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The Perfect Place for an Orthodontic Practice by Scott McDonald

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In the 1933 novel, Lost Horizons, a troubled member of the British Diplomatic Service seeks to find the perfect place. Dubbed "Shangri-La," it had everything: peace, harmony among its beautiful inhabitants, and endless longevity for all. It also had the very attributes that many orthodontists consider the "perfect" place to practice: no competition, fee-for-service patients and a faithful patient base. So, does the perfect place to practice orthodontics exist only in fantasy or remote history, or can it be found today?

The point is not to find the perfect place where every aspect of practice is seamlessly and effortlessly discovered. Rather, the goal is to find an acceptable place where a hard working professional can build a practice in sufficiently fertile soil, take root and thrive. Experience has shown that there are some elements of a practice location that must be present, but not all of these practice elements are equally necessary nor must they be found in precisely the same quantities to justify the planting of an office.

Fertile Soil

Ironically, this is not the first aspect of a practice location that many clients ask about, particularly those who are young. Instead, they want to find a place with no competition. Finding a place with no other orthodontists has some advantages but as discussed later, it is also an indication of why that place might not be suitable.

When we speak of fertile soil, there are two aspects to be considered when looking for the ideal place to practice. The first is the number of potential patients. The second is the potential for growth.

In the first case, we know that many people of all ages and income strata need and deserve a good orthodontist. But the simple fact remains that there is a subset of the general population that is more inclined to seek this specialty to a far greater degree than others – adolescents, 10-14 years old. Sure, many patients older than 14 (or younger) seek to get braces (or their parents want to get them on their behalf ). But if we are examining a site for its potential, we want to find a place with a significant number in this age range because it is an indicator of future growth for the practice.

While it is tempting to consider a population that has a large percentage of this age group, this is not really an answer to the area’s potential. In most communities in the U.S., the average percentage of 10-to-14 year olds ranges between five and 6.5 percent. But if the base population is small, even if the percentage is 10 percent, there may not be sufficient potential patients to support a full-time practice. For this reason, knowing the percentage of adolescents in the potential age range is helpful but it is not the answer to the area’s fertility for practice. This is especially true of a new or start-up practice.

Instead, we want to know the actual number (or census) of 10-to-14 year olds. Even if that percentage is only four percent of the total, if there are enough of them, a practice can flourish. Typically, we look at a census of 10-to-14 year olds to fall into the range of 1,500 to 2,500 within a practice draw area (PDA). The trick is to find what the PDA is for a particular practice area. To take a realworld example, if we consider Peoria, Illinois, the community draws from a 15-minute drive-time area. For anyone who has been to Peoria, there are many outlying communities that depend upon this city for its jobs, entertainment, retail activity and professional services. Residents in the outlying neighborhoods think that driving 15-minutes to get into town is no big deal. On the other hand, practices in Atlanta, Georgia, which has a much larger and densely populated downtown have to expect that people will want an orthodontist that is five minutes away by car. Therefore, the PDA is smaller and more concentrated on the population near that site.

There is an additional caveat, however. If the households that these 10-to-14 year olds fit a particularly desirable demographic character, the lower range will support a practice much easier than one where they don’t fit that character. There are several demographic factors we consider. These include the educational-attainment level of parents, disposable income and housing type. There are more factors to consider but these are the big three. If parents are well-educated, have money, and live in an owner-occupied housing unit, it tends to yield more potential patients.

The other aspect of a practice area’s fertility has to do with potential for growth. There are many ways to define this and they differ from one region of the country to another. True, if there are more people moving into an area, an orthodontist will have an easier time with a new practice. It is no surprise that as one drives up to the site, there is an orthodontist sign to greet you. We look at development when it comes to potential for growth. For example, in our neighborhood, there is relatively little new housing growth (particularly for single-family homes). On the other hand, ground has just been broken for a fourth office park near an interstate freeway. A large federal project is likely to open in the next year that will employ many thousands of new workers. Is there sufficient population to support a new orthodontic practice right now? Probably not. But if you want to consider locations ahead of the curve, it makes sense to put a location like this on the map.

Much of what we and other location researchers do is keep track of development and assess what its nature is and its impact upon continued growth. By the time the numbers for new housing are released, it is often too late. That is why development potential often trumps population growth as we look for practices that are ideal.

Competition Revealed

"Find me a place with no competitors!" No problem! There are lots of places that are inaccessible and secret. You just don’t want them. When such a location is presented, our first research question is, why is no one there now? There is a good reason. It is most often too few potential patients, poor employment, development or a strongly negative demographic character. Actually, we have found that a little competition can be a very good thing.

Even a savvy orthodontist can be driven to distraction trying to count the number of potential competitors, let alone real orthodontists. That is why the most important place to practice is in the places with most fertility. Some orthodontists are stuck on the idea that the competition-to-patient ratio is the most important. The number we use is on a sliding scale. If you have one orthodontist to 1,250 10-to-14 year olds in a defensible PDA, you are in a threshold practice location for a start-up. This assumes that the demographic character of residents is average and the overhead is not excessive. Just keep in mind, this is a guideline and not a commandment. We want growth and development to go along with that threshold. In locations that have a poor demographic character, that number could easily go up to one orthodontist to 4,000 10-to-14 year olds before a practice can really make a go of it.

The best place to practice is definitely not inaccessible, remote or secret. It will be where the people are. But finding the right people in sufficient numbers is not something that will fall into your lap. There are outstanding locations in the United States right now for the right doctor who is willing to do the research.

Author's Bio
Scott McDonald is the president of Scott McDonald, LLC, and DoctorDemographics.com. He is the former marketing manager at the California Dental Association. He consults and lectures on practice site analysis and the psychographic impact on dentistry. Scott is currently a master’s candidate in Communications at Brigham Young University. He can be reached at 800-424-6222 or by visiting DoctorDemographics.com.
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