One of the most frequently asked questions among doctors is, “How do I start a private practice?” The answer lies in developing an effective business plan. Essentially, a business plan is a roadmap of where your practice is heading, or, rather, the direction in which you wish to see it going. It should include all aspects of your business, from mission and objectives to marketing and finance. Think of your private practice business plan as a declaration of all your business goals. Such goals can either be specific or more general, but they should all be attainable.
Apart from reaching personal goals, a business plan is often used to get financing for your private practice. Whether you are trying to get a small or large loan, having a good private practice business plan will help keep you on track towards growing your business to a certain level. Furthermore, it will assist you in:
- Setting target goals and objectives
- Making decisions in regards to the structure of your business
- Creating a financial and marketing plan
- Carrying out research to define your key demographics, services, pricing, and competition
Think about where you see yourself and your practice a year from now. How about five to ten years from now? Consider asking yourself the following questions:
- Is this the right time for me to start a private practice?
- Do I have the drive and commitment to start a private practice?
- Do I have good standing relationships with current patients and partners? Will they be able to help me develop future relationships?
- Do I have a support system I can count on?
- Since I will be responsible for my own livelihood, am I prepared to work longer and harder hours than before? Will I be able to take on the burden of running my own business?
- What are my professional strengths and weaknesses?
- Am I patient-orientated? Will I be able to understand and manage their expectations?
- Am I ready to financially commit to opening a private practice? Can I manage cash flow?
- Am I aware of the day-to-day activities involved with running a private practice?
- What is it that sets me apart from the competition?
A business plan is an invaluable tool when thinking about establishing your own private practice. Keep in mind that every business plan is different; it is not like taking the same test with other individuals. You have the opportunity to create a plan that sets your personal ideas and objectives in motion.
Here are a few steps towards creating a simple business plan for your private practice:
1. Business plan template
A business plan template serves as an in-depth summary of your personal, financial, and marketing strategies. There are hundreds of business plan templates to choose from, so find one that best describes and fits your needs. Entrepreneur offers free templates on the following website: https://www.entrepreneur.com/formnet/businessplantemplates.html
2. Executive summary
An executive summary is the first segment of your business plan. It is a clear and concise overview that highlights the key points of your business plan and prepares readers for the content to come. Consider writing the executive summary last. This way, you can go back and re-read your plan to make sure you include only the most significant details.
3. Company description and history
The description segment of your business plan should cover the structure of your business–the products and services you offer. The history segment should include the history of your practice–the how, when, and why you started your practice.
4. Mission and vision statement
The mission and vision segment of your business plan should include a description of your overall objectives. The mission statement illustrates what you wish to accomplish and how you plan to do so, while the vision statement portrays what you want your practice to look like in the years to come.
5. Market analysis
The market analysis segment of your business plan should include your target demographics and the latest trends among your patients in terms of needs and growth. It should describe your industry, identify your target market, define your pricing structure, and include any relevant information pertaining to market knowledge–elevator pitch, promotional materials, marketing activities, and return on investment.
6. Competitive analysis
The competitive analysis segment of your business plan should identify the strengths and weaknesses of the competitors within your market. Here, you should determine sales and marketing strategies that provide you with a competitive advantage.
7. Strategy and implementation
The strategy and implementation segment of your business plan should define the main areas where you are making progress towards your goals. You should be able to envision the type of practice you wish to have and how to implement it. Essentially, this segment should also include subsections such as milestones, SWOT analysis, and competitive advantage (innovation, differentiation, etc.).
8. Operations and management
The operations and management segment of your business plan should describe the daily operations of your private practice. Such operations include tasks given to staff members, responsibilities of the management team, skills and experience of yourself and staff members, and profit and loss relating to the operations of your practice.
9. Financial plan
The financial segment of your business plan should depict how you will fund your practice and in what areas you will be spending the funds. You must be able to define the financial variables including expenses, “hidden” expenses, income, budget, personnel plans, loans, investments, sales forecast, and more.
10. Exit strategy
The exit strategy segment of your business plan should identify your efforts to get out of your investment. In other words, it is a way for you to describe how you would reduce or eliminate your stake in the business should it come to a downward spiral. Common exit strategies include merger and acquisition, liquidation, initial public offering, and selling shares. While an exit strategy may sound negative, it is, in fact, a smart move towards a successful transition.
Any individual who is running a business should have a business plan. Generally, there are two main reasons why a business plan is prepared: to get funding for your business or to rethink your business’s goals and objectives. It should be based on proper research and careful consideration. Remember that your business plan will change as your practice begins to grow and you can make necessary tweaks anytime you want.
As a doctor, you spend most of your time caring for your patients and delegating tasks to your staff members. Grad school taught you to become a good doctor, but it does not teach you how to run a business. For this reason, it is only natural that writing up a private practice business plan may seem intimidating to you. If you are seeking funding, you may be asking yourself what are the small steps you should take to reach long-term goals.
Gain some experience first and develop your own personal niche that will make the best use of your time and provide the best return on investment. Be aware of changing market trends and determine how to create a strong plan by putting your goals into words and then, in time, into action. In order to run a successful private practice, you must possess not only practical skills, but also business skills that will set you apart from the competition. Ask yourself why would patients come to see you as opposed to going to another doctor? What can you offer them that other doctors can’t? In other words, sell yourself. In order to be successful as a private practitioner, you need to know and respect your worth. Start with your business plan. Let it help you turn your vision of a private practice into a reality.