Susan Tibbles
Executive Vice President
Is knowing the Dentist to Population ratio enough to determine if a location is viable for a startup dental office?
Many dentists focus on a key number when determining if a location is good – dentist to population ratio. This number can be presented numerous ways: dentist to population ratio by zip code, dentist to population by city, and dentist to population by surrounding area. Dentist to population by zip code is common in dental demographics. Unfortunately, very few dentists actually locate right in the middle of a circular zip code, so it does not reveal the dentists that are actually surrounding a potential site. When was the last time you looked up a store’s zip code before determining if you would shop there? Naturally, you would go to one that is in your area regardless of zip code. 
Dentist to population by city can be a challenge as well especially in large cities. There may be opportunities in an area of the city that are not uncovered if you look at the whole city rather than the areas or neighborhoods. Again, potential patients are often looking at convenience – someone close to work or home. Again, looking at the area surrounding a potential location and the competition in the areas surrounding an office yields much better information.
Once you have figured out the area for your competition, it is important to look at WHO is your competition. If you are a family dentist, you are not competing for patients with an orthodontist or an oral surgeon. You need to determine YOUR competition for the services you offer.
Other factors that need to be consider in determining if a location is “good” include how much growth is expected, how much people spend at the dentist, and how many people actually go to the dentist. If an area is shrinking, the dentist to population ratio will get worse overtime unless the number of dentists decreases as well (hopefully due to retirement and not going out of business). In areas of growth, it is important to consider additional dentists moving into the area. If the population is so small, consider the effect of one other dentist coming in. If you have found a “hot” area, likely others have as well.
3000 people with 38% going to the dentist = 1,140 potential patients who average $400 in spending per year would be $456,000.
2000 people with 45% going to the dentist = 900 potential patients who average $600 in spending per year would be $540,000.
Clearly, the second scenario can bring in more revenue seeing fewer people. The growth, number of potential patients, and the spending done by those patients are just as important to consider as the dentist to population ratio.
Other influencing factors for dentist to population ratios include the employee base in the surrounding area. A higher number of employees can boost the potential patient base increasing the potential of the area.
Dentist to population alone does not determine if an area is good. Without considering numerous other factors, you could pass a location that is solid or worse – get into a location that is not viable.
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