When opening your new medical practice, these are the top 5 mistakes we have seen and some practical ways to avoid making them. Opening a new medical practice is a start up. There are so many tips and tricks you can search for to help guide you. A business is a business and these 5 tips are truly applicable to most new business owners, but there are some specific points here that are directed specifically for a medical practice. For instance, with a typical start-up, the idea is to have flexibility and agility, but with a medical practice, it is quite the opposite. There are extensive costs associated with moving as well as the fact that you have patient traffic and your patients are sensitive to geographic changes. So here is my list of the top 5 mistakes to avoid.
Unless you have money saved and money to burn the first step in opening a practice is line up the financing. Not having enough money can lead to failure. You need enough money to build out your space, handle your marketing, pay your staff and live on during the growth process. Many lenders have a division dedicated to healthcare. Make sure you are working with a healthcare specialist and you are on the right track!
Identifying the Right Professionals
The 4 must have professionals are the lender, the real estate broker, the equipment supplier, and lawyer. If you hire correctly the entire process should be smooth and streamlined. When selecting professionals, make sure they are medical specialists. Employing a friend or family member because you know them is a mistake. You want someone who focuses on healthcare real estate.
The first thought doctors have when contemplating opening a new office is to take minimal space, start small and move into a larger space if needed. However, this is a mistake the buildout cost to for an office is high. It does not make financial sense to put a large amount of money into your space and have to move and build out a larger space. Also, having less room to grow into will impeded your ability to grow. How can you see more patients when there is not enough space available?
I recommend a ten-year term to all my clients. The more term on your lease the more valuable your business becomes as you have a stable location for the health of the practice. Again, this is because the cost of the build-out costs is substantial. Why would anyone want to invest $100,000 or more just to move offices 3 years later? This also helps with the landlord’s decision to approve you. Medical tenants tend to be highly sophisticated and have low failure rates, landlords want this long term stable tenancy.
Hire Right on Day 1
Many doctors feel the need to take care of all aspects of the practice. This is a mistake, they spent years at medical school learning medicine, and that should be their only focus. Hire the right staff to succeed from a business standpoint. The right office manager is a must in order to run the everyday dealings. I also recommend reaching out to someone to handle the marketing. Last, the right equipment supplier is a necessity and can help with the different aforementioned aspects as a way for them to gain your business.
Photo Courtesy of “Doctor Using A Digital Tablet” by Naypong FreeDigitalPhotos.net