Pearls for Opening Your Own Practice

By Karen Fallon (Eye Care Business Advisor, Allergan Inc.)

So, you’ve decided to open your own practice. Congratulations on making it through the long educational journey and your decision that being your own boss and opening up your own practice is the right decision for you. It is important to realize that this can be an overwhelming and frightening process, especially in the current economic environment, but there are many rewards to doing it … and doing it right.

To help ensure that you are successful in this exciting endeavor, follow these pearls:

1. Location is critical.

Not only is this piece of advice geographical, it also includes the building structure. Fully research the demographics and growth for a particular area. Know all about your competition; what they do well and their weaknesses. What are the unfulfilled needs of the community? Do not limit yourself to a small space that does not allow for future expansion. Does your neighbor have a lease, can you move into a better location, can you build out (maybe for an ASC?). All of these questions are important as you think about starting your practice and where you see it in the next 5, 10, or 15 years?

2. Don’t lose perspective on the power of mastering the basics.

Starting your own business is challenging and success is based on paying attention to details. No matter how overwhelmed you may be, do not overlook the basics of business, such as developing strategic relationships with referral sources, attorneys, accountants, etc. Establish the type of practice to which you would send your family members, with a focus on customer service, seeing patients in a timely manner, and making the visit as pleasant as possible.

3. Never underestimate the advice from people who have done it before you.

Seek out successful MDs in private practice and find out how they accomplished it. Ask them for key learning experiences and insights about what went right … and what went wrong. Ask them what they would have done differently, knowing what they know now.

4. Focus on finance.

Realistic and disciplined financial planning is critical to the success of any business undertaking. Take administrative courses on practice management and have an understanding of your finances, including your optical, if you decide to have one in your practice. If you want to buy a new piece of equipment or make another large financial decision, perform a detailed break-even analysis on how many patients you need to see or procedures you need to perform in order to break even (and then profit) from the purchase. It is imperative that you surround yourself with knowledgeable professionals, who can help you with financial information, but you should have a basic understanding of what the “numbers” mean and what to expect from an employee tasked to provide that information to you.

5. Negotiate everything. Understand that everything is negotiable, especially up front.

Try to negotiate everything from your rent to equipment purchases, to salaries, and managed care contracts. Know where you stand and ask for the best deal possible. You will be surprised at what you might be able to save.

6. Surround yourself with smart, trustworthy people.

Be diligent and thorough in deciding who you will hire. It is much more costly to replace a worker than to make a “smart” hire in the first place. Do not sacrifice a few dollars to get mediocre help and a “warm” body to fill a certain position. These types of employees are a time-consuming waste of resources and are costly in the long run. Establish clear processes related to job search, interviewing, hiring, and training. Have up-to-date job descriptions for every position in your practice and use them to identify “good” candidates who will meet your specific needs and also display an ability to lead and grow with the practice.

7. Having a marketing plan is important.

Plan to spend 3% to 5% on marketing campaigns when you open your door. A well-thought out marketing plan should be a major component of your overall strategic plan. Like your strategic plan, your marketing component should be reviewed and updated regularly. Join clubs, churches, provide services to underserved areas, look for every opportunity to get involved and get your name recognized. Long hours and hard work doing things that you necessarily did not want to do can pay significant dividends in the long run. Promote yourself as the practice that provides the best, most dedicated patient care in the area. Find your niche and make your new practice a more desirable place than your competition.

8. Always be on your best behavior.

You never know who is watching. I once heard a woman who worked in a retail store tell me that she cancelled her LASIK surgery after seeing her physician drinking heavily at a restaurant bar the weekend before her surgery. He was loud and clearly was not portraying an air of professionalism. Unfortunately, that chance encounter made her doubt his abilities. She cancelled her surgery that following Monday morning and has told several people about her experience.

9. Rewarding Decision

Starting your own practice is a challenging decision to make, but can be very rewarding when done correctly. By adopting a realistic perspective about all the hard work and dedication it will take, you will be well on your way to success. Remember, you have already been successful, making it through medical school, residency, and in some cases, a fellowship. How exciting would it be to use all that skill and knowledge to become your own boss and take care of the patients the way you feel is best?

10. Utilizing a budget to assist with making decisions.

You can manage your risk through budgeting, from an operational perspective and a capital perspective. The operational budget will be a guideline for your revenues and expenses based upon your goals and activities. The capital budget will assist you in estimating amounts you may need to borrow for larger purchases such as furniture and equipment. Not having these budgets in place can be a mistake because they can give you some clear guidance on your decision-making and minimize the elements of surprise that can pop up when you undergo a financially involved adventure such as opening your own practice.

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This is a small sample of the resources available through the Future Focus® website, which also offers extensive coverage of contracting norms and negotiation, considerations for fellowship opportunities, detailed instructions for determining the viability of a solo practice, and many more tools. Current members can sign in through the link below. If you’re not a member, you can use that same link to register, allowing you full access to this invaluable information at no cost. Good luck! And let Future Focus® help you make the decision that’s best for you!