The next step in self-diagnosing your business is a quick study in demographics. Your journey will always begin and end with your location. There is almost an endemic demographic denial in dentistry as dentists assume that success will occur in any location. The truth is that your location will most likely define your future success. With that one decision, many will seal their fate in dentistry without really considering the consequences of where you choose to practice.
Over and over, I run into young doctors who are looking for their first practice based on where they currently live as if that should have any weight in determining where they should practice. Your practice location should be decided first and then select where you live. Not the opposite. There is just too much hinging on where you could practice and be a success not to postpone deciding where you will live. Even if you pick a state, there will be places that just will not work for a successful practice: too much competition, poor demographics, cost of startup, and even economic considerations. With that said, there will be places in the state you choose that would improve your chances of success without moving to another state. The same goes for a city. There will be good and poor locations in a city that should color your choices if you want a head start to future success. Basically, there can be better locations with any parameter that you set. Bottom line is location, location, location.
Number one thing in location will always be competition. Your goal should be to never, never, consider a location with less than a dentist to population ratio of 1:2000. Violate this and you are sure to struggle in growing your practice or in some cases, even surviving. While there might be an exception when buying an already busy practice with great reviews and a growth rate of 15% or more a year, these will be few and far between. For those established practices, if you have been in your location for more than 15 years, you are probably in the wrong location. Consider that over a decade and a half has passed in this location and everything has changed except you: Population, incomes, education, cost of living, etc. These changes occur everywhere and can drastically affect your results.
Second would be the actual, specific physical location within the “great” general location. You should notice that the average successful practice or corporate DSO will always be in a high traffic great location. Additionally, it will be where women shop and frequent. Next door to a Starbuck’s, Whole Foods Grocery Store, dry cleaners, nail salon, schools for kids nearby, etc. Women make 92% of all appointments to your office and 100% of the choices of a dental provider. Part of “location” would be the visibility of the office including a sign ordinance that would allow for a two-sided, minimum 4×6 ft. LED sign. Location can be everything every time when valuing a practice’s worth or establishing a new practice. There are just some locations that will punish you. One in particular is a professional building with multiple stories, no real external signage, and poor parking. Forget poor parking, any multi-story professional building is a horrible choice for a practice. Normally you should spend 3% to 5% of revenues for marketing, but if located in a professional building add another $5,000 per month for the rest of your career.
Finally, there are the actual demographics of your location. This will include at a minimum: medium income, cost of living, educational levels, population numbers, owner occupied homes, average age, and race demographics. We have put together a video for your access at this link: https://youtu.be/-AYbM4-AsLo. The website we recommend for a simple, quick look at the description of the people that live in the vicinity of your practice is www.zipwho.com. For a deeper dive, go to www.unitedstateszipcodes.org.
Please control your “thinking like a dentist” while you learn about demographics. This will be obvious when you justify a poor result for factual numbers for your location by saying: “Most of our patients come from another zip code”. The average patient will only drive a maximum of 18 minutes to get to your office. Wake up and understand that if you are not attracting at least 50 or more new patients each month per each full time dentist, you are losing ground. Not having two full time hygienists per dentist doing about 33% of the net adjusted production in your office means patients are not coming back. Getting stuck in the “average” rut of 20-25 new patients a month means you are not inspiring people or you are not paying attention to demographics. This is a journey toward what could be. Set aside what you did last year and dream and act on what is possible for the near future. This profile of the people within about a 5-mile radius of your office, and a much smaller radius in a large city, defines what services you should offer, hours you should work, range of ages you should treat, and even more. Download your location data from www.zipwho.com and follow us as we discuss practice demographics. This is a perfect topic to spend time explaining to you team. Don’t miss the opportunity to revamp your internal and external marketing by incorporating demographics. This time spent to understand where you are is going to pay huge dividends as we continue our 180 Degree Dental Journey.
Michael Abernathy, DDS
PS. I encourage you to contact me with your questions. I will take your questions and answer them within our written blog without letting anyone know who asked. If you are struggling or have questions, 100 other doctors are too. Don’t be timid, write, call, or email me and help me help you.