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Dreaming of building? Establish concrete goals
Ask yourself these questions, and answer honestly, to make sure your vision is feasible.
A founding member of Animal Arts, a veterinary design firm based in Boulder, Colo., Mark Hafen, AIA, has seen many practitioners rush into the building process. "You need to take time to think through why you're doing this project and what you should realistically expect to accomplish," says Hafen, a Veterinary Economics Editorial Advisory Board member.
Is it best to build?
First, consider whether it even makes sense to build. Hafen urges his clients to assess their existing practice, the direction it's going, and the potential for growth. "What are your economic strengths, and what's your potential?" Hafen asks. "Who would you like to see participate in the project? And how does a new or expanded project dovetail with your lifestyle and stage of life?"
Where will you build?
Once you know where you're headed, it's time to size up your location. "Consider whether your present location jives with your long-term goals," Hafen says. "Measure up your competition. Are you in a growing market? Is your site visible and accessible?"
What will your building look like?
Next are queries about the appearance of your existing facility and how it compares with the image you want to project, Hafen says. "I also press clients to consider the performance capacity of their dream hospital," Hafen says. "Is there room to accommodate the services you want to provide? What would be the ideal long-term capacity of the facility in terms of doctors, exam rooms, surgery rooms, and animal holding? In most cases, veterinarians underestimate how much their practice will grow."
What services will you offer?
Consider what new services you see yourself offering. But before you start dreaming of high-end doggie daycare services, consider the ramifications in terms of equipment, space required, and staff. "Boarding, grooming, and retail services were recently viewed very positively in terms of potential profit centers," Hafen says. "I'd counter that perhaps your best new services should be medically based technologies such as ultrasound or MRI, or new medical services such as oncology or dermatology."
What's your budget and financing plan?
Now it's time for the tough question of budget. "Ask yourself what you want to spend or expect to spend," Hafen says. "A simple rule of thumb is that your total borrowing capacity is equal to what your practice grosses in one year."
The next nasty question entails financing. "Do you have all the money you need for the project, or will you need to borrow?" asks Hafen. "How much and from whom? In most cases, you'll need to have an equity share of between 10 and 20 percent of the total project cost. Additionally, you'll incur out-of-pocket costs during the initial stages of the project. These costs can be significant."
What's your exit strategy?
The last question is often overlooked. "It's critical to have a clear idea of what you want to do when you're ready to move on," Hafen says. "So ask yourself, how do you see yourself getting out of the practice in the long run? Large practices are often sold to corporate consolidators. Another strategy is to sell to your junior associates."