As a medical professional, you’ve more than likely had motivations or desires to help others. Some have experienced disdain with established health care corporations and want a situation that allows them to do more good in the community. This drives some to venture out and start their own medical practice. As with starting any business, doing so is a tall task with plenty of regulations to follow and steps to take. Here, then, are 11 steps to launch your own medical practice.
1. Establish the vision for your practice.
While this may seem like an ethereal step or a no-brainer, it is crucial before starting out to establish, preferably in writing, the vision for your practice. Doing so can not only cement your drive and motivation for launching your own practice, it can also help you answer important business or legal questions moving forward as you form your business.
2. Identify the proper legal structure for your organization.
Before you get funding, before you unroll the first sheet of protective paper on the exam table, before you can see your first patient in your own practice, you’ll need to weave through some red tape. The first step to that process is, as with any business, knowing the type of legal entity you’ll be establishing, and obtaining a business license. Check with your state and county to know exactly what kind of licenses and permits you’ll need for your entity.
What could your business do with $10,000? Check out Nav's Small Business Grant now to find out how your business could win interest-free financing.
3. Understand which medical-specific licensing and permits you’ll need.
Just like any other business, you’ll need your license to practice as granted by your state. For your own office, however, you’ll need a few more permits and registrations. Depending on the type of practice you’re opening, you’ll need to register with the DEA. There are a variety of applications for different types of medical practices, so be sure to choose the correct one. If you plan on opening a pharmacy, you’ll need to register with your state board of Pharmacy each year. There are additional licenses such as laboratory licensure or registering X-ray equipment.
4. Write out your business plan.
Once you have an understanding of your vision and the specific steps you’ll take to make your practice both fulfilling and financially successful, you’ll need to write a business plan. This step is crucial, as the detail and attention you put into your plan can pay off (literally) as you seek out financing and other help establishing your practice. Including a five-year plan is especially important as you seek contracts with insurance companies in the future.
5. Plan for staffing and systems setup, which can otherwise slow down your business.
Your focus opening your own practice is likely to have more contact with the patients. Unfortunately, certain steps in the setup of your practice can take you away from patients.
“In a personal experience, one established doctor complained to me during an appointment that he had to focus on filling in data in software, at the expense of interaction with his patients,” says Stanley P. Jaskiewicz, a business attorney in Philadelphia with experience helping physicians establish their own practice. “For a new office, that technology expense can be daunting – not only for the software licensing, but also for the investment in staff to install and maintain the systems. Physicians considering an independent practice must be prepared for such expenses in their planning.”
6. Budget for restrictive covenant buyouts.
Jaskiewicz also advises doctors to be aware of restrictive covenants, essentially a non-compete agreement, they may have with their current employers that may limit their ability to practice in a particular specialty. He says “frequently a doctor can ‘buy out’ of such restrictions, but it is certainly preferable to plan and budget for such a buyout, than to be met with a default letter after opening your doors in a new venture.”
7. Secure funding.
At all stages in the life of your practice, cash is king, and perhaps never more so than during the opening stages.
“I find that most Physician’s come in with an initial investment either through savings or 401K,” says Brandon Seigel, President of Wellness Works, a consulting firm for doctors opening their own practice. “However it is very common depending on the ‘scale of practice’ for a healthcare professional to acquire debt for the utilization of finite expenses.”
Seigel added that doctors that seek debt to finance their business often use SBA loans, which are within a physician’s reach due to a dependable business plan. While an SBA loan may not be the best fit, you can see other great options for you and check your personal and business credit score with Nav free of charge.
8. Value offering/value statement.
As part of your business plan, it’s important to include a “value offering” or “value statement” according to Seigel. This will be key in the process of establishing contracts with insurance companies and bringing in cash as you begin to practice.
9. Contact insurance companies for contracts.
Perhaps the most important step in ensuring the sustainability of your practice is to establish contracts with insurance providers. Having connections and a network to connect you with providers is important, Seigel says. “I typically will identify the “Contracting Provider Network” for each commercial payor source and the Director of Contracting,” Seigel adds. “I then will send a comprehensive letter of interest that includes my ‘value offering/value statement’ along with tying analytics to the need that the payor network has and how I can solve the problem. Typically, my letter of interests will then facilitate an application to become a provider and then upon submitting a formal application.”
If you’ve done good work preparing the documentation and the network is accepting new providers, you could receive contracts.
10. Establish an office culture.
As your practice gets moving and you hire staff, it is vital to not only onboard your staff with the proper administrative processes and training, but to ensure that they’re the right fit for your vision. Having the proper office culture established will ensure that everyone is on the same page and your patients receive the best care possible.
11. Revisit your business plan and vision.
Over time, as your business continues to grow, it’s healthy to revisit your business plan and perhaps add sections pertaining to new situations you may not have fully anticipated or expected. Doing so can help keep things structured and running smoothly over the life of your practice.
Nav connects you to business financing offers that you are more likely to qualify for based on your business needs and credit — all without a hard credit pull. See my top options now.