Setting up your medical practice for success

HomeBLOG

Setting up your medical practice for success.

Being a doctor or health practitioner can be an incredibly rewarding profession. And graduating to running your own medical practice can take your sense of satisfaction to a whole level. It allows you more control over how and with whom you work and enables you to establish your name as a specialist in your chosen niche. It also means you are no longer just a GP, but a business owner too, and you need to be able to balance the two roles in a constructive manner. There’s no doubt it can be tricky juggling the roles of GP and boss, so we’ve defined some guidelines to help you navigate the day-to-day challenges you’re likely to face and achieve your goals for your medical practice.

Track every aspect of your practice spend

While tallying up your revenue and expenses will give a “big picture” overview of how your practice is performing, it is not enough. To gain meaningful insight and stand a chance of finetuning your business, you need to break each income stream down into its component elements. For example, if you’re offering patients a physical therapy service in addition to your GP service, you should track the costs involved in each service separately. The more detailed your breakdown, the better you’ll be able to understand what’s working and what’s not.

Understand how many patients you need

Once you’ve compiled an in-depth breakdown of your practice costs, including staffing, equipment, supplies, and overheads like rental or mortgage repayments for your operating space and utilities, you can backtrack to calculate the number of patients you need weekly, monthly, and annually. A properly structured practice budget can help you identify where and why you are underperforming before it is too late to course correct.

Understand the difference between your primary and sidelines

Healthcare and medical practices differ from most business models in that, by their very nature, the services you’re providing wouldn’t likely be described as popular. Ideally, you need to work out – based on market research – which services qualify as your “run rate” business line. In other words, the business line that will bring the most significant volume of people through the door with minimal costs involved. Such an approach will give you the scope to offer certain sideline services which don’t necessarily bring a large profit margin but still add value by virtue of strengthening your reputation, particularly if you’re the only practice offering said service in your immediate area.

Understand your staff, resources, and cash flow

Your staff
Your team – from the receptionist to the nurses, practice manager, and fellow practitioners – are the backbone of your practice. To remain strong and function at their best, they need time off, just like any other employees. However, being a people-centric business by nature, your practice stands to lose out on billable hours if too many staff take leave simultaneously. To avoid this potentially adverse outcome, focus on creating a smart roster that allows staff to take the off-time they need to rest without impacting too severely on your business.

Equipment & supplies
Also, take the time to review your equipment and supplies ordering regimens to uncover any inefficiencies. A clear view into purchases allows you to see if you are holding too much inventory, which essentially presents a considerable upfront expense for you. Take it further by reviewing your supplier contracts and negotiating revised terms and conditions if need be.

As the boss, the onus is on you to keep practice spend down to reduce patient costs and preserve your staff’s job security. You should be regularly conducting a line-by-line check of your expenses to ensure a healthy and steady cash flow.

Integrate your budget into your daily practice

The concept “out of sight, out of mind” is particularly pertinent to the realm of finances. Unfortunately, it is all too often what happens to that carefully crafted budget. But a budget is only as good as its application which is why it should be integrated into your daily practice management. Your budget should be actively used to guide your purchasing, marketing and recruitment decisions whilst maintaining a realistic picture of what is happening in your business. This means you’ll be in the position to intervene whenever you identify items that are over or under your predicted spend.

What now?

Putting in the effort to keep your medical practice in great shape means less stress for you, your partners, staff, and patients. SMART Business Solutions can assist in diagnosing the problems that are causing your practice to consistently underperform and develop a financial plan that will set you up for success. Contact us today on 03 5911 7000 to request an appointment.


10 Mar

Important Tax Update for Medical Professionals - ATO Income Changes


READ MORE READ MORE
6 Aug '20

Making Debt Structuring Work For Your Medical Practice


READ MORE READ MORE
6 Aug '20

Tech First Aid for Medical Practioners


READ MORE READ MORE
4 Aug '20

Why prepare a business plan for your medical practice


READ MORE READ MORE
4 Aug '20

Slash your tax


READ MORE READ MORE
4 Aug '20

Setting up your medical practice for success


READ MORE READ MORE

Related News

7 Apr

Minimise Your Business Tax: The Guide

Here’s a guide to the strategies you can use to minimise your business tax.


READ MORE READ MORE
6 Apr

Minimise Your Personal Tax: The Guide

Now's the time to review what strategies you can use to minimise your tax before 30 June 2021.


READ MORE READ MORE
31 Mar

National Licence Recognition For Tradies

Builders, electricians, plumbers, architects, real estate agents, security guards and other workers who hold an occupational licence in their home state or territory will soon be automatically deemed to have the necessary licence in other states.


READ MORE READ MORE