Many people believe starting a practice is very expensive. This is true only if you allow it to be expensive! Let me tell you, you can start a small niche side practice very cheaply. I have said this before and I will say it again:
A cheaply started business can be closed just as cheaply.
If you dump $30,000+ into starting a practice and it does not do well, closing this would be a very stressful time. On the other hand, if you started a small practice for $5,000 and you had to close it, you would not be nearly as stressed. It is very important that you try to keep your startup expenses as low as possible.
I have started all my side businesses with $5,000-$10,000 each, that is it. The only reason I had to spend closer to $10,000 was for my telemedicine practices marketing plan. You must create an effective marketing plan to build your patient base quickly, there is no way around it. With telemedicine, marketing will be your largest expense.
Many of you might not believe that you can start a practice for $5,000. If you follow the standard practice model of accepting insurance, having multiple employees, and all that mess, then it would be impossible to start a practice for $5,000. If you follow the Elite Nurse Practitioner Model and avoid taking insurance and open a cash practice on the other hand, it is totally doable. Remember, people will pay cash! If you take insurance, you will have more expenses compared to a cash practice:
- Insurance requires an expensive EMR. Cash can be done with paper charts or a simple EMR.
- Insurance requires credentialing and billing services. Cash requires a simple point of sales system.
- Insurance requires after hours answering services. Cash does not.
These are the top 3 expenses that will add up quickly for an insurance accepting side practice (you can learn how to bill insurance yourself though, which will decreases your costs). You can skip all this with a cash practice. Let’s break down the numbers for starting up a cash practice:
- Lease: You should strive to find the cheapest office space you can. All of my brick and mortar businesses are less than $1,000 a month. My first practice ever was $700 a month in a dilapidated strip mall. It was cheap and it worked. Patients didn’t seem to care. So, budget $1,000-$1,500 for the first months rent and your deposit. If you have a telemedicine or mobile practice, you can totally skip this step!
- Basic EMR or paper charting: There are a plethora of cheap EMR’s in the market such as Simple Practice and UniCharts. These cost nothing. You can get started with Simple Practice for $50. I personally would start a small side practice with paper charts. This costs practically nothing.
- Marketing: This will be your biggest expense. As I have said before, MARKETING IS THE KEY FUNCTION OF YOUR BUSINESS. This is how you obtain patients. It is vital to the success of your business. I suggest spending $500-$1,000 a month during the initial 3 month phase of your business. The more, the better
- Basic accounting software: Quickbooks is cheap. You are looking at $30 a month.
- Utilities and phone: Hopefully your credit is good, so you won’t need deposits for your utilities. Therefore, your first month for utilities shouldn’t exceed $150.
- Personal malpractice policy: Depending on what service you provide; you will likely need a malpractice policy. If you protect your assets, malpractice can be a debatable expense. If you have nothing, then there is nothing to sue you for. Regardless, having a malpractice policy is a good idea for virtually all nurse practitioners. You can expect to pay around $1,000-$1,300 for this. Be sure to read the malpractice article HERE.
- Office furniture: You can purchase very cheap furniture on the Facebook Marketplace or on Craigslist. You can literally furnish a clinic for less than $1,000.
- Medical supplies: My first exam table was a dining room table with an upholstered top. It cost me nothing. You can find used vital signs machines online for $300-$400. Basic medical supplies are cheap. Medical supply companies such as McKesson offer decently price supplies. You can have a fully supplied practice for less than $500.
- Business liability insurance: You will need a basic business liability policy. What if an old lady slips and breaks a hip in your office? This will only cost you $50-$100 a month. Many malpractice policies can add this for no additional cost.
The grand total for starting this practice would be around $5,000, without marketing. If you want to start small and slow, then you can get away with spending $250 a month on basic marketing at first. If you want to get busy fast though, then you will need to add another $3,000 to that cost so you can market the hell out of your new practice. Therefore, you are looking at $5,000-$8,000 to start a practice. That is it! No business loans, no debt, no excessiveness… You have a fully functional business ready to see patients and begin generating revenue. It is that easy friends.
Any nurse practitioner can save $5,000 to start a business. If you cannot, you need to reevaluate your spending habits. If you are a new graduate or have recently been laid off and money is tight, then consider taking a personal loan out from a friend or colleague. You would be able to pay them back fairly quickly. Otherwise, avoid business debt if at all possible.
Do not let the fear of the initial costs of starting a business prevent you from doing it! Yes, you are taking a risk, but in the grand scheme of life, $5,000 is nothing. If it fails, you gave it a try. But if you create a practice providing a needed niche service, there is no reason why you should fail if you give it enough time.