Reaching $100k in gross revenue per month one year after opening
November will mark one year since I went full time in my primary care practice. It has been a hell of a journey. From all the initial headaches, to now things starting to smooth out. The biggest headache was that Aetna took 9 months to credential me. Not only did they take forever to get me in network, they lied to me and told me I was in network (They even had me listed as in network on their website before taking it down). They then took the posting down stating it was an error. Since then, they refuse to pay me the $30,000 in claims owed to me. Yes, I may still be a bit bitter about it…but for this post, lets look on the bright side and check in to see how things are going.
I hit the 100k of revenue per month mark this month. I have to be honest that I never even fathomed getting this far this fast (one year in). Especially considering that I have some patients who pay me close to nothing.
You might ask why I even took these patients on who pay me close to nothing. Well, they started out as insured patients that fell on hard times. I see them for close to free until they get their feet back on the ground. After all, I was once technically homeless so I feel for people who have fallen on hard times.
The journey has been quite intense with long hours and a lot of…and I mean A LOT of hard work.
Taking The Leap
Staring up my own business was frightening.
I stayed up many nights worried that no one would show up. I was so worried that no one would book appointments with me that I kept asking my wife for reassurance. It seems like every other physician was going the other direction. Closing up traditional primary care and changing to direct primary care, concierge medicine, or selling out to the hospital. I kept asking myself what am I missing and why am I going down this road. The Miranda Lambert Tin Man song lyrics kept running through my mind:
“I’ve been on the road that you’re on
It didn’t get me very far”
I kept thinking I must be nuts to go down this road that many have traveled and given up on. It also didn’t help that I was choosing to open in a very established neighborhood with some very large competitors.
Minimizing the Anxiety
To quell my anxiety I initially planned to have 2 co-founders. I leaned on my co-founders at the time. We set off on setting up a business plan that took 6 months to write. Most of the time spent on the business plan was us changing numbers to see how much money we could potentially lose each month. We had no idea how much money we could make but wanted to make sure that we would not lose everything we had on this plan.
In time, both of those partners ended up dropping out. Fortunate for me, they dropped out 2 months before I created the PLLC for my business and were fine releasing all plans with no restrictions. I never ended up having to buy them out and they resigned any ownership to me in order for them to go a different direction in life.
So, I teamed up with a surgeon and opened my first office. My start up costs were about $15,000.
My first week I had about 6 appointments… of which I think half of them were friends.
Now I see over 120 patients a week, every week. Some weeks close to 150 patients. My new physician employee continues to grow her numbers each week to get close to what I’m seeing.
The unknown was the most frightening part but I can’t believe how successful this continues to be.
Putting Out Fires
Every business will have fires that pop up that need to be extinguished. How quickly you put them out to avoid collateral damage separates okay companies from good or even great ones.
Off the top of my head, here as some of the fires I had to put out in the first few months of starting my practice:
- Having only one employee who would show up late or call in sick with no coverage. I quickly had to fire her.
- Underestimating phone calls. Phones going to voicemail frequently unanswered.
- Insurance telling me I was in network when that was not actually the case, then having lots of patients call upset with out of network bills
- Landlord emailing me 1 month before we were set to renew our lease for one year informing us that someone else had taken over our lease. The group then backed out and we were allowed to stay in our place.
- Unethical and unreliable employee number 2 needing to be fired
- Credentialing company who put my personal phone number on an application leading to a lot of phone calls to my personal phone
- Not submitting ICD-10 codes correctly for annual physical labs and patients all getting large bills for labs, then having to resubmit codes
- Realized that after I fired my credentialing and billing team, that they were still getting checks and not forwarding them to me
- Not realizing that my online booking system did not block times and came in on one Monday to 5 double bookings and one tipple booking for that same day.
- The office got even smaller when another doctor was brought on to share space. I was relegated to one exam room for about 70% of the clinic time.
- Drug seeking patients leaving 1 star reviews online when I turned them away
- Being relegated to one exam room for my clinic on most days
Each challenge presented an opportunity to grow. Getting past the challenges took a lot of effort and work beyond regular business hours. I spent many sleepless nights working behind the scenes to clean up any administrative messes that kept popping up. The hardest part was truly when I was solo. Doing everything myself without a group to back me up made it almost impossible to manage the clinic, have a personal life, and be an excellent physician.
Our relentless approach to excellent patient care has helped us continue to grow and have no patients complain about the small space or current set up.
Going Without A Practice Manager
No one loves your baby the way you do. This business, the clinic, and my interactions with my patients is something that no one else will treat with the same regard as me. I would say the most frequent question that I get is why don’t I have a business manager.
The answer is simple. They will never put in the dedication or hard work that I will put in to a new start up clinic. Working capital in early small businesses are what makes them thrive or die. Spending $60,000+ a year on a managers salary when that capital can be dedicated elsewhere is in my opinion not a great idea. Spend that money on advertising and supplies. Forego the manager for now.
If you are going solo or opening your own practice, do the managing yourself until you get big enough to NEED one.
Once the process was close to perfected, then it was time to grow. Initially I started expanding hours. I started part time in June 2018.
Then, by November 2018 I went full time as I worked through some of these difficulties.
Once my schedule maxed out, I opened up extra hours since I don’t have any more exam rooms. This also allowed me to bill 99050, an after hours code that pays me extra for each patient visit. It might not sound like a lot but ~$20 per patient per after hours visit, adds up to a lot of money per month when seeing on average 6 after hours patients per business day ($2,400/month/doctor).
Once this was maxed out I brought on another doctor to join me and start seeing more patients during times when we could have an open room for them. So far the payout has been small. I’m averaging about $3,000 in income from employing this doctor (after expenses).
The new doctor has boosted gross revenue to help me cross the $100k/month mark. We still are currently hitting the ~25% overhead mark.
Calculated growth will continue at a measured pace. I still maintain 100% ownership in the company with no plans to be bought out or change my business plan. I’m going to keep on trucking along and seeing more and more patients. I love what I do and I have no intention to stop.
The most rewarding part of the business has been the ability to start giving back. As I mentioned above, I have some patients who have fallen on hard times that I see for close to nothing. I also volunteer with the deaf and underfunded population to provide them with reasonable access to a primary care physician in the area. I have a video ASL interpreter that I use for these visits that costs me about $300 a year.
Although it is nice to see the clinic make a profit. It is much more exciting to start giving something back since I have been given so much by the surrounding community. It also is very exciting to give multiple people a stable job, good pay for the positions, and good benefits.
I’ll plan on reinvesting much of the profit into growth of the company. My lifestyle is pretty modest. My family spends about $4,500 a month (including our mortgage). This overall frugality makes it so that I don’t really need to take a large salary each month. I’d rather keep growing at a quick pace. For the past year we have grown by 53% per month based on number of patients in our panel (started with 25 patients first month and now have just under 4,000). This will for sure slow down as my panel has maxed out but I still expect upwards of 15% growth per month for the next year going forward.
Life is good and a lot of wonderful people helped me get here. Now that things are more on autopilot, I plan on starting to post here more frequently.
16 thoughts on “Reaching $100k in gross revenue per month one year after opening”
Your hard work is paying off.
Congrats. Keep the updates flowing. You are inspiring others to learn what is still possible in clinical practice.
Thank you! I really appreciate it and it sure is wild to look back at a year ago when I was seeing 10 people a week to now seeing 25-30 people a day with a waiting list about 3 weeks long to see me.
I’ve had a lot of great physicians support me along the way, wishing me a lot of success to go against the grain and open up a small practice.
How do you see 30 people per day with only one exam room? With no office manager, how do you supervise office staff, keep books, and run business while seeing patients at the same time?
I start work at 7am most days and see my last patient at 5pm to 5:30 on some days and now take a 15 minute lunch.
That is 10 hours of possible appointment times for each day. Follow ups are 15 minutes, new patients are 30 minutes. When I just don’t have the space, I set up teledoc appointments with my patients and see them while sitting in my office chair. I do this for simple things like, you’ve been on zoloft for 5 years and just need a refill but haven’t been in in 12 months, lets chat real quick. No controlled substances through telemedicine or significant changes in doses, no antibiotics.
I have a protocol to keep the ladies working for me on a strict timeline to get patients in the room, then get their blood drawn, then collect money on the way out. If patients need a flu vaccine, ekg or whatever, since we don’t have the space I just do them myself while talking to the patient about the plan going forward. Patients LOVE the fact that I do them and review the EKG with them right there bedside. Now, when I get more exam rooms, I’ll have the MA’s do them and then dip in to explain things to them. But, for now we make due with the space we have.
We run efficiently and quickly in about 900sq feet currently of office space. 2 exam rooms, one break room, one check in room, one doctors room, one area for blood draws that is basically the size of a closet.
I now work 4 days a week and in my one day off I perfect the process, train my employees, work on quality control, and get metrics from my billing software to pay my physician employee. It only takes about 10 minutes or less to figure out how much money I should pay her each 2 weeks.
I plan on making a whole post about it in the future.
It’s really great to see someone be a “solo” practitioner.
Did you take any action on the “one star” reviews? This is something that is far different than when I started….
Were you able to get the on-line booking system working correctly eventually? Any tips for that? I’m contemplating putting that into place for my (part-time) solo practice.
Yes I did take action. I keep it vague but basically reply that we pride ourselves on treating patients like we would want our family to be treated by their doctor. We follow all state rules and guidelines for all medications or controlled substances that may be prescribed. From the extremely wealthy to the indigent, we treat every patient with respect and if you feel that you did not receive this level of treatment, then please feel fee to call us at XXX-XXX-XXXX. I try to keep it vague but at the same time you absolutely have to reply to each and every negative review. Simply putting something like we are sorry you are not satisfied, please call us at XXX-XXX-XXXX looks bad, doesn’t looks personalized, and I think doesn’t help and may hurt you in the long run.
Just like an interview, you have to turn a negative into a positive. I talk about our strengths because its always the drug seekers who leave the bad reviews.
Curious as to your strategy on marketing – zocdoc, word of mouth, etc? Very excited to follow your progress!
I was on ZocDoc but they changed their policy to now charge $35 per new patient acquisition so we dropped them. ZocDoc also had our highest no show rate. I advertise only through google and facebook. Google is by far the winner.
The rest is all word of mouth. People love the face to face interactions, the quick appointment times and they go back, tell their family or co workers. It is not uncommon for us to see one person from a retirement community then within the next month see 30 more from that community.
Treat people well and they will advertise for you.
Glad to hear things are going so well just a year out. I just opened my solo practice 2 months ago and am hoping to at least break even in a years time. I’ve been pretty conservative thus far so start up costs have been around $12-16K with monthly operating costs of around $1400. *Fingers crossed*
You should be able to turn a profit very quickly with that kind of start up costs and monthly expenses. It was terrifying for me in the beginning but it was one of the best decisions I’ve ever made!
Feel free to ask me any questions you may have.
Congrats on the success you’ve earned so far! I’m really enjoying reading your blog, thanks for all of the info you have available on it. By any chance will you delve deeper into the financials (broken down expenses, salaries you pay out, what you take home, etc.) in future posts? I’m contemplating hanging a shingle in the near future, but it’s so hard to find out what realistic expenses and salaries one can expect in doing so. Thanks again.
Thank you for the encouragement! I have been toying with the idea of posting more detailed financial information. However, I’m starting to put my actual face on certain things such as Instagram. I am about to post on YouTube as well with a few new videos since they are a bit more fun to make than blog posts. I’m a bit worried that I will then Dox myself and make myself a target if I post exact numbers.
For this upcoming next post I will post theoretical numbers for average income for primary care clinic. That way I don’t give out too much financial information but will answer hopefully a lot of those questions with my real world take on it. If you have any questions feel free to reach out to me at email@example.com and I’d be happy to help. It is totally worth it to start your own company if you like the business side and are willing to put in very hard work in the beginning. The hardest part for me was when it was just me and one employee. Once I hired another doctor, and especially now have 5 employees, the workload is spread out and I have a wonderful quality of life.
That is quite impressive. you are inspiring me to just jump in. I have been sitting on the edge for over a year paralyzed with fear.
1. Do you feel you “know” your patients well? Meaning, considering you see so many a day, do you feel you give them the personalized care and attention that’s lacking in today’s “factory-like” clinics?
2. do you take medicaid/medicare?
3. how do you determine the salary you want for yourself? For example, I know a solo family doc grossing $500K who pays herself $2K/month, pays his staff and expenses, then saves the rest. I read your post about IRS looking unfavorably at questionable salaries and distributions. But I am not sure what made your $10K salary and $16K distributions IRS flag worthy. Could you explain?
4. what does distributions mean?
Hi, thanks for following along!
I do feel like I get to know my patients very well. It does sometimes take a visit or two but I really enjoy getting to know all of my patients and what is going on in their life. I feel like even 15 minutes face to face with someone is a ton of time to really get to know them and what is going on for simple complaints. More complex patients will always take more time.
I do take Medicare but not medicaid. In Texas Medicaid does not pay well at all and it wouldn’t even pay the rent.
My CPA has informed me that the IRS does not like you to take more than 50% of your salary from annual distributions. For that reason, lets say I make $30,000 a month net for me to take as a income, it should be $15,000 in salary, $15,000 in distributions at the most. You should check with your CPA to see what they are comfortable with. Some say 40% is the max for distributions. I pay myself distributions every quarter with whatever is left over in the account and adjust my salary vs benefits every 6 months if need be based on the last 2 quarters.
A distribution means that I simply write myself a check for payment from the clinic. I take it as a “s corp” distribution. This can be done monthly, quarterly, or even yearly. The downside with yearly distributions is that the IRS still wants its estimated tax payments that you will have to make on the distributions quarterly. So in my mind since you are doing quarterly estimated tax payments, might as well pay yourself quarterly as well. The benefit in taking a distribution is that you can avoid paying payroll tax. More money ends up going in your pocket.
How easy/difficult was the process to hire a second doc when you were ready to expand a bit?
The only reason it was not that difficult for me was because I posted on my residency Facebook group. One of my colleagues that I graduated residency with was in the Exact same boat I was then and reached out to me after they saw my post. They got tired of doing hospital medicine and wanted to switch to outpatient medicine. This physician was willing to take a risk and I lucked out.