July 19, 2019

What DSOs Look For When Purchasing Dental Practices

When it comes to selling your dental practice, don’t rule out the option to sell to a dental service organization (DSO). DSOs have gotten a negative reputation because of their seeming corporate interest, which is why it makes sense when the seller is looking to stay on with the practice but wants to release managerial responsibilities, such as in a retirement situation or anyone who is looking to maintain a work-life balance. Here’s how to make sure your practice checks all the DSO boxes.

What most DSOs do not look for:

• A practice that has three or fewer operations.
• A practice that collects less than $800K.
• A practicing dentist who is looking to exit immediately.
• Medicaid.
• Inconvenient location.
• If the doctor’s work is not repeatable or is hard to duplicate.

What most DSOs do look for:

• A practice with at least four operations (though the more, the better).
• A practice that collects a minimum of $850K, more than a million being ideal.
• A practice that negotiates with PPOs.
• A desirable location, mostly urban or suburban.
• A practicing doctor who is looking to stay on for two or more years.
• A practice with an intraoral scanner.
• One dentist for every 1,800 patients.
• General dentistry practices, although there are DSOs for specialty practices.

What a DSO provides assistance in:

• Payroll.
• Human resources.
• Marketing and branding.
• Practice support.
• Accounting.
• IT services.
• Recruiting.
• Capital and financing.
• Tax services.
• Risk management.
• Ordering of supplies and equipment.
• Negotiating lab costs.
• Compliance.
• Strategic thinking.
• CE (depending on the size of the group).
• Growth model (acquisition, etcetera).
• Licensing.
• Scheduling assistance.
• All the mundane work a doctor typically doesn’t want to handle.

What’s next?

Unclear where you stand? Contact the experts at Professional Transition Strategies to see if selling to a DSO is the right move for your dental practice.