Opening a practice is something many physicians aspire to. While it can be an opportunity to work as your own boss and enjoy more freedom, it also comes with more responsibility. A medical clinic is a business, and while many are experts at their craft, not all of them are fit to be business owners. This leads many of them to make mistakes that end up ruining their practice. Let’s take a look at some of the common reasons why private medical practices fail.
Overpaying for Supplies and Equipment
One of the biggest mistakes starting practices make is overpaying for equipment or supplies. This often happens because they decide to buy equipment new instead of used or leased. Leasing is usually the best option for new practices. While you won’t be able to sell the piece of equipment at the end of your lease, there’s no guarantee that you’d be able to anyway. Selling outdated equipment can be tough and a big hassle.
When leasing, you greatly limit the cash flow hit. Forecasting also becomes easier as you don’t have to factor in the time to unload an older piece of equipment or how much you’ll be able to get for it. When it comes to supplies, too many do not do their research for suppliers. They go with whoever they heard was good and don’t shop around.
Make sure that you look for local medical equipment suppliers and compare prices. Also, make sure that they have a wide selection of products so you can get everything you need from the same supplier. This will facilitate things and give you a chance to get a bulk discount.
Hiring the Wrong People
HR is a major issue for many medical practices and choosing the wrong people could make or break your practice. This doesn’t only go for medical support staff. You have to make sure you hire the right people from cleaning up to your reception staff. Every one of them will affect your brand. Hire the wrong cleaning people and they might cut corners and you could end up with contamination on your hands. Hire the wrong receptionist, and they’ll sound scattered and unprofessional which will lead people to lose trust in your whole team. All from one person. So, do not take this step lightly and also take the time to build a strong culture that favours accountability and great service.
Overlooking the Legal Side
A surprising number of people who start a practice do so without consulting a lawyer or accountant, but these should be the first people you see. An accountant will be able to give you some schemes or deductions you might be eligible for, and also give you some guidelines if you change the structure of your business, i.e., when going over a certain number of employees.
When it comes to lawyers, they can help in so many ways. They can help draft employment and partnership contracts, allow you to avoid negligence lawsuits, or look over a lease for irregularities among other things.
These are some of the most common reasons why new private practices fail. Make sure to avoid them at all costs and have a solid plan before getting started.