If you have a passion for practicing medicine and want to take it into your own hands, you may want to pursue opening your private medical practice. It is a challenging and complicated process, but in the end, the reward outweighs all of the stress. Even though there is no one way to begin your medical practice, there are a few steps everyone who wants to open up a private medical practice needs to follow.
Acquire Necessary Funding
Firstly, you cannot open a medical practice without collecting the necessary funds. The exact amount may vary depending on your specific needs, but generally, it is said to gather at least $100,000 to cover the startup costs and equipment needed.
You have many options to raise this amount, such as obtaining a medical practice loan. The important thing is to ensure you have enough for the start of your practice. This will ensure your private practice will not go under soon after opening your doors.
Create a Business Plan
Since you will most likely need to convince a bank to give you the necessary funds to start up your private medical practice, it is vital to have a business plan. It does not have to be highly detailed, but when presenting it to a financial institute, it is good to have what is known as a pro forma to present to them.
In a pro forma, you should list all your medical clinic’s expenses, expected revenue, and potential debt. It will also show your practice’s projections for the next three to five years. A banker will be able to tell you which of your projections are realistic and which are not. To ensure you receive the funding from the bank, you must be able to back up your numbers.
A few tips you will want to remember as you create your pro forma is first to find the specialists. Depending on what your private practice specializes in, you will want to find the division in the bank that handles that. For example, if you are opening a medical or dental division, you will want to find a specialist in the financial institution to send your pro forma.
Buy Essential Equipment
Once you have received the necessary funding, you will want to focus on purchasing the equipment and staff needed to start your private practice. This is easier said than done since you will need to do a lot of research to ensure you are purchasing the best products and hiring the best staff.
With proper planning and research, you will set yourself up for success. When making these critical decisions, you must consider specific aspects such as an electronic health record system, medical billing services, background check services, and office managers.
Get Ready to Open
Once you have the funding, equipment, and staff, it is time to prepare to open your doors to the public. There are still many logistical steps before this can happen, and you will want to ensure you give yourself plenty of time to complete each step.
Firstly, you will want to incorporate it as a legal entity and acquire a tax ID. This is a critical step and will ensure that if you are ever sued, the only assets in danger are the ones held by the company. Furthermore, getting a tax ID helps because you will receive certain tax benefits related to each entity type.
You will also want to collect the physicians’ credentials so you can submit claims with the payers you are working with. This can take up to three months, so it should be one of the first things to do when preparing to open your practice. Purchasing insurance is also a vital step.
Finally, you will want to establish your policies, procedures, and compliance documentation. Once this is set, you will be ready to open your doors and begin running your private medical practice.
