Scott McDonald is the owner of DoctorDemographics. com. Follow us at Doctor Demographics on Facebook or check out our web site at DoctorDemographics. com. Our weekly Perfect Place to Put a Practice Podcast on ITunes, Dentaltown, and YouTube is a free resource to find out what is happening right now. And don’t forget to visit us at www.DentistSite- to get a free copy of our book on the General Dentist Site Selection Handbook.

Places with Promise and Places with the Kiss of Death

Our business is to evaluate the potential of sites for practice. This is what the 2018 list looks like. When someone asks for the good news versus the bad news, most people seem to want the bad news first. What are the places that you do NOT want to consider for a start-up. It goes without saying that it is generally true that the bad places are also going to come with a larger than average number of negatives for someone wanting to purchase a practice. It does not mean, however, that one cannot or should not practice in these places. Far from it! A great practice with a good value, healthy production and favorable new patient count is always to be desired. But these communities are facing headwinds that cannot be denied and that is why we caution those considering these for start-ups. Perhaps rather than branding them with the “kiss of death,” it would be wiser to say “exercise caution.”

It may surprise you, but San Jose and San Francisco didn’t make the cut. They have lots of problems, but are still enjoying business development which is always a big advantage. They are still viable, even if they both are expensive areas., and we all know the cost of doing business can cause headaches. So in reverse order, here is the list of best potential sites for practice from 2018:

No. 10: Jackson, Mississippi – With little growth, huge poverty and long-term unemployment, Jackson is not the place to go. But I should also say that Jackson is working hard to grow and to develop, and in a year or two, it might be much better.

No. 9: Albuquerque, New Mexico – The oil and gas business that makes up the economic base of Albuquerque is shaky. Worse, the city has not diversified its employment base. Unemployment is high and will likely remain so.

No. 8: Louisville, Kentucky – We honestly love Louisville, but with a median household Income below $45,000, increasing poverty and low growth and development, it’s hard to recommend it. Still, those who are visionary see a future Louisville doing better because the costof- living is so low and Kentucky has just switched to a right-to-work state. In essence it COULD come back. But look for its suburbs to lead the way.

No. 7: Providence, Rhode Island – This is the poster child for a community that is committing suicide. It has eight colleges and universities (which is great). But as soon as they graduate, they move somewhere else because there is nothing to keep them. Very low growth, very high taxes. Remarkably high cost of living AND cost of doing business.

No. 6: Fresno, California – I was wrong. I thought Fresno would do better. The poverty rate is twice the national average. The median household Income is $41,458. The city and county are trying to be clever in offering incentives for businesses to come here, but I don’t think anyone trusts them. Certainly a practice can thrive in Fresno, but we are taking about start-ups and therein lies the rub. It will be very hard to make a go under current circumstances.

No. 5: Santa Rosa, California – Yes, this is the same place that was nearly burned out in the recent fires. But the city and county officials got the idea that the city was full of wealthy people, so they raised taxes and allowed property values to rise quickly, thus hurting growth and development. I believe it deserves better than the way this city has been managed.

No. 4: Allentown, Pennsylvania – While other steel and mining towns were making adjustments in a changing economy since the ‘70s, Allentown decided the world would have to change instead. Its growth rate is very low, and the unemployment rate is high. And ironically, the cost-of-living is average at best. This place needs employment-friendly policies, and it looks like it isn’t going to get them any time soon.

No. 3 San Bernardino, California – Some people assume that the high poverty rate (34 percent) was the reason the city is in such trouble financially. Rather, it is the unfunded mandates of public sector employees that have hurt this community.

The first thing the city did was to cut back on police and fire services. The wildfires came as a surprise at the worst possible time. The cost of living is high, and the local tax rates are rising to meet the city’s obligations. Ironically, the competition rate is not that bad for dentists.

No. 2: Modesto, California – This area has a high cost of doing business and aboveaverage cost of living. There is simply no way that an agriculturally based economy can tax itself back into the black. Granted, the drought hurt many central valley communities, but the State of California does not seem interested in getting these cities back on track.

No. 1: Stockton, California – This is another poster child of how to mismanage a city. Wages are low. Educational attainment is low. But the unfunded mandates which reduce community services like police and fire, as well as public infrastructure, including road maintenance, make practicing here extremely risky. If you own a successful practice, the tax man sees a big target on your back. That is why fees and regulatory costs make these ten locations a poor investment.

I take no pleasure in publishing this list, but I get many questions for our clients, students and friends about them. I just want you to avoid locations that can really put a damper on your investment in a practice. Take heart, there are lots of other rising cities on this list (which we will publish in 2019).

It is not all bad news out there, and we’ve made note of several more positive markets. But I do have to mention something important: Not every neighborhood in these locations is equally positive. Often, there is a bad section of town you want to avoid or a gold mine to consider. Obviously, it is our job to help identify the gold mines, so you may want our help in refining your search area. It is what we do at Doctor Demographics. Don’t be surprised if there are other practices nearby. Trust me, you are not the first dentist thinking about establishing a practice. But the favorable growth and other demographic factors will help overcome these challenges.

Here are the 20 markets with the growth, stability, “animal spirits,” employment and overall business development that make them more reasonable for start-ups and favorable for practice purchase (in reverse order)”

No. 20: Seattle, Washington – YES, there is competition and a high cost of doing business. YES, some neighborhoods are terrible. But within the Greater Seattle market, there are new homes, new residents and lots of jobs. Sorry, I just can’t deny it. Just choose your neighborhood carefully and get a demographic report!

No. 19: Las Vegas, Nevada – A few of you may recall that Las Vegas was on death’s doorstep. Reasonable taxes, job friendly environment and a community that seems to have tamed its profligate spending is worth a second look. And not just in Summerlin.

No. 18: Salt Lake City, Utah – It has low unemployment, moderately low taxes and a boat-load of young entrepreneurs. The south side of the metropolitan area is going through some serious changes and improvements. The West Valley is also looking promising. Just stay away from the area between Temple Square and the University of Utah!

No. 17: Atlanta, Geogria – Lots of growth has occurred from out-of-state migration. Birth rates are increasing. Job growth is continuing. For former residents of Georgia, it is time to look back to the old homestead. The best potential is actually just north of the city (on the northwest and northeast).

No. 16: El Paso, Texas – One of the saving graces of this moderate-sized city is the very low cost of living and the favorable unemployment rate. This is one of the best border towns with Mexico. Sure, it has had some challenges, but it seems to be doing well.

No. 15: Sarasota, Florida – The quality of life, cost of doing business, growth and reasonable local taxes make this place hard to ignore. It seems to have avoided much of the seediness some have come to expect from Florida. And it doesn’t hurt that it is easy to get to but not TOO easy.

No. 14: Raleigh, North Carolina – The educational attainment scores of residents and the higher-than-average wages make it a place to consider for folks who want good weather and a reasonable cost of living. In many ways, the greater Raleigh market has done so much right to attract employers and residents. Just keep in mind, this is a BIG geographic area to consider.

No. 13: Colorado Springs, Colorado – This isn’t the only Colorado market to consider, nor the only one I like. But it is a good example of why Colorado is growing and what a town with growth and favorable cost of living and low unemployment looks like. One of its benefits is it looks better than most other big towns in the west.

No. 12: McAllen, Texas – This market is really a series of towns near the Gulf of Mexico on the Mexican border. Like El Paso, it thrives being in a busy and dynamic choke point between two large countries. Granted, there can be some poverty in these places, but there is also a thriving retirement and business community.

No. 11: Richmond, Virgina – By American standards, Richmond is an old city. But it’s also a place with a good quality of life (which means its weather and cost of living are good) that attracts many residents from other states. It has proximity to almost everything. In short, Richmond’s central location is making lots of very big employers consider this market for new factories and plants. But just don’t get stuck inside the city limits. The surrounding area has great potential.

No. 10: San Antonio, Texas – Not only is this one of America’s most attractive cities, the cost of living and the cost of doing business are serous advantages. Those are big reasons for its growth. In addition, the favorable tax rates don’t hurt at all.

No. 9: Des Moines, Iowa – Mid-America is doing well overall. Des Moines is leading the way. Great unemployment numbers, cost of living and more make it a good choice for dentists looking for a family friendly environment. Unfortunately, higher-than average corporate tax rates are slowing its potential. Just keep in mind the many smaller cities that dot the landscape as potential sites.

No. 8: Dallas, Texas – I will admit at the outset that Dallas’ urban center is no picnic. You really have to consider the outlying suburban communities for practice. And yes, Plano is full! Still, the huge job growth, wonderful airport, freeway beltways, and the aggressive new building make it a place for dentists to consider as a place to start their searches. Fort Worth has been picking up (along with its suburbs) so you have to put it on your list for consideration. But increasingly, Dallas doesn’t quite feel like Texas.

No. 7: Ogden, Utah – It’s odd just how often demographers are talking about Ogden. Its economy, cost of living, cost of doing business and inexpensive land keep it on the charts. It is certainly growing. For those who don’t know, Park City and Ogden have far less LDS influence than other parts of Utah. This can be considered both a liability or an asset.

No. 6: Houston, Texas – When the rest of the nation was going through a housing crisis and a dip in employment, Houston dodged the bullet. This is one of the most ethnically and racial diverse cities in America. True, it’s dependence on the energy market has spooked some, but its reasonable taxes and cost of doing business have keep it on many lists.

No. 5: Charlotte, North Carolina – I recently spent a weekend here and found it to be terrific. Taxes and the regulatory practices of government seem to be favorable for dental practices. It has very good growth.

No. 4: Denver, Colorado – To be honest, I am not in love with Denver. The deregulation of marijuana has brought in both money and a negative “element” that I don’t love. Still, growth is undeniable as is the thriving economy. I am just not as crazy about the lifestyles at this time. The other note of caution has to do with competition. That is why choosing the right neighborhood is particularly important.

No. 3: Washington, D.C. – Locals call it “The District” because it lies within some relative artificial boundaries. You can make a good living with an upscale practice that appeals to the people who work in the district. Appealing to most of the people who live here is another matter. Unemployment is low. Growth is good but churning is outstanding. Still, the cost of doing business is getting out of control. And did I mention that Amazon is moving a headquarters nearby?

No. 2: Provo, Utah – This is one of the best places on earth to raise a family. It has the reputation of being one of the healthiest places on earth. Unemployment is tiny. Costs of living and business are tiny. Reimbursements are also tiny. It is likely that all of these are related. I define this area as including all of Utah County. And that is where the real opportunities can be found.

No. 1: Austin, Texas – It surprises some people who know Austin that this is such a great place to locate a start-up. But let me be clear: the city of Austin is not cheap and neither is the competition absent. But there are tremendous opportunities in the surrounding suburbs and communities. It continues to have great potential. In conclusion, this is a solid snap-shot that is going to change, so stay tuned!