Why some private Medical Practices fail – Part 1
We at MFI , as specialist Medical Practice Financial Managers, have always felt that it is our obligation, wherever we can to give good advice to start up medical practices and this series
of articles was designed with that in mind. The reason for this is that it is mostly small start- up businesses in general that do fail. The objective however is not just to point out why
businesses fail, but to try to help you avoid it!
It is also not only start-ups that can benefit from these articles. Those who have been in practice for some time might find some very useful advice on how to improve your existing business, or just get back on track!Keep in mind that a private Medical Practice is not really that different from most other businesses and certain business principles prevail regardless of what your field of expertise may be. There are some differences though and these will be pointed out as we go along.
So, here are just a few reason why some medical practices fail – and because it’s a prettybroad subject, this is just part 1…
They are not prepared for failure
Failure is not uncommon and medical Practices can face the same kind of business failures as any other. The failure to lead correctly, the failure to set up correctly, the failure to recognise and pursue the right patients for your practice. These are common failures.
The solution is to ensure that a) you get the right mindset at the outset. Expect and be prepared for some failures and b) you learn from failure and don’t fall when it happens – just correct your course and move on. If you set up wisely with capital to cushion times of failure you can simply dust yourself off and correct course.
Note – This is particularly important for Medical practitioners who set up business right away. You will probably have incurred a lot of expense, loans etc. due to your long period of study. Ensure that your start-up capital includes the repayment of these loans and expenses.
They have no clear business plan
Many businesses fail because of the lack of short- and long-term goals and specific business plans. Your plan should include where your business will be in the both the short and long term. Will you be happy to stick to a small exclusive practice, or will you want to expand to include many associates and set up a large medical centre?
The right business plan will include specific to-do lists with dates and deadlines and a blue print of your business practices. There are coaches and many online resources that will show you how to create a proper business plan.
Poor or incorrect Financial Management
As a Medical Practice your accounting set up and needs are different to standard businesses, as there is a three way arrangement between the Medical aid, the Practice and the Patient. There are also specific licenses and compliances that are required by law to ensure you are practicing legally and with your client’s best interests at heart.
We at MFI can assist with your registration, your practice number, all taxation matters and especially, through our expert Medical Practice financial Management service, ensure that you, like our may other satisfied Medical Practice clients in Bloemfontein and Cape Town, have total peace of mind.
If you have enjoyed this article on why some medical practices fail, watch this space for more and contact us to get your business off on the right foot!
You can become another one of the over 100 Medical Practitioners that already enjoy state the state of the art technology that enables us to process medical aid claims in excess of R200 million a year!
