In an saturated market, can still a start up work?

[TheClutch]

Let's say in an competitive dentistry market (Seattle, Houston, Phoenix, Tampa, etc), how does a start up dental practice do? Of course, it is case by case. But what are pros and cons of a start up in a saturated/semi-saturated & competitive market??

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[TheToothsayer]

Avoid it. Serve more people who need it, earn more because you need it, flourish faster because the community deserves it.

There are still desirable areas to live in that aren't staturated. You will have to do a little research. Here in Virginia, we have very up-scale neighborhoods with great school systems, plenty of patients, and a low cost of living.

Toy around with the BLS. See what you can find.

Saturated markets are asking for trouble. Don't go 600k in debt for no reason.

 

[charlestweed]

America is the land of opportunity. You can set up your practice anywhere in this great nation of ours and be successful. In my opinion, location is not that important. It’s how you market your office. It’s how you control your overhead. The less money you borrow from the bank, the more financial freedom you will have. You get rich not by how much you make but by spending less than what you make.

When I set up my first practice (in Southern CA), I didn’t look at the number of orthodontists who practice nearby. Instead, I looked at how cheap the rent was. I tried to spend as little on the construction, supplies, and equipments as possible. The less I spend, the more I am able to keep.

 

[txaggie03]

Avoid it. Serve more people who need it, earn more because you need it, flourish faster because the community deserves it.

This. One thousand times this.

 

[A6project]

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[TheClutch]

Avoid it. Serve more people who need it, earn more because you need it, flourish faster because the community deserves it.

There are still desirable areas to live in that aren't staturated. You will have to do a little research. Here in Virginia, we have very up-scale neighborhoods with great school systems, plenty of patients, and a low cost of living.

Toy around with the BLS. See what you can find.

Saturated markets are asking for trouble. Don't go 600k in debt for no reason.

Deleted.

 

[DrJeff]

A start up can certainly work in a saturated market. You'll more than likely have to work at it much harder than you would in a non saturated market, but it can work.

 

[Firm]

Start ups in saturated markets are tough and required much more effort,creativity and critical thinking to make it work. Personally, I feel that you must have a "side" job along with your own office to help cover your expenses. The problem is no one will hire you if you are competition, so usually you will have to travel to another DMA to work. That could be a multi-hour drive daily or weekly. Also, when building your office space, choose a location where there was a previous dentist. Hopefully the space will have been plumbed and all you need to bring in are chairs, paint the walls, new flooring, computers and xray equipment. You can easily do this for under $50,000 and make it look nice. You just can't spend a lot of money on fixtures, plumbing, electric.
A small office with affordable rent $1000-2000, $50,000 bank loan, 1-1.5 employees working 2-3 days/weeks while at the same time working a side job 2-3 days a week can work just off of insurance.

 

[charlestweed]

Start ups in saturated markets are tough and required much more effort,creativity and critical thinking to make it work. Personally, I feel that you must have a "side" job along with your own office to help cover your expenses. The problem is no one will hire you if you are competition, so usually you will have to travel to another DMA to work.

This was what many of my GP friends did. When they first started their own offices, they worked 1-2 days/week for the dental chains (dental chains only exist in big cities). When their own practices got busy, they quit their associate jobs.

Also, when building your office space, choose a location where there was a previous dentist. Hopefully the space will have been plumbed and all you need to bring in are chairs, paint the walls, new flooring, computers and xray equipment. You can easily do this for under $50,000 and make it look nice. You just can't spend a lot of money on fixtures, plumbing, electric.
A small office with affordable rent $1000-2000, $50,000 bank loan, 1-1.5 employees working 2-3 days/weeks while at the same time working a side job 2-3 days a week can work just off of insurance.

In 2 months, I will move my satellite office (which only has 4 chairs) to a bigger dental office that has 7 chairs. I'll share the space with another GP, who is a good friend of mine. I only have to pay him $1600/month in rent. I only have to spend $17k to buy 4 new chairs (since my friend already has 3). I know, at this new location, other GPs will not refer patients to me but it's ok me since I already have 4 very loyal GPs, who will continue to refer patients to me. And 80% of the new starts at my office are not from the GP referrals but are from my existing patients (word of mouth).

When the patients trust you, they don't care if they have to drive 10-20 miles to see you. Location is not important. What's important is you, the treating dentist. It's how you treat your patients. Be honest, keep the price low, and do good work, your patients will refer their friends and relatives to you.

 

[TheClutch]

What's important is you, the treating dentist. It's how you treat your patients. Be honest, keep the price low, and do good work, your patients will refer their friends and relatives to you.

Great advice. I will remember this for the rest of my life.

 

[ozzie33]

Avoid it. Serve more people who need it, earn more because you need it, flourish faster because the community deserves it.

There are still desirable areas to live in that aren't staturated. You will have to do a little research. Here in Virginia, we have very up-scale neighborhoods with great school systems, plenty of patients, and a low cost of living.

Toy around with the BLS. See what you can find.

Saturated markets are asking for trouble. Don't go 600k in debt for no reason.

Just out of curiosity, how does one determine a saturated vs. unsaturated market? Also wouldn't working corporate or as an associate in a more "saturated" market be better than trying to start up a new practice


EDIT**** I did some research on that site you posted which turned up more questions

1. I take it to be true that the fewer the dentists per 1000 people, the less saturated the market is.

2. At the same time, the location quotient seems like it would be a good determinant of saturation (a LQ over 1 implies that there are more services rendered than being consumed, this is usually used to measure products, so a LQ of 1.15 means there is exporting, not sure how it applies to dentistry)

The problem is, I'll find an area where there are only like .7-.8 employed dentists per 1000 people, but then their LQ will be very high, like 1.2-1.4. Unless the shortage of dentists per person is creating the high LQ, im not sure how this works.

 

[TheClutch]

I actually have follow up questions.
A start up is basically starting from zero patient. How would you define "semi-start up practice"?
And what makes a "full(or buying out a retiring dentist)" practice? Is it all depends on how many patients are booked per week?

 

[corymartin2012]

Is it possible to create a crappy start up in an over-saturated area. Yes.

Is it possible to create a decent start up in an over-saturaded area. No.

Is it possible to create a knockout start up in an over-saturated area. Yes.

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I say you can't start up a decent one because those seem to be the ones to go first. The practices that do well enough from month to month sometimes under rarely over. These are the ones that have the hardest hits from other new and existing practices. These practices off very medium prices for very medium service. So if someone can do better work for a slight cash increase they lose clients, if someone can offer dirt cheap then they lose more clients. They are plenty of amazing and crappy practices in over saturated areas to make these mid-level practices shake.

Now I do believe a crappy practices are akin to pricing of corporate dentist offices while supplying the same quality of work and accepting every form of payment from fish to coins to firstborn. They run because they can take those who can't afford good quality work. These are rather plentiful.

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The hard one is the knockout practice. This is the kind of pracitce you NEED to thrive in an over-saturated market. You must bring something to the table that others do not. You need impeccable business knowledge and amazing staff and perfect front office working. You must supply something that your clients can't get somewhere else:

(I know dentists who give you immediate service the minute you walk in by alerting the patient by SMS text messaging when exactly to show up)
(I know a dentist that has an AMAZING referral system that if your refer patients you recieve MAJOR discounts)
(I know a dentist that has a raffle every year and large dinner for all his clients)

Its all about being the being the top. If you are very smart with marketing and business administrative duties and willing to "give back" to your clients. You can succeed in an over-saturated market.

*my piece of advice is to set up shop about 25 to 40 miles away from a major city in the more rural system of communities and get the patients form multiple small 3000-4000 populated cities.

 

[Ferneezy]

Avoid it. Serve more people who need it, earn more because you need it, flourish faster because the community deserves it.

There are still desirable areas to live in that aren't staturated. You will have to do a little research. Here in Virginia, we have very up-scale neighborhoods with great school systems, plenty of patients, and a low cost of living.

Toy around with the BLS. See what you can find.

Saturated markets are asking for trouble. Don't go 600k in debt for no reason.

I'd be interested in hearing where "here in Virginia" is. If you do not care to be specific ballparking the region would be helpful.

I may end up practicing in the DC area when all is said and done.