DSO 3.0 is a win win for selling a dental practice

DSO 3.0: A New Approach to Selling a Dental Practice

02/22/23 3:54 PM
Gary Kadi
Dental Practice Coaching, Dental Practice Management, DSO, Lifestyle Management

Are you considering selling your dental practice to a DSO but have concerns about relinquishing full control of your practice? There is a better way. While the first versions of DSOs required a lot of sacrifice on the part of the owner, DSOs have evolved. Today’s best DSOs (we call them DSO 3.0) offer a different approach to how we think about selling a dental practice to a dental services provider.

How Selling a Dental Practice Has Evolved

Past iterations of the DSO model heavily favored the buyer. The DSO would pay the dentist a one-time price, the dentist would put in a few extra years of service for a salary, and then everyone would move on. Sounds great, right? Not exactly. They payout (which is often less than a dentist could make selling to an associate or other private buyer) comes with a price: a complete loss of control over the business, from the approach to patient care, to the treatment of staff, and every best practice in between.

DSO 3.0 does not require a dentist to sell the entirety of their practice to the DSO. Instead, the dentist sells a percentage of the business, maintaining a stake in decision-making and continuing to collect revenue from operations. It resembles a partnership, rather than the employer-employee relationship that occurs when a practice is sold outright.

The Benefits of DSO 3.0: The Empowered Practitioner

When you still have a stake in your practice, you will find that there are many benefits that do not come with selling to a traditional DSO. Some of the benefits include:

  • Continuity of Care

    DSO 3.0 maintains the integrity of the practice. Dentistry is a lucrative profession, but it’s also a profession with heart. Dentists believe in the work that they do, and they care about how their staff and patients will be treated when they sell. They don’t want a “drill, fill, and bill” practice that churns through patients and staff like a bathtub without a plug. They want to maintain meaningful connections with their team and the patients they serve. By remaining a stakeholder in the practice, dentists have leverage to protect the values that guided them into dentistry in the first place.

  • Autonomy

    In the past, selling to a DSO meant giving up all say in how the practice was run. Even worse, many dentists found themselves contractually obligated to work within a practice they no longer recognized. Some DSO contracts may require up to five years from the selling dentist, which is a long time to work within a practice you no longer control. DSO 3.0 keeps the power in the hands of the dentists for as long as they choose to remain involved and hold onto their power within their business.

  • Self-Care

    The post-pandemic work environment has created a dramatic shift in how we view our work-life balance. Burnout is real and it can damage a practice from the inside out. It can also damage your most valued relationships! When you are forced to give everything to your practice there’s nothing left for your family at the end of the day. There’s also nothing left for you. DSO 3.0 affords dentists the perks of contracting with a DSO — set hours, support and resources — so that dentists can actually enjoy the results of their hard work. Dentists with a solid work-life balance report more satisfaction at home and in the office because they aren’t frantically burning the candle at both ends with no break in sight.

  • Collaboration

    Remember the touted benefits that originally sold dentists on selling to a DSO? The business management support and the resources designed to help dentists succeed? DSO 3.0 delivers on those promises just like their 1.0 and 2.0 counterparts. The difference is, yet again, the power and autonomy that remains with the dentist. The principles of DSO 3.0 remove the downsides of dentistry and create a cohesive, unified team who combine skills to propel profitability and achieve business goals.

Are You Ready to Join the DSO Revolution?

If current industry trends are any indication, selling sooner than later is a smart decision. The popularity of DSOs has increased dramatically in recent years. In fact, at least 30% of all dental school seniors have stated that they will join a DSO instead of opening a private practice. As such, private practice ownership has dropped 15% since 2019. Meanwhile, 70% of DSOs have plans to expand in the year ahead, indicating that industry-wide consolidation is on the rise. In fact, consolidation could hit 60% in the next 2-3 years. Timing is critical if you want to get the best value for your business and take advantage of this booming seller’s market.

If you are intrigued about the new frontier for DSOs and what it can do for your practice, NextLevel Practice may be able to help. We can give you an honest assessment of the saleability of your practice, coach you through improving your business to increase your payout, and even provide guidance on how to best divide your practice to protect your interests without alienating potential buyers. You can get started now by scheduling a complimentary consultation and taking our insightful revenue potential quiz. Give yourself the gift of time, passive income, and generational wealth with a new approach to DSO — DSO 3.0.