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 …

The idea here is that retail locations are built out strategically under one brand, similar to a store like the Gap, or Apple.

So the DSO will pick out desirable markets, build out a location and then open another practice of a specific brand.

In this model, all practices operate under a unified brand and usually pursue aggressive direct to consumer marketing strategies.

A great example of this is Aspen Dental Management Inc (ADMI), which is headquartered in Aspen, New York. They support over 800 practice locations across the country.

Each practice is owned by a dentist who licenses the Aspen name from ADMI and receives a variety of support services from the DSO, while remaining responsible for the delivery of clinical care.

Though each practice is owned by a local dentist, they all have a common look and feel and operate similarly.

Aspen’s approach has created a scenario where they know they have a high probability of winning when they open a new location. They’ve achieved a sustained rate of growth because of this operating model and the ability to drive consistent new patient volume.

It’s not for everyone, but this way of doing business certainly works for dentists who see it as a good fit.

More than likely, you’re looking at an Acquisition, which I’ll cover in the next email.