Launching a Medical Practice

Are you ready to practice medicine on your own terms but feel overwhelmed by the business side of independence? You’re not alone. Launching a private practice is a major milestone, but success depends on more than clinical skill. It requires a solid business foundation.

For physicians taking the leap, this planning phase is where vision meets reality. Thoughtful preparation here will allow you to build a practice that is both professionally fulfilling and financially sustainable.

Define Your Vision

Every independent practice begins with a clear understanding of what kind of medicine the physician wants to practice and who they want to serve.

Build a Realistic Financial Plan

Before making any commitments, create a detailed financial projection. One of the most common pitfalls is underestimating start-up costs and overestimating early revenue, which can lead to significant stress in the first year. Start-up costs for a small primary care practice can range from $70,000 to over $100,000, depending on your location and business model.

Key budget categories include the following:

1. Facility costs: Lease, utilities, build-out, and furnishings.
2. Staffing: Front desk, clinical ancillary support, billing, and administrative assistance (onsite or virtual).
3. Technology: Electronic health records, telehealth, and billing platforms.
4. Licensing and insurance: Professional liability, business insurance, and state/local registrations.
5. Marketing and patient acquisition: Website, branding, and patient acquisition efforts.

Revenue projections should account for realistic patient volume and payer mix. A break-even analysis — understanding how many patient visits or memberships you need per month to cover expenses — helps guide sustainable growth.

If the numbers don’t work, adjust the model before moving forward. It’s far better to refine assumptions early than to course-correct after opening.

Secure the Right Financing

Fortunately, physicians are often strong candidates for small business financing due to their earning potential and stable career history. Common funding sources include the following:

• Traditional bank loans or Small Business Administration loans.
• Medical practice start-up programs offered by certain banks or equipment lenders.
• Personal capital or physician partnerships.

Some doctors start lean by using personal funds for the initial phase, then seek additional financing after proving early revenue. Regardless of approach, it’s essential to have cash reserves for at least 6 months of operating expenses; this cushion provides flexibility during ramp-up.

The excitement of independence can tempt physicians to move quickly, but success depends on thoughtful preparation. A strong foundation allows you to focus on patient care instead of daily crises.

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Melissa Starowitz, MHSA, is the owner of Cornerstone Healthcare Consulting and Management, which helps physicians launch, manage, and optimize independent practices nationwide. Learn more at www.cornerstonehealthcareconsulting.com