Are you maximizing the income generated by your office space?
How do you know if you are maximizing your office space? I’ve said it once and I’ll say it again: Know the numbers in your practice! If you can understand the clients and money that is coming in and the expenses that are going out, you’re off to a really good start.
The best way to find out if you are currently maximizing your space is to reference your detailed, up-to-date financial records and calculate how much time is actually spent in your space. This is something we do with our clients to help them understand whether they are using their space to its full potential.
The first question to ask is about the efficiency of your scheduling. Let’s use an example to illustrate how an office space is used. Let’s say you have 8 rooms that are used 6 days a week and usually hold 12 appointments per day. That leaves us with a grand total of 576 appointments per week. That would be a pretty good use of the space! But what if those rooms would only be full half of the time? You can see how the practice owner would be better off paying for half the amount of space!
We are often asked when it’s time for more space. The truth is–most private practices are under-utilizing their space. When we look at the number of offices/therapy rooms at each location and figure out what the financial capacity of the space is this becomes clear. So often practice owners consider opening a second location before making sure they are fully maximizing their current space. When we show them how much more they could use their current space, opening a new practice doesn’t make sense anymore.
Based on your practice size you can set a minimum and a maximum amount of traffic in your space and then set a goal somewhere in between. For example, you might look to fill 8 sessions/room/day on Mon-Fri and 4 on Saturdays, and then you can track to see what actually happens to see if there is more capacity-filling work to do! If you find that your practice is regularly hitting under your minimum, you’ll know you don’t need additional space and where to spend your time and money instead.
What have you discovered about how you do or don’t maximize your space? Do you think you are ready to open a second practice? These are the kinds of important decisions that GreenOak Accounting can help you confidently make. We’d love to hear from you!
This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. GreenOak Accounting is an accounting firm that specializes in working with counselors and therapists in private practice. We provide monthly accounting & bookkeeping services, 1-time services and online courses. For more information on our specialized services for therapists please visit https://www.greenoakaccounting.com