Setting a room rent rate

[Raweetawan]

i have checked in this Bus. & Marketing section for help with ideas on contracts with Chiro's........got some insight but, now that I have met the Chiro and officially am invited into her office as a "separate" bus........I need to come up with a room rent. She is VERY open since I am just getting started here in Wisconsin........( I moved from another State). I just want to be fair to her.

Someone told me that it depends on the sq. fooeforum.xxxe of the room. I will measure that but can already say it is HUGE! So, what is the going rate for Wisconsin. Is it a set amount like 300.00 or so a month or is it so much per sq. feet. Any ideas.

She doesn't want to over charge either so, any help will be appreciated.

I want to add that I will have a receptionist who will take my calls and book if requested. I will do my own billing of insurance. It is a cash only office though other than that.

 

[carbefangirl]

Setting a room rent rate

i...I just want to be fair to her.

My favorite word...

Then ask her what her rent is for her entire space, divide by her entire square fooeforum.xxxe and multiply by the square fooeforum.xxxe for your space.

Add to this the % of all utilities = the % of space you occupy

Then add to that the cost of 5% of the total cost of the receptionist, or more if you think she will spend more time than that answering your calls.

OR

You can figure out what you think all of this is worth to you, and offer to pay that.

If she accepts it, then it is "fair" to both parties.

 

[Ckoal]

Thanks for the input.....

Do you think that will be better than say being an Independant contractor? I read someones post on their set up........sounds pretty good.


I will have to see how much it will add up to be with the sq foot idea.

 

[Cheyanne]

R&R has a point. Only you and the chiro can determine what "Fair" is.

I will say this though, rent for a space totally depends on where you live even here in WI. Some cities have a glut of office space for rent, others do not.

There are definite benefits to being in or near a chiro office, in that you may get referrals. I say may because you probably won't get as many as you would expect. Some chiros are good at referring and some are not. Plan on marketing yourself either way.... both in the community and "in house!"

I looked at renting some office space within a chiro's office here in town a couple years ago. He was offering a 9x12 space... wanted $300/month. And the space was only to be used during his office hours. (MWF only - and they took a 2 hr lunch break every day. In other words, I wouldn't have my own key.) His total rent for his entire office (which was about 1/3 the building) was $600. While I liked the chiro, I felt that I would have needed more access to the room than just MWF. Being a tourist area, most local clients here want to book on Saturday or in the evenings and that just wouldn't work for me. (He did refer a few clients to me when I was working at the salon... but this chiro has since retired.)

I know, however, that I live in an area where the rent is high, and you don't get much for it. (Is it historic or just plain... old?) :roll:

I have a MT friend in Madison who rented a small downstairs room, 8.5x11, I think, in a chiro's office. He charged her $300/mo rent. He did refer some clients to her... and of course when she gave notice admitted that she was the best MT he'd ever had! (She has since taken a position in a hospital wellness clinic.)

Anyway, Alexa, hope that helps you determine what you think is fair!

BTW, if you are doing your own billing & paying rent dear, you most likely are a separate business entity within her business... thus, IMO, you would be an Independent Contractor.

 

[Ruby.fuse]

Good input M.............

I thought I sounded like a IC too.....except that I will only have HER patients right now as clientele and I saw a post idea for a rate on that.....10.00 per hr (so 5.00 if only 1/2hr pt of course).....add 15% for advertising costs and I supply ALL my own equip, lotions, laundry. That sounds like fee splitting or % basis which I thought was illegal in this state. Is it really illegal to charge per pt????? as opposed to just a straight room rent?

This space as I may have said is HUGE so, I am afraid that just setting a room rent based on that will be more than I can afford just starting out. She sees that too......

She does t.v advertising and some pretty HUGE community things of which she is willing to add me to. Not sure of the price to add my name on the t.v. ad right now but she will let me put signage anywhere i want and pretty much have the key to come and go as I want even if they are not in the office.........just like I had in Kingston. I like that.


So overall it sounds like the IC would work if I can build up to what the roomis really worth and pay.........per pt. right now.

What you think?

 

[Mama77]

I'm in WI

I agree with the figuring out the square fooeforum.xxxe of room and dividing total rent paid for building by that.

You can also see if the Chrio will give you a break for the first 3 or 6 months of your business- say if you figure out rent to be $300 a month, if you can pay $150 a month for a few months, just to get on your feet!

 

[Pompal 09.]

IMO, you're better to pay her a set amount. Not based on how many of her patients you see. Or how many of your own you're able to bring there.
Really, it's illegal for a chiro to do anything that smacks of fee splitting.
You wouldn't want a chiro board to see their referring a patient to you and then getting paid for the referral as some sort of kickback. Hourly room rental? :
And I would think that ethically the chiro would be concerned about it, even if you weren't.
If she truly realizes that you are just starting out in this state, then she'll probably be patient while your clientele builds.
The first thing is to determine how much rent you both feel is appropriate for the space. Would she be willing to accept less, for say, the first 3 months while you are getting up to speed? Your not being certified by the state of WI may be a bit of a stumbling block there in the beginning... and she needs to be aware of that. She sounds like she genuinely wants to help you get started though.
I think as long as you both have a cooperative & enthusiastic attitude about working together you will do fine.

 

[C G]

Good info......

I am getting certified through the state of WI though.......don't know how that got misunderstood but, I qualified and already took the Nationals in WA.

I was thinking the same about the 3 months thing. I think it is good tool for building incentive.

Don't have the first clue about how to set the room rent but, I will start with measuring and go off of what she is paying for lease THEN see how much less she will agree to for now.

Thanks again for all of the input.

 

[iiinycboi]

Alexa, I understood that you were endeavoring to certify here in WI... I remember you saying that you've been a MT in WA for many years.
I was just saying that it might take a month or two to get all that stuff lined up and for you to actually get your certificate # to have printed on all your business cards, brochures, and any other advertising you personally do.

 

[bytchass]

Would it be illegal to pay a commission with an agreed upon cap? I did this at a salon once. 30% commission with a cap of $150/week for the first six months then it would go to a flat $150/week rental.

When thinking of the room rental rate though, obviously you're just renting the empty room, but you also have access and will most likely use the lobby/reception area which is probably already decorated. And the restrooms as well...and any break room if there is one with a microwave/fridge that you wouldn't have to supply, and you probably won't be required to clean those rooms, etc.

Just don't forget to factor in everything else you and your clients will be using in the chiro's building when you try to negotiate a 'fair' rent.

 

[Cass]

What I charged someone for rent to work out of my office some years ago was, $300/month and eventually went up to $350/month the last 6 months she was still with me (she later moved).

She had the key to the front door and her office/room.

I had the doors specifically keyed by a locksmith so I had access to everytyhing, but she only had access to her area. I never got into her area though.

She could see people I worked with or her own clients or both.

It worked out well.

She also had access to the waiting room, front desk and fridge. She came in at a lot of time when I wasn't in the office and that was just fine too.

Hope that helps. (I didn't get a chance to really read any other posts, so sorry if this seems a bit out of topic - I know sometimes things shift.)

 

[Thinker]

Flat rent vs. % rent is all about who is willing to take the risk.

Flat rent the risk is with the lessee. "Will I be busy enough to keep my rent less than the X % I budgeted?" The landlord has it easy - they know what they will get, and usually price based on their cost

% rent, the risk is with the landlord. "Will my tenant be busy enough so that ON AVERAGE I make more than I would on fixed rent?" If your practice is slow to build, you have to worry about a lack of income, but no worries about expense, since it is proportional to your success.

The riskier the proposition - month to month with a new business being most risky - the higher % the landlord's piece of the action will be. But you risk resenting your landlord if you are successful -- yet it was the landlord who was willing to take the chance on you when no one else would.

The same is true in every line of business. Software geniuses may never get their product to market without venture capitalists - but they have to sign away a substantial part of their potentially millions of dollars in value in order to get started.

 

[Madeleine Z]

Hey to all again........

I appreciate all the input.........I will be putting the proposal together soon. Some things I have learned..........yes, it is illegal in the Chiropractic world for any "kickbacks" which means anything that looks like a % of my income from her patients. That may work for a spa contract or salon but not with the Chiro.

I will be finding out how much she pays for her building lease and doing the math to find out what she pays for the perceneforum.xxxe of my room. With that price I will add in any reception help I get and I already know she doesn't want to nickel and dime this whole process with the bathroom use, reception area, etc...........

I will be asking to "work up to" what ever the value of that space is in a 3-6 month period.

Mae...........yep, it is taking some time for the paperwork to go through. I have already sent in everything they asked for.........and during this wait, I am getting all my other business things together that have been packed away and advertising.........also already have 3 businesses that will show my business cards at their front desk for advertisement.

Thanks to all for the input.