How To Start A Private Practice As A Doctor: Starting A Practice and Becoming A Small Business Owner

A Step-by-Step Guide

Starting a new medical practice is an exciting and daunting feat. Becoming a business owner even more so, although it can be a great option for physicians who want more freedom and flexibility. To transform your vision of a solo practice into a successful reality, a structured approach is crucial. This guide will walk you through the checklist to establish a solid foundation for your new practice. Read on to find the seven steps you need to take to open your own medical practice you want to consider. 

*These steps may vary depending on your practice goals. 

Step 1: Creating a Business Plan

Define Your Vision and Mission

When starting your own medical practice, before diving into the logistics, clarify your medical practice’s purpose. Yes, the purpose of opening a medical practice is to practice medicine and have more freedom, but what are your core values? What makes your private practice unique? Your vision statement should encapsulate your long-term goals and aspirations as a small business, while your mission statement should define your healthcare business purpose and the impact you hope to have on your patients and community.

Market Research: Patient Needs

Examining Local Demographics and Demand: Conduct a thorough investigation of the population within your vicinity to understand who you will provide medical services to. What prevalent health concerns exist? What is the distribution of age groups? This information is instrumental in crafting services that align with the needs of the community.

Comprehending Your Competition: Recognize other practices within the area and evaluate their strengths and weaknesses. What services do they provide? What gaps may you address?

Financial Projections: Your Practice Model

Estimating Startup Costs: Calculate all initial expenses, including facility costs, equipment, and marketing. This will help you determine how much capital you need to start your business entity.

Projecting Revenue and Expenses: Create a financial model projecting your income and expenses over the first few years. This will guide your budgeting and financial strategies for your solo medical practice.

Practice Operations

Outline of Daily Operations: Detail the workflow for patient care, administrative tasks, and other daily functions. This will determine how you run your practice. 

Identifying Your Target Patient Population: Define who your ideal patients are and create a practice that’s tailored to the communities’ needs. 

Step 2: Find a Location for Your Medical Practice

Choosing the Right Location

Factors to Consider: Look for visibility, accessibility, and proximity to hospitals or other medical facilities. These factors can influence patient convenience and your medical office reputation.

Evaluating Foot Traffic and Parking Options: Ensure the location has adequate parking and is easily accessible for patients. High foot traffic areas can increase visibility.

Leasing vs. Buying

Pros and Cons of Leasing: Leasing can offer flexibility and lower upfront costs, but it may limit your control over the space.

Benefits of Purchasing Property: Buying a property provides long-term stability and the potential for investment growth, but it requires a larger initial investment.

Space Requirements

Determining Size and Layout Needs: When launching a medical practice, choose a space that accommodates your services, staff, and patient flow comfortably. 

Compliance with Healthcare Facility Regulations: Ensure the space meets all local health and safety regulations for running your own practice.

Considering both of these when looking for spaces when starting your own practice is crucial for determining which will be the best fit for your practice.

Step 3: Legal Structure For Your Business

Obtain Necessary Licenses.

State and Federal Licensing Requirements: Prior to opening, apply for and obtain all necessary licenses from state and federal authorities, including liability and medical malpractice insurance. 

Special Licenses for Specific Services: If you offer specialized medical services, it is critical to find the additional medical licenses that may be required.

Get Credentialed 

Process for Credentialing: Complete the credentialing process with insurance companies to ensure you can bill for services. This process can take a while, so make sure this gets prioritized. Here at Contracting Providers, we help you get credentialed, amongst other things, so you can focus on the more fun parts of starting a new practice. 

Maintaining Up-to-Date Credentials: Regularly update your credentials to avoid disruptions in service provision at your physician practice.

Healthcare Business Structure

Choosing the Right Legal Structure: Decide whether to operate as an LLC, corporation, or another structure based on liability, tax, and operational considerations.

Contracts and Agreements

Drafting Lease Agreements: Carefully review lease terms to avoid unfavorable conditions.

Employment Contracts and Partnerships: Draft clear contracts for employees and partners to outline roles, responsibilities, and compensation.

Compliance and Regulations

Understanding HIPAA and Other Regulations: Ensure compliance with HIPAA and other regulations to protect patient privacy and meet legal standards.

Ensuring Adherence to Laws: Stay informed about local, state, and federal laws to maintain compliance.

Step 4: Secure Financing

Assess Your Financial Needs

Calculating Startup Costs and Working Capital: You can’t open a private practice without assessing the total amount needed for initial setup and ongoing expenses.

Getting this down will ensure you have a thriving medical practice for years to come and your practice is getting paid. 

Funding Options

Traditional Loans vs. SBA Loans: Consider traditional bank loans or SBA loans based on your creditworthiness and financial needs.

Alternative Financing Methods: Look into angel investors, grants, lines of credit, or other non-traditional funding options.

Budget Management

Creating a Detailed Budget: Develop a comprehensive budget to manage your expenses and revenues effectively.

Tracking Expenses and Revenues: Regularly monitor your financial performance to ensure you stay on track. Start as early as possible with this. You want to be thriving in private practice, not begging to go back to work for someone else. Financials are crucial to this. 

Step 5: Look into Your Staffing Needs

Hiring Process: Staff Your Practice

Recruiting Medical and Administrative Staff: Hire a skilled private practice doctor, medical practitioners, medical assistants, and other highly skilled medical staff who align with your private medical practice goals and values.

Interviewing and Hiring Best Practices: Follow best practices for interviewing and selecting candidates to build a competent team to set yourself up for success, investing in a human resources department beforehand would be helpful with this.

Practice Management Software: Upon establishing a private medical practice, it may be prudent to contemplate the acquisition of a practice management system designed to enhance the efficiency of your staff’s operations, thereby ensuring the optimal functioning of your small practice. Such a system could be particularly beneficial for tasks such as the storage of medical records, the transmission of medical transcripts, and other related functions.

Training and Development

Onboarding New Employees: Provide thorough onboarding to integrate new hires into your business operations smoothly and ensure your practice is running per outlined guidelines. 

Ongoing Staff Training: Offer continuous training to keep skills updated and improve service quality.

Creating a Positive Work Environment

Building a Supportive Culture: One your practice is up and running, promote a positive work environment to enhance job satisfaction and staff retention.

Strategies for Staff Retention: Implement strategies to retain valuable employees and reduce turnover.

Step 6: Figure Out Equipment and Supplies

Essential Equipment

Identifying Necessary Medical Equipment and Technology: Purchase the medical equipment required for your services, ensuring it meets industry standards and patient needs as your practice grows.

Sourcing and Purchasing High-Quality Equipment: Choose reliable suppliers to obtain high-quality equipment.

Office Supplies and Furnishings

Outfitting Your Practice: Acquire office supplies and furnishings to create a functional and welcoming environment in your private practice setting. Definitely a must before your opening date!

Vendor Relationships

Establishing Vendor Relationships: Build strong relationships with vendors in the medical field for medical supply and support.

Step 7: Marketing – Sell Your Practice 

When you start a private medical practice, you have to get the word out that, “Hey! We’re here and ready to serve our patients!” Depending on your practice goals, you may want to consider hiring a marketing agency or a freelancer who can help get you in front of the right people. Aside from stellar patient care, marketing will be the lifeblood of your practice and its success. By investing in your marketing once you open your private practice, you’re making sure your practice puts its best foot forward. 

Conclusion

Setting up a new medical practice involves careful planning and execution. By following these steps, you’ll lay a solid foundation for your practice’s success once it’s open and ready. Stay organized, seek professional advice when needed, and remain adaptable to changes. Your dedication and preparation will pave the way for a thriving practice that meets the needs of your community.

If you plan to start a medical practice, but want to bypass all the paperwork that comes with credentialing, insurance,  and provider enrollment, contact Contracting Providers today to fast track starting your private practice. 

Get your practice started now!