We’ve done a lot of talking about how to qualify for a DSO, the negotiations needed, and even what to do once you’ve joined. This is all a best-case scenario. I don’t want to do you the disservice of thinking that if you apply to join a DSO, you have a 100% chance of admission.
The truth is, the longer the consolidation goes on, the harder it will be to join. I’ve talked to dentists who would have easily qualified 12 to 18 months ago, and now they’re getting turned away. At this point, only the most profitable practices—ones with a minimum of 30% EBITDA—are even being considered.
Where does this leave the rest of us? Hope is not lost.
The way I see it, if you get turned down by a DSO, you have two options. You can either:
- Devote the next year or so to improving your practice and raising your EBITDA so you will qualify.
- Devote the next year or so to improving your practice and raising your EBITDA so you can achieve financial freedom on your own.
OK. You got me. No matter your situation, DSO or otherwise, I believe that by putting in the work and installing the right systems and processes, you can enjoy a thriving, profitable practice that will allow you to enjoy more financial freedom and the time and space to enjoy life outside of the office.
Does a DSO offer the chance to gain immediate generational wealth? Yes. Is it still possible to earn generational wealth while remaining a private practitioner? Also, yes.
Here are a few things that you can start working on now.
Get serious about KPIs
Financial acronyms may not be your thing, but here’s one that can revolutionize your profitability. Key performance indicators (KPIs) are a fancy way of saying pay attention to your practice’s numbers. Instead of waiting until the last day of the year to find out how the practice did, you need to be tracking your numbers daily.
Look at essentials such as production, collections, overhead, revenue, and profit. Considered together, these will show a crystal-clear picture of your practice’s performance and will help you make better decisions. It also gives you the opportunity to set informed goals. Set yearly, monthly, weekly, and even daily revenue goals that the entire team can work toward.
Get your team on board
All the KPI tracking and goal making is pointless if you’re the only one who knows or cares about them. That’s why it’s so vital to include every member of your team. Spend time in your morning meetings reviewing your daily and weekly goals, be absolutely transparent, and offer meaningful incentives.
One way to motivate the team is to create a performance-based bonus system. If your team can see their bonus growing with their efforts, they’ll become much more invested in their performances, chasing higher and higher bonuses, which means they’re working to exceed your goals. That’s a crystal-clear win-win.
Focus on patient retention
Many dentists believe that the key to success is getting as many new patients as possible, but that’s just not the case. The most profitable patient is not one who comes in for your new-patient special and never returns; it's the one who comes in every six months for a prophy and x-rays, who reliably says yes to treatment, or who will recommend you to their friends and family.
With a reliable patient base, you can focus on improving case acceptance. Chances are you’re barely scraping the surface of your potential profitability within this base. When you teach your patients about their oral health and show the undeniable connections between their oral health and their overall health, you’ll start hearing more “Yes” and fewer “Let me think about it.”
Find a support system
All these things are easy to say, but much harder to implement. Find a coach or other expert in the field to help you make a plan and then support you as you put in the work. Asking for help isn’t a sign of weakness—it’s a sign that you’re committed to improvement. These changes take work and time but will pay incredible dividends.
The bottom line is that qualifying for a DSO is great, but all is not lost if you don’t qualify. Put in the effort now, and you can still enjoy a fulfilling, profitable practice that improves your life, the lives of your team, and the lives of your patients.
Editor's note: This article appeared in the July/August 2024 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.
