Buying a medical practice can seem overwhelming at first, but the rewards of being your own boss and running your own office can make the initial work well worth it. First, understand some basic steps to getting started.
If you’re considering striking out on your own and starting a medical practice, you probably have a lot on your mind. My colleagues at Bankers Healthcare Group and I identified six steps any healthcare professional looking to start a medical practice should know.
1. Understand Your Budget
The cost of starting a new medical practice can be significant—sometimes upwards of $250,000. That’s a large sum of capital that few people have access to, requiring them to seek outside funding sources.
Bankers Healthcare Group has worked with over 100,000 healthcare professionals; we’ve spoken with many who said that they underestimated the initial startup costs, which left them short in the months following. Before they knew it, they were relying on credit cards and scrambling to find additional capital.
Estimate as best you can for initial costs to get your office up and running, and to sustain day-to-day operating expenses for the first few months. Most importantly, yet also commonly overlooked, anticipate any unexpected costs to ensure there is money available, just in case.
2. Find the Right Location
Before settling on where to locate your practice, it’s a good idea to research the area in advance to gain an understanding of the local market. You want your location to be accessible, in proximity to your targeted patients, and within your budget. You also want to avoid an area that may already be saturated with practitioners offering the same services. All of these factors can impact your potential patient base and revenue stream.
3. Purchase Equipment
Furniture, equipment, software, supplies—determining and purchasing all of the things you need for your practice to function can be a lengthy, costly process. Make sure to do your research on medical equipment and technology for the best prices, financing and training.
4. Plan for Staffing
It’s important to start thinking about hiring before you’re ready to move into a new office; make sure to make time into your schedule to properly screen and hire candidates. Beyond salary, other considerations you’ll need to budget for are health insurance, time off and other benefits.
5. Secure Licensing & Legal
Don’t wait until the last minute to handle the legal aspects of opening a medical practice. It can take months to earn credentials for your practice to accept private and government insurance can take months.
You also need to make sure you’re properly licensed in your state, have a national provider identifier number, are registered with the DEA, and comply with all other local regulations specific to your area.
On top of all of this, you will need to choose a legal structure for your business and register for state and local taxes. It’s a good idea to retain a healthcare attorney to assist so you can be sure you’re not missing anything.
6. Attract Patients
Your practice isn’t going to succeed without patients. When your opening day is within sight, it’s crucial to get the word out and start to line up your first patients. Consider implementing a marketing plan that advertises your practice across local print, TV, and radio stations, as well as online. Build a professional website with clear directions for setting up an appointment, and begin welcoming patients to your new medical practice.
Keith W. Gruebele oversees all loan originations as Senior Vice President at Bankers Healthcare Group, the premier provider of hassle-free financial solutions to healthcare professionals. If you’d like more information about partnering with BHG to finance your practice needs with fixed rates and flexible terms, have one of our experts reach out to you directly. Not ready to take the next step? Visit our cash flow calculator to better understand whether your monthly cash flow is sufficient to meet your expansion and career goals.