Article Date: 7/1/2006

relocation
The Logistics of Relocating
Part two of our series discusses the relocation details that impact patients, staff and your bottom line.
BY RICHARD S. KATTOUF, O.D., D.O.S.

Let's start with where you're going. When relocating an office, there is always a question as to the distance you should move. Try to keep the move within three miles or less of or services. With that said, let's focus on setting-up your new office.

Customize your space

Most of the time, we move due to the need for more space. Make sure to create a detailed list of all the rooms you want to include in your new facility. For example:

Number of exam rooms. Plan for expansion, growth, associate doctors and exit strategy. Think in terms of greater delegation to ancillary personnel and how this can impact the number of rooms. If you plan to teach higher levels of delegation, such as having the technician refract or assistants perform a major part of contact lens follow-up evaluations, this will necessitate more examination lanes.

Staff lounge. Most offices that I consult with do not have such a room. Having such a place exhibits a caring attitude. Planning for this room also helps implement rules (standard operating procedures) about where employees can have food and drinks. All snacks, lunches, food and drinks should only be consumed in the lounge. Without this room, simple rules like this are difficult. I have observed staffers eating and drinking at their workstations. This is totally inappropriate behavior for any organization.

Specialty testing rooms. You may need more performance and consultation for tests such as automated perimetry, retinal imaging and optic nerve analysis. Many doctors place these instruments in the data collection (pre-test) room and create a negative patient flow. Plan for the addition of developmental vision/orthoptics and low vision treat- ments. As your practice grows, you can't afford to tie up the standard exam rooms. When you relocate your office, make sure that the "non-verbal" message to your patients is clear: You are a vision care specialist who has planned ahead in a well thought out manner to offer the community a clinic and optical to serve them at the highest possible level.

Separate functions

When you're planning your relocation is the time to consider separating your optical. Benefits include:

Patients understand the real cost of their eye wear, not glasses and examination combined.

Attracting "walk-ins" and shoppers. Rarely will a consumer come into a doctors' office to "shop" for eye wear. But many consumers do want to shop for glasses. If you lose one patient per day from your optical, you lose $50,000 of gross revenue annually. Conversely, you can gain the same amount from one walk-in per day.

The ability to plan for an "in-house" laboratory. This is a great service to your patients. If done correctly you can significantly lower your cost of operation and raise your net. Planning for the move is the proper time to design the optical lab.

Your new office could benefit from such a room to accommodate ocular emergencies. More and more offices I consult with are bringing in ophthalmologists as renters. Having this room can be a real boost to efficiency, productivity, profitability and promoting your image in the community as a real doctor.

When you relocate your practice to a better, more accessible location with better parking, more modern, improved instrumentation and upgrades in the optical, it's not uncommon for the practice to increase in gross income by 20%. Of course, you have taken on a greater debt service.

Finance options

In the relocation process, let's review the options of renting or buying an office condo unit or owning the building.

Renting. This choice is similar to purchasing term insurance. Your investment demonstrates no equity for the money spent. The advantage of renting is that, if you have a good landlord, he or she will be responsible for all repairs on heating and air conditioning, as well as landscaping and outdoor maintenance. But there are no tax advantages.

Condo. With this option, you have ownership and build equity in your unit. You'll pay monthly or quarterly fees for maintenance of outdoor and "common" areas such as the foyer. This is a good choice to build some equity. A problem may arise if you need to expand. Normally, you are limited to your space unless a condo next to you or a larger unit becomes available. There are also some tax advantages from deducting interest payments or mortgage.

Ownership. In a perfect world, this is the best financial option. If you want to make a lot of income in your relocation process, you can erect a building with your space and three suites for rental, for example. If your suite is 3,000 square feet and you plan for three additional offices of 1,500 square feet, you have to have three signed leases, for five years each, prior to going to the bank for financing. This puts you in an extremely favorable position with the bank since you have the renters contracted preconstruction. In this kind of situation, many times the rental payments cover the monthly mortgage payment. The O.D. can pay himself rent, build significant equity and lower taxes. The negative side is that as a landlord, you'll be responsible for maintenance and repair costs. If you have the leases done professionally, this is by far the most financially advantageous option.

Put it together

A relocation plan requires thought, planning and proper controls. When it is executed properly, practices can increase income, raise their professional images and build equity for your future.

Dr. Kattouf is president and founder of two management and consulting companies. for information, call (800) 745-eyes or e-mail him at advancedeyecare@hotmail.com.



Optometric Management, Issue: July 2006