The Dental Business Guide

From Chairside To Scalable DSO Value

• Samera Business Advisors • Season 1 • Episode 1

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0:00 | 21:20

We share the DSO playbook that turns an owner-dependent practice into a resilient, associate-led group that buyers trust. From recruiting clinicians with special interests to building transparent financial systems, we show how consistency compounds value toward a 2030–2031 exit.

• removing key-person risk so the business runs without the owner
• keeping top clinicians busy through targeted marketing and triage
• building a complementary service mix to reduce revenue concentration
• creating a central backbone for finance and reporting
• proving consistent data over years to win buyer confidence
• planning a four to five year runway for a stronger sale

If you have any questions or need any help, do reach out to me or Smita and we'll go take it from there


If you require any help, don't hesitate to reach out to the Samera team at www.samera.co.uk. We are all here to help you!

Thank you,

The Samera Team

Speaker 1:

Well, hello today, and it's Arun here, back on the Dental Business Guide podcast. And today we're going to be talking about our DSO playbook that we recently wrote here at Samera Global, talking about what the things that DSOs need to be doing over the next five years to really maximize the value of their uh of their of their of their DSOs. And luckily enough, I've got my partner in crime today, Dr. Smita Mehra, with me today, to discuss this. So hi Smita, how are you doing?

Speaker:

Hello, Kyle. How are you, Aaron? Thank you very much for inviting me.

Speaker 1:

No problem at all. And uh it's very easy to invite you, as you are my business partner and my wife. So um we're going to talk some really about some really important aspects of this DSO playbook, and really maybe you can shed some light and your experiences on this podcast today. Um, so if you can give me a little bit of a background about who you are, your background, just for every listener's benefit, really.

Speaker:

Uh yeah, sure. Uh okay, I um I'm a dentist, uh, first and foremost, I suppose, uh, even before I met you. So um I qualified some goodness, uh gosh, 20 blyming, nearly 30 years ago. Wow, gosh. Um I was a child, obviously, when I qualified. Um so yes, uh qualified, worked for a few years uh as on the NHS, and then finally um moved to London, and you know that part, and uh eventually opened up uh my first squat practice, the Neem Tree, uh back in 2004. Um since then, uh in total I've opened uh squat-wise, uh opened, run, and then sold along the way five neem trees, which have all been squats. Um call me a bit of a squat junkie, really. Uh and um here we are now with two of the neem trees still running, the original ones, uh, one's in Wandsworth Town in London, which was opened uh nearly 22 years ago now, and then Esher uh, that's in Surrey, and that was opened in 2010. So um that's what I'm doing right now, and of course, uh very much involved in the Samera side of things uh and very excited about the playbook and everything that there is to do in it and what it uh stands for.

Speaker 1:

And just to give everyone the benefit or the understanding, these clinics are all private clinics, have always been private from day one, correct?

Speaker:

Yes, they're fully they're fully private. Um, and I am very much uh hands-off in terms of clinical decide of dentistry. Uh, haven't really had a list of my own patients for approximately 18 years now, um, when our second child was born. Uh so that's that's the way it is. I obviously cover emergencies and sometimes cover people on holidays, etc. Um, uh, you know, and mostly act as a triage dentist, but uh otherwise it is completely associate-led.

Speaker 1:

Okay, so let's let's go on to that first question, which relates to this whole aspect of um of the DSO playbook. And one of the points we've highlighted in the book is the one-man show risk. Okay, so we all know that investors always get nervous if a business relies too much on the owner. So I've seen over the years small groups, even large groups, where one of the owners is very much prevalent in not just in making all the decisions of the business, but also very prevalent in doing a lot of the high-ticket revenue generation of the business. And if that revenue generation isn't there, or if that clinician gets sick or has to go on holiday, the the dental clinic or the dental group has a massive impact financially, is it massive impact financially? So the question I have for you, Spa, what did you do to make sure your practice stays stay successful even when you aren't the one doing actually any of the dentistry really now?

Speaker:

Yeah, you're you're absolutely right. And that was a very conscious decision many years ago. Um, born in in my case, actually, uh as a lifestyle choice, uh, due to um having children and having to take a career break. But uh I never took a career break from the actual clinics or running the clinics, but it was more from the wet-handed dentistry side of things. Um, and then it kind of uh sort of spiraled onto being uh actually a really good idea when uh the decision was made that I wanted to expand the clinics because um I was then in a very good position to actually spend 100% of my time opening the clinics, running them for a short while, and then handing them over to very able clinicians or associates. And as time went on, obviously I built up a little bit of uh a black book of associate dentists, whether they be GDPs or uh specialists, um, that then came in sort of into our into my little pot of core people and allowed me to really work with great clinicians who were both brilliant clinically, very good with patients and uh earned a good alley rate, um, which meant that I could sit back a little bit um from the clinical side and just grow the business um and market them, really, which ended up being a bit of a win-win situation. And then I used that model uh as and when I grew the practices, um, and it seems to have worked quite well and in my favour.

Speaker 1:

So on that note, then very interesting. You you step back, you didn't do um clinical work. As you said, you might step in occasionally for an emergency purpose only. Um what investors see, what buyers see when they're buying groups is a red flag if staff or or team members or dentists are constantly leaving. So, what have you done to make sure that you've you attracted the best clinicians and then ultimately retain them for the long haul?

Speaker:

Um, it's a very good question. I think it's taken some time to get that core team of clinicians. Um, and I'm not saying I didn't lose do lose a few uh along the way, but I think the key uh thing here is that you want to try and keep the good clinicians happy. And what keeps good, skilled, artistic clinicians happy is keeping them busy. And I think in many practices where the principal dentist almost creams the the sort of cream of the patients away and the high-ticket items themselves and gives the associates the the lower sort of value patients in terms of needing treatment, um, that I've seen firsthand. It kind of demotivates a lot of people who I've spoken to along the way. And I've always made sure that in our clinics, in the Neem Tree, um, it firstly, it's not run by me clinically. Um, my role, and I tell them this, my role is to market you. So I want to hear all about your um qualifications, all about your experience, all about the type of dentistry that you want to do and what stands you out. And then I'm gonna make it my business, instead of taking all the patients from you, I'm gonna make it my business to actually sell those skills, uh, whether it's through the website, whether it's through seeing emergency patients and triaging them to you, or just training the team at the front desk to actually sell your skills. And they uh rightly so, they they they love this support because I genuinely mean it. Um, I'm there to support my associate dentists and hygienists, so all of the clinicians. And that works well because we're it's we're all singing off the same hymn sheet.

Speaker 1:

Okay, so on that note then, so if you go back to the mix of services that you provide in your clinics, again, investors always get very risky if it that clinic just does implants or it just does author. Okay, how did you add other services like Invisalign, Orthodontics, etc., to make sure you weren't putting all your eggs in one basket? What was your what was your approach to finding those right clinicians and how would you hire them? What would you how would you test them? How would you interview them? All that type of stuff. What would you do?

Speaker:

Well, the the first thing to to get a mix of services in a practice is is really, really important. And back in Wandsworth, what, you know, uh 22 years ago, we first started off with a base layer of GDPs, myself and and um a couple of other people, where we were general practitioners, and then we started to build up a profile of patients and treatments, and eventually started to bring in certain services and service providers like orthodontists, etc., to sort of test the waters. Since then, my recruitment has changed, and what I now try and do is I try and employ, if I'm employing a GDP, I'll always employ them with the obviously the GDP base, but with a special interest, for example, orthodontics or pedodontics, or um with a with a slant towards surgery or implants or anything like that, or restorative prostodontists. So that way you're already bringing extra skill sets in. And then obviously the next recruit will be complementary to them. So there might be an Invisalign, special interest in an Invisalign, for example, and so on and so forth. And that way you're building up a nice cycle of uh or a base layer of GDPs with nice complementary skill sets that actually take them to the next level. If, for example, the Invisalign gets very, very busy and then there is a higher need for orthodontics because of that, with the extra pair of eyes for ortho or invisalign, then we will hire in uh orthodontists, especially. And as I say earlier, I've got a little black book now of people that I can call upon, very lucky to have built this black book of specialists that I can call upon to come and service the needs of the clinic. But it's very important to have a good mix of treatments, services, uh, really to have a one-stop shop. Ultimately, the patients are the most important people in our clinics, and I don't want a patient to have to go here or there, either for diagnostics or for specialist services. Once they come to us, they need to stay there. I need to bring them the clinicians and everything that they might need.

unknown:

Okay.

Speaker 1:

So let's go back to your story or your history over the last 20 odd years. Okay. What the question is the hardest part. What was the biggest challenge in moving from being that dentist to being the owner of a of a group? Okay, what had how what was that biggest challenge for you from a mindset point of view point, firstly, and then secondly, from a I suppose from a commercial aspect as well?

Speaker:

Honestly, the biggest challenge for me was to hang up my gloves, uh, in terms of taking a list away from myself and and just saying, okay, now I'm just gonna be not wet-handed. I'm not saying I'm not purely, you know, I mean, I don't do any dentistry at all, but I'm very, very light in terms of, I mean, I haven't done a crown prep uh, etc um, or a bridge prep or anything more complicated than a single surface filling for, yeah, approximately 18 years. Um, and I think the biggest challenge for me was to lose that control because ultimately, you know, we spend five, a good five years, six years with VT, etc. We spend a good five, six years training to be a wet-handed dentist. So to undo that training and to then look at spending your time on working on the business rather than in the business was the biggest challenge. Once I, once I got away from that mindset and started to see the benefits of working on the business rather than just in the business, um, it really opened my eyes because that's something that we at university were never trained to do. So it was a whole another level of training. Um, which I'm very grateful for right now.

Speaker 1:

Cool, thank you. So now really uh going back to the business side of things, investors all want to uh the the clinical side you've talked touched on briefly today, okay? But uh for any person or any group or any bunch of investors wanting to buy a DSO, they want to look at the the systems that are in place that are in a business, okay? So how did you go about building this kind of central backbone for things like recruitment, for things like um dealing with finance or accounting um without it all becoming a mess? What was your strategy there?

Speaker:

Um, well, there's quite a few angles here. I could talk all day about hiring and uh recruitment. Recruitment is a has been a changing beast over the last 22 years. It's very much changed. Um it's it's less time-consuming in some ways because it's all been quite systemized now. But then the workforce has changed so dramatically over the last 22 years. Well, it's changed so much since COVID, as you know. And then, of course, Brexit. So the the supply of uh personnel and team members, uh whether they be clinicians or support staff, has has changed so dramatically. And I think you only need to talk to any principals of any dentist, dental practices out there uh to get good support staff these days is a bit of a nightmare. Um, but that's for another day. Uh, in terms of the backbone financially, yeah, I mean, from day one, we had certain financial um controls in place which mapped out the business and the day-to-day running of the practice, uh, including, you know, uh systems and filing ways. First, it used to be in paper and then obviously digitally, um, of all invoices, lab sheets, uh, and the day-to-day figures, obviously. Um, and so at a moment's notice, we could look at the profit and loss of the business um and and you know, take hold of all of these measures at an instant. And that's been a real guiding force. And and I have to say, Samera has been that some uh the guiding force from day one.

unknown:

Okay, thank you.

Speaker:

So I think that's been a really important aspect of because it's it's allowed me then to work as either a clinician in the earlier days or as somebody working on the business to grow the people. Because for me uh and certainly my skill set, it's all about the people. So if I had to be sort of, you know, neck deep in paperwork and financial controls from day one, A, that's not my uh skill set, I would have been extremely miserable, and B, not very good at it, and C, not being able to grow my team, my people, uh, in helping them be the people and the clinicians that they truly are. Um, and I think my time has been much better spent there rather than doing all of the financial uh control of side of things.

Speaker 1:

So and that's a very valid point because I've been dealt with many, seen many groups and craftses over the years where they've been very good clinically, but they've failed in having that central backbone system. So when it comes to valuing the group, it looks very great on paper, but when but when it comes to the financial due diligence of the investors, they dig deeper and it's a bit of a shambles, and therefore either they discount the price of what they're gonna pay, what they say when they pay in the first place, or they decide, you know what, I'm not gonna proceed. Okay, there's just too many unknowns. So the foundation of having that accounting platform robust, clean, clear, so that you can see the EBITDA of a particular clinic at a moment's notice is fundamental to any type of um.

Speaker:

Yeah, and it makes you also, as a business prospect that somebody's buying, it makes you very much more transparent. Uh, and and you know, there's there's so much more integrity there because at a moment's notice, somebody can say, okay, we're interested in your business. Can you provide all of the figures for you for us? And yeah, with within sort of moments, you're like, yep, here they are. And and and this is what we've got. There is no or the appearance uh as well from a buyer's point of view, there's no sort of fiddling going on and window dressing the practice or doing this or doing the underhand stuff, which I know, you know, I I have seen sort of third hand um happen through the years. Um, and you know, I just don't have time for it, and also not the appetite for it. And I think any buyer, any shrewd buyer will sniff that out. So uh if things are well controlled and run in an efficient way, then um it just makes it a much smoother uh transition and easier, less headache for you as a seller.

Speaker 1:

Yeah, correct. So the foundations are key. Yes. Any group that hasn't got that right needs to do that. And I was talking to a group the other day, they've got seven or eight clinics, and they've been doing a good job with them financials, but they could do a significantly better job if they were organized in a way that makes and it makes the business so much more valuable to an incoming buyer. They don't have to make these changes, they don't have to dig through the the the the the the the the inconsistent ways of reporting data.

Speaker:

Yeah, and they've got a history of that uh consistent data. It's not like, oh, you know, until a year ago we were very inconsistent now, suddenly because we decided to sell a couple of years ago, suddenly we've started to put all these amazing um uh systems into place. It's very obvious and it's very visible um where you're coming from. So, you know, if you are thinking of selling, this needs to be done a few years in advance, not just literally a few months in advance.

Speaker 1:

Yeah, well, that kind of leads me on to the last question, okay. So we've talked about in this playbook the 2030 deadline, okay. Um there's a five-year window or golden window for selling, okay. Um, if you're if you're trying to get out in 2030, you've got five years to get your house in order. So why is it so important for a dentist to start tying up their business now if they want to sell in a few years later?

Speaker:

Yeah, I'd I'd say it's a four-year window now, but I think it's uh we're looking at 2031 now, aren't we? Can't believe the year where the time is fly uh flying. Um, but yeah, I think that's sort of I I guess that's similar to what I was just saying earlier, is that you know, these things don't just happen within minutes or within days or even within weeks. You know, if you are considering selling and perhaps you don't have the consistency levels in financial monitoring and control that we've just spoken about, then I would definitely give it a good five-year window, or as long as possible, if not five, then four years and so on and so forth. But I certainly wouldn't leave it to the last 12 months and suddenly think, okay, what do I do now? Because sure, people want your last 12 months forecast, but they will also go a lot further back to see um how the business has been performing. Now, there are uh environmental factors, of course, and in our case, obviously we had COVID and such and so on and so forth, but but generally people will want to go back more than 12 months. So you want to try and get all your ducks in a row and things looking uh like they have some shape and some order, giving you less of a headache on a day-to-day basis. But then, of course, from a buyer's perspective, thinking, wow, you know, this is a great sale, because not only am I inheriting this wonderful business, but look how well it's run. I effectively don't have to do that much at the helm, especially as in my case it's it's associate run. I could be doing anything. I could be either running the business, I could be growing the business, or this could be one of my sideline businesses because it's run so well. I can be uh making my money elsewhere as well. So you do know what? Yeah, let's just buy it. It doesn't matter what the price is, let's just buy it because it's going to be worth it.

Speaker 1:

Okay, very, very valid. And I think that's the kind of the kind of last point that Smeat has mentioned is that getting your house in order now, if you're trying to sell over the next few years, is imperative. Buyers want that to see that consistent data, consistent financial data, consistent um uh clinical data, um, consistent everything. That's the key to this whole thing.

Speaker:

Yeah, it's consistency, definitely. It's consistency over time. It's not just consistency over the last six months, it's consistency over time. Whether that's in your financial control, whether that's in your numbers, whether that's in your effort as a principal dentist to be the support, the best support you can for your clinicians and your support staff. Um, or whether that means your staffing levels changing, not changing. In other words, consistency at every level is marketable and it's and it can be monetized.

Speaker 1:

And it's valuable.

Speaker:

It's extremely valuable. It's not only valuable for your own own peace of mind, it's valuable for a buyer, but it's just valuable also once you've made that sale, you feel great because you've handed over something that you've uh that is your pride and joy, because you've taken that time to add value, not just for the buyer, but it's added value to your life, to your business life, to your team, and to your patients.

Speaker 1:

Wonderful. Well, thank you so much today, Smeeter, for sharing. Uh, we'll be doing a further podcast on this topic um of the DSO playbook over the coming days and weeks ahead. Um, but uh if you have any questions or need any help, do reach out to me or Smita and uh we'll go take it from there. Thank you very much.

Speaker:

Thank you for having me. Thanks a lot, Arun.