Becoming your own boss is one of the most appealing professional endeavors out there, regardless of your industry.
It may also be the most challenging. Like any other type of new business, starting your own medical practice is subject to the same harsh reality that accompanies all entrepreneurs.
According to the Bureau of Labor Statistics, roughly 50% of new businesses fail by the five-year mark.
So, what can you do to make sure your private medical practice is among the other half that survives? For starters, make sure you avoid these six common medical practice management mistakes.
"You have to spend money to make money."
This simple truth applies to every new business to some extent. That's what makes it one of the biggest roadblocks to getting started, especially for doctors entering private practice. Starting without adequate capital puts your business at a disadvantage from the day one, so you must be well prepared to meet all of the realistic establishment costs.
For medical practices, these expenses typically include:
- Licensing and medical supplies.
- Medical malpractice insurance.
- Commercial fit out.
- Building lease.
Oftentimes new businesses fail simply because they do not have enough money to turn a profit. So, what's the best way to get the capital you need?
Of course, acquiring the capital you need to get up-and-running isn't enough to achieve long term success. You will also need to have a long term business plan that is strategic, financially-sound, and of course, realistic.
While it can be difficult to approximate your initial revenues, it is important that you perform your due diligence. In-depth market research will be necessary to calculate accurate financial projections.
Your financial plan will serve as a concrete road map for your medical practice. It's something you can continually revist and revise as your practice grows. Having a three to five-year projection is most recommended, in addition to a line of credit for the first three months after opening your clinic’s doors.
Needless to say, those who try to coast by without a viable financial plan typically do not succeed long term.
A medical practice requires the same degree of business management skills that any other successful operation runs on. This is where doctors are typically at a disadvantage.
You spent a decade of your life and hundreds of thousands of dollars to study medicine, not business.
This underscores the importance of surrounding yourself with an experienced, well-rounded team you can trust. The staff you hire will set the tone of your medical practice, which means hiring wrong people will likely result in:
- Poor delivery of services.
- Patient dissatisfaction.
- Failure of your business.
Every independent doctors wants his or her practice to be known for providing exceptional patient care. To achieve this, you must hire qualified and competent clinical and non-clinical staff members who are dedicated to providing high quality care. By having staff members who are capable and willing to satisfy the needs of patients, your practice is already trending in the right direciton.
As a private practitioner, you are both a health care provider and a small business owner. This means wearing multiple hats you do not have to wear when working for a large hospital.
In order to succeed at both, it's crucial that you develop a thorough understanding of your competition. Like your financial plan, the competitor analysis you conducted when performing market research is an ongoing effort.
You will want to keep a pulse on how these other businesses change over time, both for better and worse. How much attention you pay to your market can very well make or break your medical practice in the long run.
In the grand scheme of things, running low on supplies probably seem like a minor issue than can be fixed rather quickly. But an office culture plagued by poor communication can spiral out-of-control just as fast.
If your staff can’t access important tools to do their job, they will obviously underperform. If patients can’t get the necessary medications at your practice, they will go to your competition instead.
While you have plenty of other effective marketing channels at your disposal, many private medical practices live and die by word-of-mouth referrals. If you think a negative review between two friends is bad, just wait until you see what a scathing online review does to practice's repuation.
To ensure smooth operations, your clinic must have all the necessary supplies and whatever that might be needed. You can prioritize the supplies that will be needed the most. Take your time to research medical supply companies to find the ones that offer the best value.
You’re brilliant in medicine, and probably a few other things. But truth be told, you can't do it all on your own --- even when you go solo.
As time goes by, you will find out that running a private medical practice involves a lot more than just caring for patients. If you want to increase your chances of building your medical practice into a successful and profitable operation, you need to consult experienced business minds.
Their advice will not only save you valuable time and money, but it will also help you avoid some common pitfalls that new medical practices usually encounter.
As a medical professional who wants to escape the chaos of large health care neworks, you can open your own medical practice and enjoy all the benefits that come with it. But as you have seen, it takes careful research and strategic.
- Starting with adequate capital.
- Creating a viable financial plan.
- Understanding the business skills required.
- Monitoring your market competition.
- Staying fully-stocked with supplies.
- Asking for advice.
Of course, there is so much more to running a successful private medical practice in 2021. But whether or not you do these 6 things just may make or break yours.
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Jack is the Head of Content & SEO at LeverageRx, a digital lending and insurance platform for the medical market. He helps healthcare professionals make smart, swift financial decisions.