5 questions every doctorpreneur should ask themselves about growing a medical business
With Russell Lee OA Business Strategist from the Health Business Network
It takes years of training to become a doctor – and one thing medical school does NOT teach doctors is the skill of starting up a practice and growing it to sell at maximum profit.
Here are five questions any established medical practitioner should ask themselves if expansion is on the horizon.
1 What is my “mission”?
Have you formally identified the corporate culture values strategy and created your view of the future with a formal mission plan?
This should address the commitment your business has to its key stakeholders, including customers, employees, shareholders and communities – using numbers to demonstrate past and potential growth.
2 What is my “vision – in detail?
What is your medical vision and have you detailed it with 1,3, and 5 year business plans?
Have you had your “medical vision” professionally assessed with a practice audit?
Do you know who you are really catering to, what your competitors are doing and where are the new, niche markets in your specialty?
What are your goals, financial targets and KPIs for 1, 3 and 5 years?
Do you know where your referrals are coming from to where your competitors are getting them?
3 Is my practice operationally sound?
One of the big contributing factors in growing and successfully selling a business is ensuring that it is documented as being operationally sound and also that it can earn passive income and operated on a day to day basis without you always being there.
Other key questions that need to be answered about operations include;
- At sale can I document formal HR systems, insurance reviews and prove that adequate financial protocols are place?
- Can I formally demonstrate growth over the past 1,3, 5 or 10 years?
4 How much is the practice losing through billing and income leakage?
Any errors that occur through the claiming process should be dealt with immediately but quite often they are put in the too hard basket by front desk staff who are too busy managing the practice.
If you asked the average surgeon how much “bad debt” the practice currently has, most will have no idea as they are too busy focussing on patients.
Many practices now have a billings specialists AND an accountant working together to counter bad debt and fraud.
5 Have I got the right team to grow the practice?
Does your medical practice team truly understand your vision and are they excited about it?
Do they need to be told everything or do they come to you with issues that need to be fixed?
Within your team, have you created the culture allows the practice to accelerate growth?
ANd finally, where do you it in the team? Are you the leader or do you need to hire someone to lead the practice?
A doctor typically earns between $350 to $2000 an hour, and a practice manager $79 to $100 an hour.
It’s great for doctors to be “hands on”, but ask yourself if you really have the time or should you be outsourcing bookkeeping, HR, accounting and marketing.
Planning to expand your medical practice? Want an independent review of your practice? Call Russell on 0419 210 540 or email firstname.lastname@example.org