4 Hats and Time Horizons - determining your strategic plan
As the owner of a dental business you can potentially be wearing up to 4 hats:
The CEO's Hat - you are the boss of the business;
The Clinician's Hat - you are a dentist and you may be responsible for other dentists;
The Investor's Hat - you have some of your wealth tied up in the goodwill value of the business;
The Landlord's Hat - you own the freehold premises occupied by the business.
When I'm working with a new client, even a start-up or first acquisition, one of my first questions is to establish the time horizon for wearing each of these hats.
"At what target age would you like to be able to take each hat off?"
Experience demonstrates that most clients will tell me:
"I'd be quite happy to keep The Landlord's Hat on forever - passive income from investment property is good - if I sell the practice and get a rent that sounds attractive";
"I have a specific time-frame for wearing The Investor's Hat and The CEO's Hat. I'll keep those has on for as long as I enjoy working ON the business";
Opinions vary on wearing The Clinician's Hat - some are quite happy to carry on delivering dentistry past the point at which they doff The Investor/CEO Hats - others cannot wait to doff The Clinician's Hat and focus on The CEO/Investor Hat.
It's the determination of that final preference that can be mission critical in determining a strategic plan for the client.
Especially so in a world of 5-year earn outs for those who have kept The Clinician's Hat firmly on and generate a significant proportion of total production.
Equally so for those who want to doff The Clinician's Hat completely ASAP (a growing tribe).
Here's an exercise for you over a coffee:
blank sheet of paper and a pen;
write down the 4 hats;
write the age (if any) at which you would like to doff the hat;
think carefully about the impact of that on your overall professional planning;
call me if you need help.