How-to Start A Medical Practice Checklist
webmanager • May 17th, 2023
So, you’re ready to start your private medical practice?
Congratulations!
It’s an exciting and exhilarating time for every (soon-to-be) business owner, but one that can be highly stressful as well.
There are things to figure out, options to choose from, and an endless list of decisions to consider… it can all be overwhelming to say the least.
From structuring your business to hiring the right people, it’s hard to know where to start.
But don’t worry. At the end of this blog, you’ll have a great handle on which tasks you need to tick off first and where you can find extra support if you need it.
Let’s start!
As a starting point, you’re going to need a business plan.
A business plan is a pro forma financial statement with different outcomes for revenue, capital investments, net profit based on some assumptions.
In simple terms?
It’s a written-down plan for how you think your business will perform within its first 3-5 years.
Think of it as a crystal ball. It’s your best guess of what’s going to happen (i.e., sales and expenses) based on calculated assumptions.
You will need this crystal ball, aka business plan, to gain financing from a bank or lender in order to buy your practice.
An experienced accountant, preferably one experienced in medical practices, can help you with this step.
If you don’t yet have a medical accountant, you can book a complimentary consultation with us anytime and we’ll be happy to help answer any questions.
Once you have your business plan under control, it’s time to consider the type of practice you want to have.
Do you want to start and operate solo?
Or do you prefer to have a partner.
While group medical practices have become somewhat of a standard these days, a solo practice is still considered a viable option.
It’s important to carefully evaluate the pros and cons of each option, speak to an accountant, and get feedback from colleagues before you make your decision.
At the risk of sounding cliché:
Choosing the right legal entity can mean the difference between success and failure in a business.
It’s that critical.
Your business structure impacts every aspect of your business; tax treatment, growth opportunities and exit strategies.
So, make sure you speak to an advisor first, and plan wisely.
After ticking a business plan and business structure off of your list, it’s time to move onto financing.
Financing is always a tricky subject, but especially so after accumulating debt from medical school.
A novice business owner – fresh out of school – with huge student loans and no assets to show for? Not exactly the lender’s dream candidate.
But don’t let this discourage you. There are many ways to finance your practice.
There are medical practice loans that are specifically designed for doctors and dentists, as well as SBA loans, business lines of credit, and equipment financing which are all available resources for you as well.
Not to mention that if you’re buying an existing practice, many sellers will be willing to negotiate an installment agreement up front.
This is another area where we recommend getting in touch with an accountant.
It’s imperative that you do your due diligence and research before signing on the dotted line.
Finally! We’re moving onto the fun stuff.
Equipment and people.
However, if you thought that setting up your business was going to be the hardest part, it’s probably important to squash that myth now.
Operating your practice is going to be a big challenge.
Hiring and training staff is time-consuming, and often comes with a lot of headaches.
Here are a few of the decisions you’ll need to make up front:
See what we mean? Is your head spinning yet?
There are a lot of decisions that need to be made in a timely and organized manner before you’ll be ready to open up the doors.
Last, but not on least, on our medical practice to-do list is to choose the software you’re going to use for your practice.
Here are a few of the software platforms you’ll need to research and set up:
Electronic Health Records System (EHR) – As the software that keeps track of clients’ health records, this is one of the most essential software systems you’ll use in a hospital or medical practice.
Practice Management System – A Practice Management System will help you organize and access case documents and client messages.
Medical Billing Software – A reliable medical billing software is an essential tool to help you manage client billing, insurance billing, and keep track of patients’ procedures.
While we can’t tell you which medical practice software will be best for your business without knowing more details, we can give one crucial piece of advice: investing in technology will be essential to the success of your practice.
There is nothing worse than slow, clunky, or broken (!) office systems.
Take your time, ask your colleagues, and make the best decisions for the longevity of your practice.
Well, there you have it!
Our advice for starting your medical practice based on our years of experience as accountants for medical practices.
If you need help figuring out how you’re going to pay for all of this, how to choose your business structure, or even how to begin with your business plan, you can reach out to us any time with your questions. We’re always here to help.
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In the meantime, I think you might find this blog on Medical Practice Software helpful.
Until next time!
Samy Basta brings you more than 20 years experience in tax, financial, and business consulting to his role as founder of Basta & Company. His focus is primarily strategic business planning, empowering clients to set priorities, focus energy and resources, and strengthen operations. In addition, Samy and his firm provide strategic counsel, and technical insight, on a wide range of needs, including tax saving strategies, tax return compliance, as well as choice of entity.
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