.
So, like in every partnership,there is a win-win.
Can you figure out what it is?
If you've got a doctor in yourpractice and they're acting like
an owner and they producereally well and the patients
love them, that doesn't meanthey need equity.
And if you need somebody to runyour practice, they don't need
equity either.
I mean, my leads run mypractice and none of them have
(19:45):
equity.
So there's always win-winrelationships and they get paid
a lot to do it, so.
So there's always win-wins.
It's just finding what it isand discussing it and figuring
out what's best for everybodyinvolved.
But where it's going to fail iswhen you don't discuss it and
you just run into it.
So any closing statements there?
You want to add to that, henry?
Henry Ernst (20:03):
Look at the worst things, like I did or just
happened to see.
Look at the failed partnerships.
Write some bullet points down.
How did they mess up?
How am I going to not do thatright?
Because if you're going to doit, you know, find somebody like
anything else.
Find somebody who's successfulwith it, find somebody who sucks
at it and learn from it TotallyWell.
Paul Etchison (20:21):
thank you so much for listening, and if you're
looking to have some help orsome guidance with your practice
so that you can run a betterpractice and take more time off
and make more money and possiblydiscuss a partnership with
multiple associates and walkingdown this path into wealth and
freedom and all the amazingthings that Henry and Steve have
here, and if you want a huge,huge, huge practice like Steve
(20:44):
huge then reach out to us atdentalpracticeheroescom and
think about getting yourself acoach and making this the best
year for you that you've everhad.
Thank you so much for listeningand we'll talk to you next time
.
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