Some ‘key’ mistakes while developing your practice plan can cause your new clinic to fail; lack of research and lack of preparedness. Avoid becoming another failed clinic by making sure you don’t commit to those mistakes and the following:
Inadequate financial planning
Of the number of practices that fail each year, I believe a good percentage would be due to a lack of funding and or financial planning. In most instances, a practice owner is intimately aware of how much money is needed to keep the clinic operations running on a day-to-day basis, including funding clinical and reception staff, paying fixed and varied overhead expenses such as rent and utilities, and ensuring outside suppliers are paid on time. However, owners of failing practices are less in tune with how much revenue is generated by patient services and or products sold. This disconnect leads to funding shortfalls that quickly put a practice out of business.
In addition to finding funds for working capital and overhead expense needs, practice owners, often, miss the mark on pricing their services. Practices that end up closing their doors are those that keep the price of their patient services too low for too long.
To protect a practice from common financing hurdles, practice owners should first establish a realistic budget for the clinic operations and be willing to provide some capital from their own savings during the start-up or expansion phase.