Finances

Six Ways to Stay on Budget When Expanding Office Space

By Rachael Click, OD

Jan. 6, 2016

SYNOPSIS

When expandingoffice space, prioritize expenditures on facility, equipment and furnishings. Leaving some expenses for later can steer you around afinancial crunch.

ACTION POINTS

SET BUDGET. Create spreadsheet to trackcurrent and projected needs and expenditures.

ASSESS ABILITY FOR ADDITIONAL MERCHANDISE. How many more frames and other products will expanded space allow? Calculate how much more revenues in merchandise the new space might enable.

ASSESS EQUIPMENT NEEDS. Use membership in optometric alliances, or your own long-standing relationships with vendors, to find the best deals.

I lease my office space, and am in the process of adding the adjacent space in our building.My current space is 1,650 square feet. I am adding 1,500 square feet for a new total space of 3,150 square feet. The project is due to be complete in February 2016. Having this extra space will improve the services I can provide to my patients, but it also requires carefully planning the needed investment in equipment and furnishings.

Blueprint of Dr. Click’s current office space (shaded), with adjacent space (lined)that she plans to add to her lease. Dr. Click’s expansionis based on projected numbers of additional examsand added services.

Set Budget for Furnishing & Equipping New Space

I spent a lot of time planning my budget to make sure it was accurate, and discussed my needs at great lengths with my practice consultant. I try to objectively look at things in relation to my ROI. The things that have a higher ROI, such as the furnishings needed to showcase additional frames and other merchandise, get more priority than the lower, such as a new couch or chair for the reception area.

I was able to create a very strict budget with the help of my consultant. They sent me a spreadsheet that I was able to insert numbers into. This spreadsheet had different categories like lease-hold improvements, equipment and furniture. This was a great tool to help plan how much money to ask for during the lending process.

Assess: Will Additional Space Allow for Additional Merchandise?

The enlarged space will allow for additional optical merchandise. I plan to add about 40 percent more frames to what I currently carry, and think that I will be able to sell that many more annually. Our frames tend to be more mid- to high-priced frames. The additional space will allow us to carry frames to meet everyone’s budget, as well as carry more frames in the lines we already have.

Re-Use Whenever Possible

I had a few custom-made pieces of furniture that I was able to reuse in the new space by rearranging them and using them for different purposes. For furniture needs in the expanded space, I only had to add some selling tables, stools and chairs for the tables, and a couple of new frame display cases. The frame display cases I already have are custom made and are easy to move and duplicate for the additional space.

Assess Additional Equipment Needs

The biggest equipment purchase was an additional exam lane. I am a Vision Source member, so I am able to take advantage of some great discounts on equipment. I will also need to purchase additional computers for the optical, and potentially upgrade my EHR system because I have been running on the oldest version for several years.

IMMEDIATE NEEDS CAN WAIT ITEMS

Additional exam lane Updated software systems

Another frame board Display cases for frames

Updated flooring New furniture for reception area

Upgrade Old Part of Office to Match New

The old part of the office is getting new paint and floors. To make the space look cohesive, the floors had to be replaced as the office has a fairly open floor plan in the front. There really wasn’t a way around getting new floors, but the amount of floors that I could have saved from re-doing was only a hallway. I think these two things only added about 5 percent to my cost.

Decide What You Need to Wait & See About

There are two things I am taking a wait and see approach on. One is the potential upgrade of my EHR system. I will be utilizing a wireless internet connection in the optical and the exam rooms. If my current system won’t support tablets, then I will have to upgrade. The other thing I am taking a wait-and-see approach on is the number of additional display cases for frames. I am having some built, but this furniture is custom made and versatile. To keep inventory and built-out costs down, I may add half now and the other half as I need it.

Related ROB Articles

Project Profit Gains–Then Add Office Space

Design Resources: Guide to Creating an Ideal Office Space

Repairing Your Practice’s Four “Broken Windows”

Rachael Click, OD, is the owner of Preferred EyeCare Center in Mount Pleasant, S.C. To contact her: drclick@preferredeyecarecenter.com.

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