When I finished medical school I was clueless about the business of healthcare. Over the years I worked in different settings and businesses and it’s been an interesting journey.
I’ve learned most from my mistakes. Here is my top-5 tips for doctors who are or want to go in business.
#1: Do it for the right reasons
Before you start a business, practice, solo locum company or otherwise, make sure you know why you want to do it. As Simon Sinek asks: do you know the purpose, cause or belief that inspires you to do what you do? We often know exactly the what and how of what we’re doing, but not always the why…
And if you’re joining a partnership: Do you know what drives your business partners? Do their values and believes agree with yours? It has been said before, but money is not a reason, it is a result. It always starts with passion.
#2: Get the right advice
There are many services that may add value to your business: advisors, accountants, financial services, IT consultants, human resources companies, lawyers etc. If you add it all up it can be expensive. Here are some suggestions to keep in mind when dealing with third parties:
- Avoid becoming dependent on them. Give them a few months to set up systems and train you or your staff. If you have to go back to them for every contract, website update, transaction or other issue, something is wrong (unless they are cheaper than in-house services, but this is rarely the case).
- Don’t be afraid to make changes. Doctors are loyal – as banks know. But sometimes it is healthy to change providers, especially if you are paying top dollars and feel you’re not getting top service. Another accountant may pick up an overlooked issue, another IT provider may find some holes in your security etc.
- Work on your terms, not theirs. Some consultants want you to use their products and their systems – and they will often charge for it. This is not always necessary, may create more work and adds to the bottom line. Look for useful advice that empowers you and your staff. Keep things simple.
- Don’t accept higher fees because you’re a doctor or because a provider specialises in the health industry. As doctors we often think we’re special. This may be the case (although I’m not entirely convinced), but it doesn’t mean that you have to find providers that only service medical clients. When it comes to IT or tax or law, healthcare is not that different from other industries.
#3: Understand your business
If you can’t explain it properly, you don’t understand it well enough – this is true for many things, and certainly for a business. Like doctors, professional consultants should be empowering their clients and encourage them to self-manage.
Aim for a business structure that’s transparent and easy to understand. This also includes the finance structures and legal agreements. Don’t sign off on anything unless you understand it fully. Do your due-diligence and take time to consider decisions. Walk away if you feel uncomfortable or pressured.
#4: Beware of conflicts of interest
A financial advisor receiving bonuses or other incentives to sell products may not be working in your best interest. Always ask for a disclosure of potential conflicts of interest. But there may be other, less obvious conflicts of interest that can become an issue down the track. This can also happen within a group of owners. Examples include:
- Some owners work on the business where others only work in the business
- Some owners work full-time and others part-time
- Some owners own bigger or smaller shares in the business or real-estate
- Some owners have family members working in the business
- Some owners have the same lawyers, accountants or bank managers
In an ideal world there are no conflicts of interest but that’s not always possible. Ask yourself: Can I live with these conflicts? It’s important to disclose and discuss all potential issues before signing any agreement.
Expect ups and downs. It may take a few years before a business takes off. Be prepared for erratic government decisions that will have an impact on your bottom line and the patient services you can provide.
Find a great practice manager – see my post 4 things to look for in a practice manager. A skilful management team is an excellent investment with good returns and will give you peace of mind.
If you’re like me you will make mistakes and hopefully learn from them. You may also need to master new skills – something I enjoyed as it has broadened my horizons. Finally, always look after your team and don’t forget your loved ones at home.