Every new location multiplies what already works in a group, and what does not. Before adding another practice, an emerging DSO should measure EBITDA, collections, production per location, staffing stability, and the readiness of its shared platform.
These numbers show whether the current locations can support growth and whether a target practice fits the plan. Reviewing them together keeps acquisition decisions grounded in data while dentist owners keep control of clinical care, which is central to a doctor-owned group.
Why Growth Plans Start With Measurement
DSO affiliation has risen steadily, with ADA Health Policy Institute data showing that 13% of U.S. dentists were DSO-affiliated in 2022, up from 8.8% in 2017.
Growth is common, but repeatable growth depends on knowing which numbers predict success. Metrics reviewed before an acquisition turn expansion into a plan rather than a reaction to an opportunity.
Which Financial Metrics Show an Emerging DSO Is Ready to Grow
A handful of financial measures give a clear view of whether current locations can support another practice.
- EBITDA and EBITDA margin for each location and for the group
- Collections as a share of net production
- Accounts receivable days and the aging of unpaid claims
- Production and net income per provider and per chair
- Cash reserves and debt capacity for the acquisition and integration period
Trends over several months are more useful than a single month, since they show direction rather than a snapshot.
How EBITDA Connects to Practice Valuation
EBITDA, or earnings before interest, taxes, depreciation, and amortization, is widely used to value a dental business and to support bank financing for an acquisition.
Buyers and lenders usually adjust the figure for owner compensation and one-time items, so clean, consistent bookkeeping makes the number easier to defend.
Which Operational Metrics Signal Readiness for Another Location
Operational readiness shows up in schedule utilization, new patient flow, hygiene capacity, and staff retention at existing locations. Stable numbers suggest that management has capacity beyond the current sites.
Standardized systems matter as much as the numbers. Accounting, revenue cycle management, human resources, and procurement should work consistently across locations before another one joins.
How to Compare Practices Fairly Across Size and Service Mix
Raw totals favor larger offices, so comparisons work better per provider, per chair, or per hour of availability. Results can then be read side by side.
Service mix matters too. A location focused on restorative dentistry will show different production than one built around preventive dentistry, so each is measured against a comparable peer.
Which Acquisition Metrics Matter When Reviewing a Target Practice
Target practices are reviewed on adjusted EBITDA, patient retention, new patient trends, payer mix, and the strength of the hygiene schedule. These figures show whether earnings are stable or dependent on the departing owner.
Lease terms, equipment condition, and credentialing status are reviewed alongside the financials, since they affect integration cost and timing.
How Leadership Tracks Whether Growth Is Improving Profitability
After an acquisition, a follow-up review at set intervals compares the new location with the plan, using the same metrics applied to every other practice.
Profit per location, group EBITDA margin, and staff turnover show whether the addition is strengthening the group. Long-term care of the platform means adjusting systems before the next acquisition, not after.
Growth Planning Support From Aligned Dental Partners
Aligned Dental Partners works with emerging DSOs, group practices, and entrepreneurial dentists, supporting non-clinical functions while keeping the model doctor-owned and doctor-led. Its Analyze, Build, Grow, Monetize method begins with a financial assessment of the business.
An EBITDA analysis and a one-day on-site strategy session are available for groups planning expansion, covering financial analysis, the operating platform, and the acquisition pipeline. Leaders are welcome to ask how these measures apply to their own group.
Expansion Planning for Emerging DSOs
Measuring first makes each new location easier to plan and easier to support. Aligned Dental Partners welcomes questions about expansion metrics from DSO leaders and dentist owners.
Frequently Asked Questions
When does a shared services model become more efficient than practice-by-practice management?
A shared services model tends to pay off once several locations repeat the same tasks, such as billing, payroll, or purchasing, and the duplicated effort costs more than a central team. The break-even point depends on group size and structure.
What should a doctor-owned group keep under clinical control while centralizing business functions?
Diagnosis, treatment planning, clinical protocols, and patient relationships generally stay with the dentists. Central teams handle non-clinical work such as accounting, billing, and procurement, which leaves clinicians more time for care.
What risks should be evaluated before expanding a centralized system?
Common risks include systems that cannot handle more locations, thin management capacity, inconsistent data, and staff who feel distanced from decisions. Testing the platform on current locations first reveals these issues early.
What data should remain visible at both group and individual practice levels?
Production, collections, new patient numbers, schedule utilization, and staff turnover should be visible at both levels. Practice managers need the detail to act, while leadership needs the same figures rolled up for comparison.