A medical practice business plan may seem like a luxury when you’re starting a medical practice. After all, you’re going to need start-up capital for lots of other things, too, like initial deposits, equipment, insurance and staff, just to name a few. So why should you consider allocating resources to a medical practice business plan?
The “What” and “Why” of a medical practice business plan?
Business plans are sometimes described as roadmaps, guiding businesses in planning for future business activities, and describing the goal(s), and the steps and resources to reach the goal(s). Business plans are often required by banks or other financial institutions that may be lending the money necessary for a business to grow. And businesses seeking loans that may be guaranteed by a government agency will certainly be required to have a realistic business plan as part obtaining guaranteed financing.
What are the usual components of a medical practice business plan?
Medical practice business plans can come in many different shapes and sizes, but they should all have at least four major sections:
- Descriptions of your proposed business venture, including the products or services, the value proposition and the success factors for your venture;
- A market analysis, including market demand for for your products or services and the competitors in the market.
- A Financial Feasibility Study for your proposed business, including assumptions, proforma income and expense, cash flow statement and balance sheet;
- Management and marketing plans and strategies.
Medical practice business plans can benefit you in several ways
You can use the process of developing a medical practice business plan to help you answer several questions that come up in the planning process.
- You may not have decided on exactly where you would like to start a medical practice. The market assessment phase can provide information on the potential location or locations you are considering, helping you understand the demographics of an area, the other medical and healthcare services available – referral sources and competitors – and the payment/reimbursement environment.
- You may have some idea of the resources needed when starting a medical practice. The financial feasibility study should help you understand in detail the resources required – and equip you to obtain financing if that is required.
- You can identify early on the steps necessary to attract patients and receive payment for your services. What health plans are looking for your speciality in the area? How does social media play a role in attracting and keeping patients?
This is the second installment in our series on starting a medical practice. In the next few installments, we will cover planning office facilities and other practice issues. In the meantime, you can download a copy of our list of Healthcare Business Start-up Issues. It is a fairly comprehensive list of issues and items to consider when evaluating the need for a medical practice business plan consultant and starting a medical practice.