In this episode of Dental Marketing Mastery, we talk about the best locations to set up your practice. This includes startups, dentists considering buying a dental practice, and dentists who are expanding.
- The ideal practice
- How to get demographic data
- How to find the best markets
- The three most important factors when determining location
- How to analyze a market area
- Avoiding this recipe for disaster
- Buying a new practice
- Asking WHY a practice is for sale
- Market consolidation: a valid marketing strategy
- The best time to open a new practice
- Doctor to patient ratio explained
Hello, and welcome once again to the Dental Marketing Mastery series. This podcast is brought to you by dental web content calm and new patients Incorporated. I’m Howie Horrocks, the founder of new patients Incorporated, along with me once again, as my friend and partner and the president of new patients Incorporated. Mark Diltaush.
Mark: Hello, everybody. Welcome to all of our listeners who must be in the thousands by now.
Howie: Hello, Mark.
Mark: I think we are in the thousands.
Howie: Oh my gosh
Mark: That’s pretty. I don’t know. I guess that’s impressive.
Mark: They keep coming back too.
Howie: Did you get the feeling that you’re being stalked or something? Sometimes I do.
Mark: Yeah, Facebook. Um, so what do we have on the agenda for today? Howie
Howie: Well, we’re going to talk about how to locate your practice or relocate it.
Mark: Or get a new practice or maybe a startup?
Howie: Yeah, maybe any of those situations.
Mark: So how to position yourself to have or buying a dental practice. Actually, this applies to everyone.
Howie: Sort of does. Yeah.
Mark: Yeah, it sort of does. Alright, so and we get this question these questions all the time. Okay, um locating a dental practice. If it were me if it were my money, my personal money, forget business money, my personal money if I took all my money out of savings, and I said, I’m going to start up my own practice or buy dental office or locate a new practice. Maybe it’s my second, third or fourth practice? Where should I do that? That’s the question that we’re trying to help you solve today.
I would, my first move would probably be to call Scott McDonald that Dr. Demographics.com, and I would have him I would have him isolate the top five dental markets within? Let’s see, how far Am I willing to drive each day, let’s say 30 minutes. So I’m going to give them my home address. And I’m going to ask them to give me the top five dental markets within a 30 minute commute in all directions.
Howie: Right? That’s kind of a macro look at it. That’s the very first thing you should do it, but that doesn’t mean that you’re going to you’re going to find a place that’s you might you might be doing this in San Diego, and you might never find anything that matches your criteria.
Mark: Right. I’m sorry. Yeah, no, in every market, there is the top five markets. It just so happens that compared to the next county over those top five markets suck.
Mark: I mean, let’s face it, you know, just because you want to live in La Jolla, California, which is basically a canyon an Interstate and an ocean. Basically, it’s an island. Okay. Just because you want to live there doesn’t mean that it’s really viable to do a business of dentistry there. Okay,
Mark: Um, so yeah, Howie’s point is, is you choose wisely. You know, we counsel people all the time, is, well, I, you know, I live in this area of Southern California, say, Irvine, California. And I want to open a practice in Irvine, California, or some neighboring town to Irvine, and we just kind of roll our eyes and we say why there’s already there’s dentists with sandwich boards, with Rastafarians selling dental implant for $89. Okay, in Irvine, California, how are you going to compete with that? Right, like, what are you doing to yourself?
Howie: Well, and then by the same token, you know, you could say, well, I won’t compete, I’m not going to do the lowest the lowest price guy, which is good. But there’s already a horde of dentists who are targeting the top end. So you’re kind of messed up either half of the market you choose because it’s already been being well covered with those with those high population areas.
Mark: Right. So my number one thing, my number one indicator would be doctor patient ratio, my number two indicator would actually be projected growth. Um, it’s one thing to say that a market is a 1 to 1500 market, okay, it’s not really exciting. It’s a little bit below the national average. And that’s okay. But if it’s projected for 10% growth over the next five years, 10 percent growth each year, for the next five years? Well, you could be get on top of a wave, you could ride for the rest of your 25 year dental career.
Mark: So the second thing I would look at sure would be would be the growth projections of the area. The third thing I would look at would be the industry, you have declining industries, and you have exploding industries, I would want to know if the employment base was stable, because that’s important. So if you use those three criteria, to either go find a selling dentist, or find available leased space, or find possibly a second or third or fifth or 12th location for your own enterprise.
On those will be the three criteria I would use. Um, I can tell you, I’ve heard countless, just endless stories, stories of new owners who say, Well, I bought this practice because it was for sale. Well, okay. But nobody else has a gun to your head. And nobody, nobody told you not to analyze the market area you were buying a dental practice into. Nobody told you to buy into a 1 to 900 market area. Why did you buy that practice? You can’t just because it was for sale is not an answer. And just because you didn’t previously own a practice is not a viable answer. It’s really a recipe for disaster. Okay.
So, you know, you have practices for sale, everywhere. I want everyone to think if you’re in the market to buy dental office, I want you to think about this for a second, this is going to be second maybe third level knowledge for you. Let’s say you’re in a really, really, really, really competitive market. Like there’s some areas around Detroit, Michigan, hell 90% of the city of Houston. Um, I mean, where the doctor patient ratios are 1 to 500/600 it’s just a total, Las Vegas is, you know, most parts of southern California. It’s just a total nightmare mess, you know, trying to building or buying a dental practice in there?
Mark: Is it more likely for more practices to be for sale? In a really competitive market? The answer is yes, of course. What else?
Howie: Yeah, First thing you ask is Why is it for sale?
Mark: Why is it for sale? Right?
Howie: Because the previous dentist beat his head against the wall
Mark: Gee, 42 year old doctor, why did you all of a sudden decide not to continue on in dentistry and move to Idaho and become a farmer? Right? Why did you make that life choice at this point in your life? Okay, it’s one thing to be a 67, your old dentist who’s you know, who’s basically just done, right? I don’t want to do dentistry anymore, I want to go live in Florida with my wife, right? It’s another thing for a dentist in their mid 30s or 40s or 50s to be selling their practice, huge indicator, go look at the doctor patient ratio in that in that surrounding. And that surrounding area.
Now for those of you people who are in a very competitive market, who also have, also know about other dental practices in or near you who may or may not be for sale, or they may be manned by you know, someone who’s in their 60s or early 70s and may be contemplating retirement. What you’re talking about there is acquiring a practice for the purposes of market consolidation. Now, you can turn a one to 600 market into one to 900 market really quick if you eliminate dentists, the way you eliminate dentists, you buy them.
Howie: Buy up their charts.
Mark: You buy up their charts, okay. There’s another opportunity that you met, because we have doctors old dough, they’ll send us they’ll go to our website; there’s a little iPad on our website, that’s the entry to a client survey. And that’s where people go to give us basic information before we build a marketing plan for them. And a lot of times they’ll go in there. You know, and they’ll say, you know, I want to grow my practice, I want to be aggressive, I want to do more fun dentistry, I want to do implants, I want to do this that the other thing, and we go do an analysis of the market and it’s a 1 to 600 for the next 20 miles.
And no amount of money no amount of marketing, no amount of genius, no amount of testing, training, no amount of anything is going to penetrate a 1 to 600 market and any reliable fashion. We go back to the doctor and say Doc, how do you feel about taking your dental marketing budget and buying a dental practice? And the doctor with a lot of times goes yeah, I never thought of that. I said, Well, in a 1 to 600 market, there aren’t enough people to go around for the dentists who are already there. Y’all need 750 active charts just to support a 30 hour week. There’s only 600 humans. Okay, so.
Howie: Even if you got all your, all of your fair share, you’d still only have half or three quarters of a practice.
Mark: Right? So we, you know, I got my buddy Guido over here, you know, for a six pack, he can go kneecap some dentists for you. But Plan B is gotta be, you know, purchasing a dental practice, right, then that that’s a very viable. Now it doesn’t involve our firm, we don’t do that. We don’t do acquisitions, we don’t do transitions, we don’t do any of that stuff. Okay.
But as a dental marketing firm, it is our primary duty to counsel you whether or not we do the work, right? Um, and that’s one of the times where we will counsel somebody away from us. And we’ll say, Hey, Doc, why don’t you go buy a couple of these two or three of these practices and assimilate the patient base into the Hours of operation and your operatories and the dentist that you currently have. That’ll be cheaper in the long run, then it will be to put that money on the street and try to attract people into your practice, because they’re just simply aren’t enough of them around. So a lot of times that works. I’m dentists, go ahead.
Howie: Let’s take a little break here. And so we can get our ad and then we’ll come back and we’ll wrap this up. There’s some more things to know about this. We have an ad. Yes, we do. Here it comes.
We hope you are enjoying our podcast. Let me ask you, do you have a roadmap for your marketing? Why not let new patients incorporated do it for you. Our marketing plans have been proven effective for over 27 years for hundreds of practices across lots of different countries. We will give you the marketing data for your area, a marketing budget will show you how to allocate your budget. And then we will show you the proper deployment strategies for each medium. Click on the header where it says complimentary marketing plan when you go to www.newpatientsinc.com
Howie: Alright, we are back.
Mark: That was our ad.
Howie: Yeah. Pretty cool, huh?
Mark: We’re a dental marketing firm. We can do that.
Howie: Yeah. So we were we were talking about dentist buying a dental practice.
Mark: Buying a dental practice.
Howie: Mitigate the lousy dentist population ratio?
Mark: Exactly. Now let’s take the exact opposite. Because some most of the time when you take the opposites, the middle makes more sense. Let’s take the exact opposite. Let’s say you’re a dentist and you stumbled upon, Well, let’s say that you’re a dentist, who wants to live in South Eastern Indiana wants to treat children. And you do the numbers. And you see that, Excuse me, southeastern Indiana is a 1 to 32,000 doctor patient ratio
Mark: 32,000. Oh, is there anyone that is willing to work on children? There’s 32,000 kids running around?
Howie: Oh, yeah. Yeah. Okay. Yeah, that makes sense.
Mark: So let’s say you’re that dentist. Oh, my God. That’s wonderful. Right? What an incredible opportunity. That would be. And the let’s say you came to us. And you said, Well, what would be your counsel Mark? What would you say I should do? What would you do if you were me Mark? I would take as much budget as I possibly could. And I would put as much of it on the street as fast as I could. I would build that out so big you would be, competing would be unattainable. Like a competition would come in and look and just say Never mind.
We’re just going to move away. Most dentists would look at a market like that and say, oh, cool, I got it all to myself. I can take my time. I don’t need the market. I’m just going to hang a shingle. A Hell, I don’t even need a website. I’m just going to go to the local elementary school, introduce myself to all the kindergarten teachers, and I’ll be a millionaire Pedodontist by the end of my second year. And that might be true. But the risk you’re taking is inviting competition in.
Howie: And especially at the corporate level.
Mark: Especially at the, Oh my god, can you imagine? And they will, they will eat your lunch with their dental marketing budget. Right.
Mark: So some of these things are counterintuitive to what you might think some of our counsel might be counterintuitive to what you might think, on new doctors looking for their very first sight their very first startup. I’m actually we’re doing a couple startups now. Wow. Do not open, we have probably three or four startups this year who are going to start up in like November, which is the worst time to be a start up. So let me give you some free advice.
The best time to open your doors would be I would say January 1st, January, February, March, April, May, June. You have a good solid six months of good statistical months to promote dentistry to the masses to get yourself up and running. Probably the last month you want to open up your doors and have a grand opening would be let’s say the second week in November.
Mark: The next six weeks are dead. Mom is toast. Got Thanksgiving, you got Christmas, you got New Year’s, you got all that stuff and parties and kids and you know all that all that extra stuff that mom has to do in those time frames to take all of her attention away from what you’re trying to, to provider. So I there’s some free advice. They’re not really location based on however, it could be the opposite based on location. You could be opening in February or excuse me, you could be opening in Florida. And what arrives in Florida every year in November Howie?
Howie: Well these people, they call them snowbirds,
Mark: Snowbirds, right? So if you’re in a Snowbird community of Florida, some sections of Arizona, actually, some areas of the panhandle of Florida and even over into Texas, experienced the Snowbird phenomenon. If you happen to be in, in a place like that, then obviously you have to make adjustments accordingly. Um, other locations, signage, I would definitely choose having the benefit of maximum signage allowable. On a busy street, I would I would offer plenty of parking. You may not want to do ortho now, but at some point in the future, you may have an orthodontist on staff and if you ever have an orthodontist on staff you need however many opportunities wide every 10 minutes for every hour that orthodontist is on staff.
Howie: Yeah. And you need also corresponding parking space. I know that’s what he does. The dentist right across the street from me. He got a roaring practice going and then you know, he ran out of room to put people. It’s a capacity issue.
Howie: He had to move down the street. Anyway, yeah, that’s something consider before you before you open,
Mark: Yeah, there’s all kinds of, you know, all kinds of stuff to consider before you open again, let’s just let’s just recap. Number one is doctor patient ratio, nothing will trump it, nothing will ever trump it. It’s just, it’s how businesses decide on location.
Howie: It’s supply and demand,
Mark: it’s how Walmart decides on location, right? Stop looking for a different thing. That’s it, okay. Um, you know, types of patients have nitwit. Doctor patient ratio. That’s, that’s your indicator, if you have a 1 to 1200 or 1 to 1300 and a 1to 1400. Okay, look at all three potential markets. But keep those numbers into consideration. It’s going to take you longer to build a practice in a 1 to 1200 than it will in a 1 to 1400. And same things true with the 1to 1800 or 1 to 2200
Howie: it’ll take longer and it will cost more money.
Mark: That’s right, it’s going to take longer
Howie: The higher that number is.
Mark: Exactly right. It’s not It’s not an uncertain. It’s very predictable. Okay, so you know, there’s one of the things dentists hate, especially when they’re choosing a new location or building a new practices, they hate uncertainties. Well, this isn’t one of them. Don’t make it. Okay. Don’t make it in like I hope I succeed, no way to say, okay, 750 charts, if you you’re going in as a start up with zero patient assets, you need 750 charts in your first year to make a 30 Hour Work Week work. Okay, when let’s say you’re just bare minimum three, three chairs, person at the front desk and maybe an assistant right? bare bones stuff, you still need 750 charts, acquisition costs going to be $100 to $125 apiece and an average market? What’s 750 times 125 Howie?
Howie: I don’t know.
Mark: something like 85,000, right? Okay, so you know, so all of this is predictable, you’re not going to drive the acquisition costs down. Certainly, if you’re in a more competitive market than average, you’re not going to drive it down, it’s going to go up.
Mark: So this is all kind of math principle. And, I mean, there’s some subjective things in here. But, man, if you follow the math, and you follow the statistics, and the research and the testing and all that, if you follow all that stuff, hardly any of this is uncertain. Most of it is very predictable. So
Howie: right? And then, you know, of course, continuing the recap, you want to look at the potential population growth, you know, growing area or declining area, people moving out, leaving California and coming over here to Vegas, which many of them are doing that might be a bad place to set up as a joke.
Mark: Yeah, no, I And generally, if you look at a big, like not even a big city, like a moderate city, let’s say, I don’t know St. Louis, or Indianapolis, you have a big interstate going through town. And then you have those like the ones that make a circle the bypass interstates. You look at almost any city in America and you look around the outside of that bypass Interstate and there’s your growth just on the outside, go away from the center of town just on the outside of that bypass. And you will if you do your analysis, right, you’re going to find your top five dental market somewhere out there. anywhere there’s cranes that are building houses.
Howie: Yeah, yeah.
Mark: Okay. Anything else Howie
Howie: No I think we’ve gotten them wind down. So we’d like to thank all of you out there listening and we hope you come back next time and we will see you soon. Bye now.
Hope you enjoyed our podcast today. You can find more podcasts on our YouTube channel, on Stitcher and iTunes. Also on our websites, dentalwebcontent.com and newpatientsinc.com.