It’s exciting to think about starting or buying a medical practice, but you’ll need to keep an eye on your budget if you want to avoid any unexpected bills. There are a number of costs involved in buying any medical practice, and not all of them are immediately obvious.
There’s no one size fits all cost for starting a medical practice – your expenses will depend on a number of factors including the size of your practice, the type of practice you’re buying, number of staff and the nature of the services you’re planning to provide. You’ll also want to consider the difference between one time costs and ongoing costs, and make sure you have enough cash flow to cover them.
Here are five costs you should consider when buying a medical practice.
- Equipment costs.
Medical equipment can be expensive and if you’re buying an established practice, it’s worth finding out whether equipment is included in the asking price or if it’s excluded. The type of equipment you’ll need will depend on your practice and the services you provide. If equipment is included with your purchase, what condition is it in? What are the maintenance and servicing requirements? Make sure you have a clear idea of what these costs will be before you commit.
- Staffing costs.
Staffing is a huge expense for any practice, but it’s critical that you have the right people working in your practice. A good practice manager is integral to the successful running of your business, along with your practitioners and support staff. Make sure you have enough staff to cover your needs and that you’re considering all your hiring, training, onboarding and ongoing payroll costs before you buy.
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- Premises costs
Whether your rent or own your practice premises, this is likely to be a significant ongoing expense. Make sure you understand what’s included – will you need to pay for utilities? What happens if you decide to downsize, are you locked into a lease for a set period of time?
- IT costs
When you buy a medical practice you’ll need to factor in a number of IT costs, from your physical infrastructure – servers, computers, monitors, phones etc, to software costs and cybersecurity. Don’t forget to include service costs if you’re going to get someone else to set up your systems, update and maintain them. In some cases you may be able to reduce your IT costs by using cloud-based clinical software.
- Marketing costs
There’s no point buying a medical practice if you have no patients. Practice owners often forget to include marketing costs in their calculations. If the practice you’re buying already has an established base of patients you may need to spend less on marketing than if you’re buying a brand new practice, but you’ll still need to pay for signage, a website and at least a few basic marketing activities to keep a steady stream of patients coming through your doors.
Buying a medical practice may be exciting but it’s important to go into it with a clear understanding of how much you’ll be paying and what your main ongoing expenses will be. This can help you avoid any hidden costs and ensure your new practice is as profitable as possible.