Skip navigation
Up to Discussions in Starting a Business
Post a new topic
5109 Views 5 Replies Latest reply: Sep 3, 2010 12:46 PM by TheSoloGuide
johnthebaptis Newbie
johnthebaptis
Currently Being Moderated

Aug 30, 2010 12:32 PM

Starting a medical practice from scratch


I just finished my surgical residency approx. 4wks ago, and have been contemplating on starting my own practice. I have talked with a couple of banks which have not been able to help me. Here is the issue. I found a perfect location with limited amount of medical providers in my specialty, sitting in the middle of a medical complex. I would be very busy. It is also adjacent to the largest hospital in the area. I am in need of approx. 40-50K in order to maintain the lease and purchase equipment for 6 months which is the amount of time I give the practice to pay for itself. I have a part time job working for a nursing home agency which pays me roughly 65K annually which I planned to continue to work throughout the process. My credit scores are not the best. Fico for TU is 651, the other two are probably less. No major derogatories or pitfalls, just minor dings from undergrad and a couple of collections from medical school, and NO CREDIT established.

I was raised in poverty and I have made it thus far, so I know I can accomplished the stressful goal of establishing a practice, I just need a little assistance. Any suggestions? I have asked the hospital which thought it over, but turned me down in the long run. I have talked to microlenders which needed collateral for 100% of the loan. I dont have any type of collateral.

Any Suggestions?
  • Barky_Dog Apprentice
    Barky_Dog
    Currently Being Moderated
    Aug 30, 2010 2:44 PM (in response to johnthebaptis)
    Re: Starting a medical practice from scratch

    Hi John,

    First of all congratulations on successfully graduating medical school and finishing residency. That is a huge accomplishment!

     


    OK. Here's my two cents regarding opening your own practice.

    I would recommend not opening your own practice right out of the gate. Even though you are now an accomplished doctor, you'll be running your own business- which is a completely different skill set. You will spend a ton of time dealing with insurance companies and filing a ridiculous amount of paperwork just to get paid. You'll also have to deal with "collections" for your own patients, who are having a tough time paying medical bills in this economy.

    My advice is to work with an already established practice not too far from where you would like to have your own practice. Spend a couple years there learning the in's and out's of running a successful practice. Also, live somewhat frugally over the next couple years (even though you'll be making good money). Don't make the mistake that many new doctors do by buying the new car and living in the country club. Live below your means and save up money that can go to repairing your credit and saving for a healthy down payment for your business loan.

    When you finally do launch your practice, guess what, you'll have a pre-built patient list. That is because, even though you won't try to steal them away from the old practice, they will ask around and seek you out. They will naturally want to stay with the doctor that they've come to know and trust.

    Again, just my two cents. Best of luck with your practice.

    Barky
    • dublincpa Apprentice
      dublincpa
      Currently Being Moderated
      Sep 2, 2010 12:15 PM (in response to Barky_Dog)
      Re: Starting a medical practice from scratch
      While I somewhat agree with the idea of going to work for someone else for a while first, there are a couple of statements that I would disagree with.

      First you will likely have to sign an employment agreement that will include a provision prohibiting you from stealing the practices patients. It is usually written to the effect of waiting x months before taking patients served by the practice in the prior y months.

      Second is that there is usually a geographic restriction in the agreement on how close you can set up shop.

      Of course everything is negotiable to a point and your state's laws will impact the enforceablity, but just be aware and pay an attorney experienced in Medical employment agreements to review everything.
      • Barky_Dog Apprentice
        Barky_Dog
        Currently Being Moderated
        Sep 2, 2010 1:03 PM (in response to dublincpa)
        Re: Starting a medical practice from scratch

        Dublincpa,

        Thanks for clarifying this. I was not aware there were non-compete clauses for Physicians. You're right, if John is faced with a non-compete clause he should contact an attorney for guidance before signing. Some states bar non-compete clauses all together.

        I still think it's a good idea for someone fresh out of school to work for a company before attempting to start their own business. Spend a couple years there learning the in's and out's of running a successful practice. The experienced gained will be invaluable.

        -Barky
    • johnthebaptis Newbie
      johnthebaptis
      Currently Being Moderated
      Sep 2, 2010 6:06 PM (in response to Barky_Dog)
      Re: Starting a medical practice from scratch
      Thanks everyone for the wisdom. I greatly appreciate it. I will let you know what I decide. It is difficult working for most these other physicians w/o them taking advantage of you, and there is just no "equity" in working for someone with the exception of experience which is "priceless".

      Thanks again.
  • TheSoloGuide Expert
    TheSoloGuide
    Currently Being Moderated
    Sep 3, 2010 12:46 PM (in response to johnthebaptis)
    Re: Starting a medical practice from scratch

    johnthebatis:

     


    I recommend you check out a site called, Business Money Today, and reach out to a community member here that goes by the nickname "phanio". He is excellent with helping people find appropriate sources for financing.

     


    I hope this helps.

     


    Doug Dolan

     

    Small Biz Break (http://smallbizbreak.com)

     

    The Solopreneur's Guide (htt://thesologuide.com)

More Like This

  • Retrieving data ...

Legend

  • Correct Answers - 100 points
  • Helpful Answers - 100 points