7 Essentials to Expanding Your Medical Practice

Owning and running a medical practice takes a lot of effort and dedication but it can also be highly fulfilling. There may come a time when you start to think about expansion and scaling the practice or specialization in a second practice. Here are the key aspects to consider before you make that decision. 

Before expanding your practice, you must identify your primary objectives because they will clarify your direction and drive the planning process.  

For example, suppose your main goal is to fill a health gap or shorten wait times for patients. There might be other ways to achieve this without taking on the responsibility of opening a second clinic and the additional expenses that come with it.

Alternatively, if you want to offer new or innovative services to your patients, expanding your practice may be an excellent way to make this happen because it allows for specialization, attracting new patients and referrals from other clinics.

Remember that expanding your practice means that you’ll have additional managerial and operational responsibilities. If you're still unsure whether this is the right choice for you, consider meeting with a Scotiabank Healthcare Specialist. Through the Scotiabank Healthcare+ Physician Banking Program, our specialists can advise and assist with the options available, such as financing for the building and necessary medical equipment, as well cash flow solutions.

If you’re managing a busy clinic, opening a second practice has a multitude of potential benefits. First, it can help you provide additional care for existing patients and expanding your reach in a new location can make room for new patients in the area.  It can also allow you to widen your scope of services by giving you the ability to explore new specialties that will ultimately increase your ability to help more patients.

If you are looking to become more specialized, a second practice can help you achieve this goal as well. In this case, you can specialize exclusively in a handful of procedures, which could allow you to hone your craft while maintaining care for your existing patients. 

Opening a second clinic will be very similar to when you opened your first, except that you will benefit from past experience, helping you evaluate what worked well for you during the process. Even though there was a significant capital outlay to acquire the space, hire staff and purchase equipment, your financial position might be different now and you might be able to open a clinic by self-financing with personal or business funds. Financing your second practice independently might impact your ability to retire and have tax implications. As always, work closely with your network of professionals, like your Scotiabank Healthcare Specialist, MD Financial advisor¹, lawyer and accountant. Your Healthcare Specialist can help advise you on financing options and scenarios. An MD Advisor can hep you review your financial plan and evaluate the impact on your goals and retirement plans, especially if you’re a considering self-financing. An accountant can help you evaluate the tax implications of various scenarios and advise on what would work best for you. A lawyer can ensure any purchases, leases contracts and other binding agreements are reviewed with your interests in mind.

You may also be able to leverage established relationships with vendors who may be able to provide products and services for your new practice without requiring cash payment on delivery due to your historical track record. 

Deciding whether to self-fund some of your start-up costs is one thing, but you'll also need to decide if you want to buy or lease your clinic space. There are many factors to consider when deciding whether to buy or lease.

Leasing has many benefits. Depending on your lease agreement, you may not have to worry about repairs, garbage and snow removal or upkeep like maintenance or landscaping. If you aren't interested in managing every aspect of your property, leasing might be the right choice for you.

That said, leasing has its disadvantages. For example, you'll be limited in the renovation choices you can make, and your landlord may raise your rent when your lease renews — or sell the property and force you to move with little notice, impacting your income and ultimately affecting patient care.

The alternative to leasing is buying a commercial property. Purchasing a property outright means that you'll have control over your space, and you'll be able to renovate or change it as much as you like. Owning a property is also a significant investment for your business and the value of the property may appreciate over time depending on the market conditions, with the potential to provide you with passive income during retirement.

There are considerable costs that come with property ownership: From property taxes to repairs and maintenance to insurance. Every situation is unique so you should consult with a Scotiabank Healthcare Specialist to obtain the advice you need and look at the financing options available to you. 

There's no doubt — opening a second practice requires more of your time as you will have to run both locations, at least at the outset. As the practice owner, you are responsible for managing the day-to-day operation, and that responsibility increases when you take on a second location.

One way to manage this extra responsibility is to have a plan to transfer part of your workload. To accomplish this, you have several options:

• You can assign some of your patients at your first practice to another physician onsite.
• You can hire an office manager — either at your current location, your second location, or both — to take on administrative tasks, which will open you up to more time caring for your patients.
• You could also consider sharing your practice with another physician by working with a partner, with whom you can share the patient and administrative load.

Don’t forget to consider that if the offices are located far from each other or some distance from home, how long will you spend commuting and will that impact your well-being, lifestyle and/or time with family? 

Attracting and retaining new staff can be challenging, especially in a post-pandemic environment where employees are feeling burnout, managing additional health considerations and adapting to ever-changing work conditions.

Give this plenty of thought and seek guidance and recommendations from your current staff, along with fellow physicians. Make employment at your clinic attractive by offering a comprehensive employment package that includes benefits, health insurance, ample time off, and/or flexibility in their schedule. Don’t underestimate the value of a positive, supportive culture!

You could open your new practice as an extension or it could be a second location for your existing practice. The new location could benefit from your first practice's reputation, word-of-mouth, branding, and marketing efforts and could offer similar services.

Alternatively, you may opt to open a second location as a standalone business or clinic This approach could work well if you are planning to serve a different type of patient, offer different services or work with another physician. 

This is an exciting conversation that speaks to your current success. As you go through the journey of opening your second practice, you may experience challenges from a time, money, and responsibility perspective. At the same time, this can be incredibly rewarding and could be the right move for your career personally and professionally. Before you make that informed decision, be sure to thoughtfully consider all possible aspects of the commitment. 

For customized advice and solutions to help you expand your medical practice, contact us today.