By Dana Jacoby
There are several important steps involved in founding and building your own profitable healthcare business. It can be an expensive, convoluted, and nerve-wracking process. After all, the healthcare industry has seen dramatic changes in recent times. The share of physicians who work in physician-owned practices has declined to under 50%, and roughly 50% of new practices close their doors within five years.
Today, the pressure is on to build scale and focus on profitable niches. We look at the most crucial considerations when launching your own medical firm.
Plan Your Operational Costs
Many of us have been there. You’re an ambitious physician looking into buying a medical practice or establishing your own from scratch. Then you start to research what’s involved in launching that dream practice. Slowly, your vision starts to feel a bit further out of reach and definitely less glamorous.
The most obvious barrier to entry is the sheer cost involved in building, leasing, or acquiring new medical facility space. New practice owners should aim to provide around 2,000 square feet for every physician. They will also need to dedicate capital for software, radiology and clinic equipment, and professional fees.
That’s before we even consider other necessary expenses, including payroll costs, insurance, electronic health records, and network security.
The good news is that many financial institutions run a dedicated medical division that provides loans only to healthcare professionals. You should prepare a detailed business plan, but don’t limit your search to traditional retail banks. Some credit unions also offer compelling terms to healthcare providers.
Identify a Suitable Legal Structure
The legal business structure you choose for your healthcare practice will determine how you pay taxes, as well as affect your liabilities when it comes to lawsuits and debt. Many medical practitioners organize their affairs in the form of an S corporation, which ensures they only pay taxes on personal income owned in their businesses. Others opt for a C corporation, which is taxed at the entity and personal income level.
If you have any doubts as to which arrangement is the best fit for your circumstances, we suggest consulting with a healthcare attorney. They can help you with the drafting of legal documents, articles of incorporation, and other essential details.
Review Protocols at the Front Desk
Physicians are attempting to monetize after-hours care, but they are also competing with urgent care clinics. Modern practices are like retail stores — there is always an alternative.
Owners can no longer depend on referring practices because they are increasingly merging into larger groups or hospitals. That has raised the importance of advertising and marketing. As for the in-house experience itself, dynamic LED signage is becoming a popular means of advising clients about specials and last-minute openings.
Some physician owners have even taken to hiring mystery shoppers to more objectively evaluate customer experience levels at the desk.
Adopt the Latest Software
Advanced healthcare clinic software solutions can make all the difference to your bottom line as a practice owner, but often in subtle and indirect ways. For example, you can apply scheduling software to minimize staff burnout and improve work-life balance.
In just a few clicks, you can keep everyone on the same time, eliminate availability conflicts, and improve the ease of self-service.
If you would like more advice on starting your own healthcare business, Vector Medical Group has the experience.