Charging the groomer rent

Q. I'm opening a veterinary practice with grooming services. The groomer wants to lease a room monthly, but I'm not sure how much to charge for rent. Do I charge base rent plus a percentage of her production?

How much you charge a groomer depends on the services you provide, says Veterinary Economics Editorial Advisory Board member Dr. Karen Felsted, CPA, CVPM, a consultant with Gatto McFerson in Santa Monica, Calif. As a starting point, Dr. Felsted recommends looking at the facility costs for the whole practice in each category (rent, water, and other utilities) and prorating those costs based on the percentage of square footage the groomer is renting.

Dr. Karen Felsted

You also need to cover your other costs related to the arrangement—and let's not forget about profit, Dr. Felsted says. Will the groomer provide her own administrative services, such as booking appointments, check-in, and checkout? If not, Dr. Felsted recommends you add an amount to the base rent to cover these costs before you look at profit margins. You and the groomer will need to negotiate on this number, which can be a percentage of her sales or a flat amount. "The more you understand about the costs of the services that you will be providing to the groomer," Dr. Felsted says, "the easier it'll be for you to make sure you're charging a fair price for yourself."