If practice ownership is your objective, then your first step in reaching that goal is to develop a well-thought-out business plan that establishes the viability of your proposed venture. A business plan details the financial structure and day-to-day operations of your practice. It demonstrates that you have a realistic roadmap for success based on carefully considered ideas about how to develop and manage your business.
Here are five good reasons why developing a business plan is critical:
1) Helps you achieve your goals
Experience has shown that people who document their plans are generally more likely to achieve their goals as non-planners. Actually taking the steps to create a written plan - to think, dream, and research and document your objectives potentially increases the likelihood of ultimately reaching your destination and controlling your business career. In addition, developing a business plan helps you better understand your business. It informs you of your practice's place in the market, so you know the actions that need to be taken to improve and grow your business.
2) Allows you to be proactive
A business plan helps you see potential risks in the market and develop strategies for responding to them. Rather than simply reacting to whatever changes come your way - whether they emanate internally or from outside influences - you have a roadmap that defines precisely where you want to go. You therefore know how to respond to inevitable fluctuations in the business environment. Without a documented plan, your practice is essentially rudderless, with no destination in sight and no guideline for responding to unforeseen circumstances, such as a significant drop in the market, or new technology opportunities.
3) Functions as a communications tool
As a business owner, you may need to borrow funds or hire service providers at some point in your career. Your business plan is an indispensable tool for communicating your business objectives to lenders, contractors, equipment vendors, and others who need to understand your practice vision. The business plan serves as an introduction to you and your practice. It tells your lender that you have the personal know-how and professional means to help ensure practice success. It demonstrates that your future practice is based on a solid grasp of both the local market and outside influences. And it provides the financial rationale for lending funds for your practice purchase or start-up based on historical or projected performance.
4) Provides a competitive edge
With a documented vision of your future in hand, you will be better prepared to take on existing competition as your business plan describes the marketing activities you will use to announce your opening, attract patients, and grow your practice. You will also have a jump-start on new competition - namely, all those graduates who have not yet formulated their career plans.
5) Forms the basis for an exit strategy
A business plan is not only a roadmap for you, but also for your potential buyers. It helps them understand how your practice evolved, whether it met or perhaps exceeded expectations, and whether your vision for future growth was realized. If you sell your practice before your business plan is fully implemented, it can serve as a useful guideline for future owners to further develop the practice.
There are many more excellent reasons for creating a business plan - for example, to share your vision with family members and employees, build a framework to help attract new associates or investors, and provide a foundation for practice valuation. In summary, careful formulation of a business plan will help you focus your vision for the future and ultimately enhance your success. If you don't already have one, get started working on your business plan today.
Visit the Wells Fargo Works for Small Business® and the Business Plan Center page for more information: wellsfargoworks.com/plan
About the Author
Greg Owens is the Regional Manager East for Wells Fargo Practice Finance. As an experienced consultant and finance expert, he speaks nationally to healthcare professionals advising in practice planning strategies for emerging and established practitioners. His industry background offers practitioners a unique perspective as they approach some of the most important decisions in their professional lives. With more than 25 years of healthcare experience, Wells Fargo Practice Finance specializes in helping healthcare professionals acquire, start and expand their practices with various financing options and a signature Practice Success Program.