Starting your own medical business is an exciting venture, taking the medical practice into your own hands. Unfortunately, the process of starting is very challenging and complicated. To be successful in starting your medical business, one has to have a detailed plan and clear objectives and a financial mechanism, and proper licenses. You are also required to have relevant skills in medical field experience and, in some cases, certification of medical practice from a medical association. Here is a step-by-step guide that provides the tips for starting your medical business right.
You might have the requisite skills in medical field experience, and have the finances to support your venture, but the most important thing before doing so is first establishing why you would like to open your own medical business. It is essential to know that several issues affect the development of the health industry, especially opening medical businesses, including the upfront expenses and the inherent risk associated with it. However, estimates project a $5.5 billion growth in the healthcare industry by 2025. This shows the rising demand for medical services across the board, needing medical practitioners with quality skills in medical field.
However, it is vital to note that large healthcare enterprise systems have maintained a monopoly over the sector, resulting in a few corporations dominating it. Joining the healthcare conglomerates that wield high-level capital looks daunting. Indeed, after investing a lot of your time and money attending medical school to acquire the relevant skills in medical field, why would you bother bothering and risking your money and self with launching a medical business? Why not acquire a position in a large, well-capitalized healthcare facility? Why pay for start-up and overhead fees when you earn by working at another hospital?
In essence, when a new private medical business enters the market, it is seen as imposing competitive pressure on the industry and splitting the healthcare sector’s profits. However, the upside is that establishing medical companies contributes to expanding medical access in disadvantaged regions.
Another benefit of starting your own medical company with the appropriate skills in medical field is that you get autonomy and the opportunity to operate your own business and private practice. Interestingly, owning your medical practice provides a feeling of agency and ownership that cannot be matched by working in a larger medical institution.
While starting your medical practice is challenging, it is essential to remember that using your skills in medical field in your own medical business is significantly more gratifying if you have the proper knowledge.
Types of Medical Businesses
Venturing into the private medical business requires a better understanding of the type of medical practice you would like to venture into. There are five key medical practices that you can choose from including.
Solo Medical Business Practice
You are the sole proprietor and are completely responsible for the facility’s operations. However, the launch and marketing costs are high. In order to practice as a single practitioner, you must demonstrate your medical competence. Due to your dual role as a doctor and an entrepreneur, you are required to assume all business risks.
Group or Partnership Medical Business Practice
This is a medical practice where different professionals come together to start a medical business. The partners work together and share control of your business, making it easier to access working capital since partners contribute, hence lowering the start-up cost compared to solo medical practice.
Hospital-owned Medical Business
This is a medical business inside a hospital network. Assisting marketing and working capital resources may help decrease startup expenditures. The timetable is demanding and the staff requirements are high. This technique may help decrease startup risks but may limit your independence and freedom due to hospital medical board regulations. Because it is a joint venture with a hospital, this choice may be better for urgent care.
Academic Health Facility
Like the medical business hospital, the academic health facility practice started within a particular academic health system. Its advantage is that it minimizes risks, but it is constraining since it does not guarantee freedom and autonomy.
Federally Qualified Health Facility
This type refers to starting a business within the federal qualified health system similar to hospital-owned and academic health facilities. One can leverage the working capital funded by federal resources, but one must adhere to specific regulations and rules, compromising one’s autonomy.
Starting Your Own Medical Business
Since there is no universal formula for establishing your own medical business, it is recommended to consult with professional consultants who understand the challenges and pitfalls that underlie the establishment. It is essential to get somebody to advise on workers’ compensation and medical malpractice insurance to minimize the risks associated with medical businesses.
It is also essential to understand the regulations and laws associated with the healthcare industry and acquire the proper licensing and certification. An experienced consultant will therefore be able to help me understand the variables associated with starting your own medical business to guide your planning.
The following items in the checklist are the location of practice and financing. It is good to remember that medical businesses require specific specialized equipment, which is rather expensive. Therefore, it is essential to consider covering a proportion of your start-up financing through credit if you have not already acquired investors.
The following are the key steps to consider when starting your own medical business.
Step 1: Creating a Business Plan
You have probably heard inquiries like ‘Can I get braces today?’ ‘How can I get pediatric foot treatment?‘ ‘Is there a patient focused telehealth service in my neighborhood? or ‘Where can I find an ADHD doctor in my area?’ You may agree that these are the specialization issues for a medical expert, whether in dental practice, pediatric care, or any other specialty that falls within or beyond your set of skills in medical field.
Additionally, you must decide on the location of your medical practice, which will be included in the business plan. You must ask yourself whether the two options, purchasing or renting, are the most realistic. This is the time to research commercial real estate for sale or rent, whether to buy waterfront property assets or acquire land and build your facility from the ground up, which requires factoring in property developers and trucking companies for construction material transportation, among others.
Additionally, you must explicitly describe what skills you expect your personnel to possess and if private tutors would be required if the need arises. This is critical since staff skillsets and understanding of customer relations management may help a company’s reputation.
As with any other business, the first step after establishing an idea and deciding on an area of specialization with specific skills in medical field is to identify funding channels for your venture. Medical practice is costly and risky, and it should be backed by sufficient funds to finance its operation and mitigate any related risks. Developing a business plan that includes projections for debt and profit related to medical clinic expenditures and earnings is also critical. Bankers and financial institutions are keen to learn how you propose to actualize your concept and investment and be profitable within a given time frame.
Here are some tips for developing a good business plan for capital investment.
Finding a Specialist
It is important to get somebody who understands the healthcare industry regarding revenue models, risk management, and expenses to help develop a business plan, Pro-forma, and a loan request letter to submit to a credit institution.
Researching for Financing Options
Based on your idea and concept of ownership, you can decide to weigh the various business financing options apart from credit. If you have settled on credit, visit at least ten banks or financial institutions to understand the amortization schedule and interest rates as well as the requirements.
Adopting a Conservative Approach
To mitigate budgetary risks, it is vital to adopt a conservative approach when deciding on equipment and furniture purchases. It is essential to start with the basics, and other premium products come later as the business grows.
Step 2: Purchasing Medical Equipment and Recruiting Staff
Once the money is acquired, the first step is to ensure that the critical resources are purchased, and contracts signed. It is essential to understand that you have to be lean and conservative at this stage. Getting the correct information would help you manage costs and time and help you properly manage the resource acquisition. Some of the resources that you need for starting up your medical business include:
E-health Record System
Technology is becoming more important in medicine. Modernizing your health institution requires streamlining communication and digitizing records. In addition to prescription and lab orders, the EHR system synchronizes patient histories and information, and revenue cycle records. An electronic health record system cannot help a medical establishment qualify for government incentives.
Practice Management System
In a competitive medical institution, management must be successful. Integrating your index records, EHR, and practice management system is crucial for managing front desk information and simplifying medical operations. Investing in practice management software is crucial.
Medical Transcription Software
There are three standard medical transcribing systems used in the industry. In-house transcriptions and speech recognition software are among the options.
Other options to consider include medical bill service, background check services for diagnosis and examination, and credit card processors for out-of-pocket payments.
Equipment
Purchase the necessary equipment, electronics, and furnishings before launching your business. Ensure that you buy an extension cord that will facilitate the connection of electrical devices. Additionally, purchasing PPE in bulk is cost-effective. Additionally, it is advisable to engage interior painters to give a medical feel to your institution.
Step 3: Preparing to Start
Before opening doors for customers, it is essential to complete several initiatives that include:
- Obtaining a tax ID and incorporating the business as a legal entity.
- Credentialing the medical staff with payers. This involves gathering information on the work history of medical practitioners, attestations, hospital privileges, and receipt of malpractice insurance.
- Insuring the facility and medical staff.
Step 4: Beginning Operations and Evaluating Performance
It is indeed time to cut the ribbon and welcome your first customers. Achieving such an accomplishment requires a lot of organization, funding, and paperwork.
You must now establish accountability systems. To manage communication and customer service while attending to patients, you must engage a trustworthy office manager. Hiring an accountant or consultant who is familiar with medical procedures and operations is also advised.
Also, remember that operations and processes must be benchmarked against established standards to guarantee monitoring is present.
Important Things to Keep in Mind
When dealing with the dynamics of starting your own medical business, certain things can adversely affect the smooth running of your business. These items include:
Changing Regulatory Frameworks and Payer Rules
The healthcare sector is one of the most regulated industries that require proper documentation in almost every aspect of it. It is therefore essential to consult a professional and research the legislative requirements and matters related to pay rules. A smooth operation of a medical business can only be guaranteed when there is a high level of compliance with governing bodies and legal frameworks regulating the healthcare industry.
Getting Advisors
The healthcare industry is the most regulated, requiring paperwork in practically every area. Consultation with a specialist is advised, as is a study into regulatory requirements and pay guidelines. A medical practice can only run smoothly if it complies with all regulatory authorities and legal frameworks.
Marketing
While treating patients and using your skills in the health field, it is easy to overlook the critical role of promotion and marketing in any healthcare company. While you may possess superior health care expertise, your patient-centered medical facility will develop only using effective marketing strategies. To improve traffic to your business’s website and blog, it’s essential to enlist the assistance of SEO companies.