If you are going to be successful in your next negotiation, understanding market availability and comps is the first place to start.
Real estate is the second-highest expense behind payroll for most ophthalmology practices. The benefits of capitalizing during lease negotiations can include increased profitability, reduced debt, a nicer office and more.
On the other hand, if negotiations are not handled properly, the results can be decreased profitability; resulting in the need to produce tens to hundreds of thousands of additional dollars just to maintain the practice’s financial position.
While there are many key concepts and strategies to be aware of prior to and during any lease or purchase negotiation, there are an equal or greater number of mistakes to avoid. Having represented thousands of healthcare professionals over the last decade, we have gathered some of the most common mistakes they make during lease and purchase negotiations.
Here are three of the most common mistakes:
Mistake 1: Believing the landlord/seller will simply offer the best terms
Landlords and sellers are in business to make money. They are no more likely to voluntarily reduce lease rates or give up any extra money through concessions than you would be to reduce your reimbursement from an insurance company or cut your patient fees if you didn’t have to.
While it sounds pleasant to hear a landlord talk about giving a fair deal or reasonable price, your odds of getting either are bleak without truly understanding the market, entering the negotiation process with multiple other options and having capable guidance.
Trusting a landlord or seller without the help of professional representation will most likely result in the loss of tens to hundreds of thousands of dollars that could have stayed in your checking account.