In previous podcasts and articles I have touched on the importance of business planning for Doctors in Private Practice. In this article I will highlight 3 reasons why you should not overlook business planning for your practice.
To Establish Your Finance Needs
Whether you are starting or growing your practice, funding will play a vital role in your success. The types of finance you may require include: fit-out and equipment loans/leasing, practice rooms purchase, etc. You should map out your funding needs for the next 3-5 years and establish how you will finance this.
To Manage Your Profit Margin and Cash Flow
If you are not careful, your practice expenses will easily get out of control and erode your net income. Staffing costs in particular can quickly escalate. You need to monitor your monthly profit and loss figures and cash flow against your Budget, which you would establish as part of your business plan. Pay particular attention to ratios such as staff wages as a percentage of total income.
To build fire-breaks rather than putting out fires
Without a business plan you may spend most of your time fighting fires, such as dealing with staff issues and IT problems. By implementing robust processes and procedures systems as part of your business plan, and delegating responsibilities, you can spend your own time in a more productive and rewarding way.
Business planning for Doctors – next steps
If you haven’t prepared a business plan yet, you can find a free plan template online or contact me for a copy. Take out some time away from the practice and your home to work on your plan. Discuss it with your accountant, banker or adviser and fine-tune it with their help and input. Establish your priorities for the year ahead and create an action plan for the next 90 days on a quarterly basis.