Having your name on the door of your own practice, with your academic credentials to boast, is undoubtedly a reflection of your first-class skills as an eye care professional.
However, as exciting as the move into private practice can be, it may also be overwhelming. There are many new and unfamiliar responsibilities to factor in. We’ve identified several key considerations that aim to limit the challenges and enhance your success.
Learning what doesn’t work and avoiding the pitfalls can be just as valuable (if not more) than learning what has been successful
Buying Into an Existing Practice or Setting Up on Your Own
There are advantages and disadvantages to both. Sometimes the decision is based on opportunity (there may be a colleague selling a practice in your preferred location) or you may have a very clear vision of what you are looking to create. In this instance you may need to start from scratch.
Many practitioners like the security of buying into an eye care practice with like-minded professionals. The flip side of this is you will most likely pay a premium for the option to buy. Starting up may involve buying or renting your commercial premises. If you own your own business, it may make sense to own the property you work from. There is plenty to take into consideration and it is not an easy decision to make.
When we asked an optometrist we assisted to establish a new practice for his advice to someone setting up a new clinic, he said “They had better be prepared to work hard!”
Whether you’ve chosen to buy an existing practice, buy into a practice or start up your own, creating a business plan that defines what you are doing and how you are going to do it is your roadmap to success. The business plan should cover the following:
- Why you have chosen the proposed location and type of practice,
- What is your competitive advantage and how will you differentiate from others,
- Who is your competition,
- What will be the hours of operation,
- Cash flow considerations,
- Legal/accounting structures, and
- A general vision for the practice.
As the level of competition increases, how you market your practice is becoming one of the more critical areas for success. How do you compete against the larger corporates and how will you attract referral sources? Love it or hate it, there is certainly a significant opportunity to leverage social media to grow your practice. Whether it be Faceook, Instagram or LinkedIn, social media enables you to engage with your patients as well as referral sources and provide details about what the practice is up to. Your online presence will require ongoing maintenance to ensure its success.
Find a Mentor
A mentor can be an invaluable guide to give advice and provide input regarding the points above and on an ongoing basis. Try and identify someone that has gone through this before and who will be willing, and able, to help you navigate through good times and bad. You will want to look at what works and what doesn’t within their business and incorporate this into your practice. Learning what doesn’t work and avoiding the pitfalls can be just as valuable (if not more) than learning what has been successful.
In today’s world there are many ways to setup your business. From sole traders to companies to partnerships, and don’t forget the various trusts! You will need to consult with your accountant to ascertain which structure will be the most effective for you, in particular for accounting and legal reasons.
There will be costs to setup your practice. If you are buying a practice, you need to fund goodwill, stock and equipment. You may want additional funding to upgrade the current chair and stand, add some additional equipment such as an optical coherence tomographer or a retinal imaging system. If you are establishing a practice, what equipment do you need and what will the costs of fit out and renovations to the property be? Seeing patients is the only way to cover these costs – so you need to figure out early how much you will charge for them. Once you’re operational, day to day expenses of running a practice can be easily supported by an overdraft facility.
If you’re retaining employment elsewhere while establishing your own practice (which is not uncommon), you may find you don’t need as much working capital as you have an additional income source.
What staff do you need, which staff do you keep, or do you know someone to reach out to? What practice management systems does the practice need to be successful? Consistent and timely contact with patients for follow ups and test results, appointment bookings, and regular patient check ups all have important roles to play in your practice. Utilising these systems will greatly benefit a new practice from the get go.
Whether you’re thinking about buying or starting up a practice of your own, it’s important to have every scenario covered. What is right for one person, and one location, may not work for another, so you need to do the research and get the right advice.
Credabl has been talking to health care professionals for a long time about each of their individual aspirations and needs. Visit www.credabl.com.au for more information.
Craig is a pioneer of medical finance in Australia. He has a 25-year track record and an intimate knowledge of the financial needs of medical professionals. As a found of Credabl, his priority is what’s best for his clients.