There are concrete steps to take for physicians looking to grow and diversify their practices.
Most people struggle to balance a single full-time job, but what if that single job carried the weight of two, three, or even four careers all at once? Would it even be possible?
Just ask a physician who runs his or her own practice.
Physicians who own their own medical practices not only bear the responsibilities of a doctor, but also simultaneously those of a CEO, business operations manager and entrepreneur. It adds up-some 57% of physicians report feeling burned out or depressed in some way, with 56% of that set attributing the bulk of their troubles to “bureaucratic tasks.”
That’s why finding the time and wherewithal to invest in and grow a practice probably seems like a daunting and near-impossible task for many. But it doesn’t have to be that way-there are many physicians who are able to successfully scale their businesses.
For those looking to grow and diversify their practices but just don’t know where to start, here are five tips to keep in mind:
1. Evaluate where you stand.
Make sure you have a firm grasp of the current state of your business. Assess your revenue, costs, budget, and staff productivity on a recurring basis. Celebrate your strengths and current successes, but also make an honest assessment of your biggest weaknesses and needs as a business. And don’t forget the last step: document the assessment to ensure follow up and execution.
It may seem obvious on the front end, but starting-and maintaining-a routine of self-monitoring and assessment is an essential first step for scaling and fostering long-term success at your practice.
2. Dream, then set realistic expectations by prioritizing.
Are you looking to expand your services? Have you had your eye on some new equipment or exciting technology? Wish you could flex into a larger, sleeker office space? That’s great-as the office entrepreneur, give yourself the permission to be creative and think big.
But chances are you can’t do everything you want in the near-term.
Try to determine what can realistically be done in one, three, and five years given your patient roster, prospective revenue, and responsibilities. By embarking on this exercise, you’ll find that you’re less likely to get overwhelmed trying to achieve all of your goals, which often can lead to being discouraged when it isn’t all completed. Creating a documented plan to manage the change will keep you on track.
3. Find out what kind of financing is best for your needs.
Expanding your footprint can be exciting-but price barriers can get in the way. Practice startup costs alone run upwards of $100,000. So, if you’re looking to grow your practice, you’ll need to evaluate what borrowing options will work best for you. Remember that interest rates don’t tell the whole story-there are account fees, premiums, and other closing costs to consider. Always scrutinize the details and the entirety of the lending relationship before landing on a decision.
A key point to consider is the term of your loan. Cash flow is extremely important, and while you may want to do a quick payoff, that can create a cashflow crunch. Most loans will allow you to pay down the debt quicker if things are going well.
SBA loans can be especially helpful for doctors who are looking to open, acquire, or expand their practices because of a federal guarantee of up to 85%. That means there’s less risk for the lender and easier access for the borrower.
Expert tip: When you’ve figured out what type of financing works best for you, don’t just let the banks interview you-interview the banks themselves. You’ll find that some have expertise and experience dealing with certain types of businesses-including medical practices. Often, the business savvy they bring is every bit as important as the financing itself. Do your research and ask questions.
4. Formalize your thoughts in a business strategy.
Once you’ve arrived at a strategy, put pen to paper. Your bank or lender of choice can assist with developing your business plan, setting financial goals and parameters, and weighing financial gain against your interests and passions as a physician.
From there, it’s time to go shopping – but stick to your plan and your budget. Any smart lender will make sure you do so. It’s mutually beneficial.
5. Thoughtfully and carefully build out your team.
Human capital is your most important growth area, and it’s where you’ll be investing the majority of your capital.
Whether you’re adding a partner, hiring a nonphysician provider, or even bringing on an office manager to help with the administrative load, you’ll want to take extra care to choose team members that will be the right fit for your practice in the long-run. Unlike a big company, each person represents a significant chunk of your business. Resist the temptation to hire quickly because of immediate demands or pressures. This is where the best plans are often ruined. Focus instead on curating a high-quality staff for sustainable growth.
And if you find a new hire just isn’t the right fit, don’t drag out the inevitable. It may seem counter-intuitive, but positioning your business for success and long-term growth may require you cut before you scale again.
In short-“hire slow, fire fast.” The smaller your business is, the more critical this becomes.
By taking each of these steps in stride, you can start putting together the building blocks of a successful practice and unlock long-term value for yourself and your patients. Navigating the business of medicine can definitely be a challenge, but it doesn't have to be an insurmountable one.
David Burch is the Business Banking Director of Sales and Specialty Banking at Huntington Bank, the nation’s largest SBA lender by volume over the past decade.