Top Reasons Private Practices Fail – And How to Avoid Them
Starting and running a successful private practice isn’t easy, and over the years, I’ve seen common pitfalls that cause practices to stumble—or even fail. Whether you’re just starting out or trying to grow your business, knowing these issues can help you steer clear of them.
For those who don’t know me, my name is Brad. I own a private practice with seven providers across three locations, and we’re on track to generate about $4 million in revenue this year. I’ve also consulted with other providers, and in doing so, I’ve identified patterns in why practices fail. Here are the top reasons, particularly in the medical industry, and what you can do to avoid them.
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1. Poor Marketing Skills
One of the most common reasons practices fail is a lack of effective marketing. Time and time again, I’ve seen clinics close because people simply didn’t know they existed. A prime example is a nearby ENT who retired at just 50 years old because his clinic wasn’t thriving. The problem? I didn’t even know he was there—and I’d been in the same area for six years!
The same goes for other specialties, like urology practices that don’t connect with nearby primary care providers. If no one knows about your practice, you won’t get referrals or patients.
When I started my practice, I made plenty of marketing mistakes myself—like not even having a logo on the wall. But I did everything I could to get the word out. I knocked on doors, introduced myself to nearby providers, and encouraged patients to leave reviews and recommend us to their friends.
Don’t assume that “if you build it, they will come.” Let people know you exist. Shake hands, network, and invest in marketing. You don’t need to have a perfect plan from day one, but you do need to start somewhere.
2. Skipping Steps
Many providers fail because they try to skip the basics and jump straight to the finish line. I once hired a brilliant doctor whose concierge practice failed because she spent tens of thousands of dollars on specialized equipment—before she even had a paying customer.
It’s important to have a vision, but you also need to take things step by step. Don’t invest in expensive tools, technology, or services until you’ve established a solid patient base and revenue stream.
3. Poor Leadership
Leadership is another critical factor. I’ve seen great surgeons lose staff because they were difficult to work with, blaming their high turnover on everything but their own leadership skills.
Good leadership requires self-awareness and a willingness to grow. You need to inspire your team, foster a positive work environment, and address problems proactively. If turnover is an issue in your practice, take a hard look at your management style and consider training or coaching to improve.
4. Bad Time Management
Burnout is real, and poor time management is often a contributing factor. Many providers struggle with endless charting or overbooked schedules, leaving no time for self-care or strategic growth.
Take a step back and evaluate your workflow. Could you benefit from AI-powered dictation software? Would scaling back patient volume or delegating tasks improve efficiency? Time is your most valuable resource—manage it wisely.
5. Lack of Vision
Without a clear vision, your practice can lose direction. Where do you want your business to go? Are you aiming to be the best concierge doctor in your city, or do you want to scale a high-volume practice?
Your goals will guide your decisions, from marketing strategies to pricing and service offerings. If you’re feeling stuck, take time to revisit your mission and map out the next 12 months.
6. Life Circumstances
Sometimes, life throws you a curveball—divorce, death, military relocation, or other personal challenges can disrupt your practice. While these events are often beyond your control, building a strong foundation and a resilient business model can help you weather the storm.
7. Overspending
Frivolous spending can quickly sink a practice. Whether it’s unnecessary equipment or personal luxuries, living beyond your means will eventually catch up with you. Stay lean, reinvest profits wisely, and focus on sustainable growth.
8. Resistance to Change
Healthcare is constantly evolving, and practices that refuse to adapt are at risk. Whether it’s relying on outdated paper forms or ignoring new technology, being stuck in the past can hold you back.
Look for ways to streamline operations, such as online scheduling, automated reminders, and text-based communications. Efficiency isn’t just convenient—it’s essential for staying competitive.
The Real Culprit: It’s Not Low Reimbursement
Many struggling practices blame low reimbursement rates, but in my experience, that’s rarely the main issue. More often, it’s a combination of poor marketing, leadership, overspending, or other factors discussed above.
If you’re willing to adapt, improve, and innovate, your practice can thrive—even in challenging markets.
Final Thoughts
Running a private practice is no small feat, but by avoiding these common pitfalls, you can set yourself up for long-term success. Remember, it’s not just about providing excellent care—it’s about running a smart, sustainable business.
What challenges have you faced in your practice? Share your thoughts and let’s keep the conversation going!
These are all excellent points. And I agree that low reimbursements alone are never the problem. I am certainly in a challenging market and I have found it helpful to know and understand what kind of a business model one will need to make an insurance based practice work. In a low reimbursement state, one may need high volume practice that can be scaled while managing overhead and fixed costs and using technology to achieve efficiency.