1. Put together a solid set of financials with very detailed and clear assumptions. Those financial projections should focus not only on the revenue and cost lines, but also on the capital lines. In today’s capital markets, you must get your capital requirements right; there is no going back to the well. An experienced consultant will cover the 40 or so hard and soft cost line items That should lead to your looking at how you are going to finance the project, how it is going to be owned, and how it is going to be managed and operated. Each of these elements should be based on a project vision, as well as the projected cases and economics. This brings discipline to the design (size) and specifications.
This is the business plan you pretty much outline everything you need to know. Always be focused on this plan; continuously go back to it. Every time you diverge from it, you need to make a course correction or change the plan
2. Begin to look at locations, whether existing buildings or raw land. Evaluate those sites relative to your financial constraints. Existing building are the way to go today. Construction costs are sky high and financing new construction is extremely difficult. People often buy a site before they consult with us because it was cheap or it had great visibility. Generally speaking, it was cheap for a reason either there are structure issues or huge entitlement costs.When they commit to such sites or buildings, the result will be extraordinary costs, delays or designs that are severely compromised or all three. When possible enter into options or rights as opposed to final purchases or leases, to give you leeway to cancel the project.
Don’t let the physicians choose the site without the guidance of an experienced consultant or ASC developer; it can become an emotional call rather than a practical one.
3. The next is to put the balance of the implementation team together. That team needs to come together at the same time: architect and engineer, equipment planner, operations consultant, and IT and business systems consultants. It’s also where you start to spend serious money, as they start to actually design and develop the center. Depending on how much expertise and time you have, you can manage all these people and this process yourself, or turn to a turnkey development firm or program manager.
4. Finally, development begins. We will tend to meet with the physician group and their representatives on a weekly or bi-monthly basis to present a progress report focusing on schedule, budgets and work plans. Lack of communication and coordination is the No. 1 reason for derailed projects.
Mr. Amormino (jamormino@ambdevelopment.com) is the president and CEO of AMB Development in Milwaukee.
