In our last post, we left off with the question of how, in this day and age, with the level of competition that exists for new patients, how can I possibly keep the cost of construction and equipment under $500,000 - $600,000?
Here, we discuss some methodologies for you to accomplish just that task. Now, by no means do we intend to suggest that you somehow cut corners or have an office that is less than acceptable. Nor are we suggesting that you have some bleak, stark office that resembles the inside of an asylum.
Keep in mind that if you start 20 patients per month in a more expensive location, your return on investment and ability to repay is substantially lower than if you spent 40% less on the facility and started 18 patients per month.
Here are some things we’ve seen over the years that help to keep cost under control while allowing to create a professional, inviting environment for patients.
You don’t need to choose a location that was built yesterday
We are all certainly aware of the lure of a medical facility or retail space that has just gone up. You and all your fellow tenants will be the first occupants of that space. If you’ve chosen a retail space, you’ll probably be near one of the hot new stores sweeping the nation – like a Chipotle or Trader Joe’s. Folks will come in droves to these places and then stop by your location for the highest quality dental and orthodontic treatment in the city.
With that, you also get to pay a substantially higher rent, get less TI money and be subject to stricter building requirements (in terms of materials and the like). And you’ll be subject to substantially more risk because in a new area, who knows if patients will come? Who knows what the traffic flow will be like? Will that hot new anchor store stop being hot and new?
Rather, consider an area that is tried and true in terms of its level of traffic and consistency of population. Yes, the location may be a bit older, but you may also be able to negotiate better terms. You can still design a very nice facility within that location. More importantly, you know that x number of people have gone through the area in the past and that a similar number will be coming through in the future.
One important corollary here is that if you choose a location because the city is growing in that direction, make sure that you are certain that growth is actually headed in that direction and prepare yourself for some potential lean times as you wait for the growth to materialize and mature into a solid patient population.
Professional does not equal ugly
It is very possible to build a clean, professional looking facility without breaking the bank to look like the inside of a 5-star hotel. Consistent, diverse colors, floor coverings that aren’t necessarily top of the line, and clean angles (as opposed to curved walls) in the front desk and waiting areas all contribute to impressive, but less expensive facilities.
I regularly hear about the need for artwork, and good-looking artwork. But, add a couple of inexpensive flat screens hung in the corners and play something entertaining on them (i.e. something from Disney or the latest DVD from Netflix) and no one is spending much time paying attention to the walls. Some offices opt to add artwork done by patients, but make sure that you keep it neat looking. Too many times, those projects tend to look cluttered.
In relation to this story, one brief anecdote. I was visiting an office in Columbia, SC with a doctor who had relocated his facility without our assistance. On at least 10 occasions during the 1 hour visit, the doctor told me that my company had quoted him a price of at least $250,000 to build out his space, but that he did it for $186,000 and did it the way he wanted. I wanted to tell the doctor how we used the highest quality materials and that our offices had the most up to date, modern design features, but I had to admit his office looked good. Very open. Very inviting. Yeah, he may not have used carpet that could withstand Katrina-like flooding, but for a patient who was going to spend an hour once every 6 weeks at his office, the facility was one that any patient would be happy to visit.
Be creative to produce certain effects
Block glass always looks nice, but putting up a whole wall of it gets very expensive very fast. But putting it in select spots can create a very positive impression. You don’t need the greatest waiting room chairs in the world (all apologies to the good folks at Herman Miller), but if you configure your seats to best view the entertainment or arrange into conversational areas (a la Starbucks), people will focus less on the kind of seatback you use and more on the entertainment placed in front of them.
Remember what is important
A nice looking office is great, but in the end, the success of the practice will be determined by quality of care, service and the people that provide that service. A chandelier and fountain in the office can only do so much to get a patient to sign. I get a version of this question from clients all the time, “Would a patient rather go to an office with a neon-lit fountain or a boring monochromatic space?” From my experience, that is not the right question. Rather the decision will come down to quality of care and the patient experience.
Another story from outside of the orthodontic and dental arena. In the late 1990’s, the New Orleans Saints were a bad football team. Whether it be the talent, coaching or management, the fact was that the on-field results were greatly lacking. So, to get fans to come to games, the outside of the Superdome became a circus. Sumo wrestling suits, chances to win prizes and all sorts of gimmicks existed to lure folks to games. Still, at the games I attended (and it was most of them), the Dome always looked about half full. In the next decade, the organization put a championship caliber team on the field. As on-field results improved, the number of circus games dwindled, but the place was packed every week. In sum, focus on your product and making your patients happy. Once you make your first million, then look at building your eye popping facility – or keep the money for yourself and your family. Your choice.
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