Hello, and welcome to Beauty and the Biz where we talk about the business and marketing side of plastic surgery, and 500 dollars per sq ft build-out costs.
I’m your host, Catherine Maley, author of Your Aesthetic Practice – What your patients are saying, as well as consultant to plastic surgeons, to get them more patients and more profits. Now, today’s episode is called “500 Dollars per sq ft Build-Out Costs? — with Dr. Alexander W. Sobel”.
A very common scenario for surgeons is to rent a space with an OR. It saves them money and they don’t have huge cash outlays they’ll be paying off for years.
However, that also leaves them in a tenuous position when:
So now they scramble to find new space, borrow money, do the buildout, and hope for the best.
This week’s video is an interview I did with Dr. Alexander Sobel, a cosmetic & reconstructive surgeon for the face and body in private practice in Bellevue, WA.
He was renting an office with an OR and forced to relocate so he shared so many tips about his journey and the mistakes made. For example:
P.S. If you missed this earlier this week, please check out my “Cash-Paying Patients on Autopilot” video on how to Shift to Cosmetic Patients on Demand:
👁 DON’T MISS THESE INTERVIEWS 👁
Catherine Maley, MBA: Hello everyone. And welcome to Beauty and the Biz, where we talk about the business and marketing side of plastic surgery. I’m your host, Catherine Maley, author of “Your aesthetic practice, what your patients are saying”, as well as consultant to plastic surgeons to get them more patients and more profits.
Now, I’m very excited about today’s guest. It’s Dr. Alexander Sobel. He’s a cosmetic and reconstructive surgeon for the face and body. He’s been in practice for 15 years located in Bellevue, Washington. Now, Dr. Sobel has lectured and published research in the American Journal of Cosmetic Surgery. Now, he’s also very involved in medical associations.
He’s actually the past president of the American Board of Cosmetic Surgery, and he’s the current president of the American Academy of Cosmetic Surgery (AACS). So, we’re going to talk more about that as well.
So, Dr. Sobel, welcome to Beauty and the Biz.
Alexander W. Sobel, DO: Well, hello indeed to all, and thank you so, much, Catherine.
It’s an honor to be with you today and with our collective audience.
Catherine Maley, MBA: Oh, thanks so, much. So, Dr. Sobel, what specialty did you start with? And then how did you transition or add more procedures to it? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Well, I started with, I don’t know what I’m going to do with my life, but I think I want to be a surgeon mostly because the surgery department, you know, well, they were nice to me.
So, I found my way into otolaryngology head and neck surgery without a real clear career path. However, very shortly in, I had a mentor, or a resident a couple of years ahead of me. Who was aware of the American Academy of Cosmetic Surgery training programs, very interested in facelifting surgery and pursued a fellowship in cosmetic surgery.
So, I followed behind him to another fellowship program. But I wanted something, something more than auto HNS. Auto HNS is a great specialty. It’s a specialty, a collection of specialties. However, once you looked under the hood of What cosmetic surgery is really about it can become infatuated and thralling and all time and mind occupying in the in the best possible ways.
Catherine Maley, MBA: So, did you eventually expect to go into private practice? Like, did you decide, wait a second, I’m not going to work in a hospital, or did you work in a hospital and then journey to? What was your journey to get into solo? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Well, I had to grow up, right? So, so, so, I was doing my, my residency and then I had a path into fellowship, which seemed like a good idea because, well, I was very interested in cosmetic procedures, but Knowing that I was going to get in my, a plaque in my wall that said otolaryngology head and neck surgery, facial plastic surgery.
I really didn’t know how to do a facelift or rhinoplasty. I’d done a few and I had some exposure to it. So, a fellowship seemed like a really good idea. Now, fellowships, well, since Medicare doesn’t pay for cosmetic surgery, it’s really hard to get training in anything cosmetic. In the hospital environment.
So, you have to fellowship where that where those procedures are actually happening in the environment of care of a private office. So, having done one of those fellowships and, you know, doing my career planning along the way, thinking to myself, well, if I want to be a cosmetic surgeon, I’m going to have to learn how to run a business.
Because you can’t do it. Well, I don’t want to say you can’t. Some do and some do it really well out of a hospital, but that is certainly not the easiest way forward in most states.
Catherine Maley, MBA: Would you recommend a fellowship for everybody who I just wonder what do people do nowadays when they’ve had the training but zero business and marketing training? How did this impact you with your 500 dollars per sq ft build-out costs?
Is the fellowship the way to go or you just try to read every book you can or go get an MBA, which is what I did, but I don’t think a surgeon needs an MBA. I think you need an MBA in your plastic surgery practice like specific to you to shortcut it because you don’t have. Three to five years to go find another degree. How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: No. And even if you have the three to five years, because we have members in the academy who are MBAs and they’re super great about business, what makes them super great is they know how to find the right people. And to communicate with them, give them what they need, respond to what they ask for, and then get out of their way and let them make good decisions, help the surgeon learn to make good decisions.
That’s an invaluable part of a fellowship program because you see that happening real time. Most fellowship programs are, well, they’re successful because they’re required to have a large case volume to be able to even accept fellows. Okay. So, that means they must have figured something out. And usually, they figured out how to surround themselves with good people.
And that’s a really important skill for any cosmetic surgeon or anyone who wants to run their own business for that matter.
Catherine Maley, MBA: We’ve talked a lot about that on the podcast where when you’re training to be a surgeon, you’re following the rules. There’s not a lot of room to be creative there. You’ve got to get these procedures down. How did this impact you with your 500 dollars per sq ft build-out costs?
But then when you get in solo practice, Now you do need to be entrepreneurial. Now you do need to open your mind and say, I’m not going to do what everybody else is doing. That is such a mind shift change. Do you feel that like when training versus real life, how different are the two? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: I did, and I no longer feel that way and I’ll tell you what I learned.
Okay. What I started with was, well, all right. It’s a choose your own venture. Yes. Be entrepreneurial. Think big. What’s your plan? How are you going to figure it out? Let’s try to write a budget. And then you, then I realized, well, I don’t know how to do any of those things. I can make a lot of guesses, but if, if your early, your early axioms, the sort of the, the, the ground level guesses are wrong, then everything else you can be super clever about.
Ends up wrong really fast. Well, as it turns out, business is business. And if you go read some books and even if it’s not the perfect book and it, it doesn’t apply directly, and you just want to read cosmetic surgery books about how to succeed in cosmetic surgery, it actually doesn’t work, we’re, we’re no different.
I think in the industry. As really anyone else. So, what do we need? We need good information from tested techniques to learn how to evaluate. Options and opportunities so, that we’re not just guessing and believe. Well, you know this, Catherine, I mean, you come out of residency or fellowship or whatever your path is, and everyone wants to help.
Bless them. And they really do. I mean, some of them have the secondary intent of they’ve got to make a dollar, but most people want to see you do well. And whether they’re pulling things out of the hat, like I’ll have an event, do it, this, do it, you need to do this. And then everything will glitter and sparkle.
But, you know, ultimately, it’s not their business. You know, their business is health. That’s, that hangs in the balance. So, when I realized the combination of, well, I don’t need to agree with every outside influence that has a suggestion for me, and I can stop saying, well, my practice is different because it’s cosmetic surgery or my business is different because it’s medicine or whatever, blah, blah, blah, blah.
And just start reading and start listening. Decision making got a lot easier.
Catherine Maley, MBA: There is such a balance there because you do want to learn to see what else is going on out there. And you want to stay up to date with what’s happening with marketing and business strategies. But you’re absolutely right. A business is a business. How did this impact you with your 500 dollars per sq ft build-out costs?
I like to add a lot of spin to it for our industry, but it’s still just business. You’re still attracting customers. You’re converting them to paid clients, you’re hopefully retaining them, so, it all I mean what might get a little different is the legal, you know, I would specialize in that for sure. So, back to here you are, you’ve got your fellowships, and now it’s time to go into practice. How did this impact you with your 500 dollars per sq ft build-out costs?
Did you hook up with somebody else first, which I believe you did, is that right? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Yeah, absolutely.
Catherine Maley, MBA: And how did you make that decision? Like any, any tips on how do you join a practice that, was it thriving? Did he have a good name? All of that. How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: No, I made, I’m now having the rear-view benefit of training or having many fellows training with me, which is such a blessing and watching their path and their transition.
A lot of them and I included made a transition out of convenience. So, what is more convenient than joining one of your fellowship faculty? You know them, you’ve been around them you know, the environment of care, you know, all the people involved, you know, the neighborhood. So, it wasn’t an immediate obvious thing to do because, you know, that practice probably, well, it didn’t have room for two surgeons.
There wasn’t, there wasn’t enough commerce going on. So, that put a lot of pressure on the situation. Eventually it didn’t work out because there wasn’t enough. There wasn’t enough commerce. But nowadays I think there are a lot I don’t want to upset anybody as I do believe it’s hard to transition to practice now.
And we really want people to succeed in doing that right. But there are more opportunities. Corporate practice in medicine has gotten a lot more organized and a lot more pro patient, pro patient safety. And I think there’s, there’s, there is room for, for young surgeons to find themselves working under big organizations while they develop their own voice and decide, well, do I want to be an employee of someone else?
Or do I want to have my own practice? What do I want my next 10 years to look like? While I can make a living and, you know, make those decisions not out of convenience or out of fear or out of, I don’t know what I’m going to do next, but you know, take some time and talk to good people who can help them make those decisions in an informed way.
Catherine Maley, MBA: You know what else I’m learning as I get older, a lot of times it’s just making the decision and then making it right. It’s not making the right decision. It’s making the decision right. But you need to make some pretty good educated guesses. So, I would completely agree. Talk to everybody. I would go visit some practices, those who took over somebody else’s, those who started their own. How did this impact you with your 500 dollars per sq ft build-out costs?
There’s no need to keep making the same mistakes everybody else has made, but the issue is you have your own mindset and your own vision and you’re trying to, that’s why I think it’s so, difficult for doctors to join each other. Like when you joined that other doctor, did you have the same values and vision for the practice? How did this impact you with your 500 dollars per sq ft build-out costs?
And if not, how quickly did that become apparent? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Oh. Well, no. I didn’t know how to look for it. I didn’t know how to articulate it for myself and for all those listening you know, take away nothing else from the mistakes that I’ve made is, is learn your value proposition, not just for your business, but what do you as.
Jane Doe, Joe Doe, whoever you are, what, what is your value proposition to your patients and be able to distill that into about two words. It’s helped me organize myself, but even when days are hard, days are easy, but also would have helped that compatibility test. You know, I probably would have still made the same dumb decision, but I would have, you know, gotten to the punchline faster, right?
Catherine Maley, MBA: So, how did you disengage from that scenario? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Oh. Well, just having not enough money into the practice kind of made it want to fall apart. And in the meantime, a colleague who was near retirement at the time I, I joined the, the, my first adventure he was close to retirement and in a position where he felt a little bit more pressure to sell his practice, which worked out well for me in the end.
I think I got a very fair deal. He did too. And then we were off to the races.
Catherine Maley, MBA: So, that’s a really good avenue. I think if you know that somebody is going to retire, what I love about that is he’s much more open to negotiating when he has some why behind why he wants to wrap it up. It’s when there’s no reason to like there’s not no pressure for him to do it on the negotiations go can go on and on, but did he stay put for a while how did you to transition from him to you. How did this impact you with your 500 dollars per sq ft build-out costs?
And you think it’s a good decision. How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Well, the intent was he would stay put for a while. But at that point you know, very talented surgeon in his 70s was looking forward to retirement and. The long process he took to sell and transition his practice took a toll on his staff and his employees. And when I joined, there was a lot of friction, not between myself and the employees, but the retiring surgeon.
And it We had made the arrangement that he would, he would help the business continue as a going concern. Right. And then and be available at my need or pleasure. And we decided mutually though. I love the guy. And I still see him periodically. Now over 10 years later that it wasn’t the best interest of the practice for him to be around.
So, what should have been a year. Lasted about six weeks, maybe.
Catherine Maley, MBA: Wow. Okay. That’s great. At least you figured that out early on. Would you say that’s still a viable option in today’s world is for a new guy, a new, a new fellow coming out of I’m just wondering what are the fellows going to do now? How did this impact you with your 500 dollars per sq ft build-out costs?
How do you enter the marketplace in today’s world with today’s environment? Do you have any tips for how to do that? Is it still viable though to buy somebody else’s practice or should you just go it alone and get out your own loan and give it a shot? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: I think have your foot. I mean, just if you can turn into an octopus and put a foot in every door so, that you’re not making decisions out of, you know, having to, you’re making want to decisions, which will you always empowers the decision maker.
So, if you’re If you start conversations early, especially in the academy, well, you know, who’s doing what and what practice, who might be looking for an associate, a partner who might be looking to leave because you never know when those conversations are going to come back in your benefit, just like it happened with me.
Talk to corporate practice of medicine and find out what they’re about. Find out if there’s any compatibility. Don’t give up your primary specialty too early necessarily because you may really feel painted in the corner, you know, as I did it, you know, everything turned out great, but isn’t it nice to make decisions and sleep at night too.
So, when you the, there are many options, but having some money flowing and. Doing cosmetic surgery, doing cosmetic procedures, being in the industry you love and not just waiting for it to happen from your primary specialty, walking that tightrope. Well, I think it’s a little bit narrower nowadays, I think is the way to do it.
Tons of options out there. A lot of a lot of people come to me, ask, well, well, yeah, how do you do that? The bank doesn’t want to lend me money. Well, you can’t just talk to one bank and banks have different appetites for different kinds of lending at different times. And they might call, you know Bank A might call it like a health care provider loan, but that has nothing to do with somebody who doesn’t have an accounts receivable.
If you don’t take insurance, you don’t qualify for that loan. And now you get discouraged. Well, don’t because another bank may have another program, but you, it’s tough. It takes a lot of time. And you got to talk to the bank salespeople and eventually the underwriters find out what’s an option. If that doesn’t work, if the If the current owner, soon to be retiree is erudite about the situation at all, they don’t necessarily want a big payout all at once either.
I mean, there is a tax advantage that they get paid over time, or maybe they, they, they hold the note. That could be an advantage. And it’s a great advantage for the new surgeon because now the old surgeon Or retiring because they could be young has some skin in the game. They need this arrangement to work.
So, the loan doesn’t get defaulted on. And I love those arrangements because signing a contract, you know, goodwill. What is it worth? It’s worth as much as the lady or the gentleman retiring is going to put into it. And our new grads people who are entering the cosmetic arena, they need more than that.
Because we want them to succeed what are you buying in today’s world? Then if it’s not necessarily goodwill, then what are you buying? Because I don’t know if the staff’s going to stay, like, are you trying to buy their staff, their long, their long-term lease? What, what is the value to a to a fellow, you know, who wants to buy a practice?
I think there’s perceived value and actual value. Actual value, I think, unfortunately, is relatively low because the assets of the practice, especially in a cosmetic practice. Yeah. You’ve got some fixed things, some lasers that are depreciating. And honestly, they may or not, may or may not fire the day after whoever’s retiring leave.
So, you can’t. Count on them. The staff could end up being a liability, though they might seem like an asset on a profit and loss statement. So, however, I think all of us have limits as to how many decisions we can make in a day. And if we can reduce the number, By having who we think are good staff that have their policies and procedures that we may very well as, as the new person coming on board and starting our career, we may completely redefine them in a year around our value proposition and our values.
They become our policies and procedures and the staff. Either needs to be led into alignment with good leadership, or you have to find new staff. Having that honeymoon period of, of parachuting into a situation that’s stable, that’s generating revenue, I think that has value, even though you may get rid of it in the short term.
Catherine Maley, MBA: Right. Let’s just talk about staff for a second. There have been challenges all over the nation. You know, post COVID. Are you experiencing that yourself? And if so, any tips for not just hiring staff, but finding them, hiring them and motivating them to stay put and do a good job? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Yeah. Gosh. Tips.
We’ll start with those. We’re, we’re all in this together. Talk to good people. I mean, I’ve really enjoyed the conversations I’ve, I’ve had with you, Catherine. I mean, we went from a you know, two years ago, a very challenging supply chain. Type scenario. And I remember talking to my staff. Well, these are the challenges with supply chain and how we’re going to navigate it.
And we did really well. And that really helped us. And now I find myself because I can’t always have the conversation with my staff navigating staff challenges. The, the workforce is completely different. We all know it. It’s just. Easier to say, okay, we get that. We don’t get it. We’re going to try to roll with it, try to figure it out as best we can.
But as I, as I go, as I crawl and I’ll be totally honest, I am crawling through the HR quagmire. Not that I’m bad people, but I have personally, perhaps old leadership styles that are not necessarily useful or germane to the work workplace as it is now. And so, I guess I would ask collectively that we all work together and help, help each other find new best practices in hiring and firing understanding when resumes, an abundance of resumes come in and the, the time in a position is going from three years to three months to three weeks.
And that’s becoming a new norm. What are the things can we do to help identify great talent, and then once we bring them on board to nurture them to develop them so, that they help develop us.
Catherine Maley, MBA: A couple tips I have, is to put a lot more protocol into interviewing than ever before because it is become a very much a numbers game and you’re trying to figure out their own values and do they have anything to do with your values and you’re looking for longer term.
So, I wouldn’t have everybody and their brother interviewing. I would set up a process where I make them do things throughout this interview process. Number one, just to see if they can follow directions, if they can show up on time, if they’re articulate and they can think on their feet. And I would just have, like, I would have them email you, I would have them FaceTime you text you just do a lot more up front before you have them come in your office.
Because if they can’t get through that part, you know, they’re not going to get through the job itself. So, and then once you bring them on board, here’s my new thought, process the heck out of your practice. And I talk about this a lot in my trainings and my consulting. If you can set up a process, And you do it right, somebody could walk away from your position back position, and somebody else could walk right in because you have such good processes set up, and now they don’t have to learn that part, they just have to learn the nuances of your particular personality or your practice but.
The protocols are set just like in surgery. You know, I would treat it just like in surgery. If you can get that tightened up, then it doesn’t matter so, much if they only stay for six months, at least the learning curve is not so, difficult. So, anyway, that’s my two cents. How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Well, important to sense because that’s, that’s your armor.
And all of this that, you know, if you are, you have a staff of so, many and you have to contract for whatever reason, the policies and the processes don’t change, the people can change and they can change their spots on the bus. Of course, we know how valuable that is. If I may, Catherine, I want to ask you a question because you reminded me of this one.
So, Two different modes of thinking in in hiring for cosmetic practices that I’ve heard along the years. There’s one that I favor, but I could be wrong about it. And the one that I favor is higher to your culture, and that is just generally get people around you that are, you know, in some way, you know, feel familiar.
And, and, and work the team around that familiar form of culture. Another form of thinking that I’ve seen deployed very, very well is well develop your office culture really, really strong and hire people who are a little bit incongruous knowing that. deploying people with, with a different type of culture, different type of energy can be very synergistic and especially on the patient side, helps patients identify someone in the office that they feel most naturally responsive to any advice about those two very disparate schools of thinking and hiring.
Catherine Maley, MBA: First, I would go with the values that you really need in your practice. So, for example, do they need to be honest? See, I always do this exercise, like, what do you really value? Not the nitty gritty, the characteristics. So, you, like, value, patient centric, dependable, team player. Team player is where you, where that, what your scenario, that’s where we get muddled up. How did this impact you with your 500 dollars per sq ft build-out costs?
Because, sometimes. They become rogue and they’re going to do it their way and their way or the highway. Instead, I would just make sure at the beginning the characteristics never change. They were a people person when they came on board or a team player and they’re still a team player. You know, like they can be creative but they really are there for the good of the practice.
If you can get those kind of fundamental values of honesty, reliability, They always do their best. I love those, I mean, God, if we could only have all of those. That, those kind of people are still nimble enough to add a little of their flair, but for the good of the practice, not for the good of themselves.
You know, so, that’s what I would do to get really clear about the characteristic values that you need them to be as a person. And then they can have a little leeway after they show some skills. Because quite frankly, There are so, many. I have been so, shocked in certain practices where they hire this little silly girl.
I’m just saying, and she ends up being the rock star. It’s just she has that in her to do her best. Be everything she can be open to learning and growing, and she was like an au pair when they hired her and now, she’s the office manager. So, those are just. That’s where you’re trying to stay open minded, but please like make sure they have the right stuff just to begin with, you know? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: That’s tremendous wisdom, Catherine. As we sift through resumes and well, it’s natural is to look for education training experience. But if you are looking, your mind is open for the au pair destined to be the business manager, then there’s a lot more opportunity. All the way around.
Catherine Maley, MBA: Yeah, I mean, you’ll take an inexperienced, open minded, growth, growth focused person any day over.
The know it all who is completely closed. She knows what’s going on. That’s not how we used to at our practice where I was like, you don’t need to hear that all day So, and just so, you know, there’s nothing easy about HR in today’s world. I have wow I just I personally, used to do a lot of hiring and now, I’m just so wary of it because it’s very time consuming and you just don’t know what you’re getting and I just find it so, fascinating that a whole Psychology has shifted with so, many people.
It’s just been so, interesting to watch. My goodness. Okay. So, onto something more positive, which is, which is you just moved into a brand-new office with a new OR. So, please tell us what that was like. And especially the permits and the processes and anything, any mistakes you made that you wish you had avoided. How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: I’d love to another decision made out of need. So, I was going really well at my past location though. The building was aging. We were, we were doing really well. We were doing a lot of surgery and it was an efficient space. I mean, we’re honestly, we’re killing it over there. However, the owners of the building.
Well, I learned that owners aren’t necessarily predictable. They don’t read business books themselves. And in, in these owners, [they] certainly had whatever their motivations were or according to the property manager, maybe no motivations at all, sort of didn’t want to renew my lease, or they were willing to for about two to three years.
That does us no good. I, and anybody listening out in the audience, you know, if you’re thinking about having a cosmetic surgery center or an OR, an OR, it’s about a two-to-three-year project. So, a two to three year, at least that’s just a Band-Aid. And it gives us no comfort. So, and I tried everything I tried buying the building.
I got some good brokers and they gave me good advice. And eventually they’re like, wow, these people just don’t want to make a deal. You got to find another place. Well, mercifully, I had been looking for a long time. I had my current lease 10 years, but options along the way, take an opportunity. Please.
Every time you have a lease option, at least 3 years in advance, look at spaces. Is even if you’re not going to move. It’s great to learn what’s available and what zip codes what you might want so, that you don’t have to figure out everything all at once. If a doomsday situation like mine happened.
I don’t mean to be glum, but it was all fine. But at the time, it was very nerve wracking. So, I saw a bunch of spaces. I looked at virtually so, Or at least the floor plan. About a hundred. Okay. I’m just going to call out numbers to see if they’re valued to anybody. Okay. So, I looked at about a hundred.
I physically visited about 30. And I, and I visited some that I didn’t even think were workable. You, you, you know, just to get a sense of what could happen. And here in the Seattle Bellevue area, everything, the architecture is so, interesting and unique, but that doesn’t serve itself well to surgery centers that do really well.
If they’re a square. Okay, we talk about why then, but he’s interested, but, but squares are great and Bellevue doesn’t have any squares. So, we had to find a place that was sort of a square and wasn’t just a mini walk-up building. Many walk-up buildings were great because you have access to the roof.
You can put in a generator, all the things you need for life safety. It can reduce your costs hugely and the fire safety code. I mean, we’re talking big dollars. If you can just have you. The site environmental characteristics that are correct for fire and life safety that reduces your cost a lot, but you don’t want to be in a tiny building, especially if you’re trying to be somewhere downtown that doesn’t really work so.
Having time to look around, finding a spot with ideal characteristics that happens to be like a box, you get somewhere close, and then you find a really good architect who’s not just skilled in healthcare, but understands about cosmetic surgery, and how to help you know, one of the things I’ve loved that you’ve taught me, Catherine, and, and I’ve, well, No problem Is the is the process of inevitability.
Okay, if we’re the right practice, it’s the right procedure, the right patient. Everything’s a match. The Venn diagram lines up together. Then why not? Why not do a procedure? The architecture should support that. And I don’t mean in a High impact. Wow. Isn’t this a glamorous storefront, but how does the architecture lead the patient through the consult experience onto the procedure and for return visits for high quality of care and eventually become advocates of the practice?
Well, good architect will help you do that. And you fact check everything that they’re doing with a good accreditation consultant. So, you make sure you don’t have any whoops on the backend when department of health or whatever accrediting body. And I Do recommend you have an accrediting body, even if your state doesn’t require one.
So, make sure that gets fact checked by not just your accrediting consultant, but also your business consultants, your sales consultants. So, it all. It all looks and feels right and matches your policies and procedures, and if you need to adapt them, the time to do that is during the architectural process to make sure everything matches up.
Of course, there are a few things that I wish are a little bit different about the space that we built, but you know, every day I get to come to the office and enjoy how the policies, procedures, protocols played out in a very workable. space that supports me, the staff, the patients, it all works awesome.
Now, who is working against you? Everybody I, I thought was going to be working against me, mostly you know, supply chain turns out, well, yeah, they’re a problem, but if you get a good architect, good contractor, They’ll figure it out. You’re not going to buy a new generator. You’re going to get on the list for refurbished generator.
They’re going to help you navigate that. Having good people and having them advising you and listen to them and making sure that you’ve got a few years to figure it out makes all that happen. Where I got completely blown off course. And both cost and timing was not actually Department of Health regulation, but that was challenging to talk about that in a second, but was with local municipal permitting and honestly misunderstandings between the permit team, the expedited permit people our contract, everybody.
Gosh, weeks and months would go by and finally, what it took was me getting on a phone call to explain it to the municipal perimeter what we were trying to do about life safety, and then they got it, and I didn’t realize how well. People in local government respond better to the surgeon or the person with the vested interest than the people working on their behalf.
So, I recommend you get on those calls. I wish I hadn’t made that mistake. Get on the permanent calls. You’re not going to screw anything up. I thought like, well, they don’t want me there. Get on there. Listen. Eventually become an active participant, you will move your project along faster. Same thing with Department of Health, you know, in the postmortem of gosh, what took so, long, not just my disinvolvement, because I didn’t know I was supposed to be involved.
Well, I should have known better. And also, the fact that they are having some of the work. Workforce. Turbulence that we’re having in the industry. So, with Department of Health, my project started with the same permitting gentleman from 10 years ago, my, for my last project. Well, within a week, he was gone. I had five new permitters.
During a year long process in the in the playbook changed subtly each time, and that was very jarring and very expensive with municipal government. They were very short staffed, had junior surveyors, and they were transitioning from a virtual to hybrid environment. And they were having trouble keeping track of their files.
So, a lot of the logistics were, well, did you receive what, what we sent you? Okay, good. You received it. But in two weeks, if they say they don’t have something, but they said they received it, it’s still you, the surgeon’s problem, not their problem. And you really can’t point out to them that they lost it.
You just need to stay with them and make sure that they have everything they need to give you a yes. No, that’s long, wouldn’t it? Forgive me. I’ve been living this for a few years, but I think that sharing some of those challenges will be helpful to others.
Catherine Maley, MBA: Actually, I think that’s a really big tip that you got involved. How did this impact you with your 500 dollars per sq ft build-out costs?
You literally made some phone calls usually because everyone runs into the permit problem. And usually it’s because the, there’s a lot of politics involved or something, and somebody doesn’t know somebody that they need to know to get it done. You know, it’s like becomes this game of who do you know, who can.
Push this through on. But in your case, you pushed it through yourself. That’s really interesting. I haven’t heard that before. So, give that a shot. How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Yeah, give everything a shot. And in now that we’re permitted, we’ve been in the space for seven months doing great colleagues and competition have come out and asked me for help.
First, they share anything and anybody wants to ask me anything. I’ll have happy to share, share my advice. But I’ve, I’ve watched them have to endure the playbook continuing to change. And so, unfortunately, you know, maybe, maybe my play for the, the, the get on the, the permitting phone calls. Well, I don’t think that’s ever going to be bad wisdom.
But the, but the playbook changes and keep an open mind. And if you hear no take, it seriously. And then try to figure out why and try to figure out if you can get a different answer. I mean, it’s not just talking to one department trying to play you know, let’s make a deal. But oftentimes the nose is in an interpretation of code and policy.
And if you work hard at it, you can get there. And I hear, I hear all the time. Well, my architect says we can’t do that. Well, we just did that. So, again, we’re good at what we do as surgeons. That’s, that’s our job, but understand that there might be a surgeon you’re more comfortable going to for rhinoplasty and the surgeon you’re more comfortable for breast lift.
Well, keep that in mind when you’re talking to architects, perimeters, surveyors, and contractors and everybody else.
Catherine Maley, MBA: Well, the tricky part for all of you is you have a thriving practice that has to transition overnight and half the time your lease has run out. Now you’re now you’re homeless, you know, because your place isn’t ready. How did this impact you with your 500 dollars per sq ft build-out costs?
How, how over budget was it or how over extended did the time go from the time you thought it was going to be ready to the time it was, was that an issue. How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: It was a huge issue. We were supposed to be done in May of 2022, and that was with a conservative timeline, and we moved in in a hurry because we’re in holdover on our prior lease in December of 2022.
And I can’t thank the Washington Department of Health enough. They, they understood our situation. They worked very, very hard to the extremes of their ability. to help us continue our patient care. Can’t always count on that, but, but they really came through for us. Now, budget, I had learned something about that.
The first time I had remodeled an OR you know, multiply the number times three and you’ll get bids all over the place. And even if you, you get a hard bid. And we want it to cost a certain amount of money. I think all of us as surgeons have it, well, even consumers. I mean, we talk to patients about how much we feel an abdominal plastic should cost.
How do they feel about it? We have a set value. And things can feel, you know, traumatizing if you get out of that scope of value. However, Even in an expensive build out and ours was pretty pricey. It was about 500 per square foot. It could be different you know, for everybody. So, it’d be alarmed by those numbers, but initial bids, I got a very reckless bid at about 125 per square foot.
So, good to be true. Of course, it is right. And everywhere in between, you know, what’s, what is missing, what am I missing? And then understanding that they’re unanticipated things. All it takes is an inspector to say, you know, Hey, I don’t like something about life safety. And that could be 100, 000 expense that you’re not prepared for.
So, how do you prepare for it? Ideally have money in your general operating. Revenue account the, the ideal time to do this, and you don’t always get to do it when it’s ideal, but when you have significant net profit, okay, because that’ll help you not do things out of fear or financial concern, but write it into your budget and figure it out, even if you’re going to write yourself your own note over, over three years, five years, 10 years, figure out what that is.
And make that give that number a lot of headroom, maybe a two and a half to three times multiplier and Go to the bank too. I did that accidentally, honestly, on a whim, just to, you know, who, who knows what’s going to happen. I mean, what happened? I I’m a solo practice. I do all my injections. I do just about everything myself.
And love doing it that way. But what happens to me, I have a disability insurance, but we need to have some money in the bank for a knee outage. So, I, I got a commitment for a loan from the bank that actually really didn’t take at the end of the day. And I leveraged an SBA loan from during COVID.
That’s really low interest rates. You, you get with your financial advisors and think creatively about how to how to level this playing field. So, that you can handle what the inspectors or what might come up during the course of events and. Very, very importantly, talk to your tax people about it.
I worked under the assumption that these sort of these sort of things can be written off against income immediately, and that’s not true at all. The standard appreciation is almost 40 years. So, your tax consultant will not only warn you about that. But teach you about a very handy instrument called accelerated depreciation, where other consultants can help you.
I got to pay him a little bit, but you can accelerate your depreciation and have it now so, you can make sure that your cash balance balances at the end of the year and that you have a favorable, favorable outcome with regards to taxes.
Catherine Maley, MBA: That was a really good tip. Accelerated depreciation. Huge! Oh my gosh, I would have died without that one. How did this impact you with your 500 dollars per sq ft build-out costs?
Did you grow this did you build this new practice for growth? Like, are there any plans to expand, like add a med spa, or add nurse injectors, or add associates, or make some of the fellows, partners? What is your plan for growth? Or is there one? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Well, no I, I already explained how poor of a visionary I am sometimes, but I’m having a lot of fun.
Okay. And so, we, when I had in mind doing this, well, how do I reproduce as much fun as possible? Because it is fun and I want to keep doing that. So, I, I made more exam rooms so, that I can do what I do with a few more patients at once. And if I find someone else like minded, well, they can do it alongside me.
Got a great PR team and they tell me that, that we have inquiry volume for, for other surgeons. So. If and several. So, if the right fit comes along, especially one that’s interested in injecting and taking care of skin and doing everything I do. Well, we have six identically appointed exam console treatment injection rooms.
They’re all ready to go in their mirror images. In terms of the OR facility. Yeah, we bought, we built two beautiful ORs. I don’t go back and forth but the OR, the second OR is there that, you know, honestly, five surgeons at maximum capacity could be using this center all at once. We even have a smaller procedure room.
It’s all designed for that growth. If that’s the trajectory that we end up going in. Yes, if we if we, if we did want to have other injectors there’s room for that too, more estheticians, more really anything. But what I love most about it is it suits itself better for teaching.
Than the prior facility. There’s just more room, more room for observers and more room for people to come to conferences here again, all in the service of fun. So, hopefully you know, we do find some people that that want to be want to be part of this this this great project. But if we don’t, we’re going pretty good with just me.
Catherine Maley, MBA: Right. You’ve been so, active in medical organizations and I wanted to talk about that because I believe you have been very involved in three, especially your new appointment this year. Can you talk about that and, and what you learned from being so, involved in various groups? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Well, gosh, I continue to learn everything from being involved in groups and especially about business.
I mean, gosh stewardship of 501c3s, 501c6s where the profit margins are, there are no profit margins. I mean, it’s, it’s, it’s, it’s running the organization or helping the organization run. And so, it can keep doing the great work that it does while cultivating institutional knowledge. There are policies and procedures that you can develop, learn so, much about everything along the way and continue to do so.
And it’s such a great a great way to be part of something bigger. than your own practice island. You go out in cosmetic surgery. Many of us go out on our own. It’s just us and our staff. And the staff have to be nice to me. I, well, I, some of them are nice to me, but isn’t it nice that you can, you can interact with friends and colleagues over a shared common value, something that we enjoy so, much.
But thinking back, I had no idea how to get involved. I didn’t even know I wanted to be involved. I mean, who knew It would apply to me, but you, you great people like you Dr. Mike, well, for example, and Dr. Faisal Qureshi and people very early on, right after I took my board exams, introduced themselves as I came to later learn the American Academy of Cosmetic Surgery really is just about people really wanting to get to know you because they’re good people.
They want to get better themselves. And they’re honestly curious about. Everybody so, that that we all can get better together. So, these really neat people reach out to me. You end up joining committees, the committees. If you do good work with the committees. People asked you to do more and more things and so, privileged you know, to, you know, I think, yeah.
So, it was president of the American board of cosmetic surgery, which I loved. I love that organization for the most meaningful time. There was, was being part of the oral exam committee and then being the chair of that committee on the responsibility of delivering. high quality psychometrically evaluated exam that would help judge the, the, the, the safety of future cosmetic surgeons.
Wow, did I learn a lot. I, I joined the Washington osteopathic medical board, which I’ve now served on for 10 years, because I thought it was important for, for a cosmetic surgeon to know what’s going on in the neighborhood. And yet I learned so, much about discipline of physicians and surgeons, but what, what the, what the role is in terms of.
Protecting the public and stewardship of that, that an individual physician can have. So, every experience I’ve had has been a segue into a, a new opportunity of learning, and I appreciate all those organizations for, for tolerating me, and I hope they continue to tolerate me to some extent for the future.
Catherine Maley, MBA: Well, and your future is here right now because you’re the president of the American Academy of Cosmetic Surgery. So, what are your plans for this year? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: During our plans, always cultivating institutional knowledge. And at the very forefront of that is advocacy. Speaking to the public, speaking with legislators, speaking with other surgeons.
We take it for granted in our individual practices that, wow, we’ve got a great practice of cosmetic surgery. Thank you. Everybody deserves the right to safe and effective evidence-based practice of surgery medicine, whatever that they are, whatever they have specialized in, and the patients deserve it.
So, if we have a mismatch of what patients need and desire, which is highly educated, skilled, trained cosmetic surgeons. And a need that was identified way back in the 1970s that will shoot that isn’t getting trained as part of the typical residency environment. We got an organization that that coalesced to get that right.
And we’re still getting it right. Not because we’ve been getting it wrong, but year after year. graduating fellow class after class every academy meeting, we’re all collectively smarter and stronger and making sure that the public is availed of, of, of the knowledge of, of, of, of what, what the American Academy of Cosmetic Surgery is doing for them directly as well as through the teaching and curation of high-quality surgeons, is, is our absolute top priority this year.
Catherine Maley, MBA: Well, I urge other cosmetic surgeons to join your group. I’ve been speaking for your group for years and it has grown so, much and especially the practice management. When a long time ago, when I got started, nobody was ever in the practice management. Like I’d be talking to, you know, three people because the surgeons always wanted to be. How did this impact you with your 500 dollars per sq ft build-out costs?
Where the surgery was going on and now, they realize I see the business and marketing side of surgery is pretty important, too So, that room is now exploded so, I urge anybody to join the American Academy of Cosmetic Surgeons and you’ve got to meet Dr. Sobel and the team it’s a really nice group.
They have beautiful. You can feel it at your meetings Like our last meeting was what we’re San Diego or Vegas?
Alexander W. Sobel, DO: San Diego.
Catherine Maley, MBA: San Diego. Yeah. And it was just so, everyone’s, there’s so, much camaraderie there. It was, it’s just a pleasure. Nice group. So, Dr. Sobel, to wrap this up, I have to ask one more question. How did this impact you with your 500 dollars per sq ft build-out costs?
Tell us something that we don’t know about you.
Alexander W. Sobel, DO: Oh shoot. Well, I have a degree in music. I started out early on as a as a lover of music and someone who aspired to perhaps be a high school music teacher and studied jazz performance in classical musicology. And in, as part of the new office, we spent some money on speakers and a lot of time on the on the musical environment for the benefit of the patients and staff.
And I myself and many times people ask me, well, what does music have to do with medicine? What does it have to do with business? And you can make a joke. Well, yeah, medicine. Well, I’m business and music. Well, there’s, there’s, there’s some starving to be had. But you alluded to this earlier about well you know, having structure, having guidelines, and if you don’t have structure and guidelines, it’s really, really hard to do great work.
And what I learned from music theory is, well, if you want to write a symphony, it’s just a collection of structure and outline like any other great work. And once you learn those little parts of the outline. It’s not so, hard. It would take me forever and what came out wouldn’t be so, good, but I know where to start.
And for me, my relationship with cosmetic surgery and the business practice thereof is very much like that symphonic thinking. This is a big thing that I am not trained in, but I know there’s a way to parse it up, find good people to help, and then enjoy the hell out of it.
Catherine Maley, MBA: That’s terrific. Just are you a singer or do you, are you a producer, a director? Do you play an instrument? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: Yeah, I study a saxophone, saxophone. I nearly failed my vocal proficiency. My piano proficiency exams were terrible and conducting wasn’t, wasn’t it wasn’t much more than embarrassing. But saxophone was my instrument.
Catherine Maley, MBA: Well, maybe we can get you to do something at the next conference coming up.
Alexander W. Sobel, DO: Let’s see. Oh gosh, indeed. I can feel the blush come already.
Catherine Maley, MBA: Yeah, you and Bill Clinton, he pulled out his saxophone, didn’t he?
Alexander W. Sobel, DO: He did and I, I’m sure there’s a backstory in how much it took him to get to that moment, but I applaud him for doing so.
Catherine Maley, MBA: Do you play at least as well as he, or much better? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: It’s been a long time since I’ve raised the horn, but yeah, I don’t know.
Catherine Maley, MBA: I’ll bet you could pull that off. All right. So, so, Dr. Sobel this is going to wrap it up for us. How can anybody get a hold of you that would be interested in talking with you about how to do a build out or the organization? How did this impact you with your 500 dollars per sq ft build-out costs?
Alexander W. Sobel, DO: By any way that feels best to them from email, call in the office, smoke signal.
My email address is really easy. D R S O B E L [email protected]. Google my name, Alex Sobel. You’ll find my website, anything. Yes, my office staff is pretty good at, at, at sometimes putting up a little bit of a brick wall, but what they, they do know is that how much I enjoy the Academy X members and, and people who want to figure stuff out.
They get messages to me may have to be persistent, but I’m happy to help as best as I may.
Catherine Maley, MBA: All right, that’s terrific. Thank you so, much. It has been a pleasure and I will see you at the next conference.
Well, thank you. So much. Everybody that’s going to wrap it up for us today, a Beauty and the Biz and this episode on 500 dollars per sq ft build-out costs.
If you’ve got any questions or feedback for Dr. Sobel, you can reach out to his website at, www.AndersonSobelCosmetic.com.
A big thanks to Dr. Sobel for sharing his experience on his 500 per sq ft build-out costs.
And if you have any questions or feedback for me, you can go ahead and leave them at my website at www.CatherineMaley.com, or you can certainly DM me on Instagram @CatherineMaleyMBA.
If you’ve enjoyed this episode on Beauty and the Biz, please head over to Apple Podcasts and give me a review and subscribe to Beauty and the Biz so, you don’t miss any episodes. And of course, please share this with your staff and colleagues.
And we will talk to you again soon. Take care.
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-End transcript for “500 Dollars per sq ft Build-Out Costs? — with Dr. Alexander W. Sobel”.
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