Hi {{firstname|everyone}},
In dentistry, growth is easy to recognise. Expansion drives revenue, inviting more attractive investor decks. From the outside, it signals momentum and capability. From the inside, it often feels like validation.
What is far less visible is whether the organisation beneath that growth is maturing at the same rate.
I have seen DSOs double their footprint while the way decisions were made, monitored, and enforced remained largely unchanged. The leadership team simply absorbed more complexity. More clinics meant more calls, more reporting, and more operational noise, but not necessarily better structure.
In the short term, that can work. In the long term, it creates strain that eventually shows up in margin volatility, leadership fatigue, and investor hesitation. Investors ultimately price control.
If the ambition is to strengthen EBITDA and achieve higher multiples at exit, the distinction between expansion and structural maturity becomes critical.
1. Scaling Clinics Without Scaling Decision Architecture
In the early stages of a DSO, speed is an advantage. Founders and a small executive team can make decisions quickly because context is concentrated. But that concentration works when the group is small.
As the network expands, however, complexity increases faster than informal leadership can manage. If decision rights are not clearly defined, the organisation becomes dependent on personalities rather than roles. Performance may remain strong for a period of time, but the model becomes harder to replicate and harder to defend under scrutiny.
To avoid this, groups need to make deliberate structural choices:
Define decision rights formally across clinical, operational, and financial domains so that site leaders understand both authority and limits
Create written escalation frameworks so that disputes and underperformance follow a predictable process rather than relying on informal intervention
Separate strategic decisions from operational ones and assign clear ownership at board, executive, and site level
When decision systems mature alongside growth, EBITDA becomes more predictable because performance is driven by structure rather than by constant executive oversight.
2. Revenue Expansion Can Conceal Margin Fragility
Revenue growth is often celebrated as proof of success, but buyers and sophisticated investors look deeper. They examine whether margins are consistent, explainable, and resilient to change.
In many DSOs, expansion stretches central functions before they are fully built out. Finance teams become reactive. Reporting becomes backward looking. Cost control becomes uneven across sites.
In that environment, headline growth can mask structural weaknesses.
Real progress requires strengthening the mechanisms that protect margin as the group scales:
Standardise financial reporting across all clinics so that performance drivers are comparable and variance can be clearly explained
Centralise oversight of revenue cycle, procurement, and major cost categories before adding additional sites that increase operational load
Track margin performance by clinic maturity and operator involvement rather than relying solely on blended group figures
When margins are supported by consistent systems and transparent reporting, investors develop confidence in their sustainability. That confidence has a direct impact on valuation.
3. Cultural Cohesion Requires Institutional Design
In smaller groups, culture is transmitted directly from founder to team. Values are reinforced through daily proximity. As the organisation grows, culture can no longer depend on presence alone. It must be embedded in systems, incentives, governance frameworks, and leadership development.
Without deliberate design, clinical standards may drift as local leaders may interpret priorities differently. None of this necessarily causes immediate decline, but it introduces unpredictability.
Progress at scale demands intentional alignment:
Align incentive structures with both clinical quality and financial outcomes so that performance expectations are balanced and transparent
Implement consistent clinical governance frameworks across all sites so that standards are clear and measurable
Develop leadership pathways for site managers and senior clinicians so that expansion does not outpace capability
When culture is institutionalised rather than personalised, performance becomes more stable.
That’s Why: The DSO Exit 2030 Playbook
Our Playbook focuses on governance, financial clarity, standardisation and leadership depth. The elements that strengthen EBITDA and support higher valuations over time.
If you are serious about building a dental group that scales with confidence and exits on strong terms, I would encourage you to read the DSO Exit 2030 Playbook 2030.
Free and fully accessible, read it all here:
Cheers,
Arun