How to Prepare Financially to Build your Own Medical Practice
You’ve finally finished your education in the medical landscape, and you’re ready to start putting your skills to good use. Fortunately, there are plenty of options available to a newly certified medical expert. You can consider working in private practice, become a general practitioner, or explore a career with a range of different industry-leading companies.
However, in today’s versatile landscape, there’s also another option: starting your own medical practice. This is an exciting way to be your own boss, in an industry you love, serving patients and clients relevant to your niche. Of course, like building any business, there are various challenges to address, including figuring out how you’re going to finance your new venture, and maintain a positive cash flow. Fortunately, we’re here to help. Here are some of the top tips you can use when building your own medical practice, to ensure your venture is a profitable success.
Research Before Starting your Financial Plan
When starting a business, one of the first things you’ll need to develop is a financial plan. Essentially, this is a step-by-step overview of everything you’re going to need to spend on your practice, and all the sources of income you’re going to pursue. While there are templates out there that can help you to get started with financial planning, it’s important to avoid a one-size-fits-all approach.
Your exact start-up costs are likely to vary drastically depending on the kind of medical services you’re going to offer, the region in which you operate, and even the sorts of clients you’re going to be appealing to. A specialist practice focusing on cardiology might need to invest more heavily in medical equipment, software, and additional specialists to work in the team. With all this in mind, it’s worth doing your research to ensure you know exactly what costs you can expect.
List One-Time and Ongoing Expenses
Once you’ve done your research, you can begin identifying the kinds of costs you’re going to encounter in your business. Typically, these expenses will fall into two categories: your ongoing costs, and your initial expenses. Initially, when you’re first starting your practice, you may need to pay for new pieces of equipment, solutions for fast websites, real estate, and licenses.
In the long-term, you’ll need to think about the costs associated with medical insurance, designing, and maintaining your practice space, and leveraging crucial technologies. Think about your IT infrastructure plan, the utilities you’ll need to pay for, and how much you’re going to be paying your team members in terms of salary and benefits. Don’t forget, you’ll need to think about marketing and promoting your business too. Ask yourself exactly how you’re going to drive new patients towards your business.
Explore Sources of Capital
Once you have a good idea of how much you’re going to need to spend on your practice, both up-front and long-term, you’ll need to start exploring potential sources of capital. If you want to bootstrap your business (or essentially pay for most things yourself), you’ll need to consider what kind of savings and extra funds you can tap into. It might even be worth looking at your personal budget to see if you can unlock extra finances that way. You can refinance student loans from medical school as a way of lowering your monthly expenses, so you have more cash to dedicate to the business. Other options can include exploring personal and business loans, seeking out partnerships for additional funding, or working with investors in your industry.
Set Realistic Expectations for Profit
The medical landscape can be an extremely profitable environment for the right professionals, but it’s important to be realistic when it comes to projecting cashflow and profits. Notably, because starting a medical business can come with a lot of initial expenses, you may find that you’re losing money, or not making much of a profit for the first year or two in your company. With that in mind, it’s worth thinking about how you’re going to handle growth and manage your own personal bills while running your company.
If you’ve already looked at your budget, you might consider finding extra areas where you can cut down on expenses. It may also be a good idea to avoid expanding or adding new people to your team too quickly. While growth is a great thing for any business, it can be too much to handle financially, at least at first. If you set realistic expectations, you’ll be less likely to be caught off guard by your cashflow in the first couple of years of running your practice.
