New legislation, latest technology trends and innovative medical treatments can help pave the way for better patient care and innovative practice management. But there’s more than medical expertise required to set up and successfully maintain a profitable practice.
Other than your business plan (explored in more detail in the next edition of Care Matters), our experience tells us there are five key considerations for any health practitioner considering this bold move:
1. Legal structure options
Understand the legal structures available:
- What will best suit your needs and goals and the benefits and limitations of each? This will also aid in determining why you would use one option over another.
- What type of service do you want to offer initially and eventually?
- What will your growth and eventual exit strategy be? – Whether you shut up shop, sell the practice, or merge with another, it will all impact on the type of structure you initially look to establish.
2. Asset protection and planning
As the success of your practice builds, you need to make sure you have the right strategies and plans in place to protect what you have created.
The legal structure you operate from plays a large role in protecting the wealth you have, or will create. Asset protection is also integral in the way you hold the accumulated wealth; is it personally, through a self-managed Superannuation Fund or family trust? Each practitioner’s circumstances will likely dictate a different approach.
Read: Using KPI’s to drive growth
3. Tax management and obligations
Consider the tax matters and regulatory obligations such as GST, Pay As You Go, Workcover, Superannuation and Payroll Tax. Failure to comply with the regulatory registrations and requirements, can have far reaching consequences for the practice and your reputation.
4. Operational requirements
The way you want your practice to run will determine the general operational requirements you need to take into account. How much reliance on technology do you want? What type of accounting and patient management system do you intend to use? Will your systems allow for HR requirements (rostering, payroll, leave, etc.)?
5. Growth considerations
There is nothing more detrimental to sustainability than the inability to grow the practice. Systems and processes need to be scalable, robust and flexible enough to accommodate the growth. You will also need to ensure your financing is flexible to ensure equipment and facilities are up to date to provide the latest in patient care. Keep a clear, united vision in mind to keep everyone focused on the same growth trajectory and outcomes.
Australia’s medical workforce supply continues to expand, with the number of specialists increasing on average by 4.8% each year. So you are in the prime position to capitalise on this growing human resources pool and ensure you are able to staff up with best available talent, but you need to ensure you have the right HR practices and policies in place from the very get go.
The fundamentals of establishing your own practice will help determine the level of success you will enjoy. It takes a lot of hard work and careful planning, but ultimately, it will bring many rewards and benefits. Especially if you start with the end in mind.