Is your production potential limited by the size of your current dental office?
It sounds like you may be ready to expand your dental practice and grow your business. Expanding a dental practice is an important decision that involves countless, time-sensitive moving parts such as office design, collection of construction permits, the purchasing of dental equipment, financing, and the negotiation of the new dental office lease agreement for the additional space.
For 20 years, Cirrus Consulting Group has been helping dental professionals safely and thoughtfully prepare for their dental office expansion projects. As a result, we’ve developed this guide to help you prepare for your new business venture armed with the knowledge and confidence critical to take your business operations to the next level, and make your vision a reality.
Step 1: Define Objectives & Create the Plan
Is your potential for revenue capped by the size of your current facility? Strategically thinking about why you need to expand will help define your goals and execute a plan of action.
Step 2: Analyze the Terms in Your Current Dental Office Lease
After outlining your goals, it’s time to analyze the details in your current office lease to ensure it will allow you to carry out your expansion plans without obstacles. Contact the dental office leasing specialists at Cirrus Consulting Group to help you with this important step. A leasing expert will help you review and decipher the complex language within the lease to ensure you are fully protected when you approach your landlord with your plans.
Important Considerations in the Lease:
Being aware of the clauses and risky language in your lease before you expand or relocate into a larger space is the first step to protecting your investment.
*For more information about the practice relocation process, download our dental office relocation guide.
Step 3: Choosing the Right Team
Putting together a team of capable and trusted professionals is critical to a smooth and successful expansion project. Assemble a reliable team of office designers, builder/contractors, dental equipment suppliers, technology specialists and financial advisors.
Step 4: Review and Negotiate the Offer to Lease for the New Space
Once you’ve gotten the go-ahead on the additional space from your landlord, you will be presented with either a lease agreement, Offer to Lease (OTL) or Letter of Intent (LOI). An OTL or LOI is the short form of the office lease that mainly addresses economic terms such as rental rates, fixturing periods, start dates, length of term, “options to renew”, etc.
Ideally you will be presented with one lease agreement that binds both spaces into one contract, however, that is typically not the case. It is advantageous to the landlord to have two separate leases as it will make it more difficult and complicated for you, the tenant, to negotiate renewals or end your tenancy with the landlord at the appropriate time.
Your dental office lease negotiator will work with you to review the contract and create a negotiation strategy for improving the terms in your favor.
Step 5: Planning Your New Office Design
Once the LOI/OTL has been negotiated, it’s time to start planning your new office design. Dental professionals differentiate themselves in todays’ overly-competitive market by offering their clients an attractive office environment that enhances the patient experience. In addition, being equipped with the latest in dental equipment and technology is sure to set you apart from the rest. A modern and contemporary office design with upgraded dental technology will communicate to clients that you offer superior patient care.
Contact your dental supply consultant and dental office designer to begin planning out your new space. To ensure your expansion project stays on track and you’re not paying unnecessary rent before you open for business, request timelines from your design, build and equipment team for the work.
Items to Consider:
Step 6: Negotiate the Details in the Dental Office Lease
Once the preliminary designs are drafted, the next step is reviewing the details in the dental office lease agreement for the new space. The lease is a much more extensive and in-depth contract than the OTL or LOI that landlords use as a tool to make as much money as they can from a dentist. They enforce clauses in the lease that allow them to control the type of dentistry you practice, reap proceeds of your dental practice sale, or raise your rent.
Research and a thorough review of the details within the new lease are essential to ensure you are properly protected from risk, and that the lease does not impede your plans. Your lease negotiator will work with you to develop a custom negotiation strategy that meets your needs and expansion plans, taking over the entire process between you and your landlord.
Important Considerations in the Lease:
Step 7: Finalize Site Design and Begin Construction
Once the details in the lease have been finalized, the office design and improvement plans can commence. Work with your design team to confirm the layout and design of your office, and finalize budgets.
Confirm equipment orders, acquire the appropriate permits and schedule the construction for your office build-out. Begin construction, renovations and the delivery and installation of dental equipment.
Step 8: Finish Construction, Last Minute Touches, Open Your Doors!
About Cirrus
Cirrus Consulting Group specializes in helping dental professionals achieve favorable terms and rental rates in their dental office leases. We review the lease for risks and problem areas, and develop a customized dental office negotiation strategy to help our clients secure a dental office lease that aligns with their goals, and promotes practice protection, security and success.
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