Volume 22: Location Improvements Throughout Your Career

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I write this article at a time when three of our clients are currently in different stages of transition of location. Their experience helps me focus on the importance of location improvement throughout your career.


Rent usually costs from five to seven per cent of your gross income, which is generally similar to dental supplies and laboratory bills. The latter two are variable expenses and can be controlled on an ongoing basis but rent is a fixed expense and you have to live with your decisions well into the future. In order to control costs, it is advantageous to limit the amount of square footage especially
when setting up your practice as a new venture.

Find a great location with reasonable, affordable rent that at the same time is visible to potential patients and if possible, is expandable as you move into the middle of your career. After the first couple of years as your billings increase, your rent should begin to fall into the seven to nine per cent range. By the time you have been in your practice for five years your rent should be in line with the acceptable five to seven per cent range.

Landlords always increase your rent but with time your practice billings also increase. If your rent is increasing faster than your billings you are falling behind in your ability to control expenses. You should consider moving your practice if the opportunity comes along. The amortization of new leasehold is affordable if your new location increases your production. This could also be your opportunity to expand.


This phase of your career is critical. These are the money making years. Is your location limiting your billings?

Many practices move to larger facilities in this period. Without moving or expanding you will sell your practice in its original location that is 30 to 40 years old. Generally, purchasers find these facilities visibly old, too small and with no ability to expand and grow because you have not done so in the past 30 to 40 years.

I have had dentists tell me that it takes three moves to get the facility you would like. Certainly, it is additional capital investment to move but in the long run you will find it stimulating and rewarding. Now is the time to have larger operatories, staff rooms, a private office and a more visibly appealing practice for your patients.

Moving to a better location is an investment in your practice. This is also an opportunity to adjust your location to better relate to where your patient base is now located as was addressed in a recent article. (Article 19)


If you have correctly completed Section 2), as outline above, then this phase is easy. You have a contemporary facility that is spacious, well located, eye appealing and in demand. The concept of spending money on leaseholds in order to sell your practice is not necessary. Your practice should present itself well and be a turnkey sale.

If you did not achieve Section 2) then your practice is apt to be sold to a larger practice for the patient base. In this case make sure you have a short lease that will permit the practice to be moved. Typically, the purchaser would like you to move with your patients to the new facility for a two-year transition.

Generally speaking, if your rent and wages are under control then your total costs are under control. Remember, the percentage for rent is a ratio of your gross rent as a percentage of your billings. Typically higher costs per square foot relates to the location’s ability to attract patients. Higher rent per square foot can be overcome with higher gross billings.

The Professional Advisory

  1. One Year Later

  2. Dealing with Unsolicited Offers

  3. Covid-19 Practice Sales Update

  4. When is the Right Time to Sell Your Practice and Why?

  5. Partnership Pitfalls

  6. The Real Cost of a Dental Practice Set-up

  7. Smaller Practice Realities

  8. Dental Market Update - 2019

  9. Creating Your Own Most Valuable Practice (MVP)

  10. Small Practice Economics

  11. The Market is Very Efficient

  12. How Can Dental Practice Values be Rising and Declining?

  13. Hygiene as a Value Driver

  14. The Value of a Good Team

  15. Is it Time to Move?

  16. Staging A Dental Practice

  17. The High Cost of Dying

  18. Deal-Busters

  19. Patients - Attract and Retain

  20. Should I Stay or Should I Go?

  21. Is There a Buyer for Every Practice?

  22. Good, Better, Best - The Market has Spoken

  23. Smooth-Sale-ing

  24. Buying Time

  25. Patients, Patience, Patients

  26. A Real Patient

  27. Why Do a Practice Valuation? I'm not Selling

  28. Irrational Exuberance or The New Normal?

  29. Do dental equipment and dental technology affect a practice value?

  30. Finding and Being a Mentor

  31. Bigger is Better

  32. Dave's Top Ten List for Buyers (Vendors should read this too!)

  33. How Well Do You Know Your Practice?

  34. Dave's Top Ten List for Vendors

  35. What will happen to dental practice Values in the next 10 years?

  36. Your Premises Lease is an Important Asset

  37. What are Associates Thinking?

  38. There is Life Outside the GTA

  39. When Is the Right Time to Sell My Dental Practice?

  40. Mergers are a Viable Option

  41. Is Your Associate an Asset or a Liability?

  42. Has your Practice Facility Kept Up With Your Billings?

  43. The 100 per cent of Gross Myth

  44. The Past, The Present and The Future

  45. Caveat Emptor

  46. Overpaid Long Term Staff

  47. Selling your Practice in Stages

  48. A Potential Pitfall of Selling Shares

  49. Value in Your Practice Through Balance

  50. Only Trusted Staff Can Defraud You

  51. To Own or Not to Own Practice Real Estate? That is the Question.

  52. Coping With A Large Patient Base

  53. Successful Dental Practice Transitions

  54. Taking Care of Business

  55. The Investing Dentist Phenomenon

  56. Two areas to focus upon that could negatively impact the value of your practice

  57. Organize your Debt in Order to Sell your Practice

  58. Having a Better Team

  59. How Do I Prepare My Practice For Sale

  60. How Do I Prepare My Practice For Sale? Part 3

  61. How Do I Prepare My Practice For Sale? Part 2

  62. How Do I Prepare My Practice For Sale? Part 1

  63. Advice to My Son or Daughter Graduating from Dental School

  64. Transition - What to Expect

  65. Discussion on Digital X-Rays

  66. Partnerships and Shotguns

  67. Strategic Planning - How to Get Started

  68. Calling All Vendors - Practices have Gone Up in Value

  69. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates

  70. Matrimonial Practice Valuations

  71. Purchaser's Guide to Affording a Practice

  72. Location Improvements Throughout Your Career

  73. Small Practice Valuations

  74. Partnerships – The Best and The Worst

  75. Changing Location When the Opportunity Comes Along

  76. Visual Presentation of Your Practice

  77. Presentation of Charts

  78. Your Premises Lease Can Be Your Worst Enemy

  79. How to Select an Appraiser for Your Practice

  80. How Are Your Billing Ratios?

  81. It Pays to Invest in Your Tangible Assets

  82. The Importance of Separate Financial Statements

  83. Five Time Frame Levels to Sell a Practice

  84. 12 Suggestions to Safeguard Computer Data

  85. How to Buy a Visible Practice

  86. Why is there a shortage of good practices today?

  87. The Importance of Equipment in the Purchase of a Practice

  88. The Balanced Practice

  89. Will My Practice Be Saleable in The Future?

  90. Buyer Be Aware

  91. Excess Profit - The Second Key

  92. Patients and Profits are the Keys

  93. Plan Ahead