Date: October 1, 2015
Session 8 – Office Visibility
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Session 8. Office Visibility
It has been widely assumed that office visibility was always important and always worth the price of the extra lease rate. In this session, we are going to explore a little about the necessity and worth of visibility for different types of practice. As you would suspect, the visibility is worth much more for some types of practice than for others. There are three factors that are related that should guide your decision:
- Visibility: This is defined as how easily seen or recognized a building will be to those who are not looking for the office. Signage is included in the visibility factor. The more signage potential an office has, the more favorable will be its visibility quotient. For offices that need visibility, signage is vital.
- Accessibility: This is defined as the ease that people will have in getting to the office. Don’t assume that if a practice or office is visible, it is also accessible. I have seen dozens of offices that can be seen from an interstate freeway, for example, but require the tracking abilities of a blood hound to get to. Others may be accessible from one direction of travel but due to the lack of turn lanes, extremely long “Medians” or physical barriers like rivers or one-ways cannot be accessed from the “wrong” direction of travel.
- Proximity: Just as you would suspect, this is how close the office is to a related location. For example, does it make sense for an OB-GYN practice to be close to a hospital? Well, if the doctors are going to be involved in deliveries, it makes sense. The same is true with any practice where a surgical facility will be necessary. Being on staff at the hospital can be an important factor in building contacts and referrals. On the other hand, being close to primary care providers who may want to have the practice nearby is often a huge plus. To illustrate, a general dentist might open a tooth only to discover that endodontic treatment is needed NOW. Rather than seal up the tooth and hope the patient can drive over to the endodontist across town, it makes sense to get the patient seen as soon as possible by an endodontist in the same building. Sure, the guy across town might be a great clinician but when you need the patient seen immediately, proximity trumps talent. Well, at least this is true enough to mention.
Therefore, in evaluating locations, visibility, accessibility, and proximity ALL need to be taken into account. Still, they are not equally important to every practice model.
Here are some general rules of thumb that I will explain in more detail in a moment.
Rule of Visibility 1: If the practice does not depend upon referrals, it needs to be in a highly visible location. In the range of office spaces, those that are zoned “retail” will often be the best answer.
Rule of Visibility 2: Visible offices, those that can be seen from large traffic transportation arteries and offer signage, are going to be more expensive in every case than those offices that are in medical office parks and buildings. Interestingly, what you are paying for, visibility, may be important but too many doctors forget that accessibility is also necessary.
Rule of Visibility 3: Offices that depend upon referrals in order to gain new patients need to be concerned with proximity to the referral base. That is why it makes more sense for the endodontist to be located near many general dentists who might refer. The same can be said for any medical specialty. Does it make sense for a pediatric dentist to be situated near the pediatricians in a community? Certainly!
But what about an orthodontist? Orthodontists often get referrals from general dentists and they also get many patients who “walk-in” because the office location is perceived as convenient. In this case, a balance between visibility, accessibility, and proximity will make sense. But there is another factor that this type of practice and many others have to take into account as well: the desired market segment. What many people don’t think about is that orthodontists do not serve a cross-section of the general public. They serve a somewhat narrow age range that stretches mostly between 12 and 16. These are when “starts” are scheduled. Therefore, a practice that has the great visibility, accessibility, and proximity to a referral base may be wonderful but if there are not many teens, the practice may be doomed before it opens. There is no wonder that so many orthodontists want to set up practice near a junior high or high school or both. It is also why so many specialists that treat geriatric patients need to consider these same issues regarding retirement communities.
Does all this mean that unless the practice is located near these places that they cannot succeed? It does not. There are times that a particularly visible location can overcome the disadvantages of Accessibility or Proximity. And likewise, the practice with outstanding proximity may be able to do well even if its visibility is only marginal. What we are suggesting here is that if you are looking for the ideal practice, these are the issues to keep in mind.
But what about competition?
It may not surprise you but the best locations are going to have competition. Don’t be so naïve that you would assume that you are the first person to stumble out of the undergrowth to discover the perfect practice location that has never been seen by Man. Remember, when Columbus arrived in America, there were already people here. When Louis and Clark finally made it to the Pacific, there were already people in what became Oregon. When Neil Armstrong took the first, wait a minute, remember what I said earlier about finding locations that no one else occupied. Just keep that in mind. Sure, the Moon has great visibility but it falls a little short on Accessibility and Proximity.
Back to the point on how primary care locations will tend to do better in sites with great visibility. In “retail practices” like optometrists, having an optician and show-room makes great sense because the office space can be productive. Veterinarians that also have a retail aspect to their practices such as selling feed, diet supplements, and other products can justify the larger space because it is productive. Cardiologists with a well-center associated with the practice (something we see less and less) or an prosthodontist with an on-site lab are probably not going to do well in a retail type space because they cannot justify the “product value sold per square foot” figure.
There is one more note of caution we want to add when it comes to retail locations for healthcare offices. Some zoning laws get extremely careful about awarding a lease when there is bio-waste. This is especially true when a veterinary practice is found fairly close to a place that makes food (like a pizzeria.) In some places, it is no big deal. But when surgeries are performed, just be aware of the problems before you sign the lease. It will make your life a great deal simpler.