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Management

Setting up a private practice - phase one

27/03/2018
By Karen Crouch
Starting your own practice is an exciting and potentially rewarding prospect. But, it can be scary too, which is why KAREN CROUCH has created a special three part series to assist you with this endeavour.

Many practitioners, engaged in group practices or contractors/ licensees, contemplate establishing their own practice at some time in their careers. However, setting up a practice involves a wide variety of steps that may be quite daunting.

It also requires significant, ongoing time to consistently oversee progress, while making key decisions on items with which most practitioners have limited experience or familiarity.

Finally, meticulously planned, overarching project management throughout the implementation period of 3–6 months is absolutely paramount.

Personal supervision, if undertaken by a practitioner, will require the [future] practice owner to be involved in the daily undertakings of each service provider to ensure set-up activities are on track and properly implemented.

"The new venture, properly orchestrated from start-up to ongoing management, can be very rewarding, provided plans are put in place."

Matters requiring personal experience or familiarity range from business planning, legals, premises location/selection, design, construction, finance, technology/communications, office/medical equipment and more, e.g. signage, security, waste management, website (marketing) and ultimate recruitment of personnel (staff and other medical).

The new venture, properly orchestrated from start-up to ongoing management, can be very rewarding, provided plans are put in place to ensure high quality patient services. Meanwhile, administrative and clinical functions of the ‘practice business’ must operate efficiently, cost effectively and in synergy with the personal objectives of new owners.

Of course, once set-up preliminaries have been completed to the practitioner’s satisfaction, several other start-up aspects of practice management and managing the business will come into play. Several of those, mentioned below, will be the subject of future articles.

Preliminaries (initial decision to set-up and laying the ground)

Before deciding to start a practice, certain prerequisites are recommended:

  • Business plan & feasibility study: A ‘road map’ of the owner/s’ plans for the venture, including financial analysis of necessary elements (staff, patient volumes, revenue, expenses) to determine breakeven points and profitability (reward for owners’ endeavours). It will also support applications for finance and ultimately provide a detailed budget for first year operations and beyond;

  • Business structure: A structure such as a Company or Trust is essential for securing premises, borrowing finance and operating the new practice. Some clients fail to secure premises due to absence of an appropriate business structure as the selected ‘entity’ is likely to purchase/lease premises and apply for finance;

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  • Area/premises selection: While the business plan details pertinent aspects of practice goals, target patient segments etc., identification of the best physical premises/location requires demographic research of local statistics – age, ethnic makeup, income levels, demand, competition – to determine whether planned services fit the target area. Exploring options and site assessment is the next step. Legal aspects and negotiating skills play an important role in securing best deals;

  • Finance approval: The feasibility study and business plan is required by financiers;

  • Securing premises: The decision to rent or purchase premises is one to be considered in light of current personal resources and long-term plans.

Completing these steps will give aspiring new owners greater confidence in viability and likelihood of success, ensure funding is in place and that the new venture is afforded every opportunity to succeed.

Start-up actions

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A 'road map' for the new venture is critical

Of course, this major milestone will be the starting point in planning and execution of several further actions required to ensure ongoing practice/business management and patient healthcare. Some examples, to be detailed in upcoming articles, are:

  • Project planning;

  • Design;

  • Fit out and construction;

  • Business insurance;

  • Other (start-up):

  • Logo design & business documents

  • Website and marketing

  • Technology: Hardware and software

  • Practice furniture

  • Medical equipment/furniture/supplies

  • Security

  • Signage

  • Telephone system

  • Maintenance and other contracts

  • Waste disposal

  • MBS/PBS/DVA registrations

  • Miscellaneous: Safe, toys &andTV;

  • Mid-term reviews with all suppliers;

  • Recruitment: Administrative, clinical, allied, contracts;

  • Other (practice and business management) plans: Budget and monitoring, risk management, supplier management, staff induction and assessments, records management, Policy & Procedure Manual, communication/effective meetings and (optional) board/owners’ management.

Part two of the series deals with preliminary tasks that must be completed and can be read here.

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