What to consider when evaluating office space, signing a lease, and attracting patients
Deciding where to open a medical practice or launch a new location is a big decision that ultimately affects the success of your business. In our first post on this topic, Opening a New Practice Location? What You Should Know, we covered how to research a community, assess the competition, and identify how to best serve your ideal patients. In Part 2 of this post, we’ll discuss some specifics of choosing office space, negotiating a lease, and how to design your space to work best for your practice.
What to look for in office space
In our first post, we discussed selecting the best geographic location for your practice. Once you’ve considered traffic patterns, visibility, and medical office park vs. retail walk-in location, you’re ready to start looking at office space.
“When touring properties, look at general maintenance and landscaping, lighting and cleanliness. Consider how the front desk, exam rooms, clinical areas, and offices are set up and designed. Not only should the space make patients feel comfortable, it should also facilitate smooth patient flow,” suggested Zocdoc’s The Script blog.
Pre-existing medical offices can be less costly and functional with only minor renovations compared to new office space that didn’t previously house a practice.
As we noted, significant renovations may be required if the space previously wasn’t being used as a medical practice. Decide if you’re up for that; if not, keep looking. According to commercial real estate agency Macy Newman, “Because more medical practices are moving away from older offices near hospitals today in favor of newer office space in medical group practices, you may find suitable office space in the offices that they vacate that can be quite attractive and functional with just minor renovations. These offices are also often less costly to buy or lease than newer ones may be.”
In some spaces, simple solutions can make the space work for you, such as shared workstations or flexible furniture that can be moved and reconfigured to meet your needs. For more on this, see Design Your Office to Improve the Patient Experience.
Signing a lease
Before you sign a lease, know what you’re getting into. “In this volatile economy, it’s worth checking the stability of the community’s employers. If you’re leasing rather than buying, you might consider asking for an escape clause in your lease in case the economy of the area suddenly changes,” suggested Physicians Practice.
Some medical office leases require additional expenses in addition to the base rental rate, such as utilities, maintenance, and taxes.
Also make sure you understand the terms of the lease. The base rental rate is not always the whole picture. According to “Office Leasing 101: Understanding the Triple Net,” triple net is a common yet often misunderstood term in medical office leases. It refers to core expenses that the tenant pays for above and beyond the base rental rate, such as utilities, maintenance, and taxes. “Some triple nets include water/sewer as part of the base rent; others do not,” noted the article.
What can you expect to pay for office rent? The answer depends on several factors including your geographic location and how new the space is, but the average rent for medical offices in the U.S. reached the highest level on record in 2018—$22.90 per sq. ft.—according to a report from real estate services firm CBRE.
Make a timeline to opening day
Physicians Practice suggests creating a timeline when opening a new practice or location. Start with your projected opening date and work backwards. A week before opening, you’ll want to think about things like setting up internet and phone service, bringing in furniture and equipment, and putting up signage.
Your timeline prior to opening should allow enough time to get certified with insurers, obtain necessary licenses and supplies, and include marketing efforts.
A month prior to opening is the time to get all staff certified with insurers, order letterhead and prescription pads, and post on your website that your new location is opening soon. Two months out is the time to build out the internal space if necessary, apply for a business license, and get an NPI number for your new location, according to the article.
Last but definitely not least, do not overlook marketing. Before you move in, introduce yourself to the other tenants in the building and other doctors in the area. “Referral relationships typically take time to develop, so you’ll want to get started right away. Best of all, the fact that you are new to the area gives you a built-in excuse to introduce yourself around,” notes marketing and advertising agency Healthcare Success.Opening a new location provides you with “a rare window of opportunity to ethically and powerfully market your practice” because you’ll only be new once. Click To Tweet
According to the agency, opening a new location provides you with “a rare window of opportunity to ethically and powerfully market your practice” because you’ll only be new once. “And from a marketing point of view, ‘new’ sells.” You may even consider offering an open house or happy hour to introduce yourself to the community and get to know potential new patients and referring practitioners.
For a related post, see How to Succeed in Solo Practice in 2019.