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So, you want to open an orthodontic practice? – GET
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So, you want to open an orthodontic practice?

I don’t know who you are and where you live, but in many countries, my first advice would be “don’t do it and go and work for someone else.” However, let’s assume you don’t live in one of those countries or you are stubborn enough to open your own clinic anyway.  The very first question you should ask yourself is “where to open?” or “where to buy an existing practice?”

You could base your decision on where your friends and family live and where you would like to settle. Business wise though, this may not be the best decision.  On the other hand, a successful business may not be your priority, instead choosing life, which is many other things, such as work to live and not live to work, and so on.

My advice to you is that going into financial default with a practice is not a lot of fun, and eventually, financial misfortune would also affect other aspects of your life. 

On the other hand, who am I to dictate what priorities you ought to make in life? As for myself, I have made enough mistakes to stay away from the podium on this one.

However, let’s say that you have decided to ride along, and want to make a decision based on numbers, statistics, and demographics, to maximize your chances of success with your new clinic.

Which parameters would you want to look at? 

1. Who are your potential patients?

The location of your practice will define the group who is going to constitute the majority of your patients.  If you open in the middle of the City in London, most people walking into your practice will be adults from the neighboring offices.  If you open in a suburb populated by families, most of your patients will be children and teens.  Let me be clear about this:  the latter is the best option.  I am aware that many KOL portrays adult orthodontics as the new unexplored gold mine, but most of these people also make money holding courses about techniques for “adult orthodontics.”

The harsh reality is that the conversion rate for adults is much, much lower than for children. They are much, much more demanding, and last but not least, they are the target of many companies who are addressing direct consumers (DIY orthodontics, anyone?). We could have endless discussions about the legitimacy of such companies, the results they achieve, and their prospects of survival in the long term, but one thing is sure, they create downward pressure on adult treatment pricing. For example, if someone is offered treatment with aligners for €1,500, you will have difficulties in convincing them, that they have to pay €8,000 no matter the degree of difficulty.

2. How many patients do you need?

In order to be able to give you an answer, I should know many things about you. The most relevant, which country you live in. There are countries (like many northern European ones) in which orthodontics is heavily publicly subsidized. The treatment price is quite low, patient delegation is allowed, and the orthodontist is required to treat many patients.  There are also countries in which the price per treatment is higher, and where delegation is not allowed and the number of patients treated is not as high (some southern European countries). Finally, there are also countries in which the price is kept low and delegation is not allowed, in which case I strongly recommend to expatriate.
Second, I would need to know which model of orthodontic practice you have in mind.

Generally speaking, if you drive a niche practice (i.e., lingual only orthodontics with high fees) or a high-volume practice based on lower prices, then you will need population density in order to get your numbers in place.

Finally, I would also need to know your level of fixed expenses, which is what is going to determine your break-even point, and how many patients you will need to have, to stay open.  I assume you now can do the calculations. If not, I seriously would consider employment and postponing opening your own clinic for a couple of years.

3. How large is the area you can serve?

I am aware that some KOL’s like to brag about patients traveling to see them from foreign countries (very often, these KOL’s are the same mentioned in point 1). Let me tell you a secret: this may be true for other dental specialties, but in orthodontics, it is just not true. If you visit these KOL offices, you will find the “traveling patients” are just a couple per year, and that their bread and butter comes from the local population, just as for you.  Statistics suggest that patients on average are prepared to travel about 12 km to reach a dentist, and this is the reality.  Obviously, in rural areas, this can be more, out of necessity, whereas in urban areas it can be considerably less, probably not more than 3 or 4 km.

4. How many patients can a specific area provide you?

The percentage of under 18 years old is extremely varying from nation to nation and even more from one geographical area to the other. Therefore, you should try to gather demographic information relative to the area you have chosen.

The best way to determine the potential number of new patients is to take into consideration the number of 13-year olds (or any other subgroup under 18) in a given year. On a very general statistic level (using the USA as an example) the population under 18 years old is roughly 19 % of the general population.  Any given age will represent about 1% of the general population, which means, an area of about 100.000 inhabitants will have on average of approximately 1000 13-year olds. These are the main pool of your potential new patients.

You will then have to define the treatment need of this group. In countries like the USA, the treatment need is probably well over 50 %.  In Denmark, it is defined by the state approximately 23 %.  Hence, this number is strongly influenced by local regulations and socio-economic factors. You will need to find out about this before starting.

To these numbers, you can add some extra potential patients due to re-treatments, adults who were not offered treatment in the past, surgical patients, etc.  In my personal experience, this can drive the number up to nearly double (especially in countries with the low need for treatment).

This could mean, an area of 100.000 inhabitants has the potential to generate between 500 and 1000 new patients per year, depending on local regulations and socio-economic conditions.

5. What is the potential growth of the area?

The number of patients which an area offers, is only marginal information.  Unless you do not plan to retire two years after opening your practice, the long term potential growth in the area, is much more important than the present data.  In mature markets like the US, such data can be provided to you by the local chamber of commerce. You can try the same in Europe, with mixed results.  Determining the potential of growth of a township is a complex matter (see here: https://www.intechopen.com/books/perspectives-on-business-and-management/measuring-urban-development-and-city-performance) which takes into account several factors, such as quality of living, culture offering, infrastructure for business, and so on.  I am afraid it is not so much a do-it-yourself thing.  One general principle though, which I witnessed several times in my career, it is better to avoid areas in which the whole economy is depending on one player (like a large factory).  In such situations, the work you put in building up a business can be swept away overnight.

6. What is the level of competition?

In Europe, it is almost impossible  to find an unexplored area today for yourself.   Wherever you go, you will have to face some existing competition. Let’s say that on very general terms, the best situation would be a competitor with a low level of service and a long waiting list and the worst the opposite, a competitor with high level of service and no waiting list. Of course, there are lots of intermediate situations.   To find out what is the state of competition in the area you selected, a competition analysis should be carried out systematically, but this is a long topic, and may be the subject of a future blog post.

I have practiced in 5 different countries throughout my life, and all in all, I can give you one final advice. Don’t rush it. Whenever you think about settling down, try to work in the area for 6-12 months, because numbers can only help to an extent. There is the intangible, and the impressions you get by being in the place.  Knowing when to pass on something is just as important as deciding to start to build.

In any case, I wish you the best of luck.
I am an orthodontist with some special interest in business and management, plus a generic curiosity. A little disclaimer. I have a contract with an orthodontic material producer which sponsors my courses and which produces some brackets that I helped develop. I receive no royalties (yes, probably I am an idiot !) and I must say emphasise I was never told what to say or do.
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