When it comes to establishing a new practice, location is everything, according to last month’s story, In search of office space. But while you’re still in the stages of selecting a cosmetic practice site, there are other important steps to take, case-in-point, assembling a professional team that will get your practice off the ground — in some cases, literally — including a contractor, a real estate broker, equipment reps, a technology expert, a bank and perhaps an architect.
Assembling Your Professional Team
“You might also hire a consultant to help you get things going,” says Austin Wheeler, a partner at Practice Real Estate Group, a full-service healthcare real-estate solutions company based in Austin, Texas. “In most markets, there are probably quite a few service providers within each category.” A consultant can help to navigate and select the best providers.
Whether you hire a consultant or undertake the process yourself, Wheeler tells The Aesthetic Channel that vetting potential service providers sooner than later “will save you a lot of money and time on the backend.”
He also encourages asking for specific referrals from providers for similar work they’ve performed. “I encourage practices to be upfront with service providers about conversations they have with referrals,” Wheeler says. “The bottom line is that you want to contract professionals that are best for you and that make you feel comfortable.”
Competing quotes are important as well. “By interviewing only one contractor, for instance, he is able to inflate the price because he knows no one else is competing,” Wheeler notes. “However, if the contractor knows there are other bids, he will sharpen his pencil, which is to the doctor’s advantage.”
Emphasis on Location
When seeking a location for a practice, typically a higher income area is desired, according to Wheeler. “The minimum bar we set is a $75,000 median household income and above,” he says. “This eliminates a lot of areas.”
Population age is also a key factor, according to Wheeler, who emphasizes the need or desire of older populations for dermatologic and/or cosmetic surgery.
A dermatologist to population ratio of no less than 1 to 3,000 also increases the likelihood that a new practice will succeed. “But a 1 to 5,000 ratio is the sweet spot,” Wheeler says. “We know there is going to be competition in most areas. We just want to find the best ratio possible.”
For a new practice, strong population growth helps. “If you locate in a stagnant population, those people probably already have a dermatologist,” Wheeler says.
Prior to a practice committing to a location, Practice Real Estate Group usually maps out the competition, so that the dermatologist understands how an existing practice is set up and how the physician can differentiate their own practice from nearby practices.
Wheeler observes an increasing number of cosmetic practices moving from medical office buildings to retail space, with Mohs surgery available in some of their facilities. “You do not need to be in a medical office setting to have a successful practice,” Wheeler asserts. “A retail location offers you more visibility, accessibility and foot traffic.”
A retail location on a main thoroughfare that connects neighborhoods to an interstate or highway will allow potential patients to drive by the practice on their way to their destination multiple times a week for marketing visibility.
For a practice that sets up a location that fails to meet expectations, Wheeler recommends hiring a consulting firm that specializes on working with cosmetic physicians, to analyze their business plan and determine what the practice is doing correctly and incorrectly.
“In many cases where we see practices going slow, those doctors have sort of piecemealed things together,” Wheeler says. “They will hire a separate person for search engine optimization (SEO) on the internet and a person to send out mailers, for example, but these people do not do much after that.”
Instead, Wheeler advises hiring a single point of contact that can help a practice consolidate marketing services, although the cost may be slightly more. “At the end of the day, though, I think the doctor makes more money in the office than they are saving by trying to work with six different people who may not be all on the same page,” he says.
Next month’s column will focus on the pros and cons of opening multiple locations.