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MailSeptember 2019--Are you thinking about building a Dental Service Organization (DSO) yourself? TUSK Partners is one of the country's leading dental mergers and acquisitions advisory firms. TUSK Partners helps entrepreneurial dentists understand their goals and whether building a DSO is right for them. If they want to grow a DSO, TUSK Partners helps them develop a vision that covers the multiple aspects of scaling, advises them as they grow and scale up, and then helps them in exiting the business at the preferred time.
What is a Dental Service Organization (DSO)?
What is the difference between a group of affiliated dental practices and a dental support organization? The simple answer is centralized services. Whether a DSO has three locations, 20 locations, or more, by definition, a DSO has centralized services. Accounts receivable, accounts payable, marketing—and, perhaps, a centralized call center and regional managers help the DSO function more efficiently. A DSO is also a scalable platform. Once a dental entity obtains the status of a Dental Service Organization, government compliance reporting is required that varies at the state level.
- TUSK Partners helps entrepreneurial dentists understand their goals and if building a DSO is right for them.
- Being scalable is something TUSK Partners helps its clients focus on if they are going the route of a private equity buyer. TUSK helps dentists develop their vision of what they want to build, the structure of its scalable platform, its size before exit, and the desired exit strategy.
Do you really want to grow a DSO?
TUSK Partners offers workshops for dentists considering or involved in DSO formation and growth. They also offer “deep dive” consulting for individual entrepreneurs and entrepreneurial group practices. In the deep dive, TUSK Partners steps their client through everything it will take to build a DSO, including:
- industry trends
- centralized processes
- successful models for leadership infrastructures
- human capital considerations
- financial capital considerations
The goal is to understand where the client wants to end up and define what it will take to achieve that. Eventual sale of your business to a strategic buyer is always in the cards, so the buy-out goals you set for your exit strategy are a consideration from the get-go.
Your financial end goal guides determination of how large you will need to scale, how long you will be at this, and the strategies you will employ to achieve this. Industry trends, market equity factors, and more affect the scaling and exiting processes. The experts at TUSK Partners have the data, legal knowledge, and business experience to give you the advice you need.
What if you want to grow your dental business but not become a DSO?
During a deep dive consultation, a dentist may decide a DSO is not for them. If your goal is to go to only five locations, you can still be a great acquisition target for a strategic buyer, without going through all the legal reporting associated with a DSO. If you are the owner or manager of a few affiliated practices, TUSK Partners can help you grow those practices to a bigger level without adding locations.
Perhaps, you are a private dental practice owner who decides to not grow into a group practice or a DSO. TUSK also can help you with growth and exit strategies. Many private practice dentists seek the help of TUSK Partners to build the business for eventual transition it to family member or associate dentist, or for sale to a DSO or group practice owner.
When do you create a scalable platform and become a DSO?
Deciding when to hire nonclinical people to provide centralized services and provide the business leadership needed to manage, grow, and add locations depends on the capability of the entrepreneurial owner and the business management capacity of the teams they have in place in their practice locations. TUSK Partners helps the clinical doctor who owns the group decide when hiring C-suite employees is best for meeting the goals of the business and work-life balance. Usually, there is a trigger event for bringing in nonclinical partners, a point when dedicated business expertise is necessary.
Entrepreneurial dentists often bring in nonclinical partners for executive leadership when they grow to more than three locations, but there are many exceptions. "We have clients that have two locations that are setting up a DSO structure," says Diwakar Sinha, Founder & Co-owner of TUSK Partners. "And we have clients that have 15-20 locations that are just now setting up the centralized services of a DSO structure and looking to for a financial partner to scale their business. They’ve been able to grow up to this point without bringing in infrastructure and leadership in the form of a chief operating officer."
Do you want to learn more about TUSK Partners?
You can read about TUSK Partners and converse with its consultants via tusk-partners.com. They will be happy to help you develop your vision, become scalable, and guide you within the mergers and acquisitions market to meet your goals.
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