As we know well here at Dentagraphics, one of the key challenges that dental practice owners face is determining the ideal location for their offices. While finding a market that offers a demographic match with your target patient base and limited competition is undoubtedly important, equally crucial as a multi-location practice owner is ensuring that offices are situated at an optimal distance from one another. The decision to space practices too closely or too far apart can have profound effects on the overall profitability and efficiency of the business.
Of course, one of the primary benefits of owning multiple dental practices is the potential for economies of scale. By consolidating purchases of supplies, equipment and sharing specialized staff between offices, a dental practice owner can achieve significant cost savings. These efficiencies can translate to improved profitability, competitive pricing for patients and, ultimately, higher practice valuations.
But, while having practices in close proximity may seem like a solution to the problem of shared resources, it can also present a challenge in the form of patient cannibalization. If two practices are located too close to each other, they may end up competing for the same patient pool. This can lead to reduced patient numbers for each practice, higher marketing costs and, ultimately, lower profitability.
Neither Too Close nor Too Far
In astronomy, the goldilocks zone is where the earth resides. It’s the perfect distance from the sun, neither too close nor too far, so that water stays liquid.
So, what's the Goldilocks Zone for a dental practice? How far should one office be from another in order to benefit from economies of scale while not competing against itself? There isn't a one-size-fits-all answer, as this depends on various factors like population density, market saturation, and the specific services offered by each practice. For instance, in a densely populated urban area, practices might be able to coexist profitably at a shorter distance than in a sparsely populated rural region.
Finding Your Goldilocks Zone
Most active practice owners inherently know what distance is too far. They themselves would not want to split their time between the two practices because the drive to at least one of the locations would be substantial. But too close? That’s harder to say.
With Patient Plotter, though, dental practice owners can now visualize exactly - down to the address level - where their patients live. Even better, Patient Plotter looks at how far patients are willing to travel to reach the office and whether they come from the north, south, east or west. Not only are there site planning implications to consider but also marketing opportunities in areas where market penetration is lower than distance and demographic conditions suggest that it otherwise could be. Imagine realizing that you aren’t getting many patients from a neighborhood to the north where residents look just like your existing patients!
Patient Plotter is now available with the new Dentagraphics Grow Plan, which starts at $199 per month. The upload process is easy, and it’s just a matter of minutes before users can see their mapped patients as well as insight data to potentially act on. Want to see it for yourself? You can schedule a demo here and a member of our team will walk you through what we’ve been working on!
Unlock Your Path to Dental Practice Ownership with "My Search"
Transitioning to practice ownership is a big change with lots of steps from start to finish. That’s why we created My Search, a tool that helps you manage the process of becoming a practice owner from a high level. While it’s not intended to replace a consultant who is in the trenches with you on a day-to-day basis, My Search is designed to make your dreams a tangible reality.
Building a stellar team is paramount. Whether you're in search of a savvy real estate agent, a dynamic marketing firm, a meticulous lawyer, or a strategic CPA, My Search makes sure that you haven’t forgotten someone from your roster. And if you need recommendations? Tap into our directory of vetted professionals. We only recommend companies that we have worked with ourselves.
But that's not all. Our innovative timeline function ensures you're not just setting goals, but achieving them. Every step, every milestone, meticulously mapped out to guarantee you stay on course.
Why leave your success to chance? With "My Search", you're not just envisioning success; you're actively crafting it. Dive in now and transform your aspirations into achievements!
