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February 2, 2020 at 8:52 am #1000009gmwhilerainingMember
- Total posts: 1
I run a series of medical clinics and I am a doctor myself. All 4 of them are spaced in nearby towns, while the other is about a 5 hour drive away from the others. While three of them are doing quite well, (let’s call them location A, B, and C) one is doing really bad (location D), especially due to its poor visibility and location. To be clear, location D, the one that is doing bad is one of the clinics that IS close to the others.
I am a doctor and the owner, and I could easily bring in patients and be fully booked out every day. I have doing this for more than a year now and the stress is getting to me. The problem is finding another doctor to come in to this location. I am loosing money by keeping location D running, as even if I see patients booked out each day (bulk billing practice) there are more expenses.
To make situations worse, it turns out the lease that was signed was a horrible one. I’m talking 15+ years (I know it’s bad!). The price I am paying monthly is absolutely ridiculous, and when I signed I really thought doctors would be lining up to work here, I was wrong.
I have attempted to negotiate with the landlord, but every time I call or schedule a meeting its always his agent that shows up on his behalf. Despite this I managed to bring down the lease price by around 20%.
Even with this slight reduction, I am still loosing large amounts of money by keeping this clinic running. I have thought of just closing the whole thing down, so then I would only be paying for the lease, instead of the lease + other expenses such as doctor/software/electricity fees, reception wages, etc.
I have attempted to sell with more than 6 people coming in to have a look and everything but nobody is serious. What are some sites I could try selling on?
As you can see I really don’t know what I should do. I told the landlord that I will most likely be shutting down and he just isn’t responding.
What should I do?
Any response will be greatly appreciated.February 2, 2020 at 12:22 pm #1222270Paul – FS ConciergeModerator
- Total posts: 3,141
Hi And Welcome to Flying Solo @ .
It is great to have you!
As an exercise, it would be worth modelling your break even point – how many Doctors would you need and how many patients seen would that mean?
You could use this information in many ways eg, to provide financial incentives to attract more Doctors to location D.
It is also worth going through the Medicare rules again, especially to review if you are working within the Rules in a way that provides the best health outcomes and the largest rebate entitlements.
Can you sub-let any space eg, to radiologists or add extra services yourself that you could profit from.
CheersFebruary 2, 2020 at 7:14 pm #1222271bb1Participant
- Total posts: 4,485
The answer is really obvious you have tried the alternatives, you have answered your own question, walk away. You obviously didnt do your research into the demographic of the area, availability of doctors, reasonable lease costs, etc, etc. Admit your mistake and stop throwing money down the toilet.February 4, 2020 at 12:06 am #1222272Dave – FS ConciergeModerator
- Total posts: 2,541
Perhaps try to find a non-GP tenant to replace you? Hard to sell to another doctor when that business model isn’t working at that location, BUT a dentist? Physio? Non-health business? Do some research to figure out what might work there? You might split the rent with them to make it more affordable (better than paying full rent yourself).
Hope you find a solution!
DaveFebruary 17, 2020 at 1:19 am #1222273PowerofWordsMember
- Total posts: 179
I would write a long letter to the landlord outlining your concerns and also talk to a local lawyer about escaping the lease. For such a long lease, it should not be impossible.
Also, you said “What are some sites I could try selling on?”
This brokerage has some professionals who could help if in QLD: https://absbusinesssales.com.au/
Two other things also sell businesses besides cold hard figures: visuals and reputation. Look at the reputation through their eyes and look at the visual aspects of the location – signage / freshness and vibe – are they doing it any favours?
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