February 8, 2008
So, You Want To Start Your Own Clinic
Sturdy McKee, MPT
So, you want to start your own clinic? You have spent years honing your clinical skills and expertise. Your patients love you and respect the quality of care you provide. Now you’re at a crossroads, seeking more independence to make decisions that affect your patients and that could give you more control over your practice. Or maybe you are just toying with the idea for whatever reason. This is an exciting time! But there are questions and obstacles facing you. What insurance companies do I take? Should I take Medicare? How am I going to turn my satisfied patients into more patients? Where will the referrals come from? What is Excel? Do I incorporate or work as a sole proprietor? This is a time when it’s easy to get carried away with the excitement. You may ignore all the questions. It’s easy to get the cart before the horse.
Before you run out and get an attorney and incorporate and before you sign a lease, you need to create a written plan. It is vitally important that you create a written business plan. Your plan and timeline for set-up/start up will precede the actual start of your business. So, you'll actually have 2 plans, your start up plan and your business plan. The start up plan will be all the things you need to do before you open your doors for business. The business plan will be your plan for operations for the first 1-5 years.
Fail to plan, plan to fail. It is as simple as that. If you don’t know where you’re going, you’re not likely to get there. And if you think you know where you’re going, but have never been there and leave without a map, you’re not likely to get there in any reasonable time and in the condition you left in. An idea is not enough. Write it down. Your plans should be written and changeable. As you proceed, you will learn new things to add to your plan and you will need to modify, edit and delete portions.
Your start up plan should include all the things you need to do in order to open your doors. In most places you’ll need to obtain a business license. You will want to have a lease, a bank account, billing software or a service, equipment, business cards, stationery and liability insurance to name a few. You will also want to sequence these items with an end goal in mind of opening your doors for business on a specific day.
There are many resources available for writing business plans. There are multiple software packages, books and websites. The critical pieces of your business plan are your:
Vision: Why, Where and What do you want your clinic/business to be?
Financial Projections: (or pro forma): How are you going to make money, pay your bills,
and have something left over—profit? This is where Excel or another spreadsheet
program can come in handy. You can download your Budget Projection Worksheet here.
Marketing: How are you going to get new patients to show up for their first appointment?
Include insurance contracts, reaching referral sources, advertising, personal marketing, etc.
Exit Strategy: How are you going to get your investment back? How are you going to get
back the time, energy and money you put into your business?
Addressing the above items should serve as a good start and help you to begin mapping out your plan. Just remember, there are other components and some are very important, especially for acquiring financing, speaking to investors and building a management team.
You are just starting out. You needn't be embarrassed about anything. You may be a very accomplished and skilled clinician. Don't expect to be at that same level in business. Just remember, you didn't get to be the clinician you are in 4 months. Don't expect to master all the business issues in the first year either. Give yourself time, and flesh out your plan. Show it to someone who has been successful in business, any business. If you don’t know anyone, check with the local SBA, SCORE, MicroMentor.org, or on the APTA website for a mentor. There are many people willing to help who have been down this road before. Use them to learn and avoid their mistakes. There will be plenty of your own to make along the way.
Sturdy McKee is CEO of san francisco sport and spine physical therapy and JDSM Medical Management. He can be found on the APTA mentor website and on MicroMentor.org.
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