Forget the old DSO Model. Here’s why you should check out DSO 3.0
It’s hard to ignore the buzzing of the industry-wide DSO consolidation. But among the tales of eased business responsibilities and incredible financial payouts lurk stories of lost autonomy, tanking patient care, and miserable doctors stuck in a demoralizing life they didn’t anticipate. We call that oppressive model DSO 1.0.
Luckily, DSOs have evolved.
While DSO 1.0 still exists, an exciting new model has emerged—welcome to DSO 3.0. At NextLevel Practice, we’ve seen the positive difference this model can make for practice owners, their team, and their patients.
Here’s how it works: Instead of selling your practice to a large, existing DSO, you join a group of like-minded dentists and sell a percentage of your practice to a private equity firm. This way, your combined practices are worth more, and you have more power to negotiate, helping you retain clinical autonomy and protect your team and patients.
Here’s a few of our favorite aspects of DSO 3.0:
One of the biggest problems of DSO 1.0 and 2.0 was that dental practice owners have to submit themselves to preexisting DSOs that have already created operating procedures that all of the practices in the DSO must follow. From operating hours to clinical procedures, the DSO calls all of the shots and the dentist must obey, no matter how they used to do things on their own. Talk about demoralizing! But in 3.0, things work differently.
In DSO 3.0, a group of dentists “roll up” to create, in essence, a new DSO. In doing so, they can set the terms to ensure that the practices are run in a way consistent with the practice owners own values. They can also choose to incorporate 3rd parties, like dental coaches or consultants, to work with the practices to elevate the practices further with customized support.
Joining a DSO has always been known for its financial benefits. Because private equity firms focus on financial measures like EBITDA (and have deeper pockets), it’s highly likely that an offer from a DSO would far surpass an offer from a private individual who would base their offer on a percentage of collections.
DSO 3.0 also offers the potential of recapitalization–or a second bite of the apple. 2-5 years after forming, the rollup could sell as a whole, and you would get a percentage of that sale. It’s like getting paid twice for one sale! We’re not kidding that joining a DSO 3.0 could help you create generational wealth.
Protect Your Team and Patients
We believe in the importance of preserving the heart and soul of dentistry. By partnering with a DSO 3.0, you shield your team from a faceless corporate entity that might disregard their well-being. Instead, you can actively contribute to the growth and development of your team, helping them achieve their career goals and find purpose in their work.
You would also get to help mentor the next generation of dentists. DSO 3.0 allows you to name your own successor once you decide to exist, helping you further your associate’s career, giving them time to improve their clinical skills and even get out of debt.
Learn more about DSO 3.0 at our live, educational event
We know that thinking about DSOs can be overwhelming in and of itself, especially when there is so much at stake. That’s why we created our live event: DSO 3.0: the Empowered Practitioner’s Choice.
Join us in Scottsdale, Arizona on August 25th for a full day of instruction from our founder, Gary Kadi, and other industry experts. They’ll cover topics like:
- The evolution of the DSO structure, and where it stands today
- Understanding your threshold for financial independence
- Essential business concepts like EBITDA and Q of E
- What to look for in an offer from a DSO
- What joining a DSO will look like for you, your team, and your patients
This educational event will help you understand your options without pressure to join. And because we know that you don’t make decisions in a vacuum, each ticket includes two people. Bring your spouse, your team leader, your business partner, or anyone else involved in your decision-making process. You can also purchase additional entrances for a highly-discounted rate.
Finally, to help you ensure your financial preparedness, each ticket to our event also includes a proven NextLevel Launch Program. Before or after the event, you’ll work 1:1 with a NextLevel coach to examine your practice numbers and make a clear plan for improvement.