How to Finance a Dermatology Practice Renovation
Renovating a dermatology practice can improve the patient experience, create more functional clinical space, and allow physicians to accommodate additional services or providers. However, construction and renovation projects can require significant upfront capital.
For physicians considering dermatology practice financing, financing may provide a way to complete eligible improvements while preserving cash for other business expenses.
Why Renovate a Dermatology Practice?
A renovation may be necessary when an office becomes outdated, the practice needs additional clinical space, or the physician wants to create a more efficient workflow.
Renovations can also support changes in the practice’s services or patient capacity.
Common Dermatology Office Renovations
Renovation projects can vary considerably in scope.
Common improvements may include:
- Exam room upgrades
- Procedure room improvements
- Waiting room renovations
- Reception area improvements
- New flooring
- Lighting upgrades
- Cabinetry and storage
- Plumbing and electrical work
- HVAC improvements
- Accessibility improvements
Expanding Clinical Space
A growing dermatology practice may need additional examination or procedure rooms.
Expanding the available clinical space can allow physicians to accommodate more patients or introduce additional services.
Creating Procedure Rooms
Dermatology practices that perform biopsies, excisions, surgery, or other procedures may benefit from dedicated procedure areas.
The design should support appropriate workflow, equipment placement, storage, and patient privacy.
Cosmetic Treatment Areas
Practices offering cosmetic dermatology may choose to create dedicated treatment rooms.
These areas can be designed around the equipment and services being offered while maintaining appropriate patient privacy.
Renovating a Leased Office
Physicians who lease their facility should review their lease before beginning a renovation.
The lease may address landlord approval, permitted improvements, construction responsibilities, and what happens to improvements when the lease ends.
Renovating an Owned Property
Physicians who own their commercial property may have greater control over renovation decisions.
However, they remain responsible for evaluating construction costs, permits, contractors, and the long-term value of the improvements.
Get Detailed Contractor Estimates
Before seeking financing, physicians should develop a detailed understanding of the project’s expected cost.
Contractor estimates can help identify expenses for labor, materials, construction, permits, equipment installation, and other improvements.
Consider the Project Timeline
Renovations can temporarily disrupt normal practice operations.
Physicians should consider how construction could affect appointments, patient access, staffing, and revenue during the project.
A realistic timeline can help the practice plan for any temporary operational impact.
Renovation Financing Can Preserve Cash
Paying for a major renovation entirely with cash can significantly reduce the practice’s liquidity.
Financing may allow the physician to spread the cost over time while keeping capital available for payroll, supplies, marketing, and other operating expenses.
Renovations and Equipment May Be Separate Costs
A renovation project may involve both construction and equipment purchases.
For example, a physician may renovate a procedure room while also purchasing new dermatology equipment.
The financing structure should account for the different components of the project and the eligibility requirements of the financing program.
Consider Future Growth
A renovation should ideally support the practice’s long-term plans.
Physicians should consider whether the improved space will provide enough capacity for expected patient growth, additional providers, or new services.
Renovations Can Improve Workflow
A well-designed dermatology office can make it easier for physicians and staff to move between examination, treatment, administrative, and storage areas.
Improved workflow can be an important consideration when planning a renovation.
Budget for Unexpected Costs
Construction projects can sometimes encounter unexpected expenses.
Physicians should avoid planning a project based solely on the initial contractor estimate and should consider whether additional funds may be needed for unforeseen work.
Final Thought
Renovating a dermatology practice can involve everything from cosmetic improvements to significant construction and expansion. Physicians should evaluate the project’s scope, contractor estimates, lease or property requirements, timeline, and potential impact on operations before beginning construction.
Financing may help physicians complete eligible renovations while preserving working capital for the ongoing needs of the practice. A detailed project budget can help determine how much capital may be required.
