Cirrus Consulting Blog
The 5 Winning Strategies of High-Growth Companies - June 10, 2011
To read this full article visit http://www.profitguide.com/article/28256–the-5-winning-strategies-of-high-growth-companies.
Cirrus Consulting Group named among PROFIT 200 Ranking of Canada’s Fastest-Growing Companies. - June 1, 2011
Positive impact to the healthcare delivery value chain is the key reason for Cirrus landing on the 23rd annual PROFIT 200 ranking of Canada’s Fastest-Growing Companies.
5 Simple Things - May 6, 2011
Cirrus Consulting Group President, Jeremy Behar chimes in on the Five Simple Things to running a successful business.
Target buys Zellers Leases for $1.8 Billion: Why Should Dentists Care? - January 14, 2011
We talk to dentists all the time about the importance of having a good lease to prepare them for the sale of their practice. Your buyer gets your equipment, patient roster and good faith, but without a good lease you won’t have a sale!
Target, a popular national retain chain, has just purchased Zellers, a major Canadian retailer – however the takeover is based on Target acquiring the Zeller’s leases, and negotiating favorable terms. Richard Baker, CEO of the Hudson’s Bay Company who owns Zellers sold the leases of up to 200 stores for $1.8 Billion, and Target still has a lot of work to do to ensure the landlords will hold them to the agreements or require new leases.
When you’re ready to sell your practice, will your buyer be willing to renegotiate more favorable terms with the landlord, or would the sale close more smoothly if the incoming dentist was sure that the lease they are buying is crafted specifically for the dental practice? At Cirrus, we know that answer.
Your lease is worth something! Make sure it is written so that your potential buyer will not be stalled when reviewing the documents.
Some key things to look for in your lease to ensure sale-ability:
Assignment Clause
Is there wording there that would allow the landlord to withhold permission to assign?
Option to Renew
Is it personal to you?
There are many places within a lease that can tie the validity of the document to you personally and allow your landlord to interfere with a sale. Be prepared, review your lease and make sure you address these issues the next time it is up for renewal.
Tenant Needs Analysis for Healthcare Professionals: What Is Your Career Plan? - January 5, 2011
Before commencing negotiations with your landlord, you must have a “game plan”. To devise this plan, you must assess your current situation, considering short, and long term goals. Some things to consider include: age, health, sale of the practice, and office space requirements.
How does this relate to lease negotiations?A clear understanding of these important issues will allow you to focus on the important items to be negotiated in your new deal. As an example, if the ability to transition and sell the practice within the next few years is of great importance, achieving a fair and flexible “assignment and subletting” clause may be your primary focus. Alternatively, if the existence of deteriorating health is a major worry due to the burden that rental payments could have one’s family if you had to stop practicing, you may want to attempt to secure a “death and disability termination” provision in the lease. Internal needs analysisThe above are only a few of the many criteria that should be identified before you can start the negotiation process and these issues will only be handled properly once you have carefully completed an “internal needs analysis”. By being acutely aware of your needs, and by focusing on these needs in the right way, you will ultimately have the best chance at securing the most valuable lease for you and your practice. The name of the game is to minimize risk and maximize flexibility, thereby adding significant value to your practice. Conducting an “internal needs analysis” is a tremendously valuable activity that may ultimately help clarify a tenant’s career plan and facilitate the reaching of specific goals. |
Post-Lease Stress Syndrome and How to Avoid It - December 17, 2010
You’ve worked hard building a practice. You have the right equipment, a great staff, a growing patient base and an office in a good location. One day, you get a letter from your landlord stating that he wishes to renovate the building and your lease will be terminated by the end of the next month. According to your landlord you are required to bring your space back to four walls, removing any trade fixtures before you leave. This could cost you tens of thousands of dollars, not to mention the income you will lose while you find and build out a new space. How did this happen? Can this be legal?
Yes, this is a perfectly legal tactic that a landlord can exercise IF it is stated so in the lease documentation — after all, you signed it. Is this fair? No — especially when you find out the landlord did not renovate the building but was only making room for an ‘Old Navy’ store. This sort of thing does happen, but it can be prevented.
What’s the Solution?
The answer to this problem lies within the numerous pages of a commercial lease that come AFTER the business terms. Many tenants are focused solely on the cost of rent per square foot (which is important, but not all encompassing) and ignore the other 40 or more pages of terms and conditions that can dictate the future of their practice. This often results in disaster for many tenants across North America. It’s crucial to level the playing field between landlords and tenants by increasing the level of awareness tenants (particularly health care practitioners) have about the risks contained in their lease.
Here are a few things you should be aware of in your lease:
Tenant Construct
Who (or what) entity is signing the lease? Are you and your family liable for the rent for the entire term of the lease? If something happened to you during the lifetime of the document and you were unable to pay the rent, a landlord could very well attack your personal assets.
Term
Are the term and subsequent options structured properly to reflect the needs of the business? If you plan to retire in five years and renew your lease, are you renewing another 10 year term?
Tenant Improvement Allowances
Is your landlord offering you a tenant improvement allowance? How will the landlord recapture that amount in the years to come? Will you be double-billed?
Assignment
Are the assignment provisions written to allow you the ability to retire early without penalty? What happens if you become disabled? Will your lease be terminated if you express your desire to hand over your practice to an associate? Can the landlord terminate your lease if you express the desire to hand the business down to your child?
A Bit of Advice
As you can see, there are many clauses within a lease that can have a significant effect on the success of your practice. Once you understand the lease you can begin to change some of those clauses into fair and reasonable ones.
If you find that your lease does contain many of the risks listed above, you should begin to think about renegotiations right away. Never leave the process until the date that is written in the lease: after all, it was created by the landlord. Begin thinking about how you would prefer these terms to read as soon as possible so that you are prepared when it becomes time to renegotiate.
If you are not comfortable with the negotiating process or just need some advice, don’t be afraid to contact a lease consultant who will be able to answer questions and give you valuable advice.
Is your company growing? - December 13, 2010
Profit Magazine interviews Jeremy Behar, CEO of Cirrus Consulting Group. Jeremy discusses the importance of people in the hiring process and its impact on the overall growth of any sized company.
“…Hiring decisions matter, big time. Yet, I still find entrepreneurs often go about it on a very ad hoc basis. We are typically quick to hire and slow to fire. I was. Today, as a business adviser, I find myself recommending the reverse…” CLICK HERE to read the full article.
Family Medical Practice Resources: Improving Access for Your Patients - November 30, 2010
It’s a busy time here at Cirrus and we are happy to report that many of our clients are making positive strides to improve their respective outside use and access bonus numbers! After distributing access bonus cheques in October, we are getting lots of questions on what clients can do to continue building this positive momentum.
A successful way to make significant improvements to outside use numbers is to incorporate Advanced Access techniques. I recently spoke with Joe Mauti, Quality Improvement Coach with the Quality Improvement & Innovation Partnership (QIIP). Joe was extremely helpful in explaining how QIIP partners with offices to implement individualized Advanced Access strategies using its Office Practice Redesign Action Group Program.
The deadline to apply for Wave 2 of this program is December 10th. We have already signed up one of our clients who was eager to take advantage of this opportunity.
We want to hear from you! Let us know your experience with QIIP by commenting in the box below.
Jeremy Behar on CBC’s Lang & O’Leary - November 10, 2010
Adding Efficiencies to the Canadian Healthcare System – Jeremy Behar on Lang & O’Leary
Primary care reform and the state of the Canadian healthcare system is on the top of everyone’s mind in politics and around the dinner table.
The CBC invited Jeremy Behar, President & CEO of Cirrus Consulting Group to discuss how physicians in Ontario are changing the way in which they practice to help solve some of today’s challenges, and how a two tiered healthcare system would work should it come to pass.
Leasing Tips for Dentists and Doctors: What you should know about critical dates. - November 3, 2010
There are several critical dates in your lease. Let’s look at what they mean and how they can they affect you.
Commencement Date:
This is crucial and must always be clearly stated. In the case of a lease for a new site, the Commencement Date will often occur at a future point in time, perhaps ninety days after the tenant takes possession of the space, or when the landlord has completed the build out. This can be imprecise, as the Landlord will often complete its work prior to turning over possession. In this instance, the lease should clearly allow for both parties to agree on the Commencement once the Tenant has opened the practice.
Expiration Date:
Being aware of this date and negotiating far in advance will often work to your advantage. The length of most lease terms is five or ten years. In the case of a five year term , if the Commencement Date is stated on your lease as the ‘1st of the month’ (e.g. May 1, 2011), the term will expire on the last day of the previous month five years later (e.g. April 30, 2016).
Option Expiration Date:
This is the last day you can exercise your ‘Option to Extend’ the lease. Tenants should negotiate Options to Extend into the existing lease to provide flexibility for the practice in the future. Landlords view options as beneficial mostly for the tenant and often place limits as to when they can be exercised. For example, it may be stated in the lease that the option can only be exercised between 6-12 months prior to the term expiration date. Missing this window can result in the landlord demanding that a new, and perhaps less favorable (for the tenant) lease be signed. Or the landlord could refuse to negotiate a new Lease and might attempt to secure a new tenant for your space.
Client Feedback
My thanks for the services Cirrus provided to help me renegotiate my lease. After I attended one of your seminars, I realized the potential for problems with my lease and the effect on the long term value of my practice. I was unprepared to deal with many of the issues, so your support was valuable. I would not hesitate to recommend Cirrus. Thank you.”
Charles C. Pelletier, D.D.S.
