Many doctors have come to us expressing a wish to commence in private practice. Some of these good doctors knew what was ahead of them, others unwisely did not.
Although many are very intelligent and educated, they are often simply 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 the technical aspects, but today let’s focus on the mental preparation. After all, as we know from sport all too well, being technically prepared is only half the battle; the other important half is your mindset.
If you want to succeed in business, (let’s stop calling them practices for now; 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 sensible and others are not.
Some of the good reasons are:
- You want to provide a better lifestyle for your family;
- You want to own a number of practices; and/or
- You want to be wealthy.
Some of the not so good reasons include:
- Have you seen my boss? Surely I can do it if they can; or
- I want to able to come and go as I please – you should be able to achieve this in future, but likely the opposite will be required initially as you establish your business.
The point is, make sure it is for the right reasons. Don’t be over-confident or have what is often called 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 ways of measuring your success. You then have something to work towards. For example, a target number of consultations or procedures per day to know you are ontrack financially – too few is bankruptcy and more than this and you have a tax problem (i.e. you are going to better financially than you targeted which is good and will need to consider your tax planning)!
2. Understand that ownership is a new skill set!
So you’ve trained to be a Doctor. That’s great, but you may have never had exposure to areas such as human resources management, cash flow, budgeting or business planning. These are all disciplines which the business owner (you!) needs to be across. However, the good news is you don’t need to do an MBA or to become a guru in these areas, as we can guide you through these along with other professionals. But you do need to have a basic understanding of such 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 practice of 5 other surgeons. You will need to learn some very different skills. You can easily learn them – but you have to understand that you need them.
Learning can come in a variety of ways – course work, speaking with advisers and simply on-the-job learning through trial and error. Be prepared to learn and keep learning. The more you can learn from others’ experiences (and errors), the easier, 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, many external factors can affect your business. During your career there will be changes in so many areas, including:
- The economic environment, such as booms, busts, recessions, GFCs and consumer preferences
- Taxation law
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 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 via a sale to business partners, a sale on the open market or simply shutting the doors.
This is important to bear in mind, as all too often those who have not addressed this issue find themselves for whatever reason – financially or strategically – unable to exit the business when they want to.
It’s disappointing and sad to see, but it can be avoided with planning. The evidence has shown us repeatedly: in life we do not get what we deserve, we get what we plan for.
5. Don’t think you’re alone in this.
Are you feeling a bit overwhelmed at this point? Fair enough, but please 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 advisers (we and our network of professionals can be a wealth of knowledge in this area).
- Find a mentor. Someone who has been there, will listen to you and help you work through any problems.
- Consider a business coach for a more systematic approach.
So there you have it; that’s our take on what mindset you need to have to succeed in private practice.
It is one of the great pleasures at Doctors Wealth to see clients have an idea, set some goals and achieve them over time.
If you are considering setting up in private practice, or would like assistance regarding working on making your current practice more profitable and enjoyable for yourself, please don’t hesitate to contact us.