What can you do now to make your dental practice more profitable now, and more valuable in the future? In our next series of blog posts, we will explore the CoreValue framework of value drivers — a set of 18 factors that impact the value of an enterprise. All of these value drivers also make your dental practice more profitable now. This week we’ll examine Large Potential Market.
What’s the potential market for your dental practice? The simple answer is everyone on the planet who has teeth. But how many of those people can you serve? Until we figure out how to do a complete dental exam over the internet, your potential market is limited to those people who can come to your office.
A practice in a bigger city means more potential patients. Locating your practice in a town of 10,000 will have much less potential for growth than a city of one million. However, there are more dentists in bigger cities than in small towns, so this may not always be to your advantage. Would you rather be the only dentist in a small town, or one of hundreds in a big city?
The next level of filter is the type of patient a dentist serves. An endodontist has a much smaller potential market than a general practitioner. In the same large city, a specialty practice may be more profitable and valuable than a general practice, simply because the fee per patient is higher. A specialist in a small town may struggle to find enough patients to be profitable.
However, a particularly gifted specialist whose practice is renowned for exceptional care may attract elite patients willing to travel long distances to their small town. Such a practice could sell at a premium if a suitable successor can be found.
Another filter on market size is insurance. A dentist who accepts all insurance and who is a preferred provider for multiple networks may have a large potential market of willing patients. However, this does not need to be a filter. A dental practice that focuses on quality patient service and quality care may attract more, better-paying patients willing to pay a premium for care by a provider outside their network of preferred providers. A savvy dental practice will consider insurance a tool to be used by patients to maximize the benefits they receive, not a filter to determine which patients they see.
How big is your market?
Call our office today and we’ll help you find the ways to maximize the value of your potential market!
Eric Burgmaier, CPA, CVA is a Certified Valuation Analyst and can help you build a valuable and profitable practice. Call our office today at 505-299-8383 and talk to Eric about steps you can take today to put more dollars in your pocket now and throughout the life of your practice! Stay tuned to learn how to transform your practice into the best and most valuable it can become!