Article 1: Location, Location, Location
We believe that location to be the single most important factor to consider with the purchase of a dental practice. Business issues aside, the location of your practice will have a major impact you and your family for years to come. It is vital to find a practice in a place which fits your lifestyle, family needs, and personal & professional aspirations. Whether you ready to uproot and relocate for a new adventure, looking near to where you practice now, moving back home close family, or just looking for the highest producing practice you can find; there are dozens of questions that a dentist should think about before purchasing a practice. Here’s a handful to start the discussion:
Personal and Family Questions to Consider
- What do you like to do in your leisure time and does this location meet your needs?
- If you’re married, how do employment prospects look for your spouse?
- What is the housing market like in the area and how long of a commute would you consider?
- Do you have kids or thinking about that in the future? Have you thought about schools which will meet your family’s needs?
- Do you want to be an active member community you practice or would you rather live and socialize in another town?
- Might you go back to school for a specialty and is there dental school close?
- Are you licensed to practice in this state and if not, what is the licensure process?
Business & Practice Questions to Consider
- Are you renting or buying the real estate? What is the price per sq. foot and the annual rent or mortgage payments?
- Is there sufficient space and number of chairs today? Capacity to grow in the future?
- Is it close to major roadways, have sufficient parking, near other popular businesses, high or low traffic road?
- How updated is the building and equipment? Will you need to do major improvements?
- How many dentist & specialists per resident in the area?
- How many employees per dental office?
- What is the median household income?
- Ratio of patients with insurance?
- Population breakdown by age?
- Average dental spending per person?
- Historical and projected population growth?
- What are the competitive dynamics?
- Is the employment base diversified or concentrated to a specific industry and large employer?
- What is your target population? Aiming to have an upscale practice or specialty practice? Will your practice be FFS, PPO, or accept Medicaid?
With all those questions and many more to think about when purchasing your dental practice, we’ll give you with three final things to remember.
- There is also no single negative factor for a practice location which cannot be overcome. Trust your instincts when it comes to location. With hard work and a good plan, you’ll be able to find solutions to deal the challenges of a “bad” location.
- Numbers alone won’t tell you everything. Some people say that 1/1,500 dentist to resident ratio is “ideal”, however there are many large and successful practices in areas with ratios of 1/800 or less. Also, find out the facts which are relevant for your practice. For example, the number of schools within 5-mile radius is very important for a pediatric dentist but not necessarily for a periodontist.
- You’re not alone. There are professionals which can help you obtain this data and understand answers to these qualitative and quantitative questions. In Article 2: Professional Advice, we will talk about the variety of professionals which can assist with the purchase a dental practice, including those which will find the right location for you.
This article is written by Brian Pender, President & Founder of Fairway Healthcare Partners. Brian is a Certified Valuation Analyst and an expert in business valuations and practice transitions. For more information, visit www.fairwayhealthcarepartners.com and contact Brian email firstname.lastname@example.org or call 585-260-7566 anytime.