If you’re starting up a dental practice, you’ll establish a network of people – your ‘team’. Normally, those involved will include a real estate consultant, equipment and supply representative, contractor, banker, CPA, attorney, consultant and insurance broker. You’ll sign a lease, buy equipment, have you office built out, sign on a bank loan, and hire help for along the way.
The one thing you can’t take-back, improve upon or upgrade is the location. Once you sign your lease – that’s where you’ll be practice for the next 5-10 years – perhaps even longer.
Also, location stands as the most expensive piece of this equation. Assuming you’ll be signing a lease, a 5-year lease including triple-net at $5,000 per month runs a contract balance of $300,000, and a 10-year lease with the same specifications will cost $600,000 – likely more expensive than the entire cost of your project.
In a city/metropolitan area, about 80% of your patient base will live within a 5-mile radius of your office, and another 10% will work, but not live within this radius. It is crucial to establish the Dental IQ of your target population, and the dentist/specialist to population ratios. The ADA had, at one point, recommended at least 1/1700, but has since realized different areas require different ratios, all relative to an area’s demographics.
This is just scratching the surface, but ultimately, location is the single most important factor in practice ownership. Due diligence in Demographics is key, and we’re here to help.