Dental Unscripted | Getting into Ownership and Practice Management Insights

Welcome to Dental Unscripted.

Where Mike Dinsio and Paula Quinn break

down the practice ownership journey,

one episode at a time.

Starting up, buying,

and running a successful dental practice.

All right.

All right, guys.

Welcome back to another episode of Dental

Unscripted.

As you guys know, I'm Michael Dinsio.

My co-host Paula Quinn are both on the

program today.

And we are excited about getting into this

really interesting topic of all things

DSO.

So DSO Playbook Partnership.

we want to really break down this idea

of how dsos are purchasing practices and

what you might be up against as a

private practice looking to buy a practice

and also feather in for those folks that

own a own a practice is thinking about

your exit what it looks like to

potentially sell to a dso

And I'm really excited about today because

we have two amazing dental attorneys in

the industry.

These two are titans in their own respect

as far as how many dental transitions

these guys touch on a yearly basis.

I've known them both for a really long

time.

If you add up the stats between the

three firms represented today,

we have a lot of knowledge and experience.

So without further ado,

I'll start with the West Coast because it

is the best coast.

Ali Aramson with DM Council.

And we've had Ali on the program a

bunch of times.

We broke down LOIs.

We broke down all kinds of fun things.

He also has a fantastic podcast you need

to check out.

And then on the East Coast,

no one better than David Cohen, Cohen Law.

David,

I know you touch a ton of DSO,

you both do.

And there's no one else that I would

have asked on the East Coast to represent.

We know being on the West Coast that

things can be a little different on coast

to coast.

And so you are here to represent that

east side.

And so thank you both so,

so much for being on and just giving

your time.

And I know, Ali, you have a podcast.

It's awesome because you give back to the

community.

It's a lot of time and energy.

And I think I think the people,

the listeners appreciate it.

Paula.

also you bought from a dso so i'm

uh be interesting to hear your perspective

as you saw some challenges in buying from

a dso which is the opposite of what

today's topic is so thank you all guys

for being on the program i really

appreciate it um yeah no i appreciate you

inviting um me to be on and and

you know even though i am on the

west coast i feel like i really my

my genes are east coast based because

I was a big, notorious B.I.G.

fan.

And I feel like I'm the only person

in the West Coast who's, you know,

you know,

a fan of his as opposed to Tupac.

But, you know, it is what it is.

Tupac all the way.

You know, it's funny.

Michael said East Coast and West Coast.

I wanted to do some kind of sign,

you know, but I'm like,

I don't even know what it is.

And what if I do something bad?

I don't know.

That's right.

That's right.

It's exciting to be on and yeah,

it'll be super fun.

So thank you.

david thanks thanks again yeah likewise

really excited to be here always

appreciative uh i know this is a a

huge podcast and i'm just uh thankful to

be here and looking forward to chatting

with with you guys and ali and um

hearing what ali has to say as well

just you know obviously we see deals but

you see different similar and different

deals and always looking to see different

perspectives so everything for me is a

learning experience and i'm looking

forward to hanging out today

Yeah, I love that.

Guys,

I think we can all speak to this.

Every single day, we learn new stuff.

We touch a lot of deals,

but it's funny how every once in a

while, there's a curveball.

It's like, hmm,

how should we approach this, right?

Which is pretty cool about our industry.

So enough of the fluff.

I know that you all are probably driving

to work right now.

And so let's get into this topic,

all DSOs.

So first and foremost,

I think the best way to tee up

this episode is really...

And I'll start with the East Coast.

David, let's start with you, buddy.

How would you describe today's DSO market?

Like...

In my mind, David, it was hot.

It was fast and furious.

It was growing like crazy pre-COVID.

And things got a little weird after COVID.

And then has it rebounded or not?

And are you seeing the same volume?

Give us just kind of a market awareness

of how the DSOs are approaching this

dental industry real quick.

Yeah,

I think you nailed it that DSO

transactions from my firm's perspective

and also a lot of the colleagues that

we work with were significant,

particularly right after COVID and during

COVID even.

After that happened, from my perspective,

there was a bit of a correction.

I think that that has changed a bit

since this year.

This year I've seen the deals pick up

and my industry colleagues have also seen

the deals pick up as well.

They're not picked up from my perspective

to the same extent that they were

when things were going crazy and money was

cheap, you know, during COVID,

but we're definitely seeing more DSOs

either, you know,

kind of dipping their toes back in and

testing the waters after the correction

occurred, and also others that are,

you know,

just deciding to start up and go strong

from the beginning.

They have the financing and others that

were strong the whole time.

There certainly were DSOs that were strong

for the entire period that haven't really

changed or wavered or anything like that.

But I think

It's definitely an uptick, I would say.

And I think there's a lot of still

there's some apprehension, I think,

among these DSOs.

And there's a bunch of apprehension,

I think, from sellers as well.

Sellers have seen a lot of success stories

from their colleagues and they've seen a

lot of horror stories from their

colleagues, depending on the DSO,

depending on the situation,

depending on all the factors that were

you know, taken into account.

So I think everybody's sort of like

feeling each other out a bit,

but definitely more willing to step to the

table than they were, you know,

a couple of years ago.

Interesting.

Ollie,

are you seeing the same thing on the

West Coast or slightly different?

What's your perspective on the market?

No,

I totally disagree with everything David

said.

No, no, no.

I mean, look, that's exactly right.

I think that's exactly what's happened and

is happening right now.

But the key, I think, is this.

The FOMO that people had to sell to

DSOs is long gone, right?

It's long gone.

And the reason is because...

That heyday of money was cheap and these

groups and private equity backed DSOs were

buying left and right is not happening

anymore, right?

Because money is not cheap anymore.

The money for the private equity folks has

dried up to a large degree.

And the reason is,

is because that whole idea of let's just

buy EBITDA and just build and then sell

is like was flawed from the very

beginning.

And now we are seeing the impact of

that.

I mean, we've had seven separate DSOs,

seven just this year.

go on earnings calls with their partners

and say your shares have zero value oh

my gosh well i i actually want to

get in i'm i'm glad you actually said

that uh ali because i remember like going

into coven and i was actually representing

a seller in them in that moment

and going into that negotiation,

a lot of big numbers were being thrown

around and then the world collapsed and

they changed their offer.

My client was like, what just happened?

And I'm like, dude,

the market is literally shifting on you

right now.

And it,

You know, it's interesting in that, like,

I didn't understand it either.

Like, how DSOs could buy these,

frankly speaking,

small profit margin practices when you are

paying the dentist.

When you pay the dentist,

you don't have that much left.

Paula owned a practice and had to pay

for a dentist.

In a lot of ways,

she ran the DSO.

model when she owned there's not a ton

of profit there and if you have to

debt service you guys both talked about

that you both did if you have to

debt service now your profit's gone or

there's even less and so i'm sitting here

thinking how are these dso surviving with

the hygienists that have gone up ten

dollars an hour a dental assistants have

gone made up five dollars an hour from

pre-covid to now

and i'm just like how does this even

make sense so that i'm glad we're all

on the same page the market has softened

dsos are not winning as aggressively but

they're still happening can we all agree

that they're absolutely still happening

well yeah yeah i mean they are and

as david said the the good ones are

still out there right but there's only a

handful a small handful of really really

good ones

And the problem, I think,

is for a lot of sellers is that

they go into these discussions being

enamored by the first LOI.

And David and I have been on both

sides of that.

It's like it's like here's a number.

Suddenly it's like a seven digit number

that people are like, holy cow,

I never thought my practice was worth this

much.

Right.

I'm going to go retire, you know,

in Fort Lauderdale where David is or

wherever.

And it's like it's like, no, no, no.

like that's not reality just because they

put that number there.

It doesn't mean that one day that is

the number you get, but two,

that that is a sound financial decision.

Right.

Okay.

So, I mean, okay.

So,

so let's kind of pivot then you said

the solid DSOs, you both said solid DSOs,

um,

And I'm thinking to myself, like, okay,

when I represented that one client that I

had,

it was like there was a lot of

DSOs that were interested,

but there were only like two or three

that I knew and had a relationship with

that were reputable and are probably going

to stand the test of time.

So...

I don't know how many there are of

those ones.

But what does it look like,

the next topic,

what does it look like to be a

good DSO, quote unquote?

Like if you were to partner with a

DSO, and it is a partnership,

and we'll get into the deal structure here

next,

but what does a good partnership look like

from a practice owner's perspective when

you sell,

which basically means you're partnering

with that DSO.

David, why don't you take that one?

Yeah,

I think that it's not necessarily as much

as good and bad with respect to DSOs.

I mean,

there's certainly some DSOs that have done

wrong by their people that they have

bought from.

But for the most part,

I think it's more about

sort of a risk profile.

There are DSOs that have been at it

for a longer period of time than others.

There's DSOs that have a track record that

have recapitalized,

have owners that have recapitalized with

other businesses even before this

business, have a lot of,

they're continuing to show their strength

by buying practices.

they are pretty measured and they're not

always providing the highest valuations

from what we see because they don't have

to.

And a lot of these DSOs are very

client friendly, or I say client,

doctor friendly,

because doctors want to partner,

to answer your question,

doctors wanna partner with the DSO that's

gonna treat them like a true partner.

And that's going to create a culture that

is appealing,

that lets them run things essentially how

they ran them before,

but also creates an environment that's

fun, energetic, inspiring,

and can be sort of collaborative even with

other practices that are in the network,

all with the same goal to recapitalize.

And I think those are the great partners

that you're seeing

um that didn't really waver um during

covid and but they also there's there's

lesser risk but there's also a lesser

reward right a lot of these doctors get

enamored by uh offers that are

significantly more than maybe those tried

and true dsos would offer and i'm

generalizing here you know of course you

know the tried and true dsos i'm sure

for certain practices offer you know

high valuations,

but I'm just saying in general, you know,

the more track record, the less, you know,

the less risk that that DSO has to

take and,

that's less upside for the doctor that's

going to sell to them.

The newer DSOs that have to be competitive

and have to,

in order to grab the attention of doctors,

have to offer better valuations or better

allocations of the money in the enterprise

value for the doctor to make it more

appealing than those other maybe tried and

true DSOs.

Those are the ones that there's a higher

risk,

but there's also a higher reward for the

doctor.

And so I don't think it's as much

good and bad as it is.

The doctor has to look at their own

risk profile and say,

what is the best fit for them?

What's most important to them?

Is it the most money they can get

up front so they can mitigate any risk

in the deal?

Is it that they're pretty financially

stable and they want to roll the dice?

And, you know,

it really kind of depends on the risk

profile that the doctor has.

that combined with really the doctor

trying to understand the culture of each

of these DSOs is really important because

when you talk about great partnerships,

I think a lot of them fail.

And this isn't just with DSOs.

I mean,

this is doctor-doctor partnerships too,

but I think a lot of the partnerships

fail because of a lack of communication

and understanding of expectations and with

respect to personality differences and

things like that.

And I think

it's really important for these doctors to

vet out the DSO.

And, you know,

we're seeing a lot of doctors that are

going sort of the opposite direction of

brokers because they don't want to pay a

brokerage fee.

And that's understandable.

Brokerage fees are significant,

but brokers have a value.

And part of that value is vetting out

the proper DSOs for the doctor that are

a good fit.

and you know creating a competition but

also creating a network of dsos that are

a good fit for that doctor and really

you know helping with that facilitation

you know as opposed to the doctor going

straight to this dso or that one because

they can and they can avoid a brokerage

fee so i think it's it's getting you

know some sometimes a broker is is great

to have sometimes not i mean i'm a

proponent of having a broker involved

because i think the good ones can really

help the client but ultimately um

the bill,

the culture matters and the right fit

matters and to go back to your initial

question a partnership fails because there

are it's not the right fit most of

the time you know certainly there could be

a dso that just completely just over buys

practices they're getting crushed

everybody's stock is zero it's a disaster

of course that's that's out there but in

general i think the failures are because

of the lack of um a good fit

and we have a lot of doctors that

it's not a good fit for them to

sell to a dso period it's great for

some and it's not great for others and

that that in general has to be a

fit for the doctor well it's a long

answer but i wanted to no no it's

a great answer i think i think it's

a deep answer and i love the answer

if this is a topic for you i

think you need to go back and listen

to that part after the question that i'm

about to ask ali ali you do a

really good job of breaking things down

bite-sized pieces so david talked about a

lot of little things of what makes a

good partnership can you just give us in

your own words what the normal deal points

would be

and how you would evaluate what a good

partnership is.

Because I think this audience is gonna be

a younger audience.

I think you're either just getting into

ownership

maybe ownership isn't a good fit for you

you hate it you got into something you

don't want it that there's that out there

and you're looking for a partner to help

but and you're thinking oh maybe dso's the

way but like what are the deal points

right like it break it down in a

little simpler way and then maybe folks

listen to david's answer rewind back after

all these sections because i think

breaking it down is going to help

Yeah, I'd be happy to.

So I would probably say there's six,

not necessarily deal points,

but six factors that as a seller,

you should keep in mind.

So first is,

and they all say they don't do this,

but you've got to look in between the

lines.

which is,

does the DSO interfere with clinical

judgment?

And what does that mean?

They all say they don't, of course,

because the regulatory people would lose

their mind if they said yes.

But you've got to see,

do they have production quotas?

Do they have recommended minimum

treatments?

Do they pressure to crown everything and

put perio treatment without any insurance

or whatnot?

So I think

I think that's, that's the first thing,

right?

Do they discipline remove like doctors if

they don't hit their numbers?

So that's number one, number two,

and this is way more important.

And the thing that I see fewer sellers

do, which is financial opacity, right?

Like are they,

do they have complicated compensation

formulas or constantly changing

compensation formulas?

Do they have these crazy management fees

that are excessive and unclear?

Have they ever had temporary cuts in terms

of pay cuts?

So those things, I think, are real.

And the part that I think very few

people do is,

Does the partnership valuation,

does your partnership valuation,

does it match the true EBITDA of their

business and your business?

And this is not something that any dentist

can do.

You need a financially strong CPA advisor

to help you there.

So that's two.

EBITDA means profit, folks.

Yeah.

Number three is poor operational support.

Do they have billing errors?

do they have slow collections uh a lot

of i.t failures uh you know staff turnover

like i would look at that um number

four i would say is their psychology like

are they short-term profit first thinking

or you know because if they're private

equity back they might be thinking about

really rapid returns

which means cutting assistance,

front desk staff, hygiene time, you know,

that's going to make a difference, right?

You know, pushing high volume,

low quality dentistry, right?

Like just to boost revenue.

I think that's number four.

Number five, high provider turnover.

Okay.

So are associates leaving within a year,

right?

um are they always posting jobs for the

same locations right are employees burned

out are they dissatisfied like these are

important i think issues right that

providers right are hygienists doctors are

they leaving and then number six and the

final one

is,

and I'm going to talk a little bit

about how you uncover all this in a

second, but I would say,

I was going to ask,

how do you even approach that?

I'll tell you,

I have a secret sauce to that actually.

So number six is the patient outcomes,

right?

All of our businesses, David's business,

Mike, your business, Paula, me,

if we have bad client outcomes, right?

There's,

That's a sign of really bad things, right?

So as a seller,

you got to look at those patient outcomes

and say, are they double booking hygiene?

Are there long wait times, right?

Is there a salesy treatment conversation

and coordinators, right?

Do they not look at patient retention

numbers, right?

Like these are the basics of what we

have determined, these six, right?

are the ones that I think are the

crucial data points for understanding

whether a potential buyer is a good buyer.

And so the question is,

how do you figure this out?

So, Paula,

how do you think you figure this out?

What would you do?

I'm going to put her on the spot.

Of all six things, right?

All six things.

Yeah, I mean, just overall,

how would you uncover this if you are

helping a seller?

You're on mute, Paula.

You're on mute, Paula.

Sorry, I had an annoying background.

Well, I mean,

they can't talk to employees,

unfortunately.

If there's a time they could,

that would be a real key way to

find out.

Reviews,

looking at other offices and looking at

the reviews would be another way.

And then, I mean, looking at KPIs,

looking at retention, you know,

activation.

you know, the, you know, the,

the different KPIs of, um, the schedule.

Um, but I mean,

I think talking to employee employees

would be easy.

Well, that's right.

That's exactly right.

And so you hit it on the head.

There's two things you said,

and those two things are exactly the

things that we tell them to do.

One is pick up the phone and talk

to

other partners of that DSO.

And I don't mean the three people that

they gave you on a sheet that they

said, call these three people,

like go on their website and look at

all their partners and pick some random

person in Omaha.

Right.

And just be like, Hey, how's it going?

Can I talk to your office manager, right?

Can I talk to your lead hygienist?

And they will be more than happy because

they will share, right?

They will share this stuff with you,

right?

They will share this stuff with you.

And then the second thing is the KPIs.

For those that don't know what that means,

you know,

they're key performance indicators.

And that basically is a fancy way of

saying do your homework, right?

Do your due diligence on the practice.

You should vet them like they're vetting

you.

And then a lot of this stuff comes

up.

Well, as you were going through all this,

I couldn't agree more.

My client did that.

They talked to one of the two that

they provided.

He probably didn't call random ones.

So I think that's key right there is

random.

Look at the list and randomly call.

I love that.

But this particular DSO did a summit and

they invited...

my client to a summit where there were

existing owners and potential like he was

owners and they could round table and

smart talk.

And I think that showed some credibility

of this DSO was not scared or nervous

about their performance.

I thought that was good.

I do think reviews are good, though,

because whenever all the practice I coach,

even the practice I bought,

you see things like,

this place has gone downhill.

They treat me like a number.

They're always running behind.

It's not going to be a dead giveaway,

but people are pretty vocal on reviews

now.

I mean,

it depends on how long it's been owned,

but it will rear its own

we had in your reviews if it's,

but yeah.

Go ahead, Michael, sorry.

No, I think that's perfect.

I wanted to really put a crescendo here

on this idea of performance because one of

the things that I see

And Dave and Ali,

you guys see this way more.

You have clients that probably come back

to you after the deal was inked,

and they come back a year or two

and bitch to you.

I don't see that like you guys do.

But this idea, two things.

This idea of performance,

because once you sell to them,

they hold you to a performance standard

that could affect your evaluation for a

future payout.

That matters, right?

And number two,

the actual idea of investing in this

company.

So what I don't think a lot of

dentists think about is when you sell your

business to a DSO,

you are getting a check.

But oftentimes that check,

correct me if I'm wrong,

is sometimes equal or even less than what

a private practice dentist might buy it

for from a bank loan like we all

know is the normal deal.

But then there's like a hold back or

a percentage.

Like if I was selling my practice for

a million dollars and at close I got

six hundred thousand and they're holding

four hundred back and putting that equity

into the big company.

And so, Ali,

you broke down these six things.

David,

you talked about a lot of these pitfalls

in your little that segment that you gave

us.

But like I think about like the confidence

level of their the parent company,

their ability to resell it.

the recap, I think they call it,

recapitalization, the recap,

what is the confidence level that this

company is actually going to recap and

your shares are worth something because

you are buying into this DSO thinking that

you're going to get a bigger kicker at

some point.

You guys see the deals way more.

I know enough to be dangerous.

What are those

David,

what are those deal points kind of

percentages that you see a lot?

Because to me,

that's like a big thing for a seller.

Do you want to go into bed with

this company for three years to hopefully

get a bigger earn out

It's like you're investing your money in

Coca-Cola or actually not Coca-Cola.

It's a much smaller company.

Coca-Cola is an easy decision.

You're investing into a small company

relative to Coca-Cola.

Four hundred of your thousand dollars of

your equity is quote unquote being put

into this small company.

Are they going to perform?

So, David, do you see that a lot?

Yeah,

I think this is an easier question to

answer several years ago where I think it

was rare if ever that we would have

a client that would get

equal to or lesser at closing than they

would from a private sale.

It was a home run.

I mean,

almost every single doctor that we had

that sold to a DSO would get more

at closing than they ever would from a

private buyer.

So they had significantly mitigated their

risk just through that.

Now,

does that mean that the doctor felt like

they didn't need the rest and it was

sort of a bonus?

For some, for others,

they felt like they needed that money and

that's why they were selling to a DSO.

So the stakes were higher, but I think,

you know,

it's not so much that valuations were

higher.

I think it's more that of the enterprise

value,

more money was being paid at closing

than it is now and that's been there's

been you know significant change as far as

that's concerned and so now you know we

still see a lot of doctors that are

getting more at closing than they ever

would from a private buyer but there

certainly are those that do not and

there's no question that dsos you know i

mentioned earlier that they're dipping

their toes in and so are so our

sellers dsos have really scaled back and

you know private equities really you know

put the reins on in terms of

mitigating their risk in these deals.

And the biggest risk mitigator for them is

less money at closing.

And now you're seeing more like,

fifty to sixty percent of the enterprise

value paid at closing,

where back in the day, I mean,

it was eighty percent.

That was like the norm, right,

that you'd get.

So, you know, I think that is...

So now there's more risk is what you're

saying,

meaning you're not getting as much at

close as you were

And now you really got to decide private

practice owner or DSO.

Less risk.

Correct.

Yeah, exactly.

There's less risk for the DSO.

There's more risk for the doctor these

days.

And that's by design by the DSO is

for them to be able to continue to

dip their toes in and get back into

action.

They've had to change things.

And now not only is there less money

closing, but there's.

different holdbacks that maybe you didn't

different types of unique holdbacks like

for ar and other things that you wouldn't

always see before that you're seeing now

you're also seeing if there is a

recapitalization event that or or if there

is an earn out probably easier to discuss

if there is an earn out it used

to be

home run every single time that earn outs

paid in cash now you're often seeing earn

outs are paid like half in stock half

in cash right so dsos are definitely

mitigating their risk through different

you know different methods and i think

doctors have to really try to thread the

needle a bit now and navigate that it

doesn't mean that the great deals aren't

out there but they just doctors have to

be a little more discretionary whereas

back in the day they could you know

throw

their practice out and see what sticks and

most likely they're going to end up in

a good spot, you know,

based on the type of money they're getting

a closing doesn't mean the DSO would be

a perfect fit for them from a personality

and practice standpoint.

But from an economic standpoint,

it was harder to miss.

But now you're

again,

I kind of emphasize the value of a

broker,

but also not just broker consultants like

you guys, you know,

it's really important to have consultants

on your team, team is critical,

got to build a team.

And that's going to help guide you through

all these different layers to make sure

that you're making the right decision if

you're a doctor.

So, you know,

speaking sort of like loud and clear,

I think DSO deals are great for some

not as great for others.

I think DSO deals today are harder to

find that are

optimal for for a doctor than they were

before but they're still out there we

still have a lot of clients selling to

dsos and a lot are successful but you

have to be careful and hire a great

team and i think you know that comes

from attorney standpoint also comes from

you know consultants like you guys and

also brokers that are out there yeah ollie

anything to add as we kind of put

this thing to bed i mean it's difficult

to have four people on a call to

discuss a very robust topic

Thank you all for your contribution.

Ali,

anything to really just take home on this

topic?

Hard to do in forty minutes,

but you guys have all done a great

job.

Yeah, no, I mean,

I think I think David summarized this last

part about the valuations to, you know,

with regard to your question.

Michael, really perfectly,

which is I think these groups are

de-risking because they understand that

the heyday is gone and they can't just

buy practices, consolidate them quickly,

and then hope to recap and just be

done with it.

I think they see that they have to

put a lot of work in and sometimes

the margins aren't there,

as you were saying, Michael.

So, you know,

they de-risk by giving less to the doctors

and they're taking then more of a risk.

And I think the message that I would

say is there's zero doubt that there are

some sellers out there where the DSOs and

the groups are the only buyers that make

sense, right?

Because the practice is,

two three four five six million dollars

specialty group practice and there's no

one individual that can buy that office

right and and and then there are practices

where it's not necessarily the right

practice for them to sell to a group

and i think that's a very personal

decision that needs to be made um but

uh and it has to be looked at

with the help of lawyers and and you

guys as consultants and the financial

advisors um and then and then a decision

can be made because if you're hoping that

the sale of your practice to a dso

is going to fill your bucket your

retirement bucket that is a

the wrong reason to do a deal because

a lot of times it can be negative.

Now, now, you know,

there's a lot of things that we can

do to help minimize taxes and things of

that nature.

But at the end of the day,

you know, it's, it becomes, you know,

it's,

it's gotta be a very kind of personal

decision based on a lot of these other

factors.

So, so I love that.

I will say that if you're a struggling

quote unquote, struggling practice owner,

I mean, not struggling, struggling,

but like if you're just not loving

ownership,

and you're in it,

this is a legit option.

You can get some help,

and I think there are DSOs out there

that are good at supporting you if you

just need more help.

I love being in partnership with Paula.

She brings an element I don't have.

I think we all need great partners,

and I'm not an advocate for DSOs per

se,

but I will say that it's nice to

have some support, and if, you know,

Your hygienist calls off for the day.

Maybe you can pull another one in from

another location.

There's a lot of upside to that,

dealing with the KPIs and the business and

the professional services.

Why are you two smirking over there,

Paul and Alex?

I can see your faces and I hate

it right now.

This is part of our relationship.

Paula has a question she wants to ask,

Mike.

Oh, I'm sorry, Paula.

Go.

Do you have a question?

Do you have a question?

Well, no, I was just going to say,

but then it's kind of like I'm in

Arizona,

so it's a little bit different in Arizona

than a lot of the world or a

lot of the U.S.

And I just kind of noticed that shift.

I don't deal directly with a lot of

DSOs in my part of the consulting

business.

But what I really noticed is the

difference in them wanting the doctor to

stay on and the compensation package and

the length of time they have.

I mean,

they really get them in there now where

I feel like before, back in the day,

I mean,

I'm originally from Indiana and you had to

have a doctor own.

And I know a lot of states are

still like that.

But now they're really having these

sellers like,

stay on for quite some time.

And there's a huge commitment.

And I know just from my docs that

retire,

like when they're looking at these cash

outs, they kind of want to get out.

A lot of them are done.

Some of them just don't want to own

anymore,

but some of them want to be done.

Do you, I mean,

is that just a feeling I have or,

I mean, that has developed over time?

No, no,

I think David would probably agree with

me.

I think that's exactly right.

I think it all comes down to the

de-risk conversation, right?

As long as the seller is there,

it's a much safer acquisition than if the

seller leaves.

That's why they require them a lot of

times to stay five years,

and some of them just do three years

now.

But as soon as the owner leaves,

the team leaves too.

Right.

And, and, you know, Paula,

from your days as a hygienist,

like if your favorite doctor left, right.

You would probably leave too at that

point.

Cause there's other opportunities,

you know what I mean?

And so,

So, yeah, no, I think they're spot on.

Yeah.

Well, it's interesting.

So buyers,

to kind of put this to bed here,

buyers, when you're looking private,

private sale buyers, dentists,

folks that are listening to this episode

that are –

trying to get into a market and it

just so happens that you're competing

against the dso to purchase this practice

do not think that you are at a

disadvantage just because they have more

money or maybe pe backing or whatever you

have a solid chance appeal to the seller

appeal to their heart take care of their

patients take care of their team write the

resume

reach out and call them and say,

I will take care of your practice.

That's what the seller wants to hear.

And then since they're not getting this

big check that Ali and David said,

they're not really getting anymore.

Like they were five years ago.

You have a solid chance.

You have a solid chance.

Yeah.

Mike, I'll, I'll, I remember this quote,

uh, um, from, um,

president Obama after he left office.

And it was really kind of funny.

He,

He was talking at this conference,

and there were all these people who were

talking about conspiracy theories and all

this kind of stuff,

like who's controlling the government and

who's controlling corporations.

And you know what he said?

It was like, I'm paraphrasing,

but basically what he said was, he's like,

you shouldn't be scared of conspiracies

and these large groups of people that

don't exist trying to control the world.

There's nothing like that.

He said,

you know what's scary is when you realize

when you're in power, like I was,

that there's sometimes nobody actually in

charge.

And that the only thing you can hope

for is to be provided notice that

something's about to happen.

And like, so when you think about it,

that's kind of like the DSO world.

There's some DSOs that

You know, like you said,

they think they're, you know,

everyone thinks they're so smart and

they're backed by all this private equity.

But sometimes there's nobody in charge.

Like,

it's just kind of there and things are

happening.

And that's what's so scary if you're about

to partner with one.

And I'm not necessarily, you know,

I don't hate them.

I don't love them.

I think they're good in some situations,

bad in some situations.

But, man, when there's nobody in charge,

that's really what it scares me.

wow that's that's that's a good one that's

it's good insight sometimes i don't think

our private practices are in charge either

but well that's why they have you that's

a different episode that's a different

episode well guys uh paula and david and

ali thank you uh all for contributing it's

a great episode it's a good topic

if anybody's curious or interested or

nervous or whatever listen to this one

it's a good one so guys have a

great allowing me to speak i appreciate it

yeah thanks ollie happy holidays guys

really appreciate it i appreciate the

opportunity thanks all good to see you

ollie good to see you paul and mike

thanks for everything see you guys no

thanks all right

Let us know how you like the show.

Rate us on Apple and Spotify.

Subscribe and follow for more.