[Podcast] Pin Pointing the Perfect Professional Practice Location

Pinpointing the perfect practice location

Pinpointing the perfect practice location is a challenge for most doctors. We’re here to help!

Watch the video here:

A Note from Scott McDonald on This Week’s Episode

It has been true for a long time that brokers, realtors, and even demographers have considered only a very narrow number of factors in determining practice site viability. Traditionally, this may have been due to a misunderstanding of how to interpret the available data. We knew, for example, if the population surrounding a practice site was growing or shrinking. We certainly could tell if the competition around a location was increasing relative to the population. Terrific! But the science of demographic analysis has grown and deepened while the users of these numbers have not kept up. And there is little surprise why this is so: it is heavy lifting!

At Doctor Demographics, we HAVE kept up with the complexity of the data. Let’s start with a few terms that you should know. We talk about them in this episode:

Proxemics That is the science of analysis of how far away something is from something else. For example, do employment centers have an impact on a practice area? Does the commute path make practice more or less viable? And how can you measure the impact of that nature of the commute on the success of the practice? Well, we are studying this all the time.

Visibility There are strong indicators that a site’s visibility is losing its impact on the desirability of office space while at the same time it may increase the office price while increasing traffic congestion

Covenant Areas For years a practice seller defined the Covenant NOT to Compete Area. The problem is that judges are not willing to sustain the as they can represent an unreasonable restraint of trade. Therefore, they are asking for a logical foundation on how these boundaries were formulated and how they are likely to change over time.

Travel Time The way people behave relative to a practice location is a moving target. So many factors go into the definition of Travel Time that a buyer, seller, and manager should know that it creates a moving target. These are just a few of the issues presented in the Pin Pointing episode you should know about.

Read the Transcript Here:

Scott McDonald: [00:00:15] Hello, this is Scott McDonald of Dr. Demographics. Now, as you know, we’re in the business of helping you figure out where to put a practice, where to purchase a practice, and what locations are going to work best for most offices of different types. Now, we’ve got to say that we do a lot more than we used to. We started out doing a lot of dental, but right now we’re doing physicians and other kinds of health care practices, and we’ve come up with formulas that you need to consider if you’re considering a location in the United States. Our job is to help you find locations and evaluate them to say which one might be relatively better than another. But we also want you to understand the sites that you’re currently looking at to determine are they going to make it? Are they reasonably priced? Now, obviously, we’re in a time of economic downturn. Some people are claiming that we’re in for a recession soon. If that’s true, and certainly we know that inflation is rearing its head. You don’t have the money that you once did to kind of throw away. So you’re doing research. You’re getting to know how good or bad a location might be. So our discussion is going to be based upon the new science of practice site evaluation, and we call it pinpointing. Now, pinpointing, as I’ll describe in just a minute, is not exactly the same technique that people have been using for a long time. I’m not trying to suggest that people are dumb or ill intentioned in helping doctors figure out where to go.

Scott McDonald: [00:01:56] I will, however, say that they often don’t understand the science of geographic locations, nor psychographics, nor competition analysis. So I want to introduce you to the concept of pinpointing and explain how it’s going to make a big difference in where you go. Once again, you just don’t have the money to throw away, do you? Now, site selection is really a science, but it also involves some new technologies in analysis and really looking at the figures that people had in in the old days, realtors would look at a map and they would look at a few facts and they would make a pronouncement as to what’s a good or reasonable place to go. As things have gotten more difficult demographically and in price of practice, land use and laws, it’s not quite as simple a matter as it used to be. Now few consultants, realtors and brokers, let alone doctors, understand pinpointing in site selection. As I was saying, it’s not as though they’re ill intentioned, but they don’t understand very often the art and the science that’s involved in looking at what a good location might be. It’s time to rediscover this lost science that we refer to as pinpointing. So let me explain. What is pinpointing? Now there is a time in which people have considered a circle radius around the site to be, well, normal. So what you do is you say, I want to look at the population within a five, ten, maybe 15 miles around an office, and it was considered all good.

Scott McDonald: [00:03:51] That was as good as you can get. Now, we introduced the idea of. Drive time in determining what is a reasonable thing to look at. And this is an illustration of it. This is a five and a ten minute drive time. Now, the reason it’s important is because there are lots of factors that people have ignored to this point in terms of traffic, topography, demographic trends, commute times, and of course, the other factors that one would expect, like population growth and income land values and those are normal. What I’m saying is there is something more that you need and we can offer it. So in this episode today, I want to talk about the art and science of pinpointing, which is a way of looking at a geographic analysis in order to get a head start on everybody else. It’s to make wise decisions. In a competitive market that is not cheap. Now it involves the examination of factors from a small geographic scale. Now the scale how many people are living in a geographic area, how long it takes them to get there? The factors that one has been ignoring for a long period of time. We want to kind of bring back into the mix so you can make good decisions. So stick with me. We’re looking at non demographic factors when it comes to pinpointing. Now these factors include traffic patterns, proxy mix, which is a term you may not know about visibility, ice across another term that kind of confuses some people and other factors that may prove important to a practice’s success.

Scott McDonald: [00:05:52] And it’s going to help you understand the risks that you’re taking in some locations that may not exist in others. Now pinpointing is only possible due to modern cartographic technologies such as satellite imagery. Now Cartographic is referring to map making or map analysis. It’s the combination of demographics and geographics. In saying, Is this site going to work for you? Now, if you’ll look back at those maps that I was just showing you, you know that people don’t travel in circle radii. Yes. It’s easy for you to understand. But if there is a freeway interchange or a mountain or a body of water, a major road, you know, they ignore those things in circles, assuming, of course, that what you need is just to know everybody within a five mile radius. That’s not true. There are factors that you need to know. So let’s talk about those. Hybrid data mapping is what the term that a lot of demographers are using. It’s where you’re using multi levels of analysis and data to make assumptions about the population, how it behaves. Psychographics, for example, is an analysis of how people buy things and what they value and what they want. So a practice that is a dental practice or a medical office or some kind of medical specialty is going to be fine for one type of practice, may not be good in another.

Scott McDonald: [00:07:34] This is where micro computer technology has really helped people in their analysis of what is a good and reasonable place to go. So please stick with me. I’m trying to help you. The challenge is to understand patterns of human behavior. It’s what people do that is integrated into a geographic setting. Now you know that if you take a circle of people on the north side of that circle are going to be different than people on the south side of the circle. Of pinpointing would tell you the difference between the people on the north and the south and the east and the west, even in a five mile radius. The population can be determined to how it’s different and how they’re going to behave. Again, it’s their actions, the human behavior that is important for you to determine how to market your practice and what services to offer. Because if the population wants a service, you want to offer it. If they don’t, you don’t. Now, there are lots of ways that demographers look at these facts and I’ll talk about them specifically as we go through. So I’m going to ask your patients. Every profession is working from a different scale. Now, let me just ask, as you probably know, different practices have a different geographic area or radius that they’re going to draw from. Sometimes what you need to know is not just the distance or the competition ratio, but rather the characteristics demographically of that population to determine are they going to come to me? What should I offer? Now, as an example, people will tend to travel only a seven minute drive time between their home and a general dental practice.

Scott McDonald: [00:09:33] That is not true in every case, but it’s a truism that we think is worth measuring about a seven minute drive time specialist. People will travel further, and when there is a low population density, they may have to travel much further geographically and in time to get from their home or their place of work to your office. Now, other professions have a much larger scale, or, by the way, a smaller scale or geographic scope that define the practice area. So you’ll say, are there enough people in the area to support my practice? You see, we’re measuring your risk in that area. You might also realize that the competition analysis is not a static statistic. Some areas are going to be able to have a lot more competitors in the area, given the demographic character of that population. If they have a lot more money or if they’re in single family dwellings or in apartments. You need to know that because the number of people who live and work within an area is going to vary and it’s going to change the desirability of that site. And I really hope I haven’t lost you. Now the scale changes with different professions, and I’m going to give you the simple example as dentists versus small animal veterinarians and a patient base, the pediatric oncologists versus geriatric endocrinologist is very different.

Scott McDonald: [00:11:09] You know that to go to a pediatric endocrinologist, you may have to travel 45 minutes, maybe an hour and a half to be able to find a good pediatric oncologist. You’ve got a child with leukemia. Well, that is not an unreasonable distance to go. But if you are dealing with general practices like a veterinarian or small animal practice, you’ll tend not to travel that far. Now, these are factors that you probably already know by your gut instincts, but at doctor demographics, we can actually tell you, is there sufficient population and how big is that population? Do we have enough people in that patient base to work and keep our practice busy all the time? Can we add another doctor to our practice? And and in what we’re trying to offer. That’s the point. Now there is a thing we refer to as urgency. There are some kinds of treatment that are much more urgent than others. By the way. That’s why urgent care is what it is. Urgent care, as you know, they have extended hours most often and it is their hours of operation that are most important. So therefore, the urgency of care and the distribution of competition, etc. will influence the scale. With other factors in mind. In many cases, the number of providers makes. The distances that patients must travel will quite large and can be reasonably small when it comes to the geographic area that practices serve.

Scott McDonald: [00:12:49] The size varies with the practice type. So what you’re trying to do is say, I’m not using a measurement for veterinarians and dentists. If I’m not working in that, if I’m working in an urgent care clinic, those things are going to make it better or worse for your practice. And that’s the whole point. We can analyze it to tell you, is it is it going to work for you? Now, if a big percentage of patients and potential patients come from nearby, well, that’s great. But if they don’t, you’ve got to know how far away people are and and something about their consumer patterns. Now, as you probably know, discount coupons are very popular in some areas. Sometimes they’re the kiss of death. But you see, what makes them what they are is something about the population and its character. Retirement communities draw from a common age group, obviously. So you’re going to have people who are 55 years does 65 years of age to come there. Do they want to travel by public transportation? Retirement community residents do not. They usually come by private vehicle. Their ethnicity matters as well as their housing type. Are they coming from a rental unit? Are they coming from a home? Are they renting or buying that? You see, these things are going to determine the viability of your site and we can help you figure out if that’s going to work for you. Now, these people will use the same roads and frequent and frequent the same restaurants and shop at the same stores as other people in their demographic group.

Scott McDonald: [00:14:47] So, you know, if you’ve got a lot of retirees in an area, if you have a lot of young families in the area, those young families and those retirees are going to have things in common. To make a practice viable, you have to understand the commonality of the patient base. I hope that makes sense. And Dr. Demographics, we can tell you who you’re trying to reach and how to reach them. That’s what a marketing report does. So the where and the how the these people travel, for example, mean that they have the same traffic patterns as other people in their demographic group. But if they’re in a different demographic, they’re not. So you can’t just take the flat idea that everybody is the same within an area. You’ve got to find the people who have those things in common. That’s where the art and science of demographics really pays off to determine how much risk you have in the site, but also how to promote the practice in that site to have the best return on your investment. Now the amount of traffic passing by a practice site can determine the success of the practice, but the number of commuters and the time of day of their travel is very important. Just because a lot of people live by a site or work by a site doesn’t mean that the commute patterns are going to be beneficial to you.

Scott McDonald: [00:16:17] In other words, people today have to be measured on the move. Where do they shop? Where do they work? How do they get there? That’s what a demographic report really should be telling you, but very rarely does unless you have somebody who understands your industry to know how people are going to get there and what they’re going to want once they arrive at your office. And the demographics we provide or can provide traffic maps and tables to tell you where they are, what they come from, and their demographic characteristics in motion. You ought to know that. Now let’s talk about this term proxy mix, because this is very rarely discussed, but something is important. Literally proxy mix. It refers to how close one place is to another, what’s nearby and what are the people like who work and live in that area that is nearby? Your office? In health care, how close the practice might be to an attraction like a medical center or a hospital matters. Again, this is an issue of pinpointing the office. If the practice regularly sends a patient to have blood drawn or X-rays taken a radiologist, the proximity of your practice to these vendors, labs and diagnostic centers can be a boon to the practice. But if they’re not, you need to know that. And part of what we do in our analysis is to say you need to know these people who are going to be the referral base to your office and will those people be clustered in order to make your practice viable? One can assume that a place with population clusters could really matter.

Scott McDonald: [00:18:15] As an example, those who work with people who travel to the practice from a place of work will be different from those who travel from a residence. How far an office is from the source of patients is not really a matter of demographics as much as it is a source of the population. So the relationship between the people who live and work near a site near your office or potential office matters, you got to know who’s there and how to attract them. Demographics or doctor demographics can provide competition ratios and databases and population provider ratios. Did you know that? We can tell you what the major employers are in your site, not just who lives there. Now, look, most demographics you get are going to be about the residents. I’m just going to tell you that’s a fact. But you also need to know about how the practice site will relate to where people work, the time of day that they’re commuting to and from their offices and their place of work. And really, if it’s going to have an impact upon the success of your office. Again, that’s what a good demographer can do. Now I also want to talk about the concept of visibility. Visibility is not measured in demographics. Here’s what I mean. It used to be back in the 1970s and eighties that if you were close to a big population center and everybody knew where it was, like Chinatown or a major university or a landmark like the World Trade Center or the Empire State Building, or for 50 SUTTER It was a major asset.

Scott McDonald: [00:20:06] But that trend has declined as security, parking and expense has become liabilities. You see, you don’t need to have a visible office like you used to, because remember, the Thomas guy used to be ubiquitous. Everybody had a copy of it in their back seat. But just because you knew how to get there didn’t mean that it was really practical for people to do so. However, cell phone computer tracking really helps people figure out how to get to a site. Visibility, therefore, which helped people figure out how to get to your office, was really important. Not so much anymore. And in fact, landmark locations have become a liability. They increase traffic and definitely make this site more expensive for you to practice in. Now, for this reason, visibility does not have the cachet it once enjoyed. Accessibility defined by drive time supplanted these locations. Now, Arco Plaza in Los Angeles had a large number of offices at one time. Major streets like Wilshire and Santa monica Boulevard were all important. Broadway. Well, I won’t go through all the streets in the big cities, but they aren’t quite as important as they used to be. And in fact, they can be harmful. Doctor demographic can provide street level views of almost every site in the United States.

Scott McDonald: [00:21:44] Now, visibility is important if you’re trying to figure out, is the new office we’re going to going to have reasonable signage. Now, signage is important to figuring out where to put the practice. Did you know that we can do a visibility report and tell you if it’s going to work for you or if it’s not? Now, Psychographics. In previous episodes, we discussed the 65 plus psychographic lifestyle categories. Now, among other things, they parse the population into smaller and well defined population groups that take into account consumer preferences. So we can tell you if an area is going to be a good place based on that psychographics, what are those people going to want in terms of advertising? Offers services in your office, and it’s determined by their lifestyles, their purchase decisions. They can be identified by geographic areas. I can tell you who the dominant groups are in a location, and that’s very helpful. But it’s not typically going to tell you who the exclusive groups are in a location. We can just tell you which ones are going to be better. And this is where pinpointing really comes in to psychographics. But this market segmentation tool and by that tool, it tells us the type of practice that would fit better in a particular neighborhood or another. Now, this is demographics on steroids. It’s really a big deal and a helpful technology. But very few realtors and brokers know about psychographics. We can help you and we can help them to figure the kind of practice that might do best in a particular type of practice site.

Scott McDonald: [00:23:40] Therefore, a dental implant practice could identify what types of consumer would tend to be adventurous or older or younger, richer or poorer. In terms of wanting a service that you offer. Dr. Demographics can run a psychographic study on any location in the US providing the lifestyle and psychographic view of every neighborhood in the United States. Now I want to talk to you for a second about covenant areas because it’s not a true demographic. It’s a factor regarding geographics. And if you want to see what a covenant area might be, if its reasonable in size too big or too small, you really need to know that and only a demographer can help you with that. Doctor demographics can provide demographic descriptions, maps, prose, definitions and imagery so there won’t be any mistakes. Here’s the thing a lot of people get to court and they’re trying to defend a covenant area or a covenant not to compete. The courts often throw these things out when challenged because they’re not providing a rational explanation for why they’re coming up with these boundaries. Our experience can help avoid pitfalls, mistakes and misunderstandings that can cost you a lot of money later. We can help your transition. Remain stress free as possible. So, look, if you’re going to have an area, a transaction, a transition, have us look at your covenant area and work on that.

Scott McDonald: [00:25:24] It’s a very inexpensive process now, but if you’re trying to defend it, it can be a nightmare later. Now pinpoint services include competition analysis, traffic maps and data, neighboring businesses and employer databases. Like I was saying, we can tell you how many people work in a particular business and how stable they are, how much money the business makes, and if the employees in that business are going to be helpful to your practice. We can also talk about visibility and signage, data, psychographic reports, as we do in the marketing report. All of this is intended to do one thing. We’re trying to provide you enough information that you can make a decision on the viability of the practice, but also how to promote the practice so that you can make a good living at it. Now the marketing report’s only about $700. You can learn more about it at doctor demographics dot com. And if you want to talk about any of our products and services, call us at 800 8490499. Mike Green is brilliant at this. I’m telling you, he’s brilliant. I’ve taught him everything he knows, but, hey, he’s all right. I’m just kidding. The guy is a real great boots on the ground demographer. He understands how the numbers apply to reality. If we can help you to succeed, please give us a call. We look forward to helping you in the future. Our prices are listed on the website and the dropdown menus and thanks so much for watching.