Why some private Medical Practices fail – Part 2

We at MFI, always keen to give our start-up existing and potential clients the best advice we can, have embarked on this series of why some Medical Practices fail – and this is part 2.

As matter of interest, although there are some factors that are specifically pertinent to Medical Practices, the reasons that businesses fail are pretty generic and therefore these articles should be of assistance to our Accounting and Financial Planning clients as well.

Also bear in mind that although the statistics surrounding the failure of new businesses are pretty grim, these articles are not designed just to point out reasons for failure, but to give advice on how to possibly prevent these pitfalls. They may even help some established businesses that are struggling a little, or simply need to get back on track.

In part 1 we spoke about being prepared for failure, the importance of starting out right with a good business plan and ensuring good, thorough and appropriate financial management.
In part 2 we will cover another three reasons many start-up, or even established private Medical Practices can fail….

Poor positioning

Medical practice is not always a ‘walk in off the street’ business that has to be situated in a busy mall, but to be a little facetious, it wouldn’t do any harm! Positioning really is so important and many businesses fail because they simply aren’t in the right place. Being one General Practitioner in a small area with no doctors for miles may be way better than being one of many GPs in a huge medical centre. You need to assess this up front – and position yourself correctly.

Not knowing your marketing strengths and weaknesses

Every business, whether you’re selling wellness or toothpaste, needs to understand who they serve and what people’s needs are. In other words your target market – and you market to them accordingly. This relates very closely to positioning yourself correctly.

In Medical Practice however, where you can’t do comparative advertising and normal marketing, your business needs to stand on your reputation. Your marketing methods therefore should lean toward ‘network’ marketing. You need to build a large base of ‘satisfied’’ customers who will give you ‘word of mouth’ referrals, which is exactly how networking works. In your case, good testimonials should be treasured and displayed!

Handling ‘day to day’ finances poorly

So many businesses fail through incorrect day to day handling of their finances. You need to be running the right software with competent people who are meticulous with your financial practices.
In Medical Practice, you have a more complicated scenario though, as the Medical Aid Societies are involved as well and you need to have an Accounting firm that specialises in Medical Practice financial Management to ensure a smooth income and payment stream between Medical aid, Practice and patients.

Contact us to find out how we can help and how we ensure that with absolute peace of mind you can focus on the wellness of your patients, as we focus on your financial wellness!