The start-up phase of your physiotherapy practice, as with all start-ups, is fraught with uncertainty and excitement. While we shouldn’t deny ourselves some excitement, there are a number of issues where clarity is essential for future success. Here are five key issues for upcoming business owners to settle before taking the entrepreneurial plunge:
Personality profile for running a business
Everything stops dead in its tracks if you are not cut out for physiotherapy clinic ownership. Personality tests are one tool you can use to evaluate your business strengths and weaknesses. Nobody is perfect, but knowing who you are can make all the difference. For example, are you a motivational leader or do you lead by example? Are you very analytical or more of a “big picture” person? Your profile can also influence your decision to seek suitable business partners who best complement your skill set.
Are you ready to work long hours six, perhaps seven days a week to get your private practice off the ground? Smart, hard work has its rewards but the price to be paid necessarily involves sacrifices in your current routine (social and family life). Starting your practice from scratch or purchasing an existing clinic means go-go-go right from the start.
Chances are that you will live and work in an urban setting, so check out the business landscape of your area. Are there many established clinics in your prospective location and if so, do they specialize in the same areas as you? Contrary to conventional wisdom, a high concentration of private practices may be a good sign, since it could indicate high demand for your services.
Appropriate Business Structure
Sometimes considered as an afterthought, new business owners should recognize the basics of business structures. Three of the most popular structures for private practice owners are:
Sole proprietorship, sole trader: the easiest set-up where the business has no separate legal existence from yourself as owner. You may use either a business name or your own name, however you are responsible for all your business’ liabilities.
Partnership: involves starting a business with one or more partners whereby all partners legally share profits, risks and losses according to the partnership contract, which you establish at the onset of the business. To avoid future disputes, discuss your group’s needs with experienced professionals before committing to a written, legally binding contract.
Limited Liability Corporation (LLC) or Company (Pty Ltd): Unlike partnerships and the self-employed, it is a legal entity separate from the owner and is required to fulfil specific regulatory requirements.
Other business structures exist and it is possible that you may need to move from one entity to another as your private practice grows. Check with a qualified accountant or lawyer for more details.
Your successful private practice start-up hinges on solid financing, i.e. accurate cash flow analysis and a reasonably accurate account of start-up expenses. Once you know what your capital requirements are, you can seek out both internal (i.e. family, friends, personal savings, selling assets) and external (e.g. banks, other lending institutions) sources of funding.
When applying for outside sources of financing, your business summary and plan will prove invaluable. Together with your cash flow, expenses and break-even analysis, they will allow your lender make an offer that suits your budget.