As an accountant for many years now, I’ve had many clients come to me expressing a wish to start their own business. Some of these good people knew what was ahead of them, others unfortunately did not.
There is a very large group of very intelligent and educated people who simply are not prepared for what happens in business.
This article will examine what it means to be “prepared”.
Not technically, but mentally. In a future article, we will talk about that, but today let’s focus on the mental preparations. After all, as we know from sport all too well, being technically prepared is only half the battle; the balance is having your mind prepared.
If you want to succeed in business, (let’s stop calling them practices, we’re not here to practice, we’re here to play!) you better get ready. Have a think about these things.
1. Why are you getting into business?
What’s driving you to do this? Some reasons are good and others not so good.
Some of the good reasons are:
- I want to provide a better lifestyle for my family;
- I want to own a number of practices; and
- I want to be mega-wealthy.
Some of the not so good reasons include:
- Have you seen my boss? Surely I can do it if he can; or
- I need something to do, I’m out of work!
The point is, make sure it is for the right reasons. Don’t be overconfident or have what I call an “entrepreneurial seizure”. You will be in business a long time and it can be hard, albeit satisfying work, so don’t underestimate it.
Also, once you find the reasons, set some goals and milestones. You then have something to work towards.
2. Understand that ownership is a new skill set!
So you’ve trained to be a medical practitioner. That’s great but the university didn’t do any subjects in human resource management, cashflow, budgetary management or business planning. These are all disciplines which the business owner (YOU!) needs to be across. You don’t need to be a specialist, as we can guide you through these minefields, but you do need to have a basic understanding of the business fundamentals.
The point here is, don’t think that because you are the most brilliant surgeon, you necessarily have all the skills to lead a surgery practice of 25 other surgeons. You will need to learn some very different skills. You can easily learn them – but you need to know that you need them.
Learning can come in a variety of ways – course work, speaking with advisors and simply on-the-job learning through trial and error. Be prepared to learn and keep learning. The more you can learn from other peoples experiences (and errors), the more enjoyable and profitable will be your journey.
3. Understand your business doesn’t operate in isolation!
You need to understand that even when you open the doors, your business will be affected by many factors. During your career there will be changes in:
- Medicare and other legislation
- Economic environment, booms, busts, recessions, GFCs, consumer preferences etc.
- Taxation law which will affect your take-home pay
- Technology which will alter the way you do some procedures or perhaps remove the need for them at all
The good operator accepts these challenges head-on, works through them to understand the situation, develops new strategies to deal with them and ultimately executes upon them. If you don’t do this, you might find the market simply passing you by and your profitability falling.
4. Have some ideas about your exit plan!
You won’t live for ever and it’s unlikely you will want to do this until you take your last breath. How do you envisage your exit?
You don’t need to know the fine details but know there will be a day you take off your stethoscope and walk out the front door for the last time. Keep that in mind and work towards a plan for your exit, be it by sale to partners, sale on the open market or simply shutting the door.
I say this because all too often I see clients who have not addressed this issue and find themselves for whatever reason, financially or strategically not able to exit the business when they want to.
It’s disappointing and sad to see but can be avoided with planning. As a business advisor I have repeatedly seen the evidence that in life we do not get what we deserve, we what we plan for.
5. Don’t think you’re alone in this.
Are you feeling a bit overwhelmed at this point? Okay, but don’t be – there are plenty of people around to help you and invariably in a way which will be appropriate for you:
- Create a good relationship with your advisor (we are a wealth of knowledge in this area).
- Find a mentor. Someone who has been there and will listen to you and help work through problems with you (I had one early in my career).
- Consider a business coach for a more systematic approach.
As they said in the movie – you are not alone!
So there you have it; that’s my take on what mindset you need to have to succeed in business.
It is one of the great pleasures in this business (accounting and planning) to see my clients have an idea, set some goals and achieve them over time.
If you are considering getting into practice, call me and let’s catch up for a coffee. I would love to hear about it and help you.
Doctors Wealth Accounting