The more people that talk to us about starting their own practice, the more we hear the same questions.
The following are the most common questions we receive, so we decided to provide some answers collected from practice owners at HealthEngine.
Do I need to be a doctor to start my own medical clinic?
No, in fact many people who start clinics have a business background and an interest in providing great medical service experiences.
If you are a general practitioner and you want to open your own clinic, carefully consider how you might split your time between seeing patients and running your business. It’s a full time job managing staff, finances, marketing, accounting, and everything else that goes with it.
In saying this, some expertise in the medical industry is advantageous, as there is a lot to learn, including: laws and regulations, medical supply systems, and best practices.
To summarise, it doesn’t matter if you have a business or medical background, as long as you have the passion and drive to see it through and stick to your vision.
Do I need a business plan?
There are many uses for a business plan. It can be an important document for directing your strategy, getting partners on board, or guiding your long term approach. Most importantly though, if you need to borrow money to get your practice started, many banks and financiers will require an in-depth and well researched business plan before they will consider lending you money.
Our experts say if you want your business to be a success, starting with a solid business plan is the first step. To get tips on what to include in your plan, visit this article: Content for Your Business Plan
How much does it cost to set up a medical clinic?
To work out the cost of starting your medical clinic, you first need to consider the many variables that will affect your business:
- Where are you planning to open your clinic?
- How many practitioners will be a part of your clinic?
- What kind of billing structure will you use? Bulk Billing? High end charges, or a mix?
- Will you be an insurance preferred clinic?
- Are you buying an established business, or will you need to lease/purchase, build and fitout your property?
There is no easy answer, but a general rule is you will need at least $300-400,000 to open a small, low-key clinic, and up to $1M for a high-end clinic with room for six or seven General Practitioners.
To build accurate assumptions, we recommend finding a financial planner and/or an accountant with some experience in working within the industry to assist in creating a financial projection for your vision.
How long does it take to start up a medical practice?
Starting a medical practice can take anywhere from one month to one year! Depending on your experience, contacts, location, and funding.
If you have never started or managed a practice before, it may take many months to go from idea and planning to an opening your clinic. Consider the time it takes to create your business plan, find a location, get funding approved, fit out your practice, finish any building work, get your practice approved, hire and train staff, market your business, and add all your stationery and medical supplies.
It could take months of work and preparation before your first patient walks through the door!
How long does it take to start making a profit?
Be prepared to financially support your clinic for the first 12 – 36 months of operating.
You may need to support your GPs’ wages before you get a consistent flow of patients, put any revenue back into keeping supplies stocked, and keep spending on marketing your business to build your customer base.
Typically, experienced practice owners may not see profits from their new clinics for up to 12 months, however as a new business owner, you may not see any profit or decent wages from your business for up to three years.
How can I secure financial lending for my medical practice?
If you need financing for your business, there are a few different options to consider; from your bank, to a service that specialises in financial lending for medical businesses.
Before you can secure a loan of any kind, the lenders will have to feel confident in your ability to setup, run, and maintain a business, as well as make enough money to pay back your loan and create a sustainable practice.
This is why getting a good business plan together at the start can be a great asset to you, and an important element to your overall success.
Who can help me setup my practice?
No matter how much you want to do it yourself, it is always better to enlist the help of professionals and surround yourself with subject matter experts. Especially if you’re lacking in some of the necessary skills or experience. This will not only save you money and time in the long run, but you might also gain some key insights into the legalities and running of your business.
Consider the following:
- Accounting: Succession and exit planning, partnerships, business set up? A great accountant will not only help with budgeting and forecasting, but they will also be able to guide you through wider business structure and planning.
- Financial Planning: Financial modelling is absolutely critical – what does your billing architecture look like?
- Legal: Some minor legalities can be executed by accountants such as registering the company etc, however when it comes to drawing up contracts and policies, and making sure you comply with national and regional standards, you will want to make sure you have a great lawyer with knowledge or experience with medical clients on your team.
- Fit Out: Fitting out a medical centre is a big job. Not only do you have to think about what goes into examination rooms, but also your waiting area. Think about the little things, such as your floors will need to sustain a high volume of foot traffic as well as be easy to remove stains from. What feeling are you trying to give to your patients? If you’re looking at a high end practice, the fit out is not something to be frugal with.
- Tradesmen: Some states require floor lino to reach up the walls in examination rooms, dental clinics need centralised plumbing and special electrical setups, etc. Finding tradespeople that have done it all before will make your life a lot easier.
- Marketing/Branding: Does the name of your practice and your brand reflect your service? How will you get new patients to discover you? How will you differentiate your service from that of your competition? A marketing and branding specialist will help you get well on your way to building up your patient list from the get go.
How do I Decide on my Suppliers?
It’s important to create a supplier needs assessment. Figure out what are you going to need, then get 3 quotes from people who have a good presence in the medical fraternity. Do your due diligence on each vendor to find someone who will meet your needs and has a good reputation in the industry. You will most likely need suppliers for the following:
- IT: This is your infrastructure, server, backup data, patient files, work stations, security, everything. The right IT suppliers for you will not only install and train you and your staff on systems that work for you, but they will also be there for support, will keep everything updated and in-check, and will never let you down in a pinch.
- Practice Management Software (PMS): Your PMS dictates a lot about your business, clinical/patient setup and financial aspects. It’s very difficult to change your PMS once it’s been set up, so choose your provider wisely. Here’s our article on how to choose your PMS.
- Insurance: Insurance is key for a medical practice, especially a large one. Medical businesses need a whole range of insurance: public liability, workers compensation, director liability, IT reinstatement, general insurance – the list goes on. Shopping around for quotes and really understanding your policies will be an excellent thing to do before signing the papers. Practitioners will need their own medical indemnity insurance as well.
- Medical Suppliers: When you set up your practice you will need suppliers for medical equipment and furniture (such as beds and chairs) but you will also need regular suppliers for your consumables. These will most likely be two different vendors.
- Other consumables: Not as serious or exciting, but other consumables such as stationery and kitchen amenities will be a large cost to your business and something to factor into your planning.
Still have questions?
We’re available to answer them all! Fill in our contact form below, and we’ll be in touch.