By Gordon G. Wong, OD
Moving to a new office space can expand your capacity to better serve patients and max out profits–if you plan carefully.?
When your office space no longer suits patients as comfortably as you would like, or you have an idea that would make your patient experience even more positive–if only you had more or better space–it’s time to consider a move. Having these ideas for improvement, however, must go hand-in-hand with financial capacity to support the move. Here is how my practice moved to a new office, and in the process, enhanced our practice brand and the office environment.
The outdoor waiting area in Dr. Wong’s new office.
See If the Finances Add Up to Support Move
I have moved four times in 20 years and each time it was because it made financial sense to do so. I purposely paid extra to be in a financial building with a popular health club on the ground floor. We were located adjacent to the entrance to the club so members would have to walk by my office every time they went to the gym. According to practice metrics that I have learned over the years from doctors like Jerry Hayes or Neil Gailmard, one should be spending about 4-8 percent of one’s annual gross on rent. So, to justify paying so much on rent, I used some of our marketing funds to help pay rent. In other words, my great location was worth paying extra for since it served as a form of advertisement.
I recently moved to the building next door mostly because the rent was going to more than cut in half the rent I was paying in the old office. The decision to move was difficult because I had been in the old location for 17 years. The old office was a 2,500 square foot office in a large four-story financial building with three levels of underground parking. The new office is 3,500 square feet with a courtyard in the middle of it. We have an option to purchase the building if we choose. We ended up sub-leasing out about 800 square feet to a hair/skin spa which further reduces our monthly rent.
Dr. Wong outside his office’s optical dispensary.
Calculate ROI of New Space
The formula that I had in my head was that in my old office I was going to be paying $10,000 per month for the next 20 years and have nothing to show for it; whereas if I put myself in a position to buy the building for the same money I could own the building.
Establish Goals of Cost Containment for Move
You have to take into consideration that moving one’s office costs money to move furniture, files and equipment. My wish was to keep moving and re-modeling costs under $25,000-$35,000, but my guess is that we’ve spent about $50,000.
Lease or Buy?
We decided to lease for the first one to two years then seriously consider buying the building. The difficulty is going to be getting the seller to come down on his asking price and to find an SBA loan product that meets our needs.
Get Staff Input About Possible Move
I individually asked staff members what they thought of the proposed move. The new optical would have the look of an individual boutique and be right on street level where passersby could look at our window displays (we won a nationwide competition for vendors displaying Tiffany Eyewear!).
Art replaces pictures of eyes on the walls of an exam room inDr. Wong’s office.
Value of Staying Close to Prior Location
I bought my practice 20 years ago from an ophthalmologist who practiced in the same coastal neighborhood for at least 30 years himself, so moving to a location close to the old office was important. Our latest move is literally into the next building. Patients can even park in the same parking structure as before.
Let Patients Know About Your Move
Direct word of mouth was probably the best way to get the word out about our move, but we also put news of the move on our web site and sent out e-mail blasts to our patient base and postcards to their homes.
Consider Future Expansion Needs
I predict that I’ll probably add a second practice location before I move this office from its new location.
Foo dog statues and bamboo poles to hide data wires
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Smart Real Estate Shopping: Read the Fine Print and Negotiate
Occupancy Costs: Manage Effectively, Free Up Funds for Practice-Building
Gordon G. Wong, OD, is the owner of GW Eye Associates in La Jolla, Calif. To contact: drgwong@gweye.com
