Many new practices fail, here are the top five reasons:

1. Doctor’s Underestimate the Work Involved

2. Low Client Satisfaction is a Rampant Problem

3. The Medical Practice Isn’t Unique or Informative

4. Lack of Planning for Future Growth

5. Not Being Flexible or Adaptive.

The simple answer is no, you do not need to have these studies completed in order to open your new practice. However, having these documents can give a clearer understanding of your financial outlook, can assist in acquiring an SBA, and will be the bases for all of your decision making through the startup process.

You should expect to personally invest at least 10% of the total startup costs for the clinic, so if your business plan calls for $600,000 in startup costs, you should expect to invest at least $60,000 yourself.  Your bank lender will want to see that investment as cash from savings, not borrowed money.  

There are SBA lenders that specialize in medical clinic financing.  My typical advice is to look at the list of the most active SBA lenders and reach out to a few of the banks at the top of the list.  Those are the SBA lenders that have the most experience and are most likely to be able to get your loan approved and through the SBA process.

Typically businesses are acquired based on some multiple of the earnings of the business. For healthcare businesses we see a multiple of between 4x and 5x EBITDA.  EBITDA is your practice’s earnings before interest, taxes, depreciation, and amortization.  So if the practice you are looking to purchase did $1,000,000 in annual revenue with an EBITDA of $250,000 you could expect to pay between $1 million and $1.25 million to acquire the practice.  

The usual forecast shows a loss of $200,000 in the first year alone, so it seems prudent to have some other source of income while you build up to a full panel of patients. There are a number of physicians that will only open the clinic a couple of days per week for the first year and keep another source of income at a day job will building up the new clinic.

Yes. A lawyer will be familiar with all of the business and tax laws in your immediate area. You also want to have legal counsel available after your practice is open for advice.

1. It costs $498 per square foot to construct a new medical office space according to Levelset.  So if you are looking at 1,500 square feet of new construction, you can expect a total cost of approximately $750,000 for a stand alone medical office.  2. If we assume a 2024 rate of $28 per square foot with a 1,500 square foot office you can expect to pay monthly rent of $4200. 3. It costs between $250 per square feet to renovate a medical office according to InvoiceOwl.

According to Medscape, the average primary care practice will need 1,200 to 1,500 square feet of medical office space for a single physician practice.

According to AAFP, The average primary care physician will need 3 exam rooms and 1 procedure room in order to operate most efficiently

The process to start up a new medical practice involves a lot of steps. You should give yourself enough time so that the experience is not overwhelming and stressful. The ideal time would be 12 months before you want to start seeing patients. With that being said, many providers have opened new practices in as little as 6 months.

Essentially, there are three ways to acquire patients for your practice: 1. Advertising 2. Organic search 3. Referrals.

These services allow you to generate more revenue from the same patient base.  Typically medspa services are repeat services as well which means you can potentially increase your revenue per patient per year quite dramatically.  

Specialized equipment is only needed if you are going to be offering specialized services.