You may have heard the term “entrepreneurship” more than once by now. As a refresher, it is when a person undertakes a new business venture. In the case of medical providers, this means starting a private practice instead of working in, say, hospitals. Many decide to do so because it gives them more freedom to manage their own times and lay their own ground rules. Also, a private practice offers a good work-life balance. Although getting there can be a laborious process, the benefits are well worth it. In this article, we will discuss the basics of setting up a medical private practice. So, if you are wondering, “how do I start a private practice?” Here is some sound advice.
“How do I start a private practice?” Is the most common question because medical graduates don’t learn the business side of the industry in school. However, learning is at the core of health professionals, so they have amazing learning skills.However, setting up a private practice and running it is incredibly time-consuming.
👉 Learn the ABCs of getting started with your private practice here.
Also, there is no infallible formula to success and the journey is rather personal and different for every entrepreneur. However, the fundamentals are always the same. Let’s take a look at them.
The Fundamentals of Setting up Your Private Practice
1) Have a Plan
What do you want to achieve? Who do you need on your team? How many do you need? What facilities do you need? And what equipment? Most importantly, how much revenue do you need to run a sustainable and profitable operation? When you start thinking about these needs, voilá, you can start creating your business plan. And as you build it, the steps ahead will become clearer. Forbes and the Harvard Business Review have reliable guides for entrepreneurs. And so does the US’s Small Business Association.
2) Get Funding
To start a business, you will need capital. How much capital is going to depend on the type of practice, but you will have a clear idea once you have finished completing your business plan. That same business plan is what you will submit to the bank to secure a loan. Don’t forget to include a projection of payroll and bills until your revenue stream is stable, which may take a few months. The Small Business Association, Score and Smartsheet offer great business plan templates that can help you put together a professional and attractive plan for investors.
💡 Pro tip: Create a pro forma and be smart about how you move it around:
- Find out if your bank has a medical division.
- Submit it to at least a couple of banks, so as to be able to compare offers.
- Start safe. Think about basic equipment that will set you up for success.
3) Find your People
“No man’s an island.” Even if you are going solo, you will need to enlist the help of professionals. Whether that’s a designer helping out with the layout of the office, healthcare consultants who will give you insight, or a cleaning company. But in reality, the truth is that you will probably be working with people. You will most likely hire an assistant or an office manager. After all, you are starting a private practice to make the most of your precious time to focus on the patients. And you can’t do that if you are constantly concerned about the administrative aspect of things. You need someone efficient, knowledgeable, and above all, trustworthy and reliable.
4) Equip Your Private Practice
You found a great location to set up the practice. Now comes the fun part! It is time to equip it. Take note of these because you’ll include them in your business plan. Apart from the specialized equipment you’ll need to treat your patients, you will most likely need an EHR (electronic health records) system. This will help you centralize and thus optimize your processes and communication with patients. Also, having an EHR system helps you to qualify for federal incentive payments.
📱 Contact us to help you decide which EHR to set up and how.
In addition to EHRs, you will need a coding tool to systematize your revenue cycle. A mistake in coding can drastically affect both your and your patient’s finances, and risk your operation. The American Medical Association offers a comprehensive guide to coding that you can access at no cost here.
Together with a coding tool and system, at the end of the day, you will need a billing process that ensures a healthy revenue collection. Effective RCM is critical to maintaining the financial health of healthcare practices and ensuring they can continue to provide high-quality care to their patients.
🌀 To learn all about RCM, read our recently updated post.
5) Prepare to Open Your Doors
Before you open your doors, there are several steps that might take some time, but are essential to have everything in tip-top shape and set you up for success. Here’s a checklist to follow:
- Make sure you have all your licenses and credentials in place. This step can take up to a few months, so it’s a good idea to have professionals by your side to guide you through it and ensure that nothing falls through the cracks of the system. A group of healthcare consultants can help you.
- Additionally, you will need to set up your payer contracts and choose your payment models. Again, working with experienced healthcare consultants is a great asset in this process.
Also, as you reach the point of opening your doors, you know that you should take out insurance to protect the practice and your partners.
6) Audit Yourself
Congratulations! Your private practice is up and running. The golden rule is to enjoy every step of the process. As you continue to build your business, you will encounter many challenges and might feel frustrated at times; it’s all part of learning and growing professionally. It is normal not to see the fruits of your hard work right from the get-go, but continued efforts and learning from experience will take you to professional and financial success. In order for this to happen, we strongly recommend auditing your systems. While you can do this yourself and encourage patients and colleagues to give feedback, consulting firms can offer an unbiased and experience-backed analysis. This way, you’ll continue to expand and optimize your practice in a healthy way.
The Answer to “How Do I Start a Private Practice?”
Entrepreneurship comes with challenges, but the rewards are well worth venturing into it. So, the answer to “How do I start a private practice?” is to surround yourself with knowledgeable and can-do attitude professionals who will help you reach your goals. Even if you are building a small solo practice, you will need to engage with a number of professionals, from accountants to contractors. Therefore, it is important to carefully select who you are working with and make sure you are all striving for success. After all, the road will look different for every practice, so, make sure to enjoy the journey and be open to learning a lot while on it.
Lastly, this guide will help set you on the right path to opening your doors. At Peregrine healthcare we advocate for healthy business practices and are devoted to helping professionals offer the best care possible by taking care of their needs.
If you are planning to start your own private practice in Houston, Texasm, don’t hesitate to contact us. Let’s build a prosperous business together.