Starting your own practice can be an overwhelming task. When I started my private practice seven years ago, I had no idea how long the hours would be, how much energy it would take, and the amount of challenges we would have to overcome to stay in business. Before signing a lease, taking out a loan, or chose a practice name there are 5 things you should do to be sure you are really ready.
- Make sure you want to open a practice
According to Merriam-Webster Online, an entrepreneur is one who organizes, manages, and assumes the risks of a business or enterprise. They welcome a challenge and are not averse to change. They are persistent and have a passion that withstands the test of time and frustrations. They often see opportunity where others see a risk of failure. If you find that you are not someone who likes to organize and manage, or that risk will keep you up at night, you may want to work on development of these traits prior to starting your practice.
- Ask yourself what REALLY is motivating you.
Take some time to examine what is behind your drive to open a business. Many people will state that earning potential, work hour flexibility, and control are top reasons for the desire to create and run a company. While these are part of the equation, they generally are not enough to sustain you through the long hours and stress that comes with business ownership.
According to research conducted by Tony Tjan and co-authors Richard Harrington and Tsun-Yan Hsieh, 65% of founders have been identified as driven by “heart.” Tjan also added that most entrepreneurs are fueled “by an unshakable sense of purpose.”
Throughout all the trials and tribulations, entrepreneurs reward themselves internally by realizing that they’re on a mission for the greater good. No matter how bad it gets, it’s their passion that motivates them between paydays and during all the times when everyone else tells them to quit.
- SWOT early and often
SWOT stands for strengths, weaknesses, opportunities, and threats. The
primary objective of a SWOT analysis is to help organizations develop a full
awareness of all the factors involved in a decision. This method was created in the 1960s by Edmund P. Learned, C. Roland Christensen, Kenneth Andrews and William D. Book in their book “Business Policy, Text and Cases” (R.D. Irwin, 1969). It is a useful tool for deciding if you have what it takes to make it on your own in business. It forces you to verbalize your weaknesses and threats, two areas that can be difficult for most people to admit. If the weaknesses and threats overwhelmingly overshadow the strengths and opportunities, you may want to take some time to work on these prior to opening your doors.
- Find out what your goal is
Most people would say “to make more money” or “to be my own boss and enjoy the flexibility of my schedule”. What success looks like is different for each person, however one goal of business needs to stay intact: consistently increasing the value (revenues) of the company. After you are in business for many years you may begin to see the side effects of this focus (increased salary, increased flexibility of schedule), however you will need to sacrifice a lot before this happens. You should be prepared for your first year in business to be a loss of revenue. Also, it is important to realize that saying “good-bye” to having a set manager or boss over you means that you now have at least four other bosses: your patients, your referral sources, your staff, and your patients’ payers (insurance companies). Most new business owners find that their time and schedule is not their own. You will need to meet the demands of being available for patients (who need specific times and days to schedule), potential referring practitioners, business meetings, and other consuming parts of industry that many people who have not yet opened a business do not understand. This may mean having an understanding spouse, family, children, and friends. Before taking the leap of starting a business ask yourself if this is something you are willing to do and stay committed to.
- Do you have enough savings?
There is no right or wrong amount to have saved before opening a business, however having enough to pay your personal bills over the first year will reduce your stress and ensure that you can continue operating into a second year. This can be done by having a spouse that works, having money in a savings account, or reducing personal expenses while you enter your first year in business. You may want to pay down or get rid of debt. If necessary, you may consider working part-time or per diem while you are getting your business up and running.
According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. Make sure to “look before you leap” so that you can ben part of the 2 of 10 entrepreneurs who thrive in the first year and a half.