Do not put yourself in a position of urgency:
Beginning the process of starting a practice should start way before a physician finishes up their residency or way before they decide to leave a hospital or another group. As motivated as you may be to get your practice up and running, you will need to rely on the help of others like lawyers, real estate agents, etc. Now they will likely not share your sense of urgency. So if you don’t have 6 months to devote to starting your practice, then you take a risk. For example if you intend to open a concierge practice, the time consuming credentialing process will not slow down the progression, but you will still have to contend with multiple individuals and organizations (real estate, construction, lenders, technology, communications, etc.) to get the project done.
The timeline with credentialing is at least 6 months. Without credentialing, give yourself 4 months.
Undercapitalization is the number one reason for business failure:
There aren’t many individuals, including physicians, who can start a new business without the support of a lender. So, assume you will get to know your lender. Too little money can sink the ship but too much money can also put you in the danger zone. Developing a financial ProForma is important in not only constructing the numbers but making initial decisions about how the practice will run. What services will you offer, what space will you need, how do you want the space fit-up, what payer mix will you have, what about marketing, etc.? Calculate to the closest dollar amount your revenue expectations and then list all expenses. You should also divide up your expenses into sections or lists: what you will need before you open, after you open, and operating expenses for the first year . You will want to include any and all equipment as well as subject matter expertise (lawyer, accountant, medical business advisor). Project the worst, most likely and best case scenarios. Put together your last two years of tax statements and complete a Personal Financial Statement. Then you will be ready to go to the bank.
Impulse Hiring
Recruiting and hiring is a skillset that many people don’t possess. You will want to get help to ensure you bring in highly motivated staff that is as invested as you are. Until you are certain that an individual is a good fit culturally, can understand, demonstrate and abide by your vision and values 100% of the time, do not offer them a job. If you’re going to be in a fast paced practice, hire staff that can keep up with you. Hiring the wrong people can be extremely expensive considering how much you will invest in them to learn your IT systems, equipment, and workflow processes. More importantly, surrounding yourself with the right people will make you and your patients’ experience so much more positive. Hand holding a subpar employee is never advised. Think of the “opportunity cost” of this behavior. If you didn’t have to spend time with them, you’d have the “opportunity” to spend more time with your patients, your family, or doing anything else you’d enjoy.
CONTACT PRACTICE ADVISORS
Now that you have read some basic tips and things to consider you are ready to start your practice. After you have found a place that meets your needs you will still need to make on offer, secure financing, sign the practice sale agreement and lease, and complete the purchase. As you can see a lot of important factors go into this decision. Make sure you are being properly advised. Practice Advisors 360 is the nation’s leading dental advisory company. Contact us today at (844) 360-8360 or visit us online at practiceadvisors360.com
