Five Steps to Locating a Dental Practice for Success
Location Intelligence increases the average dental practice’s revenue by at least $13, 500,000.
The American Dental Association says that on average, dental patients stay with a dental office for 5 to 7 years, generating $4,500 over that period of time.
Consider a location that attracts just one more new patient per month. This would result in 12 new patients a year, and 300 new patients over a 25 year lifetime.
However, the return on investment is even more profound for ‘great’ locations, which attract over 3,000 more patients, and at least $13.5 M dollars in additional revenue over a practice’s lifetime.
That’s why it’s so crucial to do your due diligence when choosing a location for a new dental office.
In this article, I’ll be sharing the 5 steps to locating your dental practice for success.
STEP #1 – Start with an area analysis
Try not to find a specific location first, and then hope that the demographics and competition is adequate for a new office.
This can not only be a waste of time, but also a waste of money.
Beginning with an area analysis can help save time and money, especially by starting with a general area that you’re interested in (for example, a desired driving distance from your home , or one or more cities).
STEP #2 – Find ‘hot zones’ with your preferred demographics
Determine the demographics that align with your practice strategy, for example:
Do you have a strong preference to serve a particular demographic, lifestyle, or religious community?
Does your practice strategy align better with lower income, blue collar demographics (bread and butter dentistry), or higher income, white collar demographics (cosmetic-driven and elective dentistry)?
Do you like serving families and children? If yes, look for a lower median age, a larger average household size, and a growing community.
For more ways to align strategy with location, read our article Demographic & Lifestyle Considerations for Dental Startups
STEP #3 – Find properties in your ‘hot zones‘
This step takes the most time and patience. There can be many properties that are not actively listed, and therefore, working closely with an experienced commercial real estate broker can help. Ask your broker to help you find properties that fit your desired demographic preferences.
Real estate considerations are also extremely important when selecting a location, and should not be underestimated when doing a startup practice.
For example, you don’t want to locate your practice in an A+ market if your property is hidden in a cul-de-sac where patients will have a hard time finding you. Instead, being very visible and accessible in a slightly more competitive market, is almost always better.
STEP #4 – Narrow your top properties further
A site comparison report can help you compare and narrow down multiple locations by competitor saturation, race, demographics, and other real estate related properties.
STEP #5 – Do a detailed study of your top sites
Please, never, EVER skip this step.
You might be trying to save time but it’s crucial to do your due diligence and NOT skip this step.
Prior to lease signing or purchasing, it’s VERY IMPORTANT to:
- Verify the Population to Dentist ratio: This will allow you to weed out any false positives or false negatives in your report when it comes to competitor saturation. It is generally accepted that the ideal population to dentist ratio for a startup is 3000 : 1 or greater, or at least 2000 : 1.
- Analyze Your Competition: Sometimes you may have a great population to dentist ratio, but if you’re in very close proximity to a strong competitor (for example, a newer office owned by a corporation with a large budget available for marketing), then this might not be the best location for your startup.
- Have an Expert Review Your Lease: Skipping this step could lead to HUGE financial problems and headaches. Read more about this in our article here.