A demographic study is a compilation of data used to develop a business plan and assess the feasibility of a location. In the business world, such a study is a necessity can you imagine McDonalds building a franchise without first analyzing the neighborhood to ascertain if the franchise could turn a profit?

Treat your prospective business with the same respect. Setting up a practice is a monumental effort that involves many complexities. It's certainly not worth your time if you're not diligent from the beginning.

  • Determining Your Catchment Area
  • Research census data for a location
  • Complete a SWOT analysis to assess the viability of a location
  • Perform Due Diligence

Determining Your Catchment Area

The first step in performing a demographic study is determining your catchment area. A catchment area is defined as the geographical area from which you draw your patients. Such designations can vary widely; if you're thinking of setting up shop in a New York high-rise, your catchment area could be as limited as your building. But if you want to practice in a small community in North Dakota, your catchment area could extend as far as 60 to 100 miles in all directions. How do you determine yours?

Start by simply looking around. Walk or drive through your neighborhood or community and take note of the dentist offices. Search the phone book and/or city directory and determine the distance from your location to the location of each dentist’s listing you find. Make a comprehensive list, and keep it close at hand as you conduct the rest of your study.

Census Data: You'll Need More Than You Think

A solid demographic study should help yield census data not only about the community in which you have an interest in starting your practice, but about the community, county, and state as well. You'll want to find the following information:

Employers and Occupations

Who are the area's major employers?

  • Are they manufacturing-related or non-manufacturing?
  • What are the occupations and job titles relating to those employers?
  • What is the average wage provided by that employer?
  • Does the benefits package include dental care?


  • What kinds of transportation are available?
  • Does the area offer public transportation?
  • How far does the transportation reach? Is it offered primarily to business hubs, such as the city's downtown area and industrial parks, or does it extend to suburbs and outlying areas as well?
  • Would your potential office be along a transportation route, such as a bus line?

Local Government

  • What kind of government oversees the area – city government, township board, etc.?
  • How many people does the local municipal government employ?
  • In many cities, the local government is the largest employer. If that's the case, learn about the government's job titles, wages and benefit plans.

Community Services

  • What kinds of community services does the local government offer?
  • Are the schools regarded as high quality (an indication that the community is growing and thriving)?
  • What about other community support churches and other religious gathering places, community centers and so on?


  • How many hospitals are located there, and how many health professionals of all types practice in the area?
  • Is the area recognized as a healthcare center where people come for all types of care?

Take thorough notes on each location you're considering so you can comfortably develop your SWOT analysis next.

Narrowing your Choices with a SWOT Analysis

Once you've narrowed your choices to a handful of possibilities say three  it's time to perform a SWOT analysis. Simply put, a SWOT analysis is an updated version of drawing a line down the center of a legal pad and listing "advantages" on one side and "disadvantages" on the other. As you perform your SWOT analysis, you'll decide how each prospective location stacks up according to these variables: strengths, weaknesses, opportunities and threats. You can use a piece of paper, a computer program any tool that will help you evaluate your prospective locations according to the four categories.

For example: One of your top-three choices is Southdale. Southdale is located in a Midwestern state and has a population of about 65,000. It's a suburb of a major metropolitan area, but its growth had been stagnant until a software company built a facility there two years ago. Now it's a boomtown, with city leaders paying new attention to school quality, municipal offerings, the arts, downtown revitalization and so on. It's close to the town in which you were raised, so Southdale is attractive to you for a variety of reasons.

The new and ongoing growth can definitely be classified as strengths, along with the fact that the city's major industry offers its employees above-average salaries. Additional strengths are that the city's population is well-educated and many have strong benefit plans that include dental coverage.

Opportunities could include the city's plan to locate a new highway near the existing industrial park, which might be a good place to locate your office. In addition to the city's hospitals, the community recently welcomed a free-standing healthcare complex with a variety of professions under one roof, a one-stop shop for healthcare.

A threat is also present: A disreputable dentist who was indicted on fraud charges tarnished the image of dentists in the community. The dentist has since left town, but will you be able to regain a sense of trust? Ask yourself if you'd be able to establish yourself as an honest professional and gain the public’s trust.

Performing a successful SWOT analysis involves visiting the community long enough to assess the variables first-hand and to capture the "flavor" of the area. Remember, word of mouth from others won't be terribly helpful as part of a SWOT analysis, because you're assessing information in terms of your feelings and reactions toward it, and your ability to take action to use the information to your advantage. Others' perceptions won't be nearly as useful as your own findings.

Review an example of a completed SWOT analysis or download the attached blank form to do your own SWOT analysis.

Follow up with Due Diligence

Due diligence is defined as "the process of investigation, performed by investors, into the details of a potential investment, such as examination of operations and management by the verification of material facts."

In your investigation of potential practice sites, the definition of due diligence can be expanded to include the amount of energy you put into assessing potential locations. For example, if someone says, "Southdale has a terrific school district," you're not performing due diligence if you interpret that person's statement as fact. You are performing it, however, if you drive to the district office and ask to see the administration's 10-year plan. Another key component of due diligence is obtaining the most recent census figures - the 2000 data- from the Internet.

The general rule is: No third-party opinion can come close to being as relevant as your own investigation. Don't rely on hearsay; go directly to the source to determine if a variable is true, and how it will affect your potential plans.


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