You’ve reached that point where you wonder whether it’s time to expand. Should you take on more team members and grow your medical practice? Or is it best to just keep referring out your patients to other practitioners and lose business?
In this post, medical accountant Kym Nitschke helps you weigh the pros and the cons.
The prospect of expanding your medical practice is an exciting one. The fact alone that you’re busy and may have enough capital in your business to consider making this decision is a great sign.
But as with any other business venture, expanding is all about making the right decision at the right time, and knowing what you’re in for.
Here are a few things you’ll want to weigh before you jump into the process of taking on a partner or more team members.
Why Expanding Your Medical Practice Could Be a Smart Choice
If you don’t expand, your business growth could hit the wall. Your business will be maxed out and you won’t have many other opportunities to invest and watch the returns grow.
Expanding is healthy for a business and could lead to growth to a point that you could retire early, leaving the business to partners to care for the patient base or sell it entirely for major profit.
You might be ready to expand if you find that you don’t have the time or resources to keep up with the sheer volume of patients coming through your doors. Checkups for 40-plus patients in a day is one thing, but if any of them get sick and need to see you more often, then things can get tough.
You may choose to broaden your team because it is a service to your patients, as well. Patients like having access to multiple experts offering necessary treatments and services “under one roof.” It’s convenient and can increase their compliance with recommended care thus improving their health.
For example, let’s say you’re a general dentist and thinking about adding an orthodontist to your team. When you refer patients out for treatment in another location, you lose the business opportunity. Also, they may procrastinate and eventually decide it’s not important enough to worry about. They can lose their sense of urgency about their situation.
If you have an orthodontist on staff, on the other hand, your business can reap the benefits. You’ll have a direct role in arranging the consultation, introduce them to the specialist in person, and help them keep their mind on the needed treatment. The patients are more likely to take action for their health and as a bonus, you keep the resulting profits under your roof.
The big selling point for growing your team, though, is the ability to create multiple revenue streams outside of the hours you personally can work. You could be the hardest working doctor in the world, but there’s only 24 hours in a day!
Bring on more team members gives your business far greater capacity and helps you build wealth, without you putting in more sweat!
Reasons to WAIT on Growing Your Team
On the other hand, a large expanded team of specialists may not be right for you at this time.
Start-up costs can be staggering and it will take some time before you see a return. Your practice has to be ready to shoulder quite the expense before you decide to take on a larger team.
Adding new specialists will likely mean adding:
– Additional salaries
– More assistants and providing training for assistants
– More equipment
– Building or renovating more office space
– Marketing costs
Offering more services adds new layers to your business, making it more complex on the administrative and customer service level. Not only are you taking on a new specialist and their team but you or your office manager will have to learn how to handle more tasks and stricter scheduling. There’s the risk of more errors and miscommunications, too.
You may even have to learn a couple new business skills so that you’re prepared to raise the necessary capital for funding such growth.
You should also consider that perhaps remaining in your niche will be better for your business. Referring out will encourage other practices in your field to refer back to you in return. That in itself is a decent marketing strategy and would enable you to focus on doing the work you love doing the most and have the most experience in.
Business Growth for Your Medical Practice
So, are you really ready for growth, and all the cost and management that comes with it? Will expanding have you spread thin and keep you from delivering the high-quality services you’re already capable of?
Like most medical practices, you may feel that you could go either way. Properly weighing the pros and cons of your situation requires a more in-depth look at your business.
It’s absolutely critical that you seek the advice of a medical accountant, who has experience with helping medical professionals grow their practices. An experienced medical accountant will be able to examine the financial position of the business, advise you on a recommended way forward and help with all important issues such as cash flow and succession.
With the right help, you can get a definitive answer as to whether or not you should expand your medical practice.
Talk to the experienced accountants for doctors, the Nitschke Nancarrow team (Adelaide, Melbourne, Sydney), who have spent years helping medical pros keep finances under control and successfully build wealth.
– Kym Nitschke
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.Tags: Adelaide, business growth, financial adviser, Medical, medical accountant, medical practice, medical professionals