Part of the downside of the medical profession is that many doctors share the same trait, a desire for perfection. However, this trait can have some serious negative consequences. Especially when a doctor is involved in a startup side gig or new practice. There is a book that I really enjoyed called the “The lean startup” by Eric Ries. While the book is not revolutionary by itself, it does exemplify why focusing on getting the minimum viable product to market can be beneficial. It also promotes being as lean as possible while working on a startup.
The Lean Startup In Medicine
It might be somewhat difficult to imagine how the lean startup can apply to medicine. Afterall, while we take care of patients, we all strive to treat every patient like we would want to be treated. The idea of skimping on anything in terms of patient care is a tough pill to swallow. Patients deserve great care, individualized and personalized medical treatment plans. Patients do not deserve “good enough” medical care.
Lots of doctors fall into the perfection trap when starting a side gig or starting a practice. That desire for perfection may be costing you a lot of money.
Ways That Doctors Avoid Going Lean
- Hiring expensive consultants before opening your doors
- Paying high fees for someone to create a website for you
- Paying A Marketing Team
- Buying excess or unnecessary equipment
- Buying before renting (a medical space)
Hiring Expensive Consultants
There is nothing wrong with wanting to hire a consultant prior to opening a startup practice or doing a side gig. However, there are smart ways and less smart ways to go about things. For example, creating an LLC can be done by yourself or through a lawyer. I would advocate using a lawyer since the fees are minimum and the payoff can be high in terms of you have a lawyer to bounce ideas off of as you grow.
Someone reached out to me not too long ago and asked if they should trademark right away after meeting with a consultant. You can trademark your name buy yourself for as little as $500. However, using a lawyer you may end up spending up to $10,000 to trademark your name and logo. I would really think twice before applying for a trademark right away as this money may not be well spent in the early part of your growth.
If you are going to use consulting group, I would spend less than $5000 on this consulting group. There is almost no situation I can think of where a consulting groups fees make sense for a start up more than this amount. If you are worried about legality, ask your lawyer, not a consultant.
Paying High Fees For A Website
Pre much every physician private practice group has people asking all the time, how much money did they spend on their startup website? You can do this yourself by going to Wix or Squarespace. Or, you can go register a domain on GoDaddy and install WordPress. There, you can pay for a premium theme and customize to your hears desire.
All in, I paid about $300 for my website including the theme costs. When I want to update it, I simply log in and update it in real time. The only other recurring cost I have is to host on GoDaddy which is minimal.
Do not pay for an expensive website. It is not worth it in the beginning.
Paying A Marketing Team
Do not confuse my hate for a marketing team at opening as a hate against any marketing. You can absolutely pay for marketing or advertisement. You do not need to pay a lot of money for marketing done for you.
There are business websites where you can claim your listing. You can go to Google Business, Yelp Business, Microsoft Business to name a few. There you can create a free business account, and you can create your own advertisements if you would like. You can even pay someone $50 a last to create post for you on Fiverr.
Do not pay expensive fees for a marketing team when you start out. Spend that money directly on advertising yourself. Do not pay someone to go door to door to shake hands and let them know you are open. YOU need to go and meet those people personally.
Buying Excess Or Unnecessary Equipment
When I started my practice, Mckesson and other large medical device companies were happy to sell me as much product as I thought I needed.
I remember being pitched the idea that I needed a $4,000 EKG machine directly through McKesson. I went on eBay, bought a used one for $400 that works perfectly with no issues.
Whether you are starting up a surgical practice, a medical primary care, or a psychiatry clinic. You need to think about what is absolutely necessary in buying equipment and what is nice to have.
Grow into your practice with time with your equipment. Do not feel the need to have everything that the “big groups” have in town. You will go broke trying to have every product that you think you need.
Get the absolute necessitates and grow from there.
Rent Before Buying (A Medical Space)
Rent for your first location and do not buy. This is especially true if you are not familiar with the town that you are starting up a practice in.
Buying a commercial real estate location takes a lot of capital. From my one location alone, I spent over $400,000 in cash on the real estate.
Allocating capital such as $400,000 without knowing the market, how busy you are going to be, or before you even get busy is most likely not a wise thing to do. Rent to start out, grow your practice, and then buy a place once you have a more solid idea of what you will exactly need.
Buying does make sense for most people long term. Infact, most practice owners say that owning the real estate is often the best investment that that made once their practice was well established.
Be Thrifty Without Being Cheap
Capital allocation is a part of every business. In the beginning your capital allocation should go towards growth and getting people in through the door. Once you are making money, things that would be nice to have, now you can start to add those things.
Every dollar needs to be viewed as a worker for you. It goes out there and works on your behalf as an investment. Make sure you are allocating those dollars as your little workers to the maximum of their ability.
Minimum Viable Product
You might be surprised on what you need and do not need while starting your practice. As I have said in other post, I did not even have branding or my name on the door when I open my practice. It did not matter since I started getting patients and rapidly grew. One I was cash flow positive, I got a sign.
Have your website look acceptable, professional, spend all of your effort on growing and treating patients well. The rest will follow.