In this episode, Dr. Brady Frank covers chapter two of DDSO Strategies. Learn the difference between DSOs and DDSOs, and what incorporating DDSO strategies can get you.

 

 

Hey folks, Brady here. Thank you so much for tuning in. If you’re following along in the book DDSO Strategies, we are going over chapter two today, “DDSO Definitions”.

They’re actually two definitions, we get questions from hundreds of dentists around the country on this specific topic.

What is a DDSO or what are the two different definitions?

Well, the first definition is a dentist-owned DSO

Basically, a dentist who wants to scale their growth and grow their practice through making acquisitions and mergers and having their own group of practices, whether that’s only two practices or 10 practices, or – like a few of the folks in our Alliance – 27 or 50 practices. And as you know, I am a really big proponent of, instead of racking up debt, allowing others to buy into your group, share the wealth, right? And therefore, reduce and eliminate your debt. And in essence, instead of just giving away slices of your pie, bake more pies.

So, D-DSO is basically a dentist-owned group. DDS-O, okay, DDS-O is a dentist-owned organization. So, as you know, big dental is trying to take over dentistry, is trying to take over the private practice as well. And so big dental are DSOs, the big supply companies like Henry Schein, Patterson, Darby, right? We’ve got the big implant companies – Nobel, Straumann, BioHorizons – all those. Big dental – Invisalign, Smile Direct Club – Invisalign of course as a public company. So, a DDS-O is a dentist-owned organization, receiving some of the billions and billions of profits that are currently siphoned to non-dentists. Very easy.

So, what type of person would be that which would desire to earn a passive stream of income that would otherwise be made by these big, money-driven corporate organizations in dentistry? Well, certainly us dentists! I started doing this over 20 years ago and built multiple streams of income into my life, created what we call total dental freedom. I’ve done it through both of these different genres.

Let’s talk about D-DSO first

If you’re following along in the book, let me bring you to a graph right here in the book. Evolution of a D-DSO, okay. And that would be a D-DSO.

First of all, if you’re watching this right now, you may be just getting started building your DSO. So early D-DSO trial partner becomes a partner. That’s usually the first stage in building your D-DSO. Sometimes you buy a second location before adding another owner, but early on, that’s usually how it starts. You say, how do I figure this out where I can allow doctors to own rather than doctors be associates? That’s the first stage. Once you start to figure that out, I also talk about that in the book Transition Time, if you haven’t read Transition Time, there’s a free copy at TransitionTimebook.com.

Once you figure that out, then very quickly, a more advanced D-DSO or DDSO adds vertical components and more locations. That’s a more mature, more advanced DDSO. And so, let’s talk in that thread about how you add the DDS-Os.

Okay, so DDS-O, being a dentist-owned organization, what are we looking at for different types of vertical streams of income or what I call purpose-built income

Number one, mentorship JVs

Mentorship JV. What is that? What’s a mentorship JV? Well, one of the very, very important components of building your DDSO has to do with buying wholesale versus retail. When you buy a practice that’s doing $1 million bucks for $800,000, you’re buying retail. But when you find a value-added practice, one that you can significantly increase by just doing five or six things, that is a wholesale investment and you’re adding a great deal of value.

Think about this, hedge fund advisors, or hedge fund managers; do they