DSO: Economies of Scale Is a Myth (E.42)

DSO: Economies of Scale Is a Myth (E.42)

George Hariri, Chief Financial Officer and Co-Founder of Shared Practices, exposes why most multi-location dental groups are quietly bleeding value: the "economies of scale" pitch is a fallacy once you factor in higher debt costs and bloated central teams, centralizing functions just moves expenses around instead of cutting them, and the GP acquisition model has an identity crisis — everyone's buying the same eight-op, $2M+ practice with no real plan to add value once they own it.   Key Revelations: Why Bigger Isn't Always Better * Multi-location debt is more expensive — DSOs pay higher interest and carry a full executive layer on top of practice-level costs * "Maturation means centralization" is a trap — pushing work to a central team doesn't eliminate practice-level costs, it just duplicates them * Most General Practice acquisition groups buy the exact same practice profile, which means they all give private equity the exact same answer to "what makes you different?" * The old playbook — buy low, sell high, change nothing — is dead. Private equity now wants proof you add value, not just collect logos   💡 The "Ask Ken" Question: "How do you know if your associate dentists are actually profitable?" Ken's answer: Most dental groups never measure production in terms of hours worked — that's the first blind spot to fix. Track doctor hours alongside procedures, and you'll get real traction on true profitability, even before you tackle the harder allocation questions like supplies, lab costs, and overhead. Top 3 Episodes of The Dental Truth Project. Listen Now! (E. 2) Why High-Multiple Exits Are Bankrupting Dental Practices [https://www.accrudent.com/podcast-the-dental-truth-project-why-high-multiple-exits-are-bankrupting-dental-practices-e2] - AJ Peak, Health Wealth Capital (E.5) The DSO Valuation Crash No One Talks About [https://www.accrudent.com/podcast-the-dental-truth-project-the-dso-valuation-crash-no-one-talks-about-e5] - Gareth Petsch, pH Partners (E.38) Roll the Equity or Take the Cash and Walk Away? [https://www.accrudent.com/podcast-e38-the-dental-truth-project-roll-the-equity-or-take-the-cash-and-walk-away] - Mark Haddad, Specialty1 Partners | ScoutIQ NEW BOOK - COMING SOON Get early access to Roll the Equity: How Smart Dental Founders Sell Their DSOs Join the insider's list here 👇 https://resources.accrudent.com/roll-the-equity-insider-list [https://resources.accrudent.com/roll-the-equity-insider-list]    Got a burning question about dental finance? Submit your question, and it could be featured in a future episode. Ask Ken Form: https://resources.accrudent.com/ask-ken-form-the-dental-truth-project [https://resources.accrudent.com/ask-ken-form-the-dental-truth-project]

He Stole From Us. Here's How We Let It Happen. (E.41)

Most dental leaders only share their wins. Dr. Hardik Chodavadia, Co-Founder of Enamel Dentistry, does the opposite — and that's exactly what makes this episode required listening.  A highly capable, deeply trusted team member stole a significant amount of money from Enamel Dentistry — and the worst part? They saw the warning signs and couldn't act because he was too embedded to remove.  From a trusted team member who stole from the business to the AI technology quietly transforming how his teams perform, Dr. Hardik gives you the unfiltered version of what building a DSO really looks like.   Key Revelations: When "Indispensable" Becomes a Liability * Embezzlement in dental is far more common than anyone admits. Most operators only hear about it after it happens to them * Never let one person hold the keys to everything — access, relationships, systems, and finances should never all live in the same hands * If removing someone feels impossible, that's the signal — not a reason to wait, but a reason to restructure now * Build in redundancy across critical roles so you retain the ability to make personnel moves without the business falling apart   💡 The "Ask Dallin" Question: “What is unearned revenue — and why does it matter before a transaction?” Unearned revenue is the opposite of AR: the patient has already paid you, but you haven't done the work yet. It shows up in your practice management software as a negative credit balance and lives on your balance sheet as a liability. Common in high-ticket cases like All-on-4, where payment is collected before the procedure is complete.   Top 3 Episodes of The Dental Truth Project. Listen Now! (E. 17) Serial Embezzlers Are Job-Hopping Through Dental Practices—Is Yours Next? [https://www.accrudent.com/podcast-e17-the-dental-truth-project-serial-embezzlers-are-job-hopping-through-dental-practicesis-yours-next] - David Harris, Prosperident Inc. (E.20) Fake Codes, Hidden Fraud & The Accounting Nightmare [https://www.accrudent.com/podcast-e20-the-dental-truth-project-fake-codes-hidden-fraud-and-the-accounting-nightmare] - Paul Lowry, Dental Menu (E.24) Why Your Associate's Professional Insurance Won't Save Your DSO [https://www.accrudent.com/podcast-e24-the-dental-truth-project-why-your-associates-professional-insurance-wont-save-your-dso] - Herb Ford, Risk Strategies Dental Practice   NEW BOOK - COMING SOON Get early access to Roll the Equity: How Smart Dental Founders Sell Their DSOs Join the insider's list here 👇 https://resources.accrudent.com/roll-the-equity-insider-list [https://resources.accrudent.com/roll-the-equity-insider-list]    Got a burning question about dental finance? Submit your question, and it could be featured in a future episode. Ask Ken Form: https://resources.accrudent.com/ask-ken-form-the-dental-truth-project [https://resources.accrudent.com/ask-ken-form-the-dental-truth-project]

Why New Grad Dentists Still Need Mentorship (E.40)

Secure Dental CEO and working clinician Dr. Nazish Jafri has sat across from enough new graduates to see the pattern clearly: the clinical skills aren't the problem. It's everything nobody taught them — how to talk to a patient, how to read a treatment plan, how to understand what they actually need to earn just to survive. They're not failing because they're incapable. They're failing because no one ever had their back. Hundreds of new dentists graduate every few weeks — armed with textbook knowledge, mannequin experience, and a social media feed full of full-arch implant cases and veneer galleries. They walk into their first job expecting Day 1 to look like a highlight reel. Nobody told them it wouldn't.   Key Revelations: What Happens When New Dentists Have No One to Call? * New grads are being shaped by social media "gurus" — expecting full-arch implant cases and veneer galleries on Day 1 * Most can't answer: "What are your monthly expenses?" — yet they're negotiating salaries and signing contracts * Dental schools now test final exams on mannequins, not real patients — leaving grads dangerously underprepared for the chair * Sign-on bonuses sound like gold to hungry new grads — but the hidden clauses are "holding them by the neck"   Connect with Dr. Nazish Jafri: 📧 nazishjafri@secure-dental.com 🔗 LinkedIn & Facebook: Secure Dental   💡 The "Ask Dallin" Question: "Do you recommend off-the-shelf analytics platforms like Dental Intel or Jarvis?" Dallin's answer: It depends on one thing — how standardized is your organization? If you're running multiple practice management systems or complex workflows, build in-house or you'll be frustrated constantly. If you're tight, standardized, and lean on tech resources, off-the-shelf gets you up fast. Don't let the perfect be the enemy of the operational.   Top 3 Episodes of The Dental Truth Project. Listen Now! (E. 9) Dentist vs. Dentist What I know, You Know! [https://www.accrudent.com/podcast-the-dental-truth-project-dentist-vs-dentist-what-i-know-you-know-e9] - Josey Sewell, Dental Associate Growth (E.27) Hiring Entitled Dental Grad Nobody Talks About [https://www.accrudent.com/podcast-e27-the-dental-truth-project-hiring-entitled-dental-grad-nobody-talks-about] - Dr. Anushka Gaglani & Dr. Abhishek Nagaraj, Areo Dental Group (E.29) The Business Skills Every Dentist Needs (But Was Never Taught) [https://www.accrudent.com/podcast-e29-the-dental-truth-project-the-business-skills-every-dentist-needs-but-was-never-taught] - Dr. Rehan Shahid, Practice Success Academy   NEW BOOK - COMING SOON Get early access to Roll the Equity: How Smart Dental Founders Sell Their DSOs Join the insider's list here 👇 https://resources.accrudent.com/roll-the-equity-insider-list [https://resources.accrudent.com/roll-the-equity-insider-list]  Got a burning question about dental finance? Submit your question, and it could be featured in a future episode. Ask Ken Form: https://resources.accrudent.com/ask-ken-form-the-dental-truth-project [https://resources.accrudent.com/ask-ken-form-the-dental-truth-project]

IQ Gets the Job. EQ Gets the Patients. AQ Makes You Last. (E.39)

Dave Gaspar, CEO of Smile Partners USA, exposes the hiring blind spot that's quietly killing dental careers: practices have obsessed over clinical skill and chairside personality for decades — but nobody's testing for the one quality that actually predicts whether a dentist survives the hard days.  When the CBCT crashes, the assistant calls out sick, and patients are walking out the back door, IQ and EQ won't save you. Dave calls it the Adversity Quotient (AQ) — and he argues that until the industry starts screening for it, recruiting will keep failing doctors, practices, and patients alike.   Three scores that predict a dentist's success:  IQ — The Clinical Score Can they perform the procedure? Do they have the technical skills? This dominated hiring conversations for decades.  EQ — The People Score Can they connect with patients? Can they lead a team? This became the next frontier of great hiring.  AQ — The Adversity Quotient Can they handle a bad day? Do they take ownership when things go wrong? This is the score nobody is testing for — and the one that decides everything. Key Revelations: The Hiring Formula Is Broken * A high-AQ dentist who thrives under pressure is your best candidate for a turnaround office — but placing a low-AQ doctor there is setting everyone up to fail. * Even after selling a practice, doctors can't fully abdicate — Smile Partners still needs you to be a leader, not just a provider. * Culture isn't a mission statement on the wall — it's what happens when the day falls apart and everyone still knows exactly what to do * Most struggling practices don't have a process problem — they have a people problem, and no marketing budget or DSO support system fixes a team that can't handle adversity   💡 The "Ask Ken" Question:  Why do some DSOs grow revenue fast but never improve margins? Ken's answer: Growth mode means more expenses — more people, more marketing, more infrastructure. Margins don't disappear; they're just buried under expansion costs. The key is watching cash flow during the sprint, not profits. When growth levels out, real margins surface. But if you keep adding headcount and spending without discipline, you might never find out where you actually stand.   Top 3 Episodes of The Dental Truth Project. Listen Now! (E. 3) How Associate Mismanagement Is Bankrupting Dental Groups [https://www.accrudent.com/podcast-the-dental-truth-project-how-associate-mismanagement-is-bankrupting-dental-groups-e3] - Eric Roman, Dental Associate Growth (E.18) Why Half Your DSO Budget Is Disappearing Into Toxic Culture [https://www.accrudent.com/podcast-e18-the-dental-truth-project-why-half-your-dso-budget-is-disappearing-into-toxic-culture] - Gabriel Hofmann, The Dental Efficiency Guy (E.26) You Keep Losing Dental Team Members. Have You Asked Yourself Why? [https://www.accrudent.com/podcast-e26-the-dental-truth-project-you-keep-losing-dental-team-members-have-you-asked-yourself-why] - Bonnie Thompson, Forest Family Dentistry     NEW BOOK - COMING SOON Get early access to Roll the Equity: How Smart Dental Founders Sell Their DSOs Join the insider's list here 👇 https://resources.accrudent.com/roll-the-equity-insider-list [https://resources.accrudent.com/roll-the-equity-insider-list]  Got a burning question about dental finance? Submit your question, and it could be featured in a future episode. Ask Ken Form: https://resources.accrudent.com/ask-ken-form-the-dental-truth-project [https://resources.accrudent.com/ask-ken-form-the-dental-truth-project]

Roll the Equity or Take the Cash and Walk Away? (E.38)

Mark Haddad, Endodontist and Co-founder of Specialty1 Partners and ScoutIQ, pulls back the curtain on what private equity actually wants — and why most dentists walk into a deal completely unprepared. At the heart of every PE transaction is one defining decision: do you take the cash and walk away, or do you roll your equity and bet on a bigger payday down the road? If you've ever thought about selling your practice or scaling with PE backing, this episode will change how you think about both paths — and help you figure out which one is right for you   Option A Cash out Full liquidity at close. Best for founders nearing retirement or those who want a clean exit. You walk away with 100% of the agreed value — no strings, no risk, no upside.   Option B Roll the equity Take partial cash now, convert the rest into ownership of the larger DSO. If the group grows, your stake multiplies. Mark calls it "the second bite of the apple" — and it's how younger founders build serious long-term wealth.   Key Revelations: What Every Dental Founder Needs to Know Before Selling * PE created optionality — Before private equity, dentists had almost no exit options. PE firms are market makers — and that's a good thing for doctors. * Rolling equity isn't risky — it's strategic. Trading full cash for a stake in the larger DSO is how younger founders capture the "second bite of the apple." * PE is buying your practice in 5 years — not today. They want a growth story, not just your current numbers. Tell them how you plan to scale. * EBITDA is subjective. Buyers will fight to reduce your number through add-backs. Without a strong CFO and banker in the trenches, you'll lose that battle. 💡 The "Ask Dallin" Question:  "What factors should I consider when choosing a practice management software?" Dallin's answer: Two things outrank every other feature — scalability (can it standardize across multiple locations?) and data access (can you actually get to your own data?). Cloud-based PMS platforms tend to win on both. Everything else — user friendliness, features, cost — matters less if you're building toward a group practice.   Top 3 Episodes of The Dental Truth Project. Listen Now! * (E.2) Why High-Multiple Exits Are Bankrupting Dental Practices [https://www.accrudent.com/podcast-the-dental-truth-project-why-high-multiple-exits-are-bankrupting-dental-practices-e2] - AJ Peak, Health Wealth Capital * (E.5) The DSO Valuation Crash No One Talks About [https://www.accrudent.com/podcast-the-dental-truth-project-the-dso-valuation-crash-no-one-talks-about-e5] - Gareth Petsch. pH Partners * (E.11) Unqualified Practice Brokers Are Costing Dentists Millions [https://www.accrudent.com/podcast-the-dental-truth-project-unqualified-practice-brokers-are-costing-dentists-millions-e11] - Maria Melone, Caber Hill Advisors   Got a burning question about dental finance? Submit your question, and it could be featured in a future episode. Ask Ken Form: https://resources.accrudent.com/ask-ken-form-the-dental-truth-project [https://resources.accrudent.com/ask-ken-form-the-dental-truth-project]