The dream of owning a private practice is shared by many healthcare professionals. How do you know when you’re ready to do it?
If you’re like most medical, dental and veterinary professionals, chances are you’ve thought about taking the next step in your career by setting up your own private practice. How do you know when the time is right, and what are the key things you should consider before taking the plunge? Let’s take a closer look.
Why set up a private practice?
While there are benefits to being an employee, like having a regular salary you can depend on, many professionals find that this is not truly satisfying in the long term.
A move into private practice may be what you are looking for if any of the following sound appealing:
- * freedom to determine your professional direction,
- * independence and flexibility as a practitioner,
- * the ability to carve out the work/life balance you desire,
- * responsibility for all areas of a practice, and,
- * choice in the number and types of clients you see.
What are the downsides?
Moving from employment to self-employment is a major decision. Unless the process is carefully managed, becoming a solo practitioner can result in serious headaches. You must be aware of and have a plan for issues including:
- * upfront costs and time commitment for setting up a practice,
- * exposure to bad debts, cash flow problems and ongoing expenses,
- * pressure to bring in money to sustain your business and lifestyle,
- * difficulty in scheduling time off and holidays, and,
- * your total responsibility for all areas of the business.
What should you consider before setting up your own practice?
Let’s face it; university degrees are just not geared to teach medical, dental or veterinary professionals how to start up a private practice. It’s a smart idea to seek expert advice to guide you through all the variables.
An upfront investment in some specific business training and expert input will increase the likelihood that your business will generate profit in the long term.
Do you have the time?
Starting a private practice is much like starting any other small business—it requires a significant time commitment. In light of this, think about starting your own practice when you don’t have other important life events happening. If you're moving to a new house or planning extensive travel, it will be difficult to fully focus on the business.
Many potential private practice owners feel pressure to be up and running, and returning an income, as soon as possible. Unfortunately, it isn’t that easy. You’ll need plenty of lead time to find staff, implement systems and locate appropriate premises. It’s best if you can be flexible with your timelines to accommodate unexpected delays.
How will you manage the financial side?
Consider what finance options you need for equipment, fit-out and other expenses. It’s wise to seek out an accountant or financial adviser who understands the unique financial challenges of setting up a private practice. Is it better for you to purchase or lease premises? Which solutions are more effective than others?
Cash flow can be tight during the early stages of a new practice. You’ll need to ensure you can cover salaries, consumables and insurance. Since you’ll be an employer instead of an employee, you should understand your responsibilities in areas like taxation, employment and compliance. Help from trusted advisers such as accountants and lawyers can be invaluable in this regard.
Where to from here?
Going into solo practice as a doctor, dentist or vet may feel a bit like diving into the deep end of a swimming pool from a high springboard. The thought of taking the plunge can be intimidating—if not overwhelming.
Making the decision to jump requires endurance, planning, knowledge and a degree of courage. The right know-how and support will guide you as you step off the platform so that you’ll be well-equipped to glide into the next phase of your career.
Want to read more about starting and growing a practice? Click on the link for practice success stories from our clients, articles, research, tools and calculators.
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Checklist for setting up a medical practice
Setting up a medical practice can be daunting. This checklist shows what you need to decide and act on to get started.
Our experience working with doctors, dentists and vets means we can offer a unique range of products to help you establish your practice.
BOQ Specialist - a division of Bank of Queensland Limited ABN 32 009 656 740 AFSL and Australian credit licence no. 244616 (“BOQ Specialist”).
The information contained in this article (Information) is general in nature and has been provided in good faith, without taking into account your personal circumstances. While all reasonable care has been taken to ensure that the information is accurate and opinions fair and reasonable, no warranties in this regard are provided. We recommend that you obtain independent financial and tax advice before making any decisions.