Overcoming the Fear of Starting your Own Practice

by: Dr. Timothy J. Gay, DC

here are several steps that are necessary to developing and starting a new practice. The list is a long one that starts out with everything from leases and equipment to the paperclips that you will need at the front desk. Starting your practice is the most exciting time in your career.

Fear is always a factor, but this is still easier than eating insects or driving off a cliff backwards – just to prove that fear is not a factor for you ! The road blocks and barriers of starting your own practice are easily identified and can be conquered by simply making the decision to do and know - rather than think and plan.

Expanding your horizon starts with being ready to take on the responsibility of being a doctor and a business owner. Knowing the importance of both and being able to differentiate between the two will be the key to the success of your practice.

The business part has to do with learning how to negotiate, whether you are purchasing a building, leasing office space, becoming an independent contractor or an associate. Making sure that you have the right people involved that you trust will make this a great experience or one that you will write articles about later.

When you’re starting out, take the time to do “due diligence” on your location. Make sure that you have exclusivity for your usage. Find out what triple net in leasing means. Buying a building when you’re starting out in practice requires some serious financial backing making a lease a better option for most new practitioners. Make sure that you have a leasing agent that knows how to read leases; get an allowance for leasehold improvements, and hopefully some gratuitous rent from your landlord for signing a long term lease. The factors that make up leasing or buying a building obviously vary from state to state and location to location. Remember that location is the single most significant factor in starting your own practice.

There are several differences between buying an existing practice and starting your own. Starting your own practice and creating your own practice from scratch is by far more challenging and more rewarding than buying an existing practice. Naturally they both have distinct differences. Buying a practice may cost more, but there is cash flow that is coming in from the current patient base. Make sure if you buy an existing practice that you are buying one that has been established for a long time. The practice should not be based solely on a category or patient type. Look at the accounts receivable, patient accounts, goodwill, age of the equipment, furniture, computer systems and most of all the collections for the last four years and see if there is a down ward trend due to changes in the practice.

My preference is to start your own practice. Here are some of the underlying reasons: economically it is less expensive, you know what you have with no hidden surprises that may be uncovered later. When you buy someone else’s practice you are buying their personality and the possibility of patient drop off is a reality. You may be are inheriting staff members that are not loyal to you. There are many variations that you need to be aware of and these are just a few.

The next differentiation is whether to work for someone else as an associate or to have your practice with someone else as an independent contractor. Generally money is the issue that will be the determining factor in the decision that you make. The decision to be an associate for a certain amount of pay with a limited ability to be compensated more is a sure thing. Associates are guaranteed a salary and have the ability to learn on the job. The senior doctor should have learning and teaching processes to help the associate gain confidence and knowledge while working with the staff, the patients and learning the duties and business of running an office. This creates consistency and congruency for patients. The associate will be compensated at a higher level after he becomes more experienced and has the confidence to run the practice and understand the business as the right hand to the senior doctor.

The independent contractor comes into the practice with a different expectation- and that expectation is to pay a percentage of overhead expense to the senior doctor. Over head expenses may be based on the amount of money generated by the I.C. The senior doctor provides staff, rooms, some equipment, phones and some supplies that the I.C. uses and pays for through compensation from the patients. The practice is different because the independent contractor has no set hours and can practice differently than the senior doctor. In some cases that may cause some confusion for the patients and staff unless there are rules of engagement that are spelled out in the form of a contract or office policy to make sure that everyone is in full communication of what they are each responsible for.