Expanding a dental practice is an exciting milestone for entrepreneurial dentists, but selecting the right market is a critical decision. Should you expand in a densely populated urban area with high patient volume, or target a spread-out region with less competition?
This isn’t a simple either-or decision. Successful expansion requires strategic planning, industry-specific insights and a deep understanding of market dynamics, patient needs, and operational logistics.
Why Dental Industry Expertise Matters in Expansion Decisions
A recent real-world example highlights the importance of working with industry specialists. A dentist looking to expand consulted a CPA without dental expertise. The CPA discouraged them from acquiring a nearby practice, citing concerns about overlapping patient bases.
On the surface, the advice made sense — why risk redundancy between two locations in close proximity? However, the practices offered different services: one focused on general dentistry, while the other specialized in cardiovascular-related periodontal care. Instead of competing, the two locations could have complemented each other.
Had the dentist moved forward, this expansion could have provided significant benefits:
- Attracting niche patient demographics within a dense market
- Offering comprehensive care across locations to improve patient retention
- Leveraging population density to sustain both practices
- Gaining tax advantages by operating multiple locations
As a general rule, a minimum of 1,200 patients per dentist in an area provides a solid foundation for multiple practices. In this case, the market met the threshold, making it an ideal expansion opportunity. Unfortunately, the dentist passed due to poor guidance from a non-specialized adviser. This underscores the importance of consulting experts in dental practice transitions before making expansion decisions.
Market Considerations: Urban vs. Spread-Out Areas
Every market has its advantages and challenges. Here’s how dense urban markets compare to spread-out regions:
Urban Markets
Pros:
- Larger patient base increases acquisition potential
- Specialized services like orthodontics or cosmetics thrive
- High visibility and walk-in traffic boost growth
Challenges:
- Increased competition requires strong branding and marketing
- Higher costs for real estate, staff and operations
Spread-Out Markets
Pros:
- Less competition allows stronger market positioning
- Patients often stay with providers long-term
- Lower overhead costs improve profitability
Challenges:
- Smaller patient base may slow growth
- Recruiting specialists can be difficult
Financial Considerations for Expansion
- Urban markets: Higher costs but greater revenue potential
- Rural markets: Lower overhead but requires strong marketing to build awareness
- Acquiring an existing practice: In competitive areas, buying an established practice provides instant patient volume
Align Expansion With Your Exit Strategy
- Urban practices attract DSOs and private equity due to high revenue potential
- Rural practices appeal to independent buyers but have a smaller pool of purchasers
- A mixed expansion strategy—owning both urban and rural locations—offers balanced revenue and stability
Key Takeaways for Growth-Oriented Dentists
- Define long-term goals — Are you expanding for resale, steady growth, or diversification?
- Work with experienced advisers — Industry-specific brokers and CPAs provide informed guidance
- Use data-driven strategies — Evaluate patient demographics, market saturation and financial feasibility
- Think beyond immediate revenue — Expansion should align with sustainability and long-term profitability
Looking to Expand? Get Expert Guidance
Successful expansion starts with the right strategy. Professional Transition Strategies specializes in helping dentists scale their practices, maximize value, and plan for long-term success. Contact us today to explore the best opportunities for your next growth move.