Please Don’t Make This Mistake When Searching For An Office Space. It Will Destroy You.Jul 28, 2020
Sometimes I get entirely frustrated with the acupuncture community.
And it’s got nothing to do with our patients, but rather how we treat each other. An area that should hold no discontentment, but regrettably it does.
Here’s what I’m talking about…
I get asked a lot of questions on how to find the right office space. I’ll often advise on things such as having an accessible sink, taking into account the noise levels, and starting your practice with only one room. But that’s not what we’re going to talk about today. Today we’re going to discuss the cost of office rent.
In response to my survey, acupuncturists seeking space report rental fees as excessive as $400 per month for only 1 day per week, to 60/40 splits not in the acupuncturists favor, and most often I hear of 50/50 splits.
Now this is nuts.
First, let’s talk about the obvious point – income. Let’s just use the “generous” agreement of 50/50 for our example. The math is simple. You make $2000 in a month, they take $1000. You make $5000 in a month, they take $2500. You make $10,000 in a month, they take $5000. And onward and upward!
And let’s not forget taxes, which will cost you at least 25% of that income. In that case you make $2000 and your take home is $750. You make $5000 and your take home is $1875. You make $10,000 and your take home is $3750.
Does anyone else see a problem here?! You are healing your buns off for peanuts!
Now I’m not saying money is everything, but my whole training focuses on building successful AND happy acupuncturists. Let me tell you – rental agreements such as these will not produce happy acupuncturists.
As your patient load and income grows you’ll hand higher and higher amounts over every month to your landlord even though nothing has upgraded in the space you are renting. Grrrrr!
Not to mention that’s hardly enough for anyone to make a living.
But that’s not even my main point.
I’m on a mission to mainstream Eastern medicine and make the world a healthier place by helping you with the success of your practice. With more successful acupuncturists out there we’ll be able to treat more and more patients, public education will increase, and slowly and surely Eastern medicine will progress.
The key to this mission’s success – COMMUNITY.
I can’t mainstream Eastern medicine on my own, nor can I do it with 5 of you, or even 500 of you. It needs to be all of us. Everyone wins or no one wins.
When I hear of acupuncturists (or any healer for that matter) offering 50/50 splits to fellow acupuncturists I get aggravated. This will not help to raise the collective.
I’m not surprised by this though. I understand that rents are high, being self employed contains it’s own set of challenges, and everyone is just doing the best they can to stay in business and make a decent living. But the long and short of it is that this needs to stop.
Now here’s what I propose:
For the renter…
When you’re seeking an office, you should NEVER – let me repeat NEVER – agree to a flat out percentage split. Even if you think you’ll never find another office location again or you think the percentage is not that bad of a deal.
It is. Trust me.
Now this doesn’t mean you should turn down all percentage splits.
There’s a catch and it’s called a cap.
Here’s what I mean…
If an ideal office is offering to rent to you provided you agree to a 50/50 split, cool no problem, as long as they agree to cap it. This means you’ll pay 50% of your income to the landlord up until a certain set agreed upon amount such as $1200/month.
$1200/month is the cap.
And that’s the secret.
If someone presents an agreement to you that involves a percentage split, you don’t have to go running in the opposite direction. But you do have stand up for yourself and state loud and clear, “I can only accept this if we negotiate a cap.”
For the landlord…
Please start to provide caps.
Initially offering a percentage agreement is actually community minded.
The acupuncturist doesn’t have to worry about a large amount of rent hanging over their head every month as they are just beginning to build up their business. By offering a percentage fee you are helping out the underdog.
However to continue with the percentage fee and continuously increase the amount of money you are collecting from the acupuncturist is hardly community minded.
We’ve all been there. Struggling to start a new business and make a decent living doing what we love.
You saw the math at the beginning of this article, did that look like a decent living to you? Of course not. This acupuncturist will quickly and miserably burn out from all the patients they’ll need to treat in order to make enough money to support their family, or they’ll have to close their practice down for lack of having the funds to cover their bills.
Both these scenarios are products of forking over too much of their income to you every month.
That doesn’t really give you a warm and fuzzy feeling now does it?
This creates neither successful nor happy acupuncturists. This is a win/lose situation.
Remember what I said is the only key to forwarding our medicine? Community. Always creating the win/win.
So from this point forward, I implore you to never offer your office for rent at a flat out percentage split. I want you to use every renter that comes into your space as an opportunity to progress Eastern medicine in the medical world.
And I don’t want anyone to miss out on making a living doing what they love.
Now here’s what I want you to do…
Make a pledge to only accept and/or offer rental agreements with caps. Then please leave a comment and share this article.