When you were fresh out of university, the thought of starting and managing your own practice may have seemed unattainable, a pipe dream. But fast-forward a few years, with more experience under the belt and confidence in your skills, it could easily be that you’re ready for the next challenge – maybe even running your own clinic.
There’s no way to get from dreaming about your own practice to getting it up and running unless you’re prepared to put in a lot of hard work. But a strategic approach can significantly cut down on wasted time and money. If you put the effort into researching and planning upfront, you are setting yourself and your practice up for success, and it all starts with a rock-solid business plan.
Before we take a deep dive into researching and writing your business plan, let’s quickly make sure we’re all on the same page:
What is a business plan?
As someone with a medical degree, not a business school graduate, it’s possible that the first time you’d ever heard of a ‘business plan’ wasn’t until you first started looking at opening your own practice.The best way to think of it is an overarching plan for how you want to run your practice, and it forms the basis for your strategy and future of the practice.
It covers your goals across all major areas of the practice, including sales and expenses, human resources and financing. Mapping out these areas gives clarity to your performance goals, and in so doing it establishes:
- A baseline against which you can measure and monitor your progress, keeping you accountable as you set up your practice.
- A reference point, to keep you focused and on-track as the realities of running your own business begin to set in.
- A toolkit for continued learning as you stack your performance against your expectations.
Why do you need a business plan?
If you’re serious about setting up in private practice, whether you need external funding or not, you need to be working towards specific, measurable goals. If you don’t take the time to do this, you’ll spend a lot of time trying to put out fires that could have been avoided with a clear, well-thought-out business plan. And how will you define whether your practice is successful or sustainable?
According to Entrepreneur, anyone beginning a business (and setting up in private practice definitely falls into that category) “should take the time to draft some kind of plan.” The logic is simple, your new practice is going to consume significant resources, whether it’s financial, time or energy, and you should have a clear idea of whether it will be worth it in the long run or not. And, to do this, you need to be able to clearly articulate your goals and why they are worth achieving.
What are the most important elements of a business plan for a private practice?
Your business plan will be specific to your practice, so no two will be the same. Your business plan is a work in progress that will change and adapt as you explore different options within your practice, progress as a business owner and adapt to market changes.
At a minimum, your business plan will include an executive statement, a breakdown of your objectives (including a vision statement), and a marketing strategy. If you want to secure funding, you’ll also need to cover staffing and financing.
Sound good? Ready to become your own boss?
Make yourself a cup of coffee and let’s get straight into it… (If you own an established practice, feel free to skip down to Step 4).
Step 1 – Preparation: Do the research and select a niche for your private practice
This is the most important step. Before you even start formulating a business plan, you need to do your research. This means you will need to look at what you bring to the table, who you can offer your services to and who your competitors are:
1. Compile a list of your strengths
You can ask yourself questions like:
- Which clients give me the most satisfaction?
- What experience do I have, and who will it benefit the most?
- What are my qualifications?
- What can I do better than other health practitioners?
- What is different or unique about my practice?
2. Research your target market
Here you’ll need to ask yourself a series of questions:
- What is the demographic of the local area?
- Who are your clients likely to be?
- What are their needs?
- Why would they choose your practice over others in the area?
Then, you need to study your local competitors.
3. Understand the competition
- Who are they targeting?
- How many practitioners do they employ?
- Are there more franchises, solo practitioners or multi-location practices?
- Are they well-established?
4. Niche Selection
Based on everything that you discovered, you can start to look for gaps in the market that are a good fit for your skills and that are underserved by competitors in the area. It could be that your practice should have a paediatric focus, or perhaps focus more towards sports rehabilitation or geriatric. It’s less important which niche you choose, and much more important that you choose a niche, rather than trying to be all things to all clients. Niching down will help you set yourself up for success. Then, you can start drawing up a business plan.
Step 2 – Execution: Write your private practice business plan
A quick Google will reveal a number of templates (such as this one and this one) that you can use as a starting point for developing a business plan for your practice. But, rather than picking one and filling in the blanks, customise it so that you develop a plan that’s right for your practice.
Section 1: Executive Summary
This section summarises your business plan, giving a general overview of your purpose and goals. It usually gets written last but, because it’s the most critical of all the sections, you should start with it, and refine it at the end once you’ve covered the other sections. It should cover clearly and concisely who your clients will be, how you will address their health concerns, and how you will remain profitable while doing so.
Your executive summary forms an important reference point as you continue to flesh out your business plan. The more precise you are, the easier it is to write the rest of the plan.
It should include a short section on your:
- Target market demographics;
- Services for clients;
- Plan to market the business;
- Growth trajectory and timeline;
- Competitive advantages over other practices in the area;
- Funding requirements upfront and ongoing.
Section 2: Objectives
Whether you’ve been running your own private practice for a while or want to start a new practice from scratch, you need to solidify what your practice does and what your goals are. An easier way to think about this is to ask yourself, “where is my business now, and where do I want it to be?” Simple enough questions, but getting what’s in your head down in writing can be a bit more tricky.
This deep-dive section needs to cover:
The purpose of your practice
Why are you in business? What do you stand for? It could be that you support athletes, keeping them in top shape so they can perform at their best, or maybe you have niched down to focus on promoting health and wellness for teens in the community.
The services you offer
This is a list of the services that you can offer your clients, and there’s no getting away from it: the services you offer need to closely align with the purpose of your practice.
Your target market
Your proposed client base is just as important as it justifies your purpose, goals and service offering.
Having covered this in the preparatory phase of writing your business plan, you should have a clear idea of competitors in your niche and be able to communicate how you will successfully differentiate your practice.
Your future growth
This section should be tangible and measurable. It can’t be something like “I want to be successful”, or “I want to help people”. SMART (specific, measurable, achievable, realistic and time-based) goals, usually one-year, five-year and ten-year goals will help you map out reasonable objectives that you can measure your progress against.
They could be related to:
- The number of practitioners you want to employ;
- Community events that you want to start or join;
- Setting up multiple locations;
- Your financial goals.
Section 3: Marketing
This is the section that many struggle with, but if you are committed to building a practice that not only survives but thrives, it’s one area that you can’t afford to shy away from.
What you want to communicate?
- Your strengths;
- The benefits of your services for your target audience;
- How to access your services.
Why it’s of interest to potential clients?
You’ve carefully defined who your target market is, and that’s who you need to be talking to when you start marketing your practice. Cover the most important details, such as:
- Who your ideal clients are?
- What type of activities that are likely to be interested in?
- What services they can benefit from?
- What benefits they can expect?
- What forms of marketing and engaging they are likely to engage with?
How you want to communicate?
With many, many marketing channels at your disposal, what is the best way to go about narrowing down the options?
If you know who you’re targeting, and what you want to share with them, it helps define how you will target them.
- Social Media marketing is an effective, affordable channel for promoting a practice. Facebook Ads, for example, can be used to engage with both older and younger clients, while others may be more age-specific. If your clients aren’t as likely to have social accounts, you may need to explore print marketing campaigns such as flyer drops and advertising in your local newspaper.
- Website – You need to focus on building your website to attract potential clients, as well as setting up a newsletter to keep in touch with clients. These are both client sources that you control. In addition, they are focused on building relationships, allow you to more comprehensively detail who you are, and provide a platform for publishing value-adding content (see The Best Practices for Health Practice Websites).
- Word-of-mouth – Lastly, word-of-mouth and referrals continue to be an important source of new clients for many healthcare practices. To get this right, you will need to have an action plan for networking with local business owners, related healthcare practices, general practitioners, and leaders in the community. Your existing clients are also a powerful marketing channel. You can ask them to leave reviews online and make it easy for them to share your newsletter content and other news.
This outline should help get the ball rolling if you’re just starting out and need a private practice business plan template. But if you’ve been running your own practice for a while, you might be looking for something that will help you develop an actionable growth strategy for your practice.
Step 3 – Growth: Develop a yearly business plan (for established practices)
Before you start on a new plan, you should take a look through past business plans that you’ve developed to see if the objectives you outlined and the goals that you established are still relevant for your practice.
Then it’s time to:
Review your vision
Before you can identify what you need to do to grow, you need to refine your goals. Your vision statement is key for keeping you on track. It should be to the point, inspiring, define the services you offer, and who they are for.
Set one-year goals
We’re looking for SMART goals that will be a challenge (but not impossible) to meet. Don’t forget to include your financial goals, as your bottom line has a big influence on the health and sustainability of your practice.
Break down your goals into monthly targets
Unless you’re very lucky, you’re not going to wake up one morning to find that you’ve smashed your goals. Growth takes work, and it’s a case of “slowly, slowly catchy monkey.” Once you have your yearly goals, you can work backwards to define your monthly goals.
Develop tactical strategies
This is where we get down to the nuts and bolts. Get your team together and get those creative juices flowing. The goal is to think of strategies that will help you achieve your monthly targets. Open the discussion with a brainstorming session on how to make more people aware of your services. The focus areas should be marketing and sales, as well as the services you offer and any internal procedural changes, such as adopting a practice management software. Feeling stuck for ideas? Have a look at our comprehensive healthcare marketing guide and 4 Ways to Make Your Practice More Productive (and Less Stressful!).
Narrow down a shortlist of action items
Armed with your tactical strategies for the next year, broken down by month, you’re on to the last step: writing down a checklist of action items. This is a to-do list of all the things that need doing when they need to be done, and what order they need to be done in. Make sure each task is bite-sized to help keep your momentum up.
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A business plan is an essential strategic discipline for both new and established practice owners. It will take you a bit longer the first time around if you’re just starting out because there’s a lot of research that goes into developing a useful, actionable private practice business plan. But, if you’re in the swing of things, a yearly business plan will keep your practice on track and help build a healthy growth trajectory.