+ LR-Icons

A Checklist to Starting Your Own Practice

“Experts need checklists–literally–written guides that walk them through the key steps in any complex procedure.” – Malcolm Gladwell in his...

Published April 23, 2021

20 min read

“Experts need checklists–literally–written guides that walk them through the key steps in any complex procedure.” – Malcolm Gladwell in his review of Atul Gawande’s book, The Checklist Manifesto.

The word “checklist” probably elicits one of two reactions from you: glazed eyes or eager anticipation. If you fall into the “glazed eyes” camp, you probably didn’t read this far…If you’re reading this, then you recognize the power of a checklist to help you do things right! Starting your own practice is a complex process that involves many steps and having a checklist will help smooth the process.

A medical practice is a business. And starting a business takes planning. The Small Business Administration (SBA) says that around two-thirds of businesses with employees make it to two years, and only half survive after five years. The more organized you are, the better chance you’ll open on schedule, with limited surprises, and beat the odds.


The first thing you’ll need is time. Time to come up with a plan and time to execute that plan. The key thing to remember here is that you’ll be working with a number of different people to make your practice come to life and they won’t all feel the same sense of urgency you do to get everything done. And some of the steps take a while. For example, the credentialing process will take you up to six months.

Expect things will take longer than you’d like, whether it’s getting a loan, renovating your office space, hiring staff, or any number of the other steps that are involved in getting a practice up and running. Prepare for the worst and incorporate a time cushion into your schedule. Expect the entire process to take anywhere from six to twelve months.


Don’t be afraid to ask for advice. That might mean talking to a doctor who’s already established their own practice, or it could mean hiring a consultant who specializes in helping doctors set up their own practices. Or it could mean talking to anyone you think can help you in the process. This is not your area of expertise, so don’t hesitate to ask for help from people who are knowledgeable in the space. It will save you time and money.


If you’re finding the following list(s) overwhelming, there are consultants who specialize in helping doctors open practices – you can hire one to advise and help you. Whether you find hiring a consultant worthwhile will depend on how much help you need and how much help they’re able to give you. Ultimately, you’re going to have to do most of the work yourself while getting assistance from others at different steps along the way, but a consultant may make the process easier and more efficient.

Starting Your Own Practice Checklist


  1. Accountant
  2. Legal
  3. Business Plan
  4. Financing

Physical work

  1. Secure an office
  2. Tenant Improvements
  3. Equipment
  4. Furniture
  5. Office and Medical Supplies

Support work

  1. Staffing
  2. Practice Management Software
  3. Electronic Health Record (EHR) system


  1. Licensing
  2. Credentialing
  3. Insurance
  4. Marketing


An accountant will provide important assistance in managing the financial side of your business. They won’t run it for you, but they’ll help keep your books (revenue, expenses, etc.) in order. Look for one with experience with medical offices. While you’ll need to stay on top of the financial health of your practice, your accountant will be your financial assistant. Your accountant will also be very helpful in getting a number of the important steps on this checklist done (and ideally, they’ll also bring experience with other medical offices).

Accountant Checklist

  1. Will help determine legal structure
  2. Will help with business plan
  3. Will help you get your financing proposal together
  4. Complete your tax filing
  5. Act as general financial sounding board

An absolutely crucial step is to incorporate your practice as a legal business entity. This shields you and your personal assets if you’re sued. There are different types of business entities that you can choose from (sole proprietorship, general partnership, limited liability company (LLC), a corporation, or a cooperative), each of which offers different structures in regard to ownership, legal liabilities, and tax benefits. The type you choose will depend on a number of factors and this is where a lawyer and your accountant can help you decide what makes sense for you.

Legal Checklist

  1. Find a lawyer.
  2. Pick a name for your practice.
  3. Determine the legal structure for your practice: sole proprietorship, general partnership, limited partnership, C corporation, S corporation, limited liability corporation (LLC), or limited liability partnership (LLP).
  4. Create your governing documents. These are the internal rules that govern your business.
  5. Submit your paperwork to your state government.
  6. Hold an official meeting. Record who funded the business and what the relevant ownership stakes are, as well as any business resolutions passed at the meeting. Have everyone sign the bylaws or operating agreement of the business, as well as any resolutions passed.
  7. Obtain an employee identification number (EIN). This is also known as your tax ID number.
  8. Obtain a Medicare provider number.

Business Plan

A business plan lays out what your practice will do and how it will make money. Think of it as a three-to-five-year roadmap for investors – the clearer your map is, the more likely you are to get the funding you seek. A business plan not only assures potential investors that you’ve thought through your goals and the potential obstacles for your practice, it will also help you crystallize your thoughts on what your practice will need to be profitable. You’ll be forced to consider and calculate what expenses you expect to incur, as well as how you’ll make money.

You’ll have to make monthly or quarterly estimates for three to five years into the future. It’s a good idea to come up with three forecasts: a base case, a best case, and a worst case. Pay close to attention to the worst-case scenario – what if you don’t have as many patients as expected in the first year? What if you aren’t properly reimbursed by the insurance companies? Consider all the eventualities.

This will give you an idea of the range of potential outcomes and will help you see where your plan might have some holes or flaws. It will also give you an idea of how much money you’ll need to borrow.

Business Plan Checklist

  1. Executive summary
    1. Business name, location and contact information
    2. What your practice does and what problem(s) it solves?
    3. Who are your patients and how will they pay?
    4. Competition
    5. Management team
    6. Financial summary
    7. Proof of the need for your practice
  2. Problem: What is the opportunity?
  3. Solution: How does your practice take advantage of the opportunity?
  4. What services will you provide?
  5. Target market: Who will your patients be?
  6. Execution: How will you do it?
    1. Your practice’s operations
    2. Your team
    3. Financial model and highlights
    4. Marketing
    5. Key assumptions and risks
    6. Funding needs
    7. Exit strategy


Opening a practice is expensive. You might need a loan to do it and your business plan can help you get financing. Depending on your specialty and where you practice, you might need anywhere from $50,000-$500,000 or more to cover your initial costs. Start-up costs include renting office space, securing equipment, furniture and medical and office supplies, acquiring practice management and electronic health record (EHR) software, and more.

You’ll also need money to live and eat. There’ll be a delay from the time you open to the time you start getting paid, so you’ll need money to both keep the practice running, as well as to live your day-to-day life and you might need a loan to help you bridge that gap.

Financing Checklist:

  1. Open a bank account.
  2. How much money do you need to open your practice?
    1. Renting office space
    2. Tenant improvement fees
    3. Equipment
    4. Furniture
    5. Office and medical supplies
    6. Practice management software
    7. EHR software
    8. Credentialing
    9. Staff salaries
    10. Marketing cost
    11. Insurance fees
    12. Legal fees
    13. Accounting fees
    14. Consulting fees
  3. How much money do you need to live on?
  4. Projected Revenue?
  5. Projected Overhead/Expenses?
  6. Do you need to borrow money? If so, how much?
  7. When do you need it?

Secure an Office

Where are you going to locate your office? As the maxim goes, the choice of location is paramount. Do you need to be close to a hospital? Where are your clients located? Where are you competitors located? Is convenient parking available? Medical office building or multiuse? These are just some of the questions you need to consider when choosing an office.

Secure an Office Checklist

  1. Where’s it going to be?
    1. Proximity to hospitals
    2. Proximity to patients
    3. Proximity to competition
    4. Proximity to ancillary services (pharmacies, other doctors, etc.)
    5. Proximity to major roads
    6. Convenient parking available?
  2. How many square feet do you need?
    1. Number of examination rooms
    2. Types of services to be provided
    3. Equipment space needs
  3. What kind of equipment and services do you intend to provide?
    1. Medical office building or multiuse?
    2. Raw space, grey space or built-out?
      1. Rentable square feet vs. usable square feet?
    3. Special infrastructure needs?
    4. Vendor agreements for lab work, MRIs, etc.
    5. Janitorial services?
    6. Utilities?
    7. Is it Americans with Disabilities Act (ADA) compliant?
    8. Will your office and utilities be accessible after-hours?
    9. In the interests of maintaining patient privacy, is there a clause restricting your landlord’s ability to access your office?
    10. Are proper medical waste disposal procedures stipulated?
    11. Does your lease have any exclusivity provisions which would prevent your landlord from leasing any space in the building to a practice that would compete directly with you?
    12. Does your lease have a right to relocate clause?
    13. Does your lease have a rent escalator?
    14. Negotiate Tenant Improvement Allowance
    15. Secure Certificate of Occupancy

Tenant Improvements

When you’re looking for an office, the space you find might be “raw” or “gray box” (completely unfinished), “white” or “vanilla box” (partially finished with basic infrastructure of HVAC, plumbing and electrical and fire protection), or already built out. If your office is going to be in a medical office building, your basic infrastructure needs will likely be well understood by your landlord. If not, you may have to upgrade HVAC, plumbing, electrical, and fire protection to meet medical requirements.

Your landlord will likely be open to negotiating a “tenant improvement allowance” (TIA), which essentially gives you a break on your rent to help cover the costs of improvements you make to the space. TIAs are usually expressed as an amount per square foot. Often, you’ll have to pay for the improvements yourself and get reimbursed by the landlord later. TIAs can take different forms so pay close attention to the details of what’s covered and who’s responsible for what. For example, if you’re able to secure the right to use your architect and contractor, you’ll be able to maintain better control over costs and the design and construction process ­­– but you’ll have to specify that in the TIA agreement.

Tenant Improvement Checklist

  1. How much is the estimated cost of buildout?
  2. Amount of TIA?
  3. Schedule for reimbursement?
  4. Who chooses architect?
  5. Who chose contractor?
  6. Who has final approval of building plans?
  7. Specify all details in writing


What kind of equipment will you need for your office? Are you going to buy it new or used? What’s your budget?

Equipment Checklist

  1. What equipment do you need?
  2. New or used?
  3. Buy or lease?
  4. Cost?


You’re going to need somewhere for your patients, and for you, to sit.

Furniture Checklist

  1. Seating
  2. Coffee tables
  3. Magazines
  4. Plants
  5. Wall hangings/decoration
  6. Desks and office chairs
  7. Computers
  8. Filing cabinets
  9. Coffee machine/water cooler

Office and Medical Supplies

You’ll need both office and medical supplies. The following are sample, but by no means exhaustive, lists.

Office Supply Checklist

  1. Pens
  2. Pencils
  3. Paper
  4. Stapler & Staples
  5. Paper clips
  6. Folders
  7. Envelopes
  8. Stamps
  9. Printer cartridges
  10. Stick it notes

Medical Supply Checklist

  1. Thermometers
  2. Blood pressure monitor
  3. Pulse Oximeter
  4. Stethoscope
  5. Ophthalmoscopes
  6. Otoscopes
  7. Reflex Hammer
  8. Bandages, wipes, and gauze
  9. Paper TowelNeedles
  10. Tweezers
  11. Personal Protection Equipment


You’re going to need help. Start by adding just the people you need. You can add more employees as you grow. You’re probably going to need a receptionist and a medical assistant or nurse to begin with. Additional staff will be determined by patient volumes and the extent of the services your practice offers.

Staffing Checklist

  1. Receptionist
  2. Medical Assistant
  3. Licensed Nurse
  4. Registered Nurse
  5. Billing
  6. Phlebotomist
  7. Lab Technician
  8. Coder
  9. Checkout Desk
  10. Office Manager

Practice Management Software

Practice management software helps with the administration of your practice, handling appointment scheduling, billing, organizing patient records, generating reports and other administrative needs. All of these functions are important, but billing is a crucial component of your practice – if you don’t get paid, you won’t be in business very long. You can choose to handle your billing inhouse or you can outsource it to a billing management. Your practice management software should also work seamlessly with your EHR software to ensure better efficiency. The software can be installed on a computer on a standalone basis, or on a network server, or in the cloud to allow multiple users.

Practice Management Software Checklist

  1. Desk-top? Network server? Cloud based?
  2. Does it meet the needs of your specialty?
  3. Does it meet the requirements of the Office of National Coordinator (ONC) Health IT Certification Program?
  4. Patient portal
  5. Patient information
  6. Scheduling
  7. Insurance verification
  8. Billing
  9. Reporting
  10. Coding Assistance?
  11. Does it work seamlessly with your EHR?
  12. Will the vendor help with implementation and training?
  13. How long will it take to get up and running?
  14. Customer support?

Electronic Health Record (EHR) system

A good electronic health record (EHR), or electronic medical record (EMR), system is essential to organize and secure your patient’s medical records. It will help make it easier to access their information and keep it accurate and up to date, which should hopefully lead to safer and more effective care and treatment. It should also work seamlessly with your practice management software.

EHR Checklist

  1. Patient history and diagnostics
  2. Testing orders and referrals
  3. Task management
  4. Prescription management
  5. Does it work seamlessly with your practice management software?
  6. Will the vendor help with implementation and training?
  7. Customer support?


Make sure your licenses are up-to-date and in good order. If you’re planning on moving to a different state to open your practice, research what the licensing requirements are for your new location and sign up for your exams well in advance of your planned opening date.

Licensing Checklist

  1. State medical license (process and requirements vary by state)
    1. Federation Credentials Verification Service (FCVS) (may be required)
    2. Uniform Application for Licensure (UA) (available in many states)
    3. Individual state medical boards
  2. If necessary/desired
    1. American Board of Medical Specialties/American Osteopathic Association (AMBS/AOA) Specialty Board Certification Exam
    2. Hospital privileges
    3. Credentialing and participating provider status with insurance companies
    4. Drug Enforcement Administration (DEA) Registration, if applicable
    5. Medicare/Medicaid provider, if applicable
  3. State license renewal, includes:
    1. Continuing Medical Education credits, if applicable
    2. Maintenance of Certification, if applicable
    3. Interstate Medical License Compact (IMLC), if practicing in more than one participating states


You’ll need to go through the credentialing process in order to be able to accept private and government health insurance. This process can take up to six months and is an example of why you need to budget enough time when you set up your practice. Each state has its own credentialing laws and regulations, so be aware of what the specific rules are for your area.

There are two main steps involved in this process. The first is credentialing, where you get networked with health insurance companies. The insurers will want to know about your medical education and residency, as well as confirming that you’re properly licensed and have appropriate malpractice insurance. The second part is contracting, where you’ll negotiate a participating provider contract that defines the terms of your agreements with insurers. The second part is critical to ensuring your practice’s viability­—this dictates how you’ll get paid for your services by the insurance companies—so pay close attention to this step!

Whether you plan to accept government health insurance and what type, will depend on your patients, where your practice is located and what type of services you’ll be providing.

A third step is to obtain hospital privileges, which involves credentialing by the hospital which you want to access.

Credentialing Checklist

  1. Credentialing
    1. If you don’t already have one, apply for a National Provider Identifier (NPI)
    2. Determine the legal structure of your practice (see “Legal” above). Any changes you make to your tax ID number or billing structure after you get credentialed will require you to get credentialed again
    3. Get malpractice insurance (see “Insurance” below) and a copy of your malpractice insurance declaration page.
    4. Determine which insurance companies you want to be credentialed with and apply to each company
    5. Complete the Council for Affordable Quality Healthcare (CAQH) application
    6. Follow up with each insurance company to check on the progress of your application and resolve any issues or questions
  2. Contracting
    1. Negotiate language, reimbursement rates, and details and responsibilities of the contract
    2. Review contract and fee schedule. Sign if all is in order
    3. Receive letter of participation from insurer and update your billing system to receive payments. It may take up 30-45 days for you to being receiving reimbursements
  3. Hospital Privileges
    1. Check medical staff bylaws of hospital to ensure you meet the criteria
    2. Contact hospital credentialing office to determine what documents are needed and how to submit them to begin credentialing process
    3. Submit credentialing documents
    4. Apply for privileges


Proper insurance coverage is critical. As a business owner, you’re on the hook for more eventualities than when you’re an employee working for a hospital or at a large healthcare provider. That being said, you may not need every type of insurance coverage on the list. Coverage for malpractice, disability, business liability and workers compensation are either mandatory or highly recommended, while the others may be considered depending on their applicability to your practice. For example, commercial auto insurance may not be necessary if you don’t use a car for anything related to your practice.

Insurance Checklist

  1. Professional Liability Insurance, better known as Malpractice insurance. Your coverage should match, or exceed, the amount in your insurance network contracts.
  2. This coverage is even more important when you’re in business for yourself where the viability of the business could be threatened if you’re injured.
  3. Business Insurance, often bundled as Business Owners Package (BOP)
    1. Liability Insurance. Covers general liability and property damage.
    2. Property Insurance. Covers damage to your office and equipment.
  4. Business Interruption Insurance. Provides income in the event your practice’s operations are disrupted by fire or a natural disaster.
  5. Workman’s Compensation. If you have employees, most states require you to provide workers compensation in the event one of your employees is injured on the job.
  6. Health Insurance. If you have employees, they may not be interested in working for you if you don’t provide health benefits.
  7. Commercial Automobile. If you use a car to do any activity related to the practice (house calls, bank deposits, etc.), you could be liable in the event of an accident.
  8. Covers hacking or ransomware events.
  9. Practice Overhead Insurance. Covers things like rent, salaries and other overhead if you’re were unable to work due to a disability.
  10. Umbrella Liability. Consider this a top-up to increase your coverage above and beyond your other policies in case of a catastrophic event.


Unless you’re going to have a backlog of patients when you open your doors, you’re going to need to invest in marketing yourself and your practice. The Small Business Administration (SBA) recommends as a general rule that “small businesses with revenues less than $5 million should allocate 7-8 percent of their revenues to marketing,” while the CMO survey shows that healthcare and pharmaceutical companies spend an average of 9% of revenues on marketing.

The correct amount will be unique to you and will probably be the result of some trial and error.

Marketing Checklist

  1. Direct Mail
  2. Billboards
  3. Print ads
  4. Website
  5. Digital advertising
    1. Social media
    2. Search ads
    3. Search engine optimization (SEO)
    4. Content marketing
  6. Podcasts
  7. Blogging
  8. Tracking methods to see what works


These are the steps you’ll need to consider when opening your own practice. As you begin to drill down into each one, you’ll find that many of them have additional components, which is why it’s critical to give yourself enough time to work through them. Although this list may be daunting, it’s manageable if you’re organized and ready for the challenge. Being your own boss brings with it great challenges as well as great rewards – are you ready?

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.

Don't miss the latest financial resources.

Get tailored Laurel Road resources delivered to your inbox.

Search Results