The Dentalpreneur Podcast w/ Dr. Mark Costes

1876: A Unique DSO Model Pt. 2

Dec 19, 2023

Dr. Weston Spencer, accomplished cosmetic dentist and dental partnership group co-founder, joins Dr. Mark Costes to discuss the future of dental practice consolidation and group partnerships. They explore the current state of industry consolidation and the ideal characteristics of a dental practice that would attract high valuations from DSOs and private equity firms. Dr. Spencer shares insights into SPP Dental Partners and their unique model that seeks minority partnerships with practices. They cover the benefits of joining a group like SPP and the investment opportunities for dentists within the industry.

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Introduction

00:00 • 3min

Consolidation in the Dental Industry

02:40 • 8min

Building an Attractive Practice and Joining a Group: The Importance of Revenue Generation

10:52 • 3min

Options for Dental Practice Owners

14:20 • 11min

Leveraging the Momentum of Successful Practices

25:26 • 2min

Connecting and Appreciating Knowledge Shared

27:14 • 2min

Introducing Dr. Weston Spencer and Dental Success Network

28:45 • 2min

On today's part 2 episode, Mark is joined by Dr. Weston Spencer, an accomplished cosmetic dentist and dental partnership group co-founder. They discuss the future of dental practice consolidation and group partnerships. They explore the current state of industry consolidation, with estimates varying widely, and the projection that within the next seven to ten years, consolidation could reach around 50%. The conversation then turns to the ideal characteristics of a dental practice that would attract high valuations from DSOs and private equity firms. They emphasize the importance of a balanced and diversified provider base to mitigate "key man" risks and maintain practice value.

Dr. Spencer shares insights into SPP Dental Partners, the group he co-founded. He outlines their approach, which differs from traditional DSO models by seeking minority partnerships with practices, thus preserving ownership and autonomy for practitioners. They discuss how their model allows for increased valuations and shared services, leading to practice growth. The model aims to bring together a strong EBITDA and provide access to the benefits of larger groups without sacrificing the independence of private practices.

Towards the end, the dialogue covers practical aspects such as the processes of selling to a DSO, the benefits of joining a group like SPP, and the various investment opportunities for dentists within the industry. They also delve into the specifics of partnership agreements, emphasizing the importance of maintaining a say in the practice's future and the potential for financial gain through a well-strategized partnership.

The conversation concludes with Dr. Spencer explaining how SPP Dental Partners supports dentists by offloading administrative tasks, enabling them to focus on clinical work. They also discuss how the partnership structure allows dentists to leverage the financial advantages of being part of a group while retaining control over their practice.

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