Survey: Dentists share thoughts after selling to a DSO

2020 01 10 23 57 8777 Head Brain Thinking 400

There is a good amount of information now available on dental service organization (DSO) trends, statistics, and projections.

This information includes the following:

  • What is the current percentage of U.S. practices now affiliated with a DSO? (18% to 22%)
  • What will be the percentage of practices affiliated with DSOs in 2023? (35% to 40% or more?)
  • How many DSOs are there currently? (over 900 platforms)
  • What percentage of dental school graduates in 2020 will work in a DSO-affiliated practice? (approximately 50%)

OK, so as mergers and acquisitions (M&A) advisors and practice valuators, we at Connect the Dents began thinking about one question: How do dentists feel once they have sold to a DSO? After all, that question is something that may be of interest and informative to many of us in the dental industry.

With that in mind, we spoke to approximately 125 dentists who recently (defined here for this survey as within the last two years) sold their practice to a DSO.

Here are some of the results:

How did you find the DSO you eventually sold your practice to/affiliated with?

  • Broker/consultant/M&A advisor -- 32%
  • Introduced by a colleague -- 22%
  • Was solicited (mail, phone, email) by the DSO -- 18%
  • Did my own research and contacted them -- 17%
  • Met at a conference/tradeshow -- 9%
  • Other -- 2%

Are you still practicing in the same office?

  • Yes -- 88%
  • No -- 12%

Would you say you are satisfied/pleased with your decision?

  • Yes -- 84%
  • No -- 16%

If you said yes, if you had to choose one thing, what are you most pleased about with how it went/is going?

  • Financial -- Overall price I received/That I was able to roll over a percentage of the sale price into equity of the DSO -- 54%
  • No more administrating! -- 25%
  • Assistance I received in finding the DSO/getting the deal done -- 17%
  • Income I am making now as an "associate" -- 4%

If you said no, in hindsight, what is the main thing that could have been done better?

  • Should have received a better purchase price -- 35%
  • Should not have used a "traditional broker" -- 30%
  • Didn't receive any opportunity to invest back in to the practice or DSO -- 15%
  • Should have had a formal, more thorough practice appraisal beforehand -- 15%
  • Negotiated better compensation as an associate -- 5%

What did you take away from these results? If you are considering selling your practice, especially to a DSO, we would strongly recommend you know what your practice is truly worth as well as who your DSO options may be. There are many out there and, as we have previously stated, they come in all shapes and sizes.

Regardless, according to the feedback we have heard, the chances are pretty good you will be happy with your decision.

Anthony Stefanou, DMD, CBI, is a dentist of 32 years (nonpracticing) and a certified business intermediary. He is the managing partner and founder of Connect the Dents, a dental mergers and acquisitions and business development advisory company working with manufacturers, dealers, DSOs/practices, and the Dental Sales Academy. He can be reached at [email protected].

The comments and observations expressed herein do not necessarily reflect the opinions of, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.

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