If You're About To Open A Practice, you're faced with literally hundreds of questions. For example, should you rent space
or buy or build your own facility? It's a relatively simple question with no particularly simple answers. Certainly economic
factors come into play, as do practical business issues. The short answer: It depends, of course. Here's a look at what you
should consider.
How much cash do you have on hand?
Location, location, location
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When you rent, you'll sometimes need first and last month's rent, and you'll be locked into a lease. But you don't need a
down payment. For this reason, Dr. Bob Froehlich, MBA, of Summit Veterinary Advisors in Littleton, Colo., says renting can
offer easier entry to practice. "If rent is fair for the market area, you can generally start a practice with a lower initial
investment," he says.
How much space do you need?"Start-up practices can really struggle when they overbuild," Dr. Froehlich says. "A start-up practice that builds a 10,000
or more square-foot building won't be appropriately sized until that practice is five to 10 years old, so owners are paying
more than they should for their facility in the meantime."
That's money you could be spending on new equipment, marketing, or employee development—all things that could help build your
practice. "If you begin by leasing a 2,000 square-foot space, if and when your practice grows, it might be easier to build
or buy a larger space to match your practice's growth," Dr. Froehlich says.
To figure out how much space you need, Dan Chapel, AIA, Veterinary Economics Editorial Advisory Board member and owner of Chapel Associates Architects Inc. in Little Rock, Ark., says you can do some
educated guesswork. "First, decide how many exam rooms you need—ideally, two for every veterinarian that will be actively
using them," he says. "This way, doctors can be working in one exam room while technicians and assistants clean and prepare
the other one for the next appointment. Then multiply the number of exam rooms you need by 1,000 to 1,200 square feet. So
if a hospital needed four, you'd estimate total square footage of 4,000 to 4,800 square feet." The actual exam rooms usually
run about 100 square feet each, Chapel says.
When he uses this formula, Chapel says he's assuming that the practice will incorporate fairly standard equipment, runs, and
so on. "If you want something out of the ordinary, such as a gigantic grooming area, then you'll need more room," he says.
Where's the perfect location for your practice?
Figure 1. Pros and cons of renting
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If you can't find a building for sale in your ideal location, then you could consider renting until the perfect space becomes
available. Whether you rent or own, location is crucial, says board member Wayne Usiak, AIA, a senior partner with BDA Architecture
in Albuquerque, N.M. "So research your choices carefully," he says. (See "Location, Location, Location" for site selection
considerations.)
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