Once you have developed a better idea of what you want your practice to look like, you can create a business plan that will start putting your goals into motion. A business plan is a written document that describes in detail how a new business will achieve its goals. The plan is a timeline that sets deadlines for when the big and small details will get done and who perform the task. For example, when will the doors open for your practice? (BIG detail) or when will you put an ad out for your first employee? Listing who will perform the task provides a level of accountability to complete the task and keeps you on track. At this point, you will be the one doing all the heavy lifting in planning your practice but as you open the doors and hire employees, you may have a practice manager or other administrative person completing tasks as well.
Business Plan Steps
This section outlines a description of your practice including long-term and short-term goals. We add the goals and a description at the top to stay focused on them! Then, when we continue to add to our business plan, we can always go back and reference our goals and determine if our plan additions are in-line with our practice goals. In your proposal, answer questions such as:
What will your practice look like in one year?
How about in three years?
Where will your practice will be located?
What services will you offer or not offer?
The more detailed you can be in your proposal, the better you can align your tasks to your goals. You don’t need to have all the answers now and your business is very likely to change over time. Therefore, the plan can and will change over time. That’s ok!
2. Do the research
The next step in your business plan is to put numbers to paper and prove that the practice you want to own is attainable and sustainable! To start, this step can sound daunting but by breaking each step down and taking it one task at a time, you will have a thorough business plan which is backed up by data!
Based on the size and practice areas of your practice, what size space will you need? Estimate how much it will cost to build out the space or to purchase a location that matches your needs. Will you hire an architect to create a floor plan so you can better visualize the space?
If you are starting a new practice, are there enough clients and demand for your services in the area you serve. How will you be different from other practices that operate in the same space? Analyze your target market and look at the demographics in the area you intend to practice.
What staffing will you need in the first year and as your practice grows? There are tools and websites that offer salary data as well as benchmarks for salary data through the AAHA that you can use to forecast your staffing level and pay. When will you start paying salaries and will you use a payroll company? You will also want employment contracts, employee manuals and possibly fringe benefits with your practices. There is a lot to think about! Your advisors can help you sort these questions out and tackle them one at a time. However, it’s important to set a budget for each of these essential pieces of your practice.
How will customers learn about your practice? Will you have a grand opening? Who will setup your website and your social media accounts? The marketing section of your plan will address how you plan to attain and retain new customers!
What software will you use to run your practice? Who will send out invoices, pay the bills and prepare the accounting? As a doctor, you will hopefully be too busy to do these tasks. Your CPA can give you great ideas on how these tasks can be accomplished within your budget and how this area of your practice can change as your practice grows.
Once you have your business plan completed and have estimates for the essential areas of your practice, then we can review your income and expense forecast and see if the plan can work! It’s not uncommon that you may want the BEST and BRIGHTEST for your practice to start, but with an uncertain starting cash flow, you may have to stay lean and mean in the first year in order to get your practice off the ground. This is once again where a CPA can come in handy. An outside review of your business forecast can give an objective opinion to whether or not your business plan and cash flow projections are reasonable. This is also where a good discussion on your backup plan can take place if cash flow projections do not follow your expectations at first. Will you have additional funds to draw upon if needed?
Creating a business plan can seem like a lot of work, especially when you are putting the entire plan in writing. However, the process of creating the plan and all of the questions that arise from the creation are invaluable and will give your practice its best chance of success.