Who Will Mind the Store? The Value of Emergency Planning

While attending to office items, the telephone rang and it was the office manager for a chiropractic practice informing me that the principle, Peter, had taken ill and was rushed to the hospital. After several moments, I uncovered that Peter had been having some bouts of forgetfulness - nothing urgent until he blacked out and was rushed to the hospital. In the analysis, it was found he had a brain tumor and was rushed into emergency surgery.

This info comes on the heels of another practicing physician named Brian who recently discovered he had cancer. While he is able to fight it through treatment, he needed assistance with his practice. These stories then remind me - who minds the practice when illness strikes?

It is one thing to create a practice and develop it. But, as with any other business, it becomes necessary to create succession plans. Just about the most frightening thing about your practice is losing it, but providing a succession plan enables you to create financial stability for your family and estate.

One of the most difficult decisions to think about is the transfer of your business - your pride, joy and most important, your creation. Turning over management/ownership authority is not easy for any founder, nor is it easy for the successor. However, if you want your practice to continue to prosper then you must seek a way to do it. Research shows that practices tend to fail after death and fewer than 30 percent are transferred successfully to a second generation or associate.

Getting Started

The first step in any transition is your ability to get your mind in the right context. Succession planning helps you prepare for two basic premises a) crisis and b) retirement. While there are very few statistics in each of these areas, I will bet that less than ten percent of most chiropractors are ready for these categories. The facts are these, one day your practice (heaven forbid) may get hit with a crisis and you will also need to or want to retire. When either occurs, what are your plans? There is an old maxim that says if you "fail to plan then plan to fail." This is very true. Operating a business where you are the sole focus has its positives as well as negatives. The benefits are the financial freedoms and lack of bureaucracy, but there are negatives as well. What happens if you are ill and you cannot bring in revenue or when you retire and you have not placed anything in savings? All this can and will harm you. It is for these reasons that planning is so beneficial.

Convincing chiropractors to have a disaster replacement plan in the event of a tragic event is not too difficult; persuading them to prepare people for advancement years ahead of their actual promotions presents more challenges. Therefore, replacement planning is a start, but only a start.

Consider that many succession plans pertain to most large organizations such as hospitals or healthcare administrators. Most small companies don't have one, much less replacements for key positions such as chiropractic assistants, therapists, associates, etc. Succession planning balances the short and long-term needs and promotes the simultaneous analysis of each.

So, if the stories above concern you and there is a desire to position the practice for continuity, what are some areas of consideration? Ask yourself the following:

• During a short-term illness who is responsible for maintaining the practice?
• Does the current team have enough training to continue practice standards when the principle is away?
• Should a crisis occur, who is my go to person?
• What areas of the practice are covered in a crisis and where is there vulnerability?
• Do I wish a one time payout or do I want an annuity if I retire from the practice?
• Do my siblings desire the practice in times of a crisis, death or retirement?
• What is my legacy? Do I want to leave one?
• What are my retirement and post treatment plans? Do I need a plan?
• Have I paid off my property or have I spent foolishly on needless items?
• What is my current debt to equity ratio?

As with any succession plan, using a professional approach is a key to your success. It is prudent to think about who might take over when you are incapacitated, die or become involved in some other crisis. The idea here is to provide on paper who will take over, what role they might fill, (not every successor need be a chiropractor) and what support and resource they will provide. However, not every chiropractic practice will have a family member ready, willing and able to takeover.

[pb]Succession Planning Benefits

Proper planning for succession helps to ensure that the practice will be ready for volatile periods. All businesses, large and small, have varying degrees of volatility and as such each business needs to plan for these particular issues.

When staff recognizes that they will continue to be paid during some type of hardship and patients comprehend that they will be treated, there is less concern for the practice. Further, planning for your future should also provide some level of comfort in knowing that your family, your patients and your revenue will be protected. One cannot go through life living day-to-day and not being concerned about future impact. While I do recognize that living in the moment is vital for everyday happiness, planning is exceedingly important since your business depends on it.

What to Look For in a Successor

So, what might be some of the competencies to look for in finding a successor? Here are some of the following issues that might be helpful to you.

Decision Making/Problem Solving:

• The ability to focus on short-term objectives and get them done quickly.
• A terrific knowledge of goal setting and delegation ability.
• A good understanding of project management and task orientation.
• They need to understand how to ensure accountability and measurement for success.

People Skills:

• The ability to articulate information as well as listen to it.
• A willingness to help your most prized assets-staff and patients.
• The tolerance to deal with a multiplicity of issues including insurance reconciliation and payment.
• In innate ability to deal with conflict and confrontation.

Perhaps the best piece of advice to give you is to always be looking for your successor and never be looking for perfection. However, the best that you can do is create a foundation that ensures one thing, should you desire, that your practice and its revenue continue without your existence.

One other idea that you should be looking for is the difference between your leadership skills and the core principles of the practice. No matter what, during times of either incapacity or even retirement, it was your blood sweat and tears that brought the ideas and, most of all, the patients to the practice. Therefore, you want to make certain that your legacy lives on and that your ideas still continue to transcend the practice and the foundations of the practice that you've put in place.

Once the decision is made, it will then become necessary for you to choose one of three paths: making the slow transition and offering assistance on a month-to-month basis; making a quick transition and cutting off all access; or making the transition and allowing the other person to take over completely, while offering consultative advice on a monthly or periodic basis. The notion here is that once you transition out and retire, then retire. Although you have a love for the practice and its people, you're hanging around will interfere in the future progress of the practice. It's unfortunate for me to say this as well as you to read it but it is time for the new person to take over. I do recommend being available, but you really need to allow the new person to provide his or her own personality, core beliefs and principles if the practice is to continue and thrive.