I don’t believe there is such a thing as being ready to start your own practice. But there are some markers to indicate that you are ready and some which might indicate it’s a bad time to start your private practice.
There are many cash-based practices out there. It’s what I prefer. But for those who prefer an insurance-based model, that kind of practice is even easier to start.
Starting Your Own Medical Practice
I have coached quite a few physicians who started their own medical practice. Most have been physical practices, some virtual clinics. Many specialists and quite a few general medicine physicians. What they have in common the most is that it happened spontaneously.
They knew they didn’t want to keep working for someone else. They often didn’t have a lot of resources for starting a new practice. But they went for it and figured it out.
Something else that they have in common, they all leveraged the help of others to get started and succeed. What they didn’t know, they hired out, with the goal of learning it.
The chance of a medical practice failing is incredibly low. That’s because there aren’t enough physicians out there and far too many patients looking for care.
What it Takes to Start a Medical Practice
To start a medical practice you need a site to interact with the patient and you need customers.
The Clinic Site
The site can be a physical clinic or a virtual space. I run my practice virtually, it makes the most sense to me. But with commercial spaces so cheap these days, a physical space might make sense too.
Customers are abundant. Word of mouth will spread quickly if you can offer good customer service.
For those who have no idea where to find patients, an insurance contract is the fastest way to get feet in the door.
Billing, EMR, medical supplies, hired staff … it’s like the gym bag you need to go to the gym. The gym itself is far more important and the gym bag will figure itself out.
Are You Ready to Start?
I started my own medical practice when I no longer was satisfied working for an employer. And I started my own auto mechanic shop when I couldn’t find the kind of shop I wanted to take my race car to.
Are You a Happy Employee?
If you have worked for a few employers and don’t enjoy the dynamic then you might be ready to start your own medical practice.
There is no guarantee that you’ll be a happy business owner. But it doesn’t make sense to stay in something you don’t enjoy.
Can You Organize Your Life?
Being an employee requires you to take directions and show up on time. Not a lot to it for a physician.
To run your own medical practice you need some organizational skills and it’s important to manage people. You’ll be working with employees and contractors.
Keeping track of items you purchase for your practice, making payments on time, interviewing potential candidates, and vetting good contractors are the most important aspects.
If your life is quite chaotic and you can’t even find your phone or pay bills on time, running your own medical practice will be a bear.
Many physicians want to be here: be emotionally ready to start their medical practice. I don’t think this is realistic or too healthy.
Emotional readiness to start a business might be there once you have started a few businesses. By then you realize that it’s a matter of risk mitigation, chance, and dedication.
If you are petrified that your business will fail, that’s what I would talk to a more seasoned physician about. What is the worst outcome? What are your biggest fears? Can you plan for those potential risks? Have there been others who have done what you want to do and succeeded?
Embracing the unknown and being okay with uncertainty is overall a great strategy for life. And it’s even more so effective when it comes to starting a medical practice.
How Much Money Do You Need?
Having runway, both in time and money, will make your life easier when starting a new practice. I will, for example, give myself 3 years for the practice to take off and I’ll dedicate up to $150,000.
If you are committing to a 5-year lease, buying office equipment, and renovating a space, it can take the whole $150,000 over a 3-5 year timeframe.
Instead, you can start a lean practice. Get a smaller space, spend less on renovations, sign a shorter lease agreement, and hire part-time staff only when you need the help.
A lean practice gives you the option to grow into your practice. You may decide to move locations or pursue a totally different direction if your practice is virtual.
Write down what you need over the next 3 years to run your business and double it. That should be a very safe estimate.
And remember, you’ll be making money in these 3 years. Not everything will have to come out of your savings.
Do You Need Business Skills?
My coaching clients lament that they don’t have the entrepreneurial spirit I have. I assure you that I don’t possess any such business or entrepreneurial skills.
I look at what I would like to do, such as start a virtual medical practice, and I set out to do it. It’s like when you want to clean your gutters – you’ve never done it and you want to do it. That’s all that matters. The information is out there and you’ll eventually figure it out.
The media makes it seem as though entrepreneurs have business skills. I don’t think that’s true. They have people skills which are called soft skills. They hire out business skills they don’t possess.
Some of these people skills can be manipulation skills of people. Not so nice. Others have a genuine desire for the well-being of others.
So, set out to learn the skill to care about your customer (the patient) and care about your employees. That’s the most important skill necessary to succeed in business.
EMRs and Insurance Contracts
Choosing an EMR is like choosing a cell phone, take your pick. If you are stuck on which EMR to choose there is perhaps some myopia to work on so that you don’t get stuck in the weeds.
I am a big believer in the cash model of healthcare. From fee-for-service to DPC to concierge, all of these models have been proven successful and sustainable over and over again.
If you prefer to go the insurance model then negotiating insurance contracts is perhaps your biggest hurdle. But that’s already done for you. Contact any insurance company or hire a dedicated contract negotiator.
The barrier to entry for a physician to start their own practice is easier than ever before.
What’s the Worst Case Scenario?
The worst thing that can happen is that the business fails and you go back to being an employee.
I don’t know a single physician whose private medical practice failed. I know of 2 physicians who decided to not put as much effort into their practice because they were working on the side and that income seemed easier to them.
It’s nice to fall back on a $300k salary if your business fails. Any entrepreneur would give a spare organ to have such a great fallback.