[Transcript]
Spotting Practice-Friendly State and Local Governments

Welcome to The Perfect Place to Put a Practice, the podcast dedicated to helping private practice owners find the ideal location to grow their businesses. I’m your host, Mike Green from Doctor Demographics, and today we’re tackling a topic that can make or break your practice: how to spot the difference between business-friendly and non-business-friendly state and local governments.

Your practice’s location impacts everything from your profitability to your day-to-day operations. State and local policies on taxes, regulations, and incentives can either fuel your success or hold you back. In this 20-minute episode, we’ll break down the key factors that define a business-friendly environment, share practical tips for evaluating your options, and wrap up with five top business-friendly states for private practice owners. This episode will help you make smarter location decisions. Let’s get started!

Section 1: Why Business-Friendly Governments Matter 

As a private practice owner, you’re not just providing healthcare—you’re running a small business. That means dealing with taxes, regulations, staffing, and more. The state and local government where you set up shop plays a massive role in how easy or hard it is to succeed. A business-friendly government creates an environment where your practice can thrive with lower costs, fewer hurdles, and support for growth. A non-business-friendly government, on the other hand, can bog you down with high taxes, red tape, or a lack of resources.

For example, the American Dental Association reported that the average net income for general dentists in private practice in 2024 was around $207,980. But in states with high taxes or strict regulations, that number can shrink due to increased costs. Choosing a location with supportive policies can mean the difference between scraping by and building a thriving practice. So, how do you identify the right place? Let’s dive into the five key factors to look for.

Section 2: Key Factors to Identify Business-Friendly Governments 

To find a business-friendly state or local government, you need to evaluate several factors. Here are the top five things private practice owners should consider when choosing a location.

1. Tax Environment

Host: First, let’s talk about taxes. Taxes can eat into your profits, so a business-friendly state offers low corporate income taxes, property taxes, and personal income taxes. For private practices, where margins are often tight, this means more money to reinvest in staff, equipment, or marketing.

Take states like Texas and Florida, which have no state income tax. This can save you thousands of dollars each year compared to high-tax states like California. Local taxes are just as important—some cities add their own business taxes or fees that can add up fast. To get a sense of a state’s tax climate, check out the Tax Foundation’s State Business Tax Climate Index, which ranks states based on their tax policies.

2. Regulatory Environment 

Host: Next up, regulations. Private practices face a complex web of licensing, scope-of-practice, and compliance rules. Business-friendly states make these processes straightforward. For example, some states allow nurse practitioners or physician assistants to own med spas with minimal physician oversight, reducing costs and increasing flexibility.

For dentists look at how easy it is to get and renew licenses or hire support staff like hygienists or technicians. States like Arizona and Utah are known for streamlined regulations, making it easier to operate. In contrast, non-business-friendly states might require excessive oversight or paperwork, slowing you down and increasing costs.

3. Incentives and Support Programs 

Third, look for incentives. Business-friendly states often offer grants, tax credits, or loan repayment programs to attract healthcare professionals, especially in underserved areas. The Health Resources and Services Administration reports nearly 6,888 dental health professional shortage areas in the U.S., and states like Wisconsin provide loan forgiveness for dentists who practice in these areas.

These incentives can help offset startup costs or reduce financial burdens, making it easier to build a sustainable practice.

4. Workforce Availability and Labor Costs 

Fourth, consider workforce availability. A business-friendly state makes it easy to hire qualified staff, like dental hygienists. The American Dental Association notes that the median hourly wage for dental hygienists is $39.14, but this varies by state. States like North Carolina, with a strong supply of trained professionals and reasonable labor costs, are ideal.

Non-business-friendly states might have restrictive scope-of-practice laws that limit what your staff can do, forcing you to hire more expensive personnel. Check local unemployment rates and job market trends to ensure you can attract and retain talent.

5. Market Demand and Competition 

Finally, evaluate market demand and competition. A business-friendly state often has a growing population or underserved areas where your services are needed. States like Florida and Texas, with booming populations, have high demand for dental services. But you also need to watch for oversaturation—too many practices in one area can lead to price wars and lower profits.

Use tools like the U.S. Census Bureau’s County Business Patterns to check the number of practices in your target area. States like Georgia, with a balanced provider-to-population ratio, can offer opportunities without excessive competition.

Section 3: Red Flags of Non-Business-Friendly Governments 

Now, let’s look at the warning signs of non-business-friendly governments. These red flags can make running your practice more challenging than it needs to be.

    
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  High Regulatory Burden: States with excessive paperwork, frequent inspections, or complex compliance requirements—like low Medicaid reimbursement rates—can drain your time and money. This is especially tough for practices serving low-income patients.
      
      

      
    
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  Restrictive Ownership Laws: Some states, like California, have strict Corporate Practice of Medicine laws that limit who can own a medical practice, complicating partnerships or expansion, especially for med spas.
      
      

      
    
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  High Cost of Living: States like New York often have high staff salaries and steep rent due to their high cost of living, which can squeeze your margins.
      
      

      
    
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  Lack of Incentives: If a state offers no tax breaks, grants, or loan forgiveness, you’re missing out on financial support that could ease startup or growth costs.
      
      

      
    
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  Saturated Markets: Areas with too many practices relative to the population can reduce profitability. Check the Health Resources and Services Administration’s data on health professional shortage areas to avoid oversaturated markets.
      
      

      

Section 4: Top 5 Business-Friendly States for Private Practices 

To wrap up, here are five business-friendly states that stand out for private practice owners, based on their tax policies, regulations, incentives, and market opportunities:

    
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   Texas: No state income tax, a growing population, and streamlined regulations make Texas a top choice for dentists. Cities like Austin and Dallas offer strong demand and reasonable labor costs.
       
       

       
    
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   Florida: With no state income tax and a booming population, Florida is ideal for practices serving diverse communities. Areas like Tampa and Orlando have high demand for healthcare services.
       
       

       
    
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   Nevada: Low taxes, business-friendly regulations, and small business grants make Nevada attractive, especially for med spa owners. Las Vegas and Reno have growing markets for aesthetic services.
       
       

       
    
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   Arizona: Streamlined licensing and a favorable regulatory environment make Arizona a great choice for dentists. The state also offers incentives for practices in underserved areas.
       
       

       
    
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   North Carolina: With a strong supply of healthcare professionals, reasonable labor costs, and a growing population, North Carolina is ideal for practices looking to balance demand and competition.
       
       

       

Conclusion 

And that’s a wrap for today’s episode of The Perfect Place to Put a Practice! Choosing a business-friendly state and local government can set your private practice up for long-term success. By focusing on taxes, regulations, incentives, workforce availability, and market demand, you can find the perfect location for your dental practice. And don’t forget to check out resources like the Tax Foundation, the U.S. Census Bureau, and the Health Resources and Services Administration to dig deeper into your options.

If you enjoyed this episode, subscribe to The Perfect Place to Put a Practice for more tips on growing your business. I’m Mike Green from Doctor Demographics, and I’ll see you next time with more strategies to help you thrive. Until then, keep building that dream practice!