Business Plans for Professional Practices
Business plans that are specific for a professional practice are pretty easy to develop given that most financial institutions and investors are very keen to provide capital to these businesses. This is primarily due to the fact that the services remain in demand regardless of whether or not the economy is doing great or there is a recession. The types of business plans are specific for a professional practice include dentists, physicians, surgeons, certified public accountants, attorneys, and allied health professionals. Generally speaking, a professional practice business plan is specific for someone that has received a licensure from the state to operate in a very specific capacity. Generally, these individuals have undergone rigorous academic training that has allowed them to take state-based exams so that they can obtain a license to practice. This is especially true among physicians, dentists, surgeons, attorneys, and certified public accountants.
One of the nice things about developing this type of business plan is that it is very straightforward in nature given that almost everyone understands exactly what services being provided. As with any other type of business planning document, any financial institution or investor putting up the necessary capital for this type of business is going to want to see a profit and loss statement, cash analysis, balance sheet, breakeven analysis, and business ratios page. The industry research portion of the business plan should focus significantly on trends regarding billing, number of new practitioners entering the market, the local market as relates to demographics, and a competitive analysis.
For many financial institutions – especially for doctors and lawyers – the lending process is straightforward given that these institutions like putting capital with these businesses. The very high incomes generated among professional practice service providers allows for the easy repayment of any financial obligation undertaken. Additionally, most financial institutions understand that if the private practice does not work out as planned an individual can easily obtain a very high paying job to allow them to continue to satisfy their debt obligations even if their professional practice has failed. This is one of the reasons why many banks often have specialized programs specific for professionals. The lending requirements for a physician, lawyer, dentist, or any other service provider typically are little bit lower than that if an individual was looking to establish a retail location or service-based business. However, it can be expected that a
professional service provider is still going to need to have a 10% down payment and a FICO score in excess of 650 in order to obtain the financing of the need.
Of course, a certified public accountant should be hired to assist the professional service provider with developing the business plan so that the bank will related lender can make an appropriate decision as it relates to providing these services to the general public. One of the other things that should be mentioned thoroughly within the business plan is the educational background of the owner as well as the relevant experience. This is especially true among doctors and lawyers who trade specifically on their ability to render these services to their clients and patients.
As relates to billing practices, a special section of the business plan should be developed that discusses issues relating to receiving payment on invoices. This is especially true among lawyers that maintain a client trust account for holding funds that have not yet been earned by the attorney but are going to be used in conjunction with legal services provided. Most banks allow for an attorney to maintain a special client trust account to hold these funds. If the owner operator is a physician then and in depth discussion regarding invoices as relates to reimbursement from private insurance, Medicare, and Medicaid should be thoroughly discussed as well in order to ensure that the practice is able to remain cash flow positive while the physician is waiting for payments from these entities. These are all topics that are typically discussed in this type of business plan.
A professional service providers marketing plan should also be in depth in regards to how the individual owner is going to obtain patients or clients for their professional practice. This website has a number of different templates that are specific for a wide variety of professional practices including specialized medical practices and law firms that operate within a specific niche focus.
In closing, anyone that has obtained the ability to operate as a professional service provider is generally a very smart person that is going to be able to effectively develop their business operations to profitability within the first year. Of course, many people who are in these fields often do not have a business background so it may be in the best interest of the practice to hire an office manager or practice manager that has an understanding of the day-to-day strata functions of the business. If this is the case, then the background of the office manager or practice manager should be included within the documentation that is going to be submitted to a financial institution.