Insight into the unique business strategy of Sage Dental from Jim Mizouni

Jim Mizouni is senior vice president and chief development officer of Sage Dental, a DSO that supports 93 total practices across Florida and Georgia. 

He recently spoke with Becker's about how the company's business model differs from other dental support organizations and what strategies have helped grow the company from 59 practices two years ago to what it is today. 

Editor's note: Responses were lightly edited for clarity and length.

Question: What has spurred that growth, and what are some strategies that have been useful and effective in expanding the network and adding new practices?

Jim Mizouni: Sage is one of the few DSOs that isn't specifically de novo driven or specifically acquisition driven. One of things that is different about us, when we approach a market we try to go in with a 50/50 blend. There's not a lot of direct competition in our space that does that. It may take 12,18 or 24 months in terms of the construction and real estate to open up a new practice today, so if we identify a market we want to expand in, we will go in and identify some quality targets, look for some de novo locations. That gives us between 12 and 24 months to try and find some acquisitions within that market. If we do our jobs properly, then we will go into the market with acquisitions and come back and fill with de novos. The other thing that is unique about us is we are branded. There are certainly other branded concepts out there, but there's not a lot of branded concepts that are doing acquisitions. It's easy when you are not branded to do acquisitions because you essentially go in and tell the doctor that they are not going to have to change the name. For us, I also have to go in and create a value proposition for the doctor about why Sage and why should I take my name off of my practice and put Sage on. It leads us into a lot of different conservations, but from an integrated development strategy it all tends to work out.

Q: When you are going in and looking for new practices, either acquisitions or de novo, are there certain qualities you are looking for when deciding whether or not they would be a good fit for Sage?

JM: I see DSOs that will buy a pediatric group in Michigan, a general dentist practice in South Carolina, an orthodontic practice in Arizona; that is not what we do. Our entire business model is that we bring the specialists to the patient. All of Sage's practices right now are both general and specialty. We don't have any specialty-only practices, and we don't have any general-only practices. We have a network of specialists — endodontists, orthodontists, periodontists, oral surgeons — that cover a group of practices. Because of that, the practices have to be large enough to support that. There are a lot of practices for sale out there are four to six operatory, single-doctor practices that are always designed to be one-doctor practices. If we don't have the ability to expand those, it is probably not a good acquisition for us because our model is 3,000-, 3,500- and 4,000-square-foot practices where we can have a couple of doctors and specialists. By doing so, I think we can drive some of the most successful practices in the industry. More importantly from a patient standpoint, you don't have to get referred out or go to another practice. You are in the location that is convenient for you, you are dealing with the staff that you already know. So that means right away that there are a certain amount of practices that I just can't consider because they don't have the ability to be expanded. 

Q: What sets Sage Dental apart from other DSOs and DPOs?

JM: I think the branded nature combined with the specialty-general model, plus a 50/50 de novo-acquisition development strategy makes us unique. I couldn't come up with any specific direct competitor DSO that has that particular three combination of things on a consistent basis. The fourth thing I would add to that is that we do not hopscotch all over the place. Our roots were in South Florida. We have expanded throughout the state of Florida, we have gone up to Georgia, we are now looking at Alabama, Tennessee, possibly South Carolina. Most other DSOs don't do that. They will go market to market throughout the entire U.S. or they'll go wherever the acquisitions are. So they'll end up buying a couple of practices in one state, a couple practices in another, but there is no geographic cohesiveness. Because we are more selective, we want to make sure that we can market successfully and support our practices operationally and clinically. We integrate practices so they truly become part of the Sage network and family. If you are consistent and run all of your practices on the same platform, if you have basically all the same infrastructure, as new technology comes along it becomes much easier to roll it out on a consistent basis. 

Q: Does the company have any major goals for 2023 or beyond?

JM: We have done a lot of pre-work to understand who our patient is. We do extensive analysis on our current patients in terms of segmentation demographics and what the best patient looks like. I don't believe that every DSO can be successful in attracting every kind of patient. Success to some extent comes down to knowing what you do best and trying to put yourself in locations that meet that specific patient's needs. If we come across some really good acquisition opportunities that have some scale and in some additional states, we will certainly look at them, but we do want to be centralized regionally. The Southeast is still our primary focus, followed by the Mid-Atlantic and Midwest. We started at 59 practices two years ago, we are at 93 today, we will cross the 100 barrier in March, and depending on what happens this year we will probably finish 2023 at 120, 130, possibly 140. I don't see any reason why we can't be over the 200 mark within the next couple of years.

Q: What have been the best or most impactful decisions the company has made when it comes to growth and expansion?

JM: I think for a lot of dental groups and individual practices, COVID was a very difficult time. In Florida and Georgia it was probably less of a difficult time than if we were in the Northeast or West, where the business dynamics were significantly more different and difficult. We actually came out of the COVID period stronger than ever. We made a pretty big bet early on in 2020 that we felt we had the opportunity to grow despite the fact that the major macroeconomic situation had a lot of things very much up in the air. We believed in our concept, we believed in our practices and we actually invested deeply to start the development engine before most other people were turning that on, and we have seen record revenue since. It was easy to wait and say, "Let's wait until 2021 or 2022, let's wait to see how this all shakes out," but we believed in what we did, so we turned it on in 2020 instead of waiting to see what came next. 

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