The benefits of a DSO are ultimately simple …

And SO good for dentists as to be completely life-transforming.

How about getting a high cash payment, retaining equity, doing only what you love in the business, having no management responsibility, and far less stress?

Pretty good.

“Working with Stan Kinder has been the best decision of my career.

Besides getting top dollar and a high seven-figure cash payment for partnering with the DSO Stan introduced me to, I retained equity. I work chairside doing the dentistry I love. I earn mid-six figures a year. I have no management responsibility, far less stress, and money in the bank.

My life is better in every way. Thank you Stan Kinder!”

—R. W. DDS

What are you waiting for?

In a previous email, I talked a little bit about how your practice would likely be valued in a dentist-to-dentist transaction …

Where the bank’s capacity to loan is the limiting factor in valuation.

So let’s look at the other primary driver of practice value, especially when a DSO is driving the transaction …

Private equity!

You see, DSOs don’t need banks.

The dentist partners at Sunshine Dental (not the practice’s real name) knew the senior partner wanted to retire in the next few years.

The practice was thriving …

But the junior partner didn’t want to assume the senior partner’s role in running and managing the practice.

Her preference was to spend the majority of her time face-to-face with patients and not at a desk, looking at financials, dealing with staffing, and figuring out marketing.

I bet you’re curious how DSOs will value your practice.

To start off with …

Let’s look at how a BANK may value a practice when a dentist-to-dentist sale happens.

(This is your other option, either you sell to a DSO, or another dentist, these are the only buyers in the marketplace)

How do you know what a good offer is for your dental practice?

This is an important question to consider because naturally, it goes beyond just what amount of money they are offering you.

You might want a cash offer. But you might want an equity purchase. You may also wish
to stay after the deal is done … (or you may not).

I mentioned this before as an aside, but one thing you want to consider when looking at a DSO is their source of capital.

What are they using to fund their growth?

You can think about this in two major buckets …

Bank financed, or private equity financed.

Why is this important?

When it comes time to sell your business to a DSO, the scenario is not unlike real estate.

Especially these days, with DSOs on the rise, there’s a lot of investment money flowing into buying independent Dental Practices.

So when you’re selling, it’s not unusual to have several buyers express interest in your practice.

If you’re following along, in the previous email I shared a bit about the “branded” strategy for DSOs.

Most of the Dentists I work with are looking to connect with a DSO that is using an “acquisition” strategy.

This is the most dominant operating model for DSOs.

The idea for these DSOs is to fully acquire a Dentist’s practice while keeping the pre-existing identity of that business in order to protect the goodwill that the Dentist has built up over many years.

Since you are considering working with a DSO, I thought it might be helpful for you to understand the two primary operating models of DSOs …

The first, which I’ll get to in this email, are DSOs which run a “de novo branded” strategy (this means they built practices from scratch).

The other (an acquisition strategy), I’ll touch on in my next email.

On the de novo branded strategy …

Not having enough money to retire as a dentist is a common challenge.

If you’re experiencing this, don’t feel alone.

And there are good answers.

I’ll just let these words from a former client tell the story:

“I never dreamed I would partner with a DSO, but I had a problem that needed solving, so on a colleague’s advice, I spoke with Stan Kinder.