I get asked a lot about practice locations and how to start the search for your new practice. The simple answer is this: your ideal location may be different than mine, BUT there are several KEY aspects of practice location that will dramatically increase the likelihood of GROWTH. That's ultimately what you're trying to determine when evaluating practice purchase/startup locations - how easily will it allow you to create growth? Because it's my belief that as young dentists buying out boomer practices - we must transform the declining or old/stable practices we acquire and transform them into growth practices in order to counter declining active patient #, sub par revenue, patients lost during the transition and non existent marketing/growth systems.
All this said, location is one of the most important (fundamental) aspects of your new practice purchase. It affects patient type/demographic, dentistry type and ultimately your income. Think it through...
So, what should you look for and where should you begin. There are a lot of services that will help you evaluate practice locations (practice cafe, etc) but unless you are entering a STARTUP situation...you probably do not need to use one of these services. Save yourself the money and dig in a little on your own. Honestly, all the info you need can be found on zillow, google and other demographic sites. The trick is knowing what you're trying to interpret.
Here is the formula (I'll list everything you could do to maximize growth...BUT, in the end you may decide to decrease the size of your "net" you use to create growth; and sacrifice some aspects of growth in order to create a practice that better fits your dream. The goal is to create and ensure success...but more importantly to build a practice you love.
First - Choose a location you'd love to live; a place that you can invest in the community. This should be withing a 15 - 20 minute drive time from your home; beyond that you risk burnout simply from the wasted commute time. I've spoken with handful of dentists this year that are selling their practices simply because they are NOT in the right locations and are sick of the commute. Plan to invest time - energy and marketing $ into the surrounding area/community - throw patient VIP BBQs, engage the local school and businesses. These investments will definitely be an important part of growing your dental business.
So, rural vs urban vs suburban? Truth is this - and the numbers don't lie: a quality rural location delivers less competition and more income for dentists that urban and suburban (generally). So, if you don't mind heading out state...your practice will be cheaper to purchase AND you'll have a higher production/income potential.
Second - Look at the number of dentists in the surrounding area. Pull up google map and do a "dentist"search. How many are within 10-20 miles? How big are the practices? Are they older (future acquisition targets)? Are they newer practices with killer reviews and great marketing ( this is a threat to your growth potential )? Look at the demographic info for the surroundings 10 mile area (patients will usually NOT travel farther than this unless they have no other choice...again rural wins out). What type of patients do you love to work with? Does the patient demographic demand the TYPE of dentistry you love to do? Ideally you patient to dentist ratio should be around 1:2000...anything over that means the market is getting saturated, and growth could be affected. What's the household income? White collar vs blue collar? Is the area full of young families, new builds and anchored (families with stable jobs, kids in school that are less likely to move around)? To see the demographics for your target area, check out zillow demohraphics, neighborhood scout, census bureau, areavibes, point2homes.
Third - Are there schools, large businesses and industry in your target area ( check maps ) that will supply large numbers of patients? What types of insurance are common in the area (call local dentists)? Do most dentists participate with lower reimbursing PPO plans or do you have the ability to remain out of network and focus on cash patinets?
Fourth - Getting more into the micro aspects of location selection...do a drive by of the practice location. Does it have good signage and street visibility? Is it in a high traffic area (again creating good visibility)? Good visibility is not essential to growing, but it definitely helps you cast a wider net to create growth.
Ok! That's a good start. If you want to dig deeper or get help while buying/growing your practice - shoot me an email! Check out www.practicingdentist.com to learn about my one on one coaching program. I help with as little (or as much) as my clients like: getting a dentists guidance and perspective on a potential practice appraisal and growth plan to full one one one help setting up and growing their new practice. I've helped so many new practice owners avoid costly mistakes and set their practice up on a sound foundation for growth. See if it's right for you!
~ Cole Brenny DDS