Eyeworld

MARCH 2021 | EYEWORLD | 107 P Contact Pinto: pintoinc@aol.com Wohl: czwohl@gmail.com and you'll lose the promotional value of being on a major thoroughfare. • If you're in solo practice and have no solid succession plan, don't build a new facility if you plan to work for less than 10 more years. If you plan to practice for 10 years or longer, try not to rent, unless you work in a costly urban environment. 4. Don't overlook exterior appeal. Senior patients are more likely to have an interest in gardening. A patient's first impression of your landscaping could reflect on the quality of your medical and surgical care. Keep up the parking lot resurfacing and stripes. Purchase the larg- est/brightest signage local zoning will allow. 5. Don't pursue any significant expansion or building project without first preparing a realistic pro-forma showing the cost/benefit of the project in the years ahead. There are many factors to consider: • Will your total facility costs, as a percent of total collections, be at or under 10% imme- diately post-project, and fall to 6% or less within 5 years? • Are you realistic in your projections of how fast practice collections will grow with a new facility? Don't count on 10% annual growth if your baseline has been a steady 5%. • Do you possess the risk tolerance to handle the prospect of having facility costs escalate as a percent of collections if fee reform leads to materially lower professional fees? • What will be the future appreciation on your new property? Will you be able to find a buyer when the time comes, or is your area overbuilt with professional space? • Are you properly hedged and able to carry higher facility costs in the event of a COVID resurgence, temporary disability, loss of a key provider, or similar difficulty? • Finally, what's the bottom line? Will your personal net worth be higher or lower in 10 years or 20 years if you expand or develop a new facility today? 3. If you absolutely need to expand but have to do so on a budget: • If your budget is tight, eliminate non-essen- tials. Do you need a private washroom for every doctor? Over the course of an average year, this owner perk may cost you about $5 per bathroom break. The same goes for pri- vate doctor office space; a group office with a meeting table and separate cubicles not only costs less but facilitates communication. • Use flexible cubicles for business staff rather than erected, fixed walls. • Fit out an impressive waiting/reception area, but leave the back clinical space more industrial. Consider doing what Hampton Inn and similar mid-grade hotel chains do with a plush foyer and serviceable but plain guest rooms. • Leave out the crown molding, premium carpet, custom wall treatments and original artwork. The real product of the practice is the doctor; a little extra "packaging" never hurts, but some patients can be turned off by lavish facilities. • Make sure your builder takes a second pass through your architect's plans to "value engi- neer" the final project. • Don't under-build; if you build for today's needs in a growing practice, the second phase of near-term construction will be far more costly per square foot than being right-sized for a longer service life. • Unless you think you must, don't try to win architectural awards with off-beat, expensive designs. • Don't buy more land than you need, but leave room for any obvious, future expansion. Very few ophthalmologists should take the entre- preneurial approach of building the 10,000 square feet they need today, plus another 30,000 square feet to rent to other users. • In many cases, it costs less to create a new facility from the ground up than to redesign an existing structure. • Don't try to save money by buying cheap, out-of-the way land; the appreciation of your facility in the coming years will be far lower,

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