Many medical practices have been faced with both financial and practical challenges over the past two years because of the many effects of the COVID-19 pandemic, some temporary and some lasting. As a result, when starting up a new practice, you need to ensure it is designed to survive and thrive in this new environment.
Related Read: Proactively Overcoming Industry Challenges
You cannot casually assume that if you treat patients and pay the bills on time, your new practice will be fine. You need to plan your operations strategically — and creating a business plan can help provide you with a blueprint for success.
WHAT SHOULD IT COVER?
A good business plan generally should contain:
A Business Description
Essentially, this is your medical practice's mission
statement. It could consist of a single sentence, such as: "To
run a single-practitioner family medicine practice." Or:
"To run a single-practitioner orthopedic surgery practice
focusing on sports and athletic medicine." But those examples
are rather bare-bones. It is a good idea to include more details on
your intended practice structure, whether you plan to have a
partner and whom you expect your target patient population to
be.
A Marketing Plan
Marketing is a never-ending aspect of running any
business, but it carries more weight when starting up a practice.
Plan on developing a website and being on social media platforms
such as LinkedIn. Make sure you connect with local physicians and
introduce yourself as a potential referral doctor. Based on your
practice's focus, you may even want to visit nursing homes or
sporting events — wherever your targeted group of patients
might be.
In addition, ask any hospital with which you are affiliated to help you market your new practice. Pharmaceutical reps also are often willing to assist with marketing efforts. Hosting an open house can be another way to introduce your practice to the community.
Financial Budgets
Start-up medical practice budgets need one budget for the
business and another for the household. Generally, new practices
require about six months of working capital for both the business
and the household.
The household budget includes how much money you need to live on for six months, including rent or mortgage, taxes, insurance and food. Be generous with yourself, because it is better to estimate on the high end and have more than you need rather than less.
The business budget is more complicated and requires you to make decisions about your practice. For example, if you plan to perform surgery, you will need a surgery suite. This will require a larger space and a bigger budget that includes equipment and staff. After you decide on the appropriate number of staff, you will also need to determine how much to pay them and what kind of benefits you will offer.
A specialized consultant can help with many of these decisions. A pro forma budget covering expenses and income for the first year makes sense, but having one that projects financial activity for two to five years is even better.
A Staffing Strategy
Management includes you, of course, but the biggest part
of your job is to see patients. You will likely need someone to run
your office. Thinking this through will help define your practice
and shape the budget. Decide whether you will hire an office
manager or administrator or act as your own — at least at
first. Determine how many nurses will be needed and whether you
will need to hire a specific number of physician assistants or
nurse practitioners. Finally, evaluate whether you will need
additional full- or part-time staff on board.
Related Read: A Good Business Plan Can Help Your Practice Thrive
WHO CAN HELP?
After you have written the initial draft, it is generally a good idea to revise your business plan based on advice from qualified professional advisors such as your banker, your CPA and your attorney. If you consider all aspects of operations and put sound strategies in place, you will better ensure that your new medical practice will get off to a good start and meet the distinctive challenges of these uncertain times.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
