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5 Tips to Scale Your DSO

In the business world, it can be hard to find mentors willing to share their experiences and advice. Patient Prism is bridging that gap by creating a video series with DSO executives from  around the country.

Patient Prism CEO Amol Nirgudkar sat down with AJ Acierno, DDS, the CEO of DecisionOne Dental Partners. Much has happened since AJ and his brother, Mike Acierno, DDS, first founded the DSO in 2011. It has grown from their two private practices to a dental support organization with 25 practices in the Chicago area.

In a frank and funny discussion, Dr. Acierno shares his top 5 tips to scale a DSO. Many of them were lessons learned the hard way, and Dr. Acierno hopes that by sharing his knowledge, he can help other dentists looking to expand.

Hire ahead of your growth.

“Probably the most important thing that we've learned is hiring intentionally ahead of your growth,” said Dr. Acierno. He said they originally tried to add practices without adding additional staff, and quickly discovered that wouldn’t work. Now they plan for the growth and budget for the new staff members they may need, such as an additional person in the accounting department. “We made sure that we had the support to take care of those practices once they came on board.”

Identify your team’s abilities - and shortcomings.

It can be very easy to want to promote people from within your organization to higher-level positions. However, that can be a mistake. “That was hard for me because everybody in my group scaled up with me, and were really good (at handling) one, two, three offices. At seven, that wasn’t their niche.”

Dr. Acierno said managing multiple offices and dozens of people requires a different skill set. It’s not a knock against the people who are excellent at managing one or two offices; it’s just a fact.

Learn from other people’s mistakes.

Dr. Acierno got a great piece of advice from his dad, who was also a dentist. He told AJ to always surround himself with really good people who knew more than he did.

Dr. Acierno took that advice to heart. He joined the ADSO and talked to their members about mistakes they had made, and how he could avoid making the same ones. He talked to dentists who worked at other DSOs to learn what they liked and didn’t like about those organizations. He talked to business owners, which was invaluable since he had never taken a business class and needed to learn business basics, including legal considerations, quickly.

Keep corporate overhead under 11%.

As you’re growing your dental support organization from a small group practice to a DSO that has four or more locations, it’s important to keep an eye on your corporate overhead costs, said Dr. Acierno. He proposes keeping the overhead expenses to about 11%.

That can be difficult, especially when you’re expanding and adding C-Suite executives. “For about an 18-month period, we were at 12.5 to 13%,” said Dr. Acierno. They brought the costs back down.

One way to help keep corporate overhead in check is to make sure you don’t overpay the C-Suite as you’re trying to grow. Both AJ and Mike Acierno continue to practice; they like working with patients, but they also liked having income that came from their own production.

Dentists, keep on practicing dentistry.

And tip 5 is for dentists to keep on practicing. Do the dentistry you love and make that additional stream of income, so your income is not reliant on the business you are growing. “Right,” says Nirgudkar. “You don’t want to deplete the resources that are going to help your scale up and build a great infrastructure.”

The complete story of DecisionOne Dental Partners’ development and the challenges they faced is told in a video series available on Patient Prism Academy.

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