The decision to start your own medical or dental practice is exciting. You’ll be able to better control your patients’ experience, from customer service to patient care. But setting up a practice can be an expensive process. It may also require you to make decisions that fall outside your area of expertise.
From a financial perspective, these four financial considerations when setting up a medical practice can give you a leg up as you get ready to open the door that has your name on it.
1. CREATE AN EMERGENCY FUND
Many new practices don’t make money in the first year. You’ll still be paying expenses while building a client base. That’s why it’s important for any new doctor or dentist to have an emergency fund big enough to cover six months to a year of personal and business expenses. Your emergency fund can help you cover unexpected expenses or in case revenue doesn’t flow in as quickly as you would like.
2. FIND A FINANCIAL PROFESSIONAL YOU TRUST
You want to focus on your practice and your patients. A financial professional can help you by focusing on your unique situation. A good financial professional will ask a lot of questions to understand your complete financial picture and your goals. Then they can help you put together a plan that will balance generating income for the life you want today, tackling student debt, preparing for the unexpected and saving for the future.
3. GET THE PROPER INSURANCE
There is a fair amount of insurance doctors and dentists should carry. That includes liability, malpractice and umbrella insurance in case something goes wrong in your practice. Life and disability insurance for doctors and dentists is also important to protect the income you have worked so hard for. In fact, there is disability insurance specifically designed for doctors and dentists. That’s because disability can affect doctors or dentists differently than people who work in other professions.
You should look for a policy that offers you the ability to qualify as disabled in as many situations as possible and the flexibility to let you decide whether you keep working or not in the event you are disabled from some but not all of your duties.
4. IMPROVE YOUR CREDIT
Most doctors and dentists who open a medical practice will need a loan to cover at least some of the expense. Good credit is essential for qualifying for a loan with a favorable rate. Work to establish good credit as soon as possible so that you’re well positioned when it comes time to take out a loan.