Private dental clinics already top the rankings of the nation’s most profitable industries.
According to IBISWorld market research published earlier this year, dental revenues are soaring industry-wide after years of negative or stagnant gains, with 5.7% annual growth rates forecast through 2021. Profit margin (currently at 19.7%) is also expected to hit 24.6% in five years. Considering that private dental clinics already top the rankings of the nation’s most profitable industries, these are truly remarkable times.
Experts say this rapid move toward consolidation is making it more feasible for dentists to invest in much-needed capital projects. For example, it usually costs between $300,000 and $500,000 to start a practice. Combine that with increased overhead and soaring debt levels for dental school graduates, and it’s no wonder the traditional sole practitioner model is losing appeal.
In its place, dental practice management corporations (DPMCs) and corporate franchises are using economies of scale to lower operational costs and free up money for physical expansion. It’s one reason why names such as American Dental Partners, Smile Brands Group, Comfort Dental, Coast Dental, and Aspen Dental have established themselves as regional and national players.
Michael Unthank, a registered architect and dentist who has designed more than 1,000 dental and specialty offices, writes, “Creating a new office environment will likely be the largest single investment you make in your practice.”1 To maximize value, as well as customer experience, he recommends a long-term, quality-first approach that creates a “highly functional, pleasant, inviting, and professional environment.”