Has a dental service organization (DSO) approached you with an offer for your practice that seems too good to be true? Are you concerned about the impact that selling to a DSO will have on your future business, your team and your plans for retirement? You’re right to be cautious! A DSO can completely transform a dental practice, sometimes for the better and sometimes for worse. The best way to know which scenario will apply to you is to get a second opinion.
Selling to a DSO is a crucial decision. There are rules, regulations, valuation, transition and many other factors to weigh when deciding if selling to a DSO is right for you. An expert consultant can help you make an informed choice that protects the practice you have worked so hard to build. Here are three reasons to get a second opinion if you have a serious offer from a DSO.
1. To Protect Your Team and Patients
The shift to a DSO model is meant to take administrative work off your plate and help you with operations. The proposed benefit is that outsourcing via the sale of your practice allows you to focus on patient care, continuing education, and revenue development. However, if the new DSO’s policies and procedures do not align with the traditional model of your practice, it can cause issues in staffing and patient retention. It’s important to note that sometimes these changes are necessary. Sometimes a DSO’s new policies help you determine areas of toxicity in your office or your patient roster that you may not have recognized. Unfortunately, it is also not uncommon for some DSOs to alienate longtime staff with new policies that make them work longer hours or completely re-shape their roles in the office.
An expert consultant can help you take a deep dive into your contract to help you better understand your future power within the DSO. A practice consultant can also help you assess the reputation the DSO has with other existing practices it has purchased. Is the DSO known for forcing staff layoffs? Changing hours? Removing benefits? Alienating patients? Alternatively, you may also discover that the DSO provides incredible advantages like reduced hours or bigger benefits packages for you and your team. An expert will help you find out the truth in the promises so you can protect your staff, your patients and yourself.
2. To Evaluate the Fine Print of Your DSO Contract
One of the key reasons to consult an expert in consideration of contracting with a DSO is to assess the fine print. A business agreement with a DSO can have dramatic ramifications for the future of your practice and it is vital that you have an outside party review the contract carefully. What are the payment terms of your agreement? What is your role moving forward? Will you be required to stay on for a predetermined number of years? The conditions set forth by the DSO can be quite rigid and there may be little that you can do once the contract is signed.
Hiring a practice management expert to review the contract will inform you of potential challenges in the contract. Potential challenges include limitations on your ability to sell the practice, hiring and firing limitations and much more. At NextLevel, our practice management consultants are fluent in the legalese that can hinder your plans. They are also familiar with predatory clauses and restrictions that can be buried in the fine print. We help dentists across the country make the right decision for their practice. If you are seriously considering shifting to the DSO model, you must have a third party help you ensure you are not governed into nonexistence or taken advantage of.
3. To Ensure the Highest Value for Your Dental Practice
Like every other business owner, a dentist may be subject to hard sell tactics or low valuation. Some DSO offers are accompanied by scare tactics about the health of the economy or unfounded predictions about the decline of your future operations. Make no mistake. If a DSO is approaching you, then your practice has value. Do not leave money on the table and do not succumb to sales manipulation. You worked hard to develop a saleable business and you should get the return on investment your time and efforts deserve.
When NextLevel provides a second opinion to our clients, we include a thorough financial review, so you know exactly what you have to offer. Knowing your worth gives you the leverage you need to maximize your financial return from your agreement. After all, there is no benefit to selling to a DSO to make them a profit. Get the true payout you are owed from your years of education and effort.
Would you like help deciphering if your current DSO offer is going to benefit your dental practice?
Give NextLevel Practice a call. Our team can help you get a second opinion on the benefits and drawbacks of your contract before you sign on the dotted line. With our expert practice management consultants, you’ll receive a culture review, financial review, independence review, red-flag review, and a one-on-one findings session to discuss how to proceed. An estimated 20% of practices are predicted to shift to the DSO model in the next three years. If you plan to be one of them, we’d love to help you get the best outcome from your business agreement.