3 Ways to Spot A Failing DSO

3 Ways to Spot A Failing DSODental service organizations (DSOs) work with practices to support dentists in management and non-medical operations. If you’re looking to sell your dentist office as part of a DSO, you should know that these organizations maximize your practice’s efficiency and profitability.

When you hand over a critical piece of your business, becoming part of a new DSO can be intimidating. However, keep in mind that you will be able to focus more on your patients and less on the details of operations.

Here are three things to look for before signing on with a DSO.

Lack of Experience and Time Invested

With today’s popularity of HGTV’s “Fixer Upper” and “Flip or Flop,” just about everyone thinks they have what it takes to renovate a house for profit. The same is being said of dentists in the DSO industry. Despite their unmatched knowledge in the medical field, dentists may lack experience in business and marketing.

A failing DSO will attempt to group practices together that aren’t necessarily cohesive. Profitability, rather than unity, is at the forefront for them. An experienced DSO will set aside a great amount of time to research the industry and its evaluation standards prior to asking you to sign the dotted line.

Gaps Across Teams

A successful DSO is made up of three teams: managers, dentists, and investors. An unstable DSO will focus too much on one of these teams, leaving the other teams helpless with little support. Each team is equally critical for success, and without one of them, the DSO will fail.

When considering a DSO, look for one that’s led by dentists who have great leadership, communication, and medical skills. The management team needs to be carefully selected and should have previous dental positions. Finally, the investor group should bring a level of understanding and commitment that you can’t get with anyone else.

No Growing Capital

As with any business, a DSO with no growing capital is destined for failure. Incoming revenue is needed for the latest technology, equipment, and future plans of growth like acquisitions and mergers. If a practice is looking to grow even by a few practices, a steady source of capital is required, especially if the DSO wants to be a player in the national market.

A smaller DSO can get by with initial capital from the three key teams previously listed. You can quickly determine whether a DSO is a startup or an established organization by whether they have a venture capital firm or lender in place. You’re entitled to ask questions about their financial situation before signing.

Are you ready to sell your dentist office? Look no further than U.S. Dental Transitions. We’ve helped thousands of practices transition from one owner to another. When you hand off your legacy, you’ll have peace of mind that it’s in good hands. With over 25 years of experience, we’re confident we can connect you with the perfect buyer for your selling criteria. Contact us at 678-482-7305 or info@goUSDT.com. Any information we share will be kept in the utmost confidence.

About the Author

  • CEO

    As CEO of US Dental Transitions, Pete is responsible for the overall success and direction of our company. He joined the company in 2003 after working in sales for Lanier, Siemens and AT&T, which allows him to have a broader business vision for US Dental Transitions. Pete has been involved with more than 600 successful transitions and has consulted with thousands of dentists. He is a graduate of the University of Rhode Island where he earned a Bachelor of Psychology degree. He is also a graduate of the Institute of Business Appraisers and member of the Practice Valuation Study Group.

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