Most imagine healthcare professionals working in hospitals or clinics, but the truth is that nearly half of all healthcare providers operate out of private practice. Private practitioners enjoy many benefits, not least of which are greater stability in their schedules and enhanced job security. The benefits increase dramatically for private practitioners who own their own practices, as they gain nearly full autonomy over their operations.
Still, launching a private practice requires diligent planning, or else the practice will fall into business failure. While the following guide might include only two steps, those steps should help providers develop a strong strategy for their private practice that leads to success for the business and their patients, alike.
Build a business plan
Though doctors and nurses might like to think of their private practice as a community resource or a societal service, the truth is that a private practice must be run like a business if owners have any hope of maintaining operations in the future. And, the first step to building a successful and long-lived business is a strong business plan.
A business plan gives providers a roadmap for launching and growing their organisations over the next few years. Often, business plans are essential for incorporating and acquiring funding from lenders and investors. Building a business plan is a daunting task, but it becomes more manageable when providers can break down the plan into more easily understood components. Here is a simplified rundown of six essential steps of a basic business plan for private practices:
- Be detailed about the ideal client and the type of problem that the client needs to be solved. This will help providers develop more effective marketing plans to reach their target audience.
- Determine the practice’s private pay rate, including how the practice will panel with insurance companies. It might be necessary to adjust the pay rate after the next step and frequently as medical costs shift.
- Evaluate needs for an office location. Different types of practices will have different needs, and providers must remember details like the size and scope of necessary equipment, parking availability and accessibility.
- Use an expense template to estimate monthly expenses. While providers should strive to be as accurate as possible regarding their expenses, over-estimating slightly might be advantageous and prevent shortfalls in the future.
- Create a personal budget as well, so providers understand exactly how much income their practice needs to generate to allow them to survive. Ideally, the practice will produce more income than this bare minimum, but the first year or so may be tight so you need to find more information about applying for a new loan.
- Bring the business plan to a private practice mentor or consultant to ensure that the plan covers all necessary aspects of business operations.
Hire staff
Few healthcare providers expect to cease the practice of medicine once they launch their private practice. However, administration of the practice is a full-time job; most providers will not be able to balance patient care and running their business with success, which means they will need to choose between abandoning their medical responsibilities and hiring healthcare administrators to manage the business side of their practice.
From the beginning, healthcare providers should have high standards for the staff they rely on to manage administrative responsibilities. Depending on the size and scope of their practice, providers might need one or more employees with an MHA degree, which ensures that workers have a foundation of knowledge and skill in healthcare accounting, legal and ethical standards, health policy-making and sensitivity, among other unique aspects of the healthcare business field.
As the practice grows, providers will likely need to hire additional staff, including receptionists, medical assistants and additional providers like physicians and nurse practitioners. Providers might draft required qualifications for different types of employees to help administrators make staffing decisions while providers are focused on patient care.
Final thoughts
It should go without saying that launching a private practice is more difficult than developing a business plan and hiring employees, but these two steps are essential for achieving success. A comprehensive business plan and experienced staff will form the foundation providers need to build a productive and profitable practice that endures into the future.
Adam Mulligan did his degree in psychology at the University of Hertfordshire. He is interested in mental health, wellness, and lifestyle.
