With commoditization underway in dentistry, this is the perfect time to revisit the subject of your office space. This is one major area that you must tend to, though it is often overlooked by dentists or brushed off as "too big" to tackle. We call this "Space and Equipment."
Your Space and Equipment encompasses the land, building, and all contents inside the building. It's anything a patient can see, touch, smell, or otherwise come in contact with, which makes it very important to the success of your practice. Your Space and Equipment is pretty straightforward, but based on our experience working with thousands of dentists, I can tell you that the majority of dentists do not fully understand this investment opportunity.
Let's start with the basics -- the land, and the structure itself. We suggest you buy a practice based on three things -- location, location, location! Visibility, signage, and parking are also very important for a thriving and successful practice. We advise our clients to buy their building and become their own landlord, rather than renting a space; otherwise they're just throwing away cash to build up someone else's net worth. Owning is a great investment and an opportunity that dentists do not want to miss out on.
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When buying a building, the most crucial issue that challenges dentists is buying with expansion in mind. Most dentists make the mistake of buying what will meet their current needs, but they fail to think about what they're going to need in the future. Do not make this mistake! This is a Band-Aid approach that will not sustain the long-term growth of your practice. You must have a long-term growth strategy mapped out and be prepared to purchase the right office to match your strategy.
This is the biggest thing we see that stunts growth in most dental practices. If you're in a space that's at maximum capacity, there is simply no room to add new capabilities. We teach dentists a formula for getting to the revenue number where they want to be, and it depends heavily on the number of operatories they have available. If a practice has extra operatories available, or even room to build out another operatory in their current space, we can turn up the revenue very quickly. But if there isn't any additional capacity, this opportunity can be suppressed or significantly delayed.
There are lots of creative ways to get the right space for your practice, and most doctors tend to think too small. An example would be looking at floor plans that provide no place for back office support. For instance, if I told you to add a marketing director to your team, where would you put the person? Adding a marketing director can be a turning point in a practice's growth, but would you have the space to accommodate them?
Most office plans do not account for what is really needed when the office is productive. Getting your ducks in a row and establishing good long-term financing in advance of your purchase is critical. Banks always want to lend you more, but you should only borrow what is strategic and correct for you. And remember -- you should always be working to pay off your loans as quickly as possible. Otherwise you may overrun your credit while trying to hide a lack of performance.
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Ultimately, your Space and Equipment should focus on the most important persons in your practice -- your patients! We feel very strongly that successful dental offices of the future will be extremely patient centered, and will provide a wide range of comprehensive care under one roof. Being in a building that is too small can cost millions of dollars in untapped opportunities during your career. So I will leave you with this thought -- I have never had a client say they built their building too big. Almost all of them tell me they built it too small.
