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.

I hinted at this in a previous email …

One of the most enticing reasons I see dentists choose to sell their practice to a DSO has NOTHING to do with money.

It has everything to do with how they want to live their life.

In my forty-plus years of working with dentists, I have yet to meet one who said they wished they could spend more time paying the bills, dealing with staff issues, and the myriad of other business tasks that come with practice ownership.

I have a question, and a thought exercise for you today …

What do YOU most want to achieve in the next 3, 5, and 10 years?

Only you can figure out the specifics of this …

However,

Once you know your goals and desires, I would also encourage you to ask this:

Going through a sale with a DSO is a deeply involved process.

I actually really love this whole process … which is of course why I do what I do.

But you can see through my previous work that I work through every aspect of the sale process, and even afterward…

… (because sometimes there are bumps in the road post-sale, but I know how to navigate them) …

I’ve found it helpful for some dentists to understand WHY DSOs are growing the way they are, and more importantly …

Why the investors are so interested in dental businesses.

The short answer is “yield.”

Investors love being able to place their money into something which yields them more money …