Taking the step to owning a practice is both exciting, daunting and many other emotions all at the same time. The path will be different depending on whether you are joining an existing practice or starting your own. Here are 5 key questions to ask yourself before you decide whether you are ready owning your own practice:
1. What are your strengths and weaknesses?
It can be quite confronting asking yourself what are you good at and what aren’t you good at. When you understand both your strengths and weaknesses you should consider how each will impact your practice ownership career. By identifying your strengths you can confidently undertake the tasks required in practice ownership where you know you perform well. By understanding your weaknesses you can seek help from professionals or others in your support network who have the skills, traits or knowledge you lack.
2. Does it fit into your life?
Practice ownership is a big commitment and to be successful it has to fit in your life. You don’t necessarily need to change everything else in your life in a drastic way but it needs fit in alongside your family, social, community and health priorities.
If you are setting up your own practice there are lot of business decisions that will need your attention immediately. There are also many administration tasks to be carried out from setting up rooms, banking, policies and procedures, hiring of staff and the list can go on from there. Once you have a core team of staff underway the administrative tasks should require less of your time but the business decision making requirements are likely to continue throughout your period of ownership.
In an existing practice, the day to day running of the practice will probably be taken care of by a practice manager and their team but you will still need to understand how the business is going and make business decisions accordingly – this is when you are working on the business. This needs to be done in addition to patient consulting and your other duties you are required to do when working in the business.
While there is more time involved in practice ownership it does not mean that you have to work more overall – you might decide to spend less time working in the business and more time working on the business.
3. How are you going to fund it?
Whether you are buying into a practice or establishing a new practice you are likely to have funding requirements. You may have some existing funds put aside for this very purpose or you may need to source funding externally. Banks are usually the first port of call but there are other lenders out there that provide alternative funding. It might be appropriate to consult your professional advisor to help you get the best outcome.
4. What’s your Plan B?
So, what if practice ownership doesn’t work out for you? It can happen for a wide range of reasons so it’s a great idea to have an idea of what you will do if the unthinkable happens. Your plan B might be to go back to your previous employment (a good reason not to cut any ties!), undertake some study or maybe even retire. Having your plan B in place will give you some comfort and confidence in your business decision making.
5. What is your Exit Strategy?
It seems strange to plan your exit before you even enter the world of practice ownership but some of the best entrepreneurs do this before they go into any new venture. An exit strategy doesn’t have to be a formal document, it can be as simple as having an idea of what options you have to “get out” when the time comes. This might mean having open dialogue with potential future partners and purchasers or you may plan to wind up the practice upon your retirement. Having an end point in sight will guide you in making decisions throughout your ownership period in the business.
If you would like to know more about the ins and outs of starting a private practice or any other financial matter, please contact Jennifer Rees, Health Services Manager at William Buck on (08) 8409 4333 or by email jennifer.rees@williambuck.com
Disclaimer: The contents of this article are in the nature of general comments only, and are not to be used, relied or acted upon without seeking further professional advice. William Buck accepts no liability for errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. Liability limited by a scheme approved under Professional Standards Legislation.
