It is common for allied health practices to rent space to other clinicians or allied health professionals. There are many benefits to this, including revenue, saleability, economies of scale from sharing resources such as practice staff and common areas and creating the impression that you are a larger practice. Some practices for sale currently have space or multiple spaces in their clinic that would be perfect to lease out and increase the value of their clinic. If you are potentially thinking of leasing out your sessional space it is a great step to take that in the long run can help you get the most for your practice when it comes to selling.
However, there are also risks that you may need to be aware of and basic business procedures to follow to make sure your space leasing goes as smoothly as possible. Here are some tips to help you when leasing space or rooms in your clinic.
Speak to your network: Many practitioners have experience with leased sessional space, both as a lessee and a lessor. Speak to as many people as you can to gain real-world insights. Find out what the going session rate is or what the percentage commission split is normal.
Draw up a business plan: This should ideally be with the help of your accountant and coach (if you have one) and should include projected income and expenses as well as a risk analysis.
What arrangement are you seeking? Do you want your tenant to pay a monthly rental for a specific number of square metres or will they pay per day or per session? Or will they pay a percentage of their fees? Will they be using your reception staff, telephone system and internet? How will this be charged for and managed?
Communicate internally: Explain your plans to your practice staff and give clear insights about how their workload or responsibilities might change. Allow people to ask questions and apply your mind to providing non-defensive answers. If you are leasing a space before planning to sell, decide if you are going to tell your staff about the sale.
Set up systems and procedures and ensure they are followed: This includes Work Health and Safety as well as mundane matters such as ensuring that the kitchen can cope with the extra tea and coffee consumption. Ensure you and your tenants comply with safety regulations and that everyone knows their responsibilities regarding internet, passwords, and patient records.
If you have taken these tips into consideration and are now planning to lease out your clinic space before selling your practice, please call Healthcare Practice Sales and we can help you with your next steps.