There’s no teacher like experience, but for some things in life wouldn’t it be nice to avoid some of the...
Published July 11, 20227 min read
There’s no teacher like experience, but for some things in life wouldn’t it be nice to avoid some of the mistakes we make along the way? Especially when it comes to the big things, like opening your own practice. Luckily, there’s a wealth of experience to draw on that might help you avoid some of the pitfalls others have encountered. Here’s our top seven common mistakes people make when starting their own practice.
It takes anywhere from three to twelve months to open a practice. There are a number of crucial steps involved that are time consuming and prone to delays. One of the key steps is credentialing, which usually takes three to six months. Getting an EHR system takes 30-60 days on average. Depending on the state of your office space, it might need renovations, another step which can take months. And it takes time to find the right staff, and get all your systems installed and running smoothly.
There’s lots to do and you need to be organized and thorough. And even then, things won’t always go smoothly or according to your ideal timeline. So, when you’re making your plans and checklists, build in a cushion for yourself, just in case things don’t proceed like clockwork. Because they probably won’t.
Our checklist to open a practice has 16 steps. For each of those steps, there are anywhere from four to twenty more steps. And our list is just the starting point—there are, and will be, many more things to do when you open your practice, so you need to be organized from the start.
This is directly related to being organized but it deserves its own section. Write. Down. Everything. Keep detailed notes and records of everything you’ve agreed to and what others have agreed to do for you. Hold onto emails. There will be disputes, misunderstandings and oversights, and having a paper trail will help you reconcile them in your favor.
You’re a doctor, but when you open your own practice, you’ll be a business owner as well. And smart business owners make a business plan and create a financial forecast, known as a “financial model.” What services will you provide? What is your niche? Who are your competitors?
Make forecasts for the next three to five years. What do they look like? Are they reasonable? This is your financial roadmap. It will guide you and your decision-making. If you don’t make one, you’ll be flying blind.
Consider making three different estimates: your base case, your best case (say 25% more), and your worst case (say 25% less). Start with your base case, or what you think is reasonable and achievable. Estimate the number of appointments, services, and all the other things that will bring in revenue. Estimate all your costs and expenses. Add up the revenues and subtract the costs and see if you’re profitable or not. If not, then adjust your forecasts until you are—but make sure they’re feasible!
Once you’ve finished the base case estimate, do the estimates for the best and worst case scenarios. And once you’ve done those, you’ll have an idea of what the possible range of outcomes are.
Keep in mind that it will take a while to increase your patient volumes and you’re likely to lose money until then. Set up a loan or a line of credit to help you survive until you’re profitable.
The location you choose is one of the most important decisions you’ll make in setting up your practice. Are there competitors nearby? Is your office accessible? How is traffic? Are you near a highway? Do you have convenient parking (this is a big one)? There are many questions to consider when it comes to choosing a suitable location. Make sure you do your research and consider them all when searching for a spot.
Your staff will play a key role in making your practice thrive. That’s why it’s important to hire the right people. Hire the wrong people and it’ll cost you: in time, money, and stress. It’s takes time and a little luck to find the right people, train them, and get them working together as a cohesive team. But it’s time well spent if you do it right. If you don’t, you’ll be repeating the process and spending less time with your patients as a result.
Your electronic health record (EHR) system is the backbone of your office. An efficient EHR system can help make your practice hum. A clunky one will cause you hassle and headaches. Do your research. Talk to other doctors and ask them what they like and don’t like about their systems, what kind of training they received from the vendor, and the level of customer support they have. And go to https://chpl.healthit.gov/#/search to check whether a health IT product has been certified by CMS and the Office of the National Coordinator for Health Information Technology (ONC). If your system isn’t certified, you won’t be eligible to receive HITECH incentive payments. Take the time to get this one right.
In providing this information, neither Laurel Road nor KeyBank nor its affiliates are acting as your agent or is offering any tax, financial, accounting, or legal advice.
Any third-party linked content is provided for informational purposes and should not be viewed as an endorsement by Laurel Road or KeyBank of any third-party product or service mentioned. Laurel Road’s Online Privacy Statement does not apply to third-party linked websites and you should consult the privacy disclosures of each site you visit for further information.
Get tailored Laurel Road resources delivered to your inbox.