3 Traits of a Successful DSO
The dental industry is growing, and now is the right time to position your DSO for success. In fact, it is estimated between 14-18% of dental practices are now associated with a DSO. And, that percentage is expected to increase. Our clients at Skytale Group tend to have between 3 and 20 locations. Therefore, as your DSO advisor, we want to set your business up for future growth or sale.
A dental service organization (DSO) is a form of corporate dentistry where an umbrella company acquires other dental practices and manages each location’s operations. The DSO model allows dentists to excel in their practice with professional office support. When done correctly, it should be a mutually beneficial and profitable partnership for all parties. Whether or not you’re planning to sell your DSO, we make sure our clients are always “deal ready.” To do so, we set them up for success by building out the proper systems of management, leadership, finances, and operations.
The secret behind any successful business is a good infrastructure–the people, systems, and technology that sustain operations. Read more from our team of DSO growth consultants about how these factors can bring you success in the dental industry.
1. A successful DSO employs good people.
An effective employee understands the expectations of their role. They perform to the best of their ability and are willing to be held accountable. From associate dentists to hygienists front desk staff, hiring strong candidates is one way to sustain success. Further, Harvard Business Review lists several factors behind why an employee may be able to reach their full potential. Feeling safe enough to ask questions and the ability to problem solve matter. Rewards, recognition, and meaning in their work are several more of the reasons why an employee may or may need to fulfill their role.
No matter how many practices you have, the members of your leadership team have a responsibility to build culture a positive for your employees. Recognize employees with high performance and create incentives for improvement. Moreover, create paths for employees to grow and check in with them regularly about their career goals. And offer ongoing education to your employees to keep their skills fresh so that they build a career, not just a job. Once you understand that a large portion of your job as a leader is to manage your people well, your DSO success will thank you for it.
Lastly, consider your employer brand. It’s your company’s reputation in the workforce. Therefore, it’s the perceptions about your culture and value proposition that impact potential employees. Before an employee applies for or accepts a job with your company, they will consider your brand. In short, build your employer brand with a vision statement that’s reflected in all your decision-making: the workplace location, compensation packages, advancement opportunities, work-life balance, and job security.
2. Successful DSOs build an efficient organizational structure.
Your DSO success also depends on tracking every step it takes to get there. At Skytale, we teach clients about Key Performance Indicators (KPIs) to serve as a roadmap for where the company wants to go. There are two important types of KPIs to track: financial and organizational.
Financial metrics drive and predict revenue. Our list of suggested financial KPIs to track each month include:
- New patients
- Revenue by provider
- Hours worked
- Available hours
- Capacity percentage
- Revenue per hour
- Procedures by provider
- Revenue per procedure
When you record these KPIs monthly, you paint a picture of your DSO’s productivity. You can use these data-driven insights to predict your monthly revenue. A dental consulting practice (like Skytale) can help you identify, track, and manage these KPIs for your company’s unique operations. The more you scale, the more important it is to have a handle on your KPIs. This kind of financial clarity also adds value when you’re looking to sell.
- Cost per hire
- Acceptance rate
- Employee turnover rate
- Employee engagement
- Customer acquisition cost
- Customer lifetime value
Understand what DSO success looks like for you, and set KPI goals that reflect your desired destination.
3. Successful DSOs invest in the right technology.
New technology is constantly improving patient care and dentist performance. Often, investing in the right technology can have a substantial ROI for your organization. Make sure your company is investing in technology with intention. There should never be equipment sitting around unused. Employees should understand how to use each piece of technology properly. We don’t typically suggest cutting costs by buying equipment from non-reputable brands. Some tools even have their own brand and may be requested by patients.
The technology checklist for a DSO can include:
- Hardware like dental equipment, digital x-rays, cameras, imaging tools, laptops, or tablets
- Clinical software applications like charting, imaging, AI, diagnosis and treatment, patient education
- Administrative software applications like email, backup management, scheduling, patient records, insurance claims, accounting
Bottom line: do your homework before buying equipment. Verify compliance with HIPAA. And, make sure to teach every team member how to use it.
DSO consultants like Skytale Group can help companies build a road map to success. When we engage with clients to build out a DSO, we start by sharing a Project Timeline and Operational Assessment Questionnaire. Then, we move together through three phases: putting a strategy in place; building an Operating Model; and executing, implementing, and managing. Building out a DSO is not easy, and it takes a significant commitment. That’s why we break it down into actionable phases, guiding our clients through each step.
Are you interested in working with a DSO advisor? Send us a message today and get started on the path to your DSO’s success.