Rural vs Urban — Is It Really Better to Buy a Rural Practice?

“Want to build some real wealth doing dentistry? GO RURAL.” I have no doubt you’ve heard this before. I see it all the time on dental forums and Facebook groups. But is it true?

Maybe. Yes and no. It’s complicated. Okay fine, we should dive into this one.

In your search for the right practice to buy, the “urban vs rural” question is a good one to consider. If you’ve never considered purchasing a rural practice, I want you to give it some thought. I say that with one giant caveat, which we’ll get to in a bit.

First, let’s look at some intriguing data released recently by the ADA. It shows that as of February 2021, rural dental practices had recovered an average of 84% of their pre-COVID patient volume, compared to just 73% recovery for practices in the top 20 most populous cities.

And this tracks with my own experience, which is that rural practices on the whole tend to be a few percentage points more profitable than their urban counterparts, probably due to having slightly less competition to deal with.

Going rural sounds pretty sweet, right? And on top all that, there’s more:

  • Because of lower demand, rural practices tend to sell for lower than their urban counterparts.
  • Rural practices usually deal with less regulation and more flexibility than practices in the top 20 cities.
  • Rural practices tend to have less competition for patients.
  • Rural practices tend to have lower staff costs.

​All of this makes for a rural practice that’s probably somewhat easier to buy and easier to run, and will probably bring in a little more profit over the years than an urban practice.

So why in the world would anyone go urban?

The answer is that, to put it bluntly, it’s not really about the money. At least, it shouldn’t be. The number one piece of advice I give buyers is that they have to love the qualitative side of the practice, including where it is. That’s why, of my seven keys to analyzing a potential practice to purchase, the family rule is number one.

In fact, it’s so important, I call it the Monopoly Test because if the answer is “no” to any of the questions below, do-not-pass-go and stop analyzing this practice. You’re considering living somewhere for a period of, probably, decades. Consider the following:

  • Can you live in this city, and (more importantly, if applicable) can your spouse live here?
  • Will you have the kind of life you want in this area?
  • Will you be able to do the things that are important to you, if you spend 50 weeks a year in this part of the country?
  • Will the cost of living here enhance or detract from your financial goals?

​In the rural vs urban debate, it comes down to this: Wherever you buy your practice, you’ll be living there for a long time. You’d better love it.

Back to our original question: will buying a rural practice lead to more wealth? Certainly, the post-COVID from the ADA, and the strong overall performance, are good reasons to look into buying a rural dental practice. If you buy the right practice, it might lead to more money over the course of your career. And that’s no bad thing.

But money is not the only way to measure wealth. Make sure you’re also enjoying your sweet profits with the lifestyle you actually want, whether that’s urban, rural, or something in between.

Read More:

5 Red Flags When Searching For a Practice to Buy

3 advantages (and one disadvantage) private buyers have over DSOs

Should Dentists Buy the Building with the Practice? | Negotiating a Dental Practice Purchase