Dr. Allen Nazeri explains how strategic partnerships can multiply clinic value through limited financial integration. He uses a watermelon metaphor: partnerships look good until you engage them. Four keys: contribute real value, avoid direct competition, use geography to expand, and align long-term goals. He warns about failed programs like Malo Clinic and details what to look for in a partner.
Chapters
Value Engineering strategies to 10x the value of your clinic and dominate the market Part 10 Chapter 9 Not all watermelons are red or sweet Identifying the Right Partnership.
Strategic partnerships are like marriages and both very similar to a watermelon. Why a watermelon? Because no matter how well we pick one by color or tapping sound, we don't know how good it will be until we cut it in half.
As much due diligence that goes into picking the right partner, sometimes the results may not be what we expect.
It only shows up after the relationship has begun. However, because there is typically no financial integration between a strategic partner partners, the risk is limited, unlike a traditional merger and acquisition.
To further mitigate the risk, I'd like to share some of the key points to consider when picking a partner.
1. Don't focus on what you can get out of the partnership, but concentrate on the value you can contribute. A true partnership is a two way street. No affiliation or relationship can last unless an equal amount of value is exchanging. If you are there to only benefit from the partnership, do not be surprised if the relationship ends sour. An example of this type of relationship was the former Malo Clinic with its licensees as one of their licensing program dealmakers. I negotiated and closed malloclinic licenses for 17 clinics in Thailand, Singapore and Norway. However, the licensor's lack of promised support led to resentments and non payment of licensing fees by some of the licensees. Finally, a major creditor took over the Mallow Clinic's operation for not meeting its debt obligations.
2. Be sure you and the partner are adding value and not competing with one another. If in the same geographic location, a strategic partnership may be between two competitors but focused on different market segments and customer demographics. For example, you may have a high end fee for service practice focused on specialty treatment special such as cosmetic dentistry. You can create alliance with a group of dental centers focused on emergency dental services. In this example, both are competitors in the dental market. However, the cosmetic dental center can add value to its customer base through a partnership with a group focused on emergency care when patients require those services due to expanded hours often and available to emergency patients. On the other hand, emergency dental centers can add value to their patients by increasing their offering to those looking for a cosmetic dentist. The following are some examples of possible strategic partnerships for non competing businesses in the same markets. You can consider.
Dental clinics, specialty providers, physician hospital emergency rooms, schools, nursing homes, prisons, telediagnosis platforms, dental tourism agents, third party financing companies, hotels and concierge associations, government and unions, veterinarian clinics, adoption shelters, pet bakery, pet sitting service, home cleaning and sanitizing agencies, pet parks and recreation centers, pet pickup and delivery, pet hotels and teleconsulting platforms other healthcare practices.
Third party financing companies, hotels and concierge associations, unions and other healthcare providers.
3. Look for partners with different geography that both leverage each other's market to grow the customer base.
A network of businesses across different markets can make a company look stronger than competing rivals, be able to negotiate better with suppliers and build more integrated platforms for achieving financial milestones while providing greater access and convenience to its patient base. For example, in 2016 I negotiated a deal for a group dental practice based in Thailand serving Australian patients with the Melbourne Dental Group.
This agreement was for any of the patients visiting Thailand facing any issues with their treatment, they could visit the partner dentist in their home country. This partnership created the peace of mind for all dental tourism patients coming to Thailand and the Australian clinic benefited from the new customer base that usually did not target.
4. Having an open mind with similar long term objectives A strategic partnership begins with loose affiliations between partners. There is no strict legal binding but only a commitment of time and possibly some shared resources. However, finding a partner with similar goals that are innovative, creative and has identical objectives is better than a partner with different goals and values. Lets say the long term plan for your company is to become listed as a public company. Finding a partner who is already listed or thinking of becoming one can leverage the relationship and build a close and more sustainable relationship. Frequently Asked Questions we own a 20 physician cardiac group in London, United Kingdom and our patients are referred to us by other generalists. It seems to us a strategic partnership can affect our current relationship with our referrals. How can we minimize the risk of losing or upsetting our referrals?
You are already getting patients from referral sources. It means you already have a strategic partnership with generalists. However, this arrangement may not be formal where you can both exploit this relationship and convert it to a competitive business advantage. Strategic collaboration may upset some of your referrals, but you need to do what is right for you and your business. You also may look for ways to add value to your existing referrals through a new strategic partnership. A well planned strategic partnership can supply your group with more patients than a single physician office can ever refer to you, but also look for opportunities outside of your existing domain. For example, you can work with gyms or fitness centers where customers patients are cross referring and you can give your group an extra competitive advantage.
To whom should I assign the role of finding a strategic partner?
You have an option to hire a consulting company like mine or find an individual on your team or externally with the following.
Great business acumen, strategic thinker, excellent presentation skills, a good negotiator, and a good closer.
What happens when one partner does not perform as promised in a relationship?
In situations where a partner fails to keep up with the promises, it is best always to approach and discuss to be sure both parties have similar short term and long term objectives. If the situation continues not to be mutually beneficial, the partners have to cease their agreement. The nice thing about these arrangements is that they can quickly be terminated with minimal or no setbacks to partners. This is the end of Part 10, Chapter 9. Please proceed to Part 11.
