Sorry I have been away for so long!
We are seeing some serious growuth in places that have always been of interest but the RATE of growth in population has been far faster than we had imagined. Growth is found in the following Counties, State (and Cities).
Kendall, IL (look at Plano and Yorkville but be sure to get a report on Oswego before jumping)
Flagler, FL (Palm Coast is a booming geriatric community)
Pinal, AZ (Tucson is finally taking off. We like the north side of town along with the rest of the city)
Rockwall, TX (Rockwall and other towns are booming and affluent BUT beware of lots of satellites from Austin)
Forsyth, GA (Cumming is a great town with no-center. Look along US 19 toward the north)
Loudoun, VA (The story is more than just new homes. There is a great deal of turnover here and in its contigous Counties)
Lincoln, SD (Canton continues to be surprising.
If you want to know more about where growth and development are, keep your eyes on this space.
Wednesday, May 6, 2009
Wednesday, July 30, 2008
Hot Spots: Alabama
Almost every day we get a call asking where the "No failure location in the U.S. for practices." If by that definition, you mean the place that seems to have the greatest demand for MOST practice types, we see a great deal going on in Alabama. Yes, there is growth. No, there is not a great deal of money. But in so many of the towns we consider, if a doctor is willing to move to the town of the practice and get involved in the community, these states look pretty good. Among our favorites are:
1 Helena
2. Hoover
3. Trussville
4. Alabaster
5. Pelham
Never heard of them? Maybe that is for the best.
1 Helena
2. Hoover
3. Trussville
4. Alabaster
5. Pelham
Never heard of them? Maybe that is for the best.
Best Cities for Senior Care
Our friends at "Sperlings" have come up with an interesting study. Rather than consider locations that are best for ACTIVE seniors, they put together the places that are best and worst for senior care. These would include adult care centers, senior assisted living, and infrastructure that is senior friendly. Their top choices are:
So, where do the say the worst cities are? They are:
50. Passaic, NJ
49. Miami, FL
48. Nassau-Suffolk, NY
47. Orange County, CA
46. Riverside-San Bernardino, CA
Here is their methodology: The data categories include health, economy, transportation, housing, social, crime, environment, disease, and spiritual. Each data category was statistically weighted to reflect the needs of the senior population, and the 50 largest U.S. cities received points based on their relation to the other cities' scores in that data category. Categories were suggested by senior living experts from the International Longevity Center, Health and Human Services, and Bankers Life.
1. Portland, OR
2. Seattle, WA
3. San Francisco, CA
4. Pittsburgh, PA
5. Milwaukee, WI
6. Philadelphia, PA
7. New York, NY
8. Boston, MA
9. Cincinnati, OH
10. Chicago, IL
So, where do the say the worst cities are? They are:
50. Passaic, NJ
49. Miami, FL
48. Nassau-Suffolk, NY
47. Orange County, CA
46. Riverside-San Bernardino, CA
Here is their methodology: The data categories include health, economy, transportation, housing, social, crime, environment, disease, and spiritual. Each data category was statistically weighted to reflect the needs of the senior population, and the 50 largest U.S. cities received points based on their relation to the other cities' scores in that data category. Categories were suggested by senior living experts from the International Longevity Center, Health and Human Services, and Bankers Life.
WAKE UP!: Trends That Are Changing Practice
The U.S. Census is a gold mine into the minds of Americans. These trends are very likely going to touch every practice and every region in the U.S.
1. Aging Trends
It may surprise you but the average head of household in the U.S. is almost 50 years old. But that is nothing when we compare the fact that 80% of the growth in the number of households in the next five years will be with households headed by 55+ year olds. For the rest, most new households will be headed by 25 to 34 year olds. For those 35 to 54 (the ones with the money), there is likely to be almost no growth but their economic impact will actually grow more than their numbers.
Those between 35 and 54 have the highest number of dual-earners and account for nearly half of U.S. Consumer Spending. This age group is going to shrink over the next five years (due to aging). As they move into the older group, for the first time in history, we are seeing those 55 to 64 really guiding the consumer patters for the rest of the U.S. This is the great hope of the economy. With more than $10,600 more in Per Capita disposable income than any other group, doctors had better think about serves that these healthy but older adults want.
2. Risk Aversion
Something all of a sudden happens when you realize you have something to lose for the first time. You don't want to lose it. We strongly recommend consideration of promoting practices and services based upon the desire of patients to hang on to what they have. Prevention is a strong selling point to consumers who still feel healthy and have money and don't want to lose either.
3. Widening Demographic Gulf in Attitudes and Regions
We have long believed that what works for a practice in Denver may have no relationship for a practice in Atlanta. Based upon the demographic and consumer attitude research we are reading, that is becoming TRUER and TRUER.
Americans have always had divisions in opinion and assumption. This is nothing really new. However, as people age, there is an understanding among social scientists that these attitudes are become calcified. And these consumers do NOT want someone to preach at them that they are "stogy" of "close-minded." Senator Obama has (at this writing) hit a wall in his poll numbers as he tries to convince older Americans that they have been wrong for all these years. There is something to be said for the safe and the familiar.
The divisions in Americans can be tracked by their demographics as well. As we look at different regions, the differences can be quite stark. In the Northeast, for example, the population is significantly older, more white and has fewer children. The West is younger and more diverse. Two-thirds of recent immigrants have settled in the South or West. We will make a prediction that the Media Bigwigs (who are primarily products of New York and Washington, DC) will claim shock at how electoral trends will turn during the next two cycles. It is more than a difference in party allegiance. What will surprise them is just how out of sync they will be with those outside of their region.
The Northeast has one fifth of the nation's elderly. The six New England states are among the 10 oldest states for median age. In many towns in New England, only one in five households has a child in the home. The national average is one in three. For health care practitioners who treat children, the practice areas must be significantly larger than in the west.
The implications for practices is this: we have to devise rules that are more regional rather than national in determining the ideal size of a patient base, referral base, cost of living, office overhead, and revenues. The differences we are finding between regions are growing larger, not smaller. There is an ancillary trend of migration and immigration we will discuss in a future post.
1. Aging Trends
It may surprise you but the average head of household in the U.S. is almost 50 years old. But that is nothing when we compare the fact that 80% of the growth in the number of households in the next five years will be with households headed by 55+ year olds. For the rest, most new households will be headed by 25 to 34 year olds. For those 35 to 54 (the ones with the money), there is likely to be almost no growth but their economic impact will actually grow more than their numbers.
Those between 35 and 54 have the highest number of dual-earners and account for nearly half of U.S. Consumer Spending. This age group is going to shrink over the next five years (due to aging). As they move into the older group, for the first time in history, we are seeing those 55 to 64 really guiding the consumer patters for the rest of the U.S. This is the great hope of the economy. With more than $10,600 more in Per Capita disposable income than any other group, doctors had better think about serves that these healthy but older adults want.
2. Risk Aversion
Something all of a sudden happens when you realize you have something to lose for the first time. You don't want to lose it. We strongly recommend consideration of promoting practices and services based upon the desire of patients to hang on to what they have. Prevention is a strong selling point to consumers who still feel healthy and have money and don't want to lose either.
3. Widening Demographic Gulf in Attitudes and Regions
We have long believed that what works for a practice in Denver may have no relationship for a practice in Atlanta. Based upon the demographic and consumer attitude research we are reading, that is becoming TRUER and TRUER.
Americans have always had divisions in opinion and assumption. This is nothing really new. However, as people age, there is an understanding among social scientists that these attitudes are become calcified. And these consumers do NOT want someone to preach at them that they are "stogy" of "close-minded." Senator Obama has (at this writing) hit a wall in his poll numbers as he tries to convince older Americans that they have been wrong for all these years. There is something to be said for the safe and the familiar.
The divisions in Americans can be tracked by their demographics as well. As we look at different regions, the differences can be quite stark. In the Northeast, for example, the population is significantly older, more white and has fewer children. The West is younger and more diverse. Two-thirds of recent immigrants have settled in the South or West. We will make a prediction that the Media Bigwigs (who are primarily products of New York and Washington, DC) will claim shock at how electoral trends will turn during the next two cycles. It is more than a difference in party allegiance. What will surprise them is just how out of sync they will be with those outside of their region.
The Northeast has one fifth of the nation's elderly. The six New England states are among the 10 oldest states for median age. In many towns in New England, only one in five households has a child in the home. The national average is one in three. For health care practitioners who treat children, the practice areas must be significantly larger than in the west.
The implications for practices is this: we have to devise rules that are more regional rather than national in determining the ideal size of a patient base, referral base, cost of living, office overhead, and revenues. The differences we are finding between regions are growing larger, not smaller. There is an ancillary trend of migration and immigration we will discuss in a future post.
Age of Austerity
There is an undeniable change that has occurred in purchasing habits over the last year. Due to the PERCEPTIONS of the economy (reality rarely has any significant impact), a larger segment of the population feels insecure about large purchases and commitments. This falls into the concerns of many health care practices.
The most immediate impact of this trend will probably be felt by orthodontists and plastic surgeons. It isn't as though there is a major unemployment crisis in America. With 5.5% unemployment, things are still about 1% BETTER than during most of the Clinton administration. True, energy is much more expensive but as a percentage of gross income, it is still something that can be managed. But what has gotten into consumer's heads is the idea that MAYBE things will get worse AND SOON. Why? Because during a political election cycle like this, it makes good sense for one or both major parties to appear like they are the answer to the crisis.
So, those procedures that are perceived as needing a "commitment" are the ones that will be delayed. Obviously, oncology will continue to be a business that will remain untouched by economic shifts but dentistry and chiropractic may. "After all,: the patients says, "Can't we do without it?" The answer is YES but only for a time.
We suspect that the fundamental demand (and the desire for the benefits of treatment) will only be delayed, not denied.
The answer is to add the "moral imperative" to helping patients move forward with their treatment. "It is the right thing to do," is the message that must be repeated load and clear and often.
Is there a geographic region that is more prone to this trend? We have found the "delayed, not denied" attitude to be most common in those areas that are losing jobs (think Detroit) and losing homes (think California, Arizona, Florida, and New Mexico.) Our advise is NOT to panic! Don't slash fees. Don't blindly discount. Think about what patients are thinking and help them find the REAL reason they need this service.
The most immediate impact of this trend will probably be felt by orthodontists and plastic surgeons. It isn't as though there is a major unemployment crisis in America. With 5.5% unemployment, things are still about 1% BETTER than during most of the Clinton administration. True, energy is much more expensive but as a percentage of gross income, it is still something that can be managed. But what has gotten into consumer's heads is the idea that MAYBE things will get worse AND SOON. Why? Because during a political election cycle like this, it makes good sense for one or both major parties to appear like they are the answer to the crisis.
So, those procedures that are perceived as needing a "commitment" are the ones that will be delayed. Obviously, oncology will continue to be a business that will remain untouched by economic shifts but dentistry and chiropractic may. "After all,: the patients says, "Can't we do without it?" The answer is YES but only for a time.
We suspect that the fundamental demand (and the desire for the benefits of treatment) will only be delayed, not denied.
The answer is to add the "moral imperative" to helping patients move forward with their treatment. "It is the right thing to do," is the message that must be repeated load and clear and often.
Is there a geographic region that is more prone to this trend? We have found the "delayed, not denied" attitude to be most common in those areas that are losing jobs (think Detroit) and losing homes (think California, Arizona, Florida, and New Mexico.) Our advise is NOT to panic! Don't slash fees. Don't blindly discount. Think about what patients are thinking and help them find the REAL reason they need this service.
Wednesday, May 7, 2008
Micro versus Macro Demographics for Practices
"I heard that Indiana sucks."
"I heard the Phoenix is overcrowded with dentists."
"I heard that you can't swing a dead cat in Salt Lake City without hitting a dermatologist."
No kidding. I have heard it all and much more besides. And what is most interesting is that none of these statements is necessarily wrong. The problem is, they are irrelevant.
A practice area as small as three Zip Codes will define a signficant number of practice types. These include dentists, chiropractors, and veterinarians along with many others. You just don't need to look to the entire metropolitan area to determine the viability of a site. Rather, it is a unit of geography much smaller than this that will define the viability of a site.
So, does Indiana suck?
It is hard to deny that the statistics for the state overall are challenging. Even if we took a fairly middle-sized city like Gary, we could say, it is not positive. But does that mean that no new practice can or should open in Gary?
Of course not!
As we consider the work of a major downtown developer (New Gary Development Group), it seems that someone finally figured out that Gary is an easy drive and train-ride from Chicago. They are taking the "rust belt" image and making Gary a little mroe "people friendly." More suburban developments are going in on reclaimed farm land on the south side of town. This is useful when you consider that the Median Price for a home in Chicago is $261,000 but is only $124,600 in Gary.
Can we recommend practices in ANY part of Gary will be a good idea? Nope. But we can say confidently that even a site that has had such a poor image and bad reputation can hold promise if we look at the Micro versus Marco Economics (and Demographics) of a community.
In conclusion, be creative in your location selections and you will be well-served. There are some gold nuggets in MANY markets others have considered dead, dead, dead.
"I heard the Phoenix is overcrowded with dentists."
"I heard that you can't swing a dead cat in Salt Lake City without hitting a dermatologist."
No kidding. I have heard it all and much more besides. And what is most interesting is that none of these statements is necessarily wrong. The problem is, they are irrelevant.
A practice area as small as three Zip Codes will define a signficant number of practice types. These include dentists, chiropractors, and veterinarians along with many others. You just don't need to look to the entire metropolitan area to determine the viability of a site. Rather, it is a unit of geography much smaller than this that will define the viability of a site.
So, does Indiana suck?
It is hard to deny that the statistics for the state overall are challenging. Even if we took a fairly middle-sized city like Gary, we could say, it is not positive. But does that mean that no new practice can or should open in Gary?
Of course not!
As we consider the work of a major downtown developer (New Gary Development Group), it seems that someone finally figured out that Gary is an easy drive and train-ride from Chicago. They are taking the "rust belt" image and making Gary a little mroe "people friendly." More suburban developments are going in on reclaimed farm land on the south side of town. This is useful when you consider that the Median Price for a home in Chicago is $261,000 but is only $124,600 in Gary.
Can we recommend practices in ANY part of Gary will be a good idea? Nope. But we can say confidently that even a site that has had such a poor image and bad reputation can hold promise if we look at the Micro versus Marco Economics (and Demographics) of a community.
In conclusion, be creative in your location selections and you will be well-served. There are some gold nuggets in MANY markets others have considered dead, dead, dead.
Building Purchase Conundrum
During the course of our consultations regarding properties, we get the question, " Would it better for me to purchase the building (or land) or merely lease?"
It is a difficult question to answer ONLY on the basis of demographics and market trends. The Client's economic situation, credit, and myriad other factors have to be considered FIRST. But with that taken into account and all other factors being equal, we say that the time to consider purchase of real estate (either an existing building or land for construction) is looking good.
Here is our reasoning based upon the numbes we see coming through:
1. Real estate (both commercial and residential) is at a low-point right now. Obviously, when the market is down, there is money to be made by those who have income and credit.
2. The cost of borrowing money is going down. Recent interest rate cuts are not the sole indicator of the price of money, however. Lenders WANT to lend as the way for them to shore-up their portfolios (some of which are looking less than stellar), to keep relevant in the marketplace, and to continue cash flow. True, State and Federal regulators are trying to fix what they had caused earlier by making loan qualifations more restrictive. But we believe this is only giving better leverage to those who CAN borrow.
3. If well selected, real estate is the safest investment in the world IF IT IS AN INCOME PRODUCING PROPERTY. Now, here is where the rubber meets the road: No favorable market can overcome "stupid." You have to do your homework (and consider purchasing a demographic report to help) to determine the best sites.
So, given the current market and all other factors being equal, we believe that an investment in real estate to support your practice could put your well beyond your financial goals in a short time, keep your overhead low (or controllable), and vastly benefit your retirment using a tried-and-true method of investing for doctors.
It is a difficult question to answer ONLY on the basis of demographics and market trends. The Client's economic situation, credit, and myriad other factors have to be considered FIRST. But with that taken into account and all other factors being equal, we say that the time to consider purchase of real estate (either an existing building or land for construction) is looking good.
Here is our reasoning based upon the numbes we see coming through:
1. Real estate (both commercial and residential) is at a low-point right now. Obviously, when the market is down, there is money to be made by those who have income and credit.
2. The cost of borrowing money is going down. Recent interest rate cuts are not the sole indicator of the price of money, however. Lenders WANT to lend as the way for them to shore-up their portfolios (some of which are looking less than stellar), to keep relevant in the marketplace, and to continue cash flow. True, State and Federal regulators are trying to fix what they had caused earlier by making loan qualifations more restrictive. But we believe this is only giving better leverage to those who CAN borrow.
3. If well selected, real estate is the safest investment in the world IF IT IS AN INCOME PRODUCING PROPERTY. Now, here is where the rubber meets the road: No favorable market can overcome "stupid." You have to do your homework (and consider purchasing a demographic report to help) to determine the best sites.
So, given the current market and all other factors being equal, we believe that an investment in real estate to support your practice could put your well beyond your financial goals in a short time, keep your overhead low (or controllable), and vastly benefit your retirment using a tried-and-true method of investing for doctors.
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