Advantages Of Owning a Rural Dental Practice
Personal LifeOn the personal front, the African proverb “It takes a village to raise a child” could not be closer to the truth. Your neighbours include health care providers, teachers, business owners and your children’s classmates. You will find that you will quickly develop personal relationships that will help you and your family grow and succeed. In a small community, you can maintain your culture and beliefs while getting involved in the many initiatives the community and surrounding area has to offer, such as sports, recreation, art, and drama. These are just as viable, if not more so than in a larger urban centre. Living rural allows the time & opportunity to enjoy and promote a healthy lifestyle. Having two of our children and grandchildren settle in a smaller community, we have seen first-hand the benefits that life offers. Rural dentists can often set their own schedules and patients work around these schedules, in start contrast to dentists in cities, who often must accommodate with evening and weekend hours based on competitive pressures and patient demands. Also, with commute time from home to office often being as short as 10 minutes you have more family time. But if you miss the commute, how about a satellite practice in a neighboring community 45 minutes to an hour away?
Financial PerspectiveWhen you look at a rural practice from a business and financial perspective, your purchase cost is much lower. With the cost per patient and overall valuation being lower there is less bank debt and therefore a much higher rate of return. The range of selling prices for rural practices is from 3.5-5 times earnings, compared with practices in urban centres which tend to sell for anywhere between 5-7 times earnings. This makes rural practices some of the best deals available on the market.
As well, in rural communities the practice is often located in a community-owned facility with rents considerably lower than larger urban centres, or in a commercial building often owned by the seller, and again at very low real estate cost. Both scenarios immediately contribute to an enhanced cash flow. That cashflow allows the opportunity to make a robust retirement plan.
50 years later still in rural MB. Best decision we ever made.”
Patient Base and ProceduresIn smaller communities there is a more loyal and committed clientele, as they appreciate your service and want to ensure you stay in the community. Often times, they will drive long distances just to have the same dentist or hygienist who understands their situation. In some cases, rural dentists are the only provider servicing multiple towns, which translates to a steady and reliable patient base. We all know that the cost to acquire a new patient is in the range of 1.5 to 2 times the cost of maintaining an existing patient. One of the most fulfilling aspects of practicing dentistry in a rural community is that there is opportunity to do more procedures (where needed) on a portion of the patient base than they may have previously had. Younger dentists tend to be more proficient on a wider range of procedures than some retiring dentists. Or, they may be motivated to spend more time at the outset to catch up on needed procedures such as amalgam replacements or crowns. In rural practices that grow quickly, some owners have the chance to bring in specialists to treat the patient base.
Community ServiceVolunteerism is not only expected but needed. In rural communities, personal care homes are an area of desperate need for dentistry. Most residents of these centres are grateful to have you work on their mouths. This kind of contribution may help to fulfill the desire that we as dentists have to give back to the community.
But… I Want to Live in the CitySome have told me that they want to be closer to the city, where they can enjoy nightlife, restaurants, and activities. The reality is that they often work 2 or 3 associate jobs without ever building equity in their own business. Moreover, the hectic pace that comes with working as an associate in multiple practices makes it difficult to have a high-quality family life (especially for dentists with young families), or to enjoy all of the benefits of living in a city. So consider this – do you want to deal with the daily grind of traffic, congestion, and constant competition for patients? If the lure of city life is great, but the desire to own is greater, let me suggest that a workable compromise is to purchase and operate a rural practice for a 5-10 year period. This allows the opportunity to set down roots with a steady patient base, learn how to be a practice owner, and realize respectable cashflow. It may be a sacrifice for those who are used to urban life, but for a temporary period of time. In the end, beauty is in the eye of the beholder, and we make trade-offs to suit our life goals. I’d like to leave you with this thought – In the words of one of my satisfied customers, “Get out of the city for the lifestyle… the dentistry is a bonus!”
Written by: Tom Breneman