Click here to get this post as a PDF and read it later!
If you are looking for a business idea that is profitable and relatively stable even when the economy is bad, the medical sector is a good choice. Everybody needs healthcare regardless of what the financial situation looks like, which means that you will always have a steady flow of patients, provided you run a good practice and market yourself well. It’s also a very fulfilling business to be in because you are providing an essential service and helping people to stay fit and healthy.
However, a lot of new business owners in the medical sector struggle because they are not prepared for the startup costs. Compared with other businesses, starting a medical practice can be incredibly expensive, and there are certain areas where you simply cannot cut corners without putting your patients at risk. If you are considering starting your own medical business, it’s important that you have a clear idea of how much it is going to cost you. These are the main costs associated with opening a medical business.
Choosing The Right Location
Before you do anything else, you will need a location for your medical business, and this can be very costly. If you lease the cheapest building you can find, there’s a strong chance that it will be in a bad location that is inconvenient for patients to get to, which means that you will really struggle to convince people to register with your practice. When you are deciding on a location for your medical practice, it’s important that you find somewhere that is close to a residential area, so it’s easy for patients to reach you. However, you also need to pick a location where there is not already a medical practice. Patients want to stick with the same doctor if possible because the patient-doctor relationship is very important. So, if you open a medical practice in an area where there is already one conveniently located, you will have to work hard to get new patients. Look for an area where people are driving long distances to see their doctor, and open your practice up much closer to them. Just bear in mind that the best locations are going to be a lot more expensive, and you need to be prepared to absorb that cost for a while until you have enough patients to cover your overheads.
Equipment
When you open a medical practice, there is a huge amount of expensive equipment that you need to invest in. You will need a range of different diagnostic tools, like X-ray machines and heart rate monitors etc. If you plan to carry out surgical procedures, you will have to invest a lot of money in setting up a safe operating theatre. Then there are all of the smaller pieces of equipment, like a mini medical fridge for safe storage of medication, for example. All of this equipment quickly adds up, and even setting up a basic medical practice will be expensive. However, if you want to attract more patients, you need to invest in the latest medical technology so you can provide treatments that other practices in the area cannot, and that will pump the cost up even more.
As well as all of the medical equipment, you need all of the normal equipment that any business needs. You need to kit out the office with computers, printers, and furniture, and the cost of that will quickly add up as well. Before you start your medical business, it’s important that you calculate the cost of all of the equipment and make sure that you can afford it. If you are missing vital pieces of equipment, it will have an impact on the quality of care that you give to patients, and that’s a big problem.
Software
Any medical business requires a lot of different pieces of software to operate effectively. Even if you are trying to keep costs down, you can’t get by without medical records software. It’s important that you are able to organize records properly so your doctors can easily access them when they are with a patient. You cannot accept Medicare without medical records software either.
It’s also a good idea to invest in practice management and scheduling software so you can easily book patients in for their appointments and keep track of them all. Without good organization, you will struggle to run your practice efficiently.
Security is also incredibly important for medical practices because you handle a lot of sensitive patient information. There are data privacy regulations in place to protect that information, and if you do not meet the guidelines for patient privacy, you may find yourself in legal trouble. If there is a data breach and you lose patient information, this will have a huge impact on trust and it will be very difficult to come back from. It’s vital that you boost cybersecurity by investing in the right security software to protect patient data. It may be best to outsource to a managed IT company so they can handle your security for you. There are companies that specialize in medical business cybersecurity and have a good knowledge of the potential challenges that you may face.
Insurance
Insurance is important in any business, but it’s particularly important in the healthcare industry. If one of your doctors makes a mistake, you will find yourself in the middle of a medical malpractice lawsuit, and that can get incredibly expensive. As long as you have the right insurance in place, it will cover any settlements that you have to pay. However, if you are not insured, you will have to absorb that cost yourself and that can land you in some serious financial trouble.
Staff Costs
Once everything else is in place, you will need to start hiring your first employees. It’s important that you hire experienced doctors if you want to reduce the chances of a medical malpractice lawsuit and improve the patient experience, and you will need to pay higher salaries for the best people.
If you want to start a medical business, it’s important that you add up all of these costs and make sure that you are in a strong enough financial position before you start your business.
