New dentists have a lot of information to consider when choosing where they would like to establish their practice. In fact, the information can be very overwhelming. However, when properly evaluated, it will provide an excellent starting point for making a final decision. Some might think that a simple demographic study of the area is enough, but that is only a small piece of the puzzle. Here are some items to consider that may have a great deal of impact on your decision:
•Demographic data and per capita income
•Consumer spending trends
•Lifestyles and buying behaviors
•Distribution of dentists in the trade area (overserved or underserved)
•Average net income of dentists in the area
•Location of schools, churches, and other community centers
•Traffic count statistics
•Drive time data
Most people are familiar with the need for demographic data and per capita income, but any decision made without additional supporting data will be a risky one. For instance, a target area may have great demographic data and high per capita income, but be overserved by dentists in the area. This would result in a poor opportunity for a new dentist trying to compete in this area. It is quite typical to see areas overserved by dentists, since these are usually attractive areas to set up shop. Similarly, traffic count statistics might be high, which is ideal for retail, but if it results in longer drive times (more than 10 minutes), then the location might be less attractive.
Retail organizations have been performing location analyses for many years. Dentists should consider the same approach since they are also establishing a retail location and presence. There are many sources for this type of data, but you may want to ask your CPA for assistance. They should be able to provide this service at a reasonable fee, depending on the depth of information required and the number of locations assessed. It is a worthwhile investment, given the significant impact such data can provide. Location is one of the most critical decisions you will make when establishing your practice — don’t underestimate its importance.
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