The Definitive Guide to Setting Up Your Own Medical Practice
The Definitive Guide to Setting Up Your Own Medical Practice
Taking the leap from employment to building and running your own business can be daunting, that’s why many medical professionals don’t take that step at all. When it comes to wanting to be in charge of your own lifestyle and income, however, this step is necessary. Are you a doctor or specialist thinking about setting up your own medical practice? Here is everything you need to know about independent practice from deciding whether it’s the right decision for you to setting up a business that’s fit for success from the start.
The 5 essential steps to setting up your own medical practice
Step 1 – Ask yourself if it’s the right time for you
As we said previously, starting and running your own practice is a daunting thought in itself, never mind actually running it. Much like anything that is a major commitment, one that you know will be extremely challenging, you need to consider a few vital questions before making a decision to ensure that it is the right one for you.
What are your motivations? – you need personal motivations for wanting to work for yourself (e.g. higher income, wealth-building, better lifestyle etc). These are what will get you through the most challenging times and can make or break a business.
Are you prepared to develop new skills? – you’re qualified as a doctor, but are you qualified to run a business? You need to be prepared to develop these skills (e.g. human resources management, business planning, cash flow and budgeting etc).
Are you able to adapt to change? – your operating environment will constantly change when you’re in business so you will need to consider how these will affect your internal processes and perhaps your bottom line. Changing legislation, tax regulations, and technology etc will all bring new challenges that you’ll need to adapt to.
What is your exit strategy? – further down the road, will you want to change your career, retire early, sell your practice or shut it down? Knowing your exit strategy in advance allows you to plan ahead and exit when and how you want to.
Step 2 – Research before settling on location
Finding a suitable location is one of the most important things you’ll need to do when conducting in-depth research for your own medical practice. Here are the major considerations that you’ll need to look at to make the right decision for you:
Accessibility (local transport/parking)
Sufficient local demand/proximity to patients
Complementary facilities (pathology services/allied health/proximity to a public hospital)
Potential for future growth (is the local population and potential demand likely to rise within the next 5 years? Can your site accommodate growth?)
Property features (the property should be approved for operation as a medical practice and needs to accommodate staff, patients, and any future extension plans).
Step 3 – Create your business plan
A crucial step when setting up your own medical practice is to outline your business plan. How do you intend to set up and run your practice? How will you measure your success against your goals? If you’re applying for finance, you’ll need to present a solid business plan with financial projections, but creating one for yourself anyway is always a smart move.
Your business plan needs to include:
How much it will cost to set up your business (depends on the location, whether you want to lease or buy, whether you’re taking over an existing practice or starting a new one from scratch, salary rates etc)
How you will finance it (savings, a loan etc)
How you will adapt to changes in business tax law (your accountant can help you factor in tax issues to see the impact on your bottom line)
Your cash flow projections and loan structure (e.g. you may want to minimise repayments in the first six months to ensure you sustain a healthy cash flow while you build your patient base)
Your staffing needs and I.T. infrastructure (you need to outline your processes, technology tools, methods for scaling up, the type and amount of staff that you will need etc)
Your insurance plan and risk management strategy (as well as business insurance, you will need medical indemnity insurance and public liability insurance. Consider your personal insurance and outline your policies for staff and equipment.)
Your marketing strategy (look at your competitors, foot traffic, and advertising regulations. Would it be best to encourage referrals or to market online? How much will it cost?).
Step 4 – Have your compliance and paperwork in order
This step is always underestimated and often left until too late. While you may have the perfect location, a solid business plan and promising future plans, you can’t set up your own medical practice without having all of your compliance and paperwork completed. Practising medicine is strongly regulated so you will need:
A Medicare provider number
ATO Registrations (you will need an Australian Business Number (ABN) and you may need to register for GST. Contact the Australian Tax Office (ATO) for everything you need to do).
General practice accreditation (although voluntary, most general practices in Australia have accreditation to access the government’s Practice Incentives Program so that they can provide better care to patients).
Step 5 – Consult expert advice
As you need to learn a lot of new skills to be able to set up your own successful medical practice, make sure to seek advice from experts to help guide you in the right direction. Consider building a team of advisers where you can consult in essential areas such as accountancy, law, HR, business development, and financial planning. As your medical practice grows, your team of advisers will become trusted partners to help you develop further so that you can exceed your goals.
Do you need help setting up your own medical practice?
Running your own medical practice gives you the freedom to help patients on your own terms. However, like with any new business, researching, planning, establishing and building your practice is hard.
Whether you need help or advice from business planning to creating a cash flow and profit strategy, we can give you our insights to ensure that whatever decision you make is a success. Just contact me via email@example.com and I’d be keen to help.