Starting a medical or dental practice must be one of the most difficult commercial ventures anyone can undertake. Relocating an existing practice comes not far behind. There are so many factors to consider, in choosing the right location and getting the right agreements. As with all big undertakings, research and planning are the keys to success.
Lease or Buy
Whether to lease or buy a property is a business decision, and needs to be treated as such, involving your accountant’s advice. You may have an instinctive feeling about what you want to do, or you may be prepared to wait until you have researched the options more.
Location, Location, Location
Location matters. This is true of business property just as much as residential, and probably is especially true of businesses which provide a service to the public. Once you have an idea of the general area you are looking at, start some in depth research. Better still, find three or more areas and research them all.
What is the demographic make-up of the area? Is your practice likely to find its main patients among older working men or young professional women? Is the area you are looking at growing or declining—newer growing communities have a need for more professional services, whereas older declining communities are already well served by those they have. You can get very detailed information from the US Census Bureau or from local authorities.
What is the professional competition in the area you are considering? People are generally reluctant to change their doctor or dentist. If you offer a specialism, do people have to travel for that at present? If so, you may well be able to offer the service conveniently close—or is there a good reason why no other specialists have set up shop in this location?
Pinpoint the Site
When you are satisfied that your medical or dental business has a future in a particular area, you need to narrow down the possible sites. Again make a short-list of ten or so, and look into them in detail.
Look at the traffic through the area. Is location A more visible and accessible than location B? If people are most likely to call in on their way home from work, is the site on a commuter route? If so, is it easy for them to turn off to reach your practice? Is the traffic slow going past your signs? Most important, is the parking good enough?
Consider the impact of your neighbors. If you are a specialist, it may inspire confidence if you are close to a hospital, or in a block where a number of different specialists work with a measure of co-operation. If you are a family practitioner, then you might be better located where people shop or spend their leisure time, where they will have a better chance to notice you. If your work is largely insurance funded, you might be want somewhere closer to the facilities of major employers.
Close the Deal
Once you have arranged your prospective locations in order of preference it is time to look closely and negotiate. If you haven’t already taken advice from commercial real estate experts, you will probably want to get it now.
Whether you decide to buy or lease, you will have local regulations that you must observe, and your proposed property must be capable of meeting them. As a medical facility, you will be handling pharmaceuticals and dangerous products—you will have to satisfy the authorities that you can safeguard them and dispose of them appropriately. There will be statutory as well as common-sense requirements for access by the disabled. There may be local restrictions on the sort of signage you can use.
If you are planning to lease, then there will be agreements to be made with the owners of the property, which will need to be expressed in the terms of the lease. For instance, you may need to make alterations to the property to make it suitable for your purposes—get it spelled out that you can do what you need to do. You may well want to get an agreement from the owners that they will not let out premises in the same building to a competitor. Be clear about your rights if the owners sell the premises.
A Big Challenge
Choosing and negotiating the right location for your practice will probably be among the biggest tasks you will take on in your professional life. There are no guarantees you will get it right every time, but the more carefully you prepare your way the more confident you can feel.
For over 10 years Eli Russell has worked as the Chief Marketer and Leasing Agent for JGM Properties. In that time he’s placed nearly 500 business tenants in a new office, retail, commercial, industrial, or warehouse space rental. Because they have so many different types of commercial real estate space available for lease throughout the Minnesota Twin Cities Metro Area, it’s afforded him the opportunity to meet thousands of entrepreneurs and business owners.