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A GP setting up a private practice needs to consider everything that comes with owning a business from demographics to finance, taxation, employment and compliance issues. Paul Freeman, CEO of Medfin Finance, explains how to avoid the pitfalls.
For a general practitioner (GP), setting up a private practice can be the culmination of years of study, professional training and hard work. It brings a great sense of pride and achievement – but, unless the process is carefully managed, it can also cause serious headaches.
“You need to think carefully about where your practice should be based,” says Paul Freeman, Chief Executive Officer of Medfin Finance. “What are the demographics? What kinds of patients are you likely to attract? Who are your competitors? Are any of these factors likely to change?
“One GP we know of in a major capital city had recently taken over a very well established practice when more than 1,000 apartments were built nearby. If he had known about this in advance he may have had an opportunity to expand into the complex but, instead, he found himself in competition with a large corporate practice which bulk bills everything and is open 24 hours a day.”
In smaller towns or suburban areas, practices with one, two or three GPs working together will always be sustainable but the landscape is definitely changing as primary care becomes increasingly corporatised. “You need to use your networks in the industry and the local community to stay informed about who’s setting up where,” Freeman adds.
You also need to be realistic about the look of your practice. “Some people who come to us have exciting dreams but, while it”s important that your rooms are pleasant, functional and in line with your business plan and local economics, you probably don’t need a grand piano in the foyer,” Freeman adds.
When you”re considering whether to purchase or lease your premises you should bear in mind that some finance solutions are more tax effective than others.
Likewise, as cash flow can be tight during the early stages of a new practice, you need to be sure you have access to funds and capital to cover basics such as wages, stationery and insurance. You should also be prepared for your responsibilities as an employer in areas such as taxation, employment and compliance as you make the transition from being a doctor to a doctor who”s also a small business owner.
Help from a team of trusted advisers such as an accountant, legal adviser and finance specialist can be invaluable.
“It’s very tough being a sole practitioner if you’re working long hours with patients and then trying to keep up with all that goes with running a business,” says Freeman. “Having the right team around you can provide the support you need, leaving you free to focus on what you do best.”
Paul Freeman lists 10 things you should consider.
If you’re considering setting up a practice find out how Medfin can help.
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