How do you start your own practice? These owners can tell you

‘In medical school, you get absolutely no business training. Doctors are not really business-minded. So when you open your own business, there’s a huge learning curve.’
 
That’s Dr Maria Boulton, who decided three years ago that she wanted to open her own practice with her friend, Dr Fiona Raciti.  
 
The decision paid off, and last year their inner-Brisbane practice, Family Doctors Plus, won the Telstra Queensland Business of the Year.
 
Dr Boulton and Dr Raciti are bucking the trend – the number of GPs who are practice owners has fallen from 35% in 2008 to 24% in 2015, according to the ‘Medicine in Australia: Balancing employment and life’ (MABEL) longitudinal survey of doctors.
 
Many GPs are interested in opening their own practice, but taking the plunge can be daunting.
 
The idea first came to Dr Boulton when her husband’s business was nominated for a Telstra award. At the finalists dinner, she listened, amazed, to the stories of people who had built something from nothing.  
The next day, she was at work with Dr Raciti, talking about the awards night. 
 
‘I was complaining about being disillusioned with five-minute medicine and how I’d love to do things differently. We looked at each other and thought, let’s give it a go,’ Dr Boulton told newsGP.
 
The key, Dr Boulton said, is to surround yourself with good people – medical finance consultants, accountants, contract lawyers and bookkeepers – who know their stuff.
 
‘We put everything into a very detailed business plan, and that’s what we used to decide if a location was suitable or not,’ she said. ‘If the numbers don’t add up, don’t go for it.
 
‘You have to allow for everything – even servicing a fire extinguisher is expensive.’
 
Dr Boulton said it was vital that people be prepared to tighten their belt until the clinic achieves financial viability.
 
‘You’ve got to know that, initially, no business makes money,’ she said.' ‘We started working seven days a week, incredibly long hours. But now, we only do five, and have most weekends off and I get to see my kids a lot more.
 
‘It’s lovely having done it; we wouldn’t go back.’
 
Dr Boulton cautions other would-be practice owners to be aware of the competition.
 
‘You’re competing against big corporates that make money in pathology and radiology, and who have deep pockets. So your margins are tight and you have to understand the business inside and out,’ she said.
 
‘When we started, I thought I could delegate that part, but I quickly learned that was wrong and had to upskill.’
 
Dr Boulton said having a point of difference was key. Her clinic is privately billed and has a focus on education and community events, with a custom education room that can fit 50 people.
 
‘Instead of five minutes per patient, we spend 15 minutes for a standard appointment. Doing five-minute medicine is no fun – you burn out,’ she said.
 
The practice also focuses on a one-stop-shop approach to family care, with everything from paediatric psychologists to education nights for girls approaching puberty, women experiencing menopause, and gut health sessions.
 
It took Dr Boulton and Dr Raciti three months to find the right location. Eventually, they found a good spot in Windsor, not far from where both live. It wasn’t a medical clinic at the time, but had reasonable rent, an underground car park and, importantly, room to grow.
 
Their fit-out builder gutted and rebuilt the former office. As the clinic has grown from three full-time-equivalent (FTE) GPs to 10, it has expanded into two units next door.

‘I have always loved people, so I think family medicine is great. It’s such a privilege,’ Dr Boulton said. ‘You can look after a lady who is pregnant, and then see her child as she’s growing up.
 
‘The other day I had a lady who’s 71 who didn’t look her usual self. I knew just from looking at her – because I see her so often – that something was wrong, and I love that I could fix it.
 
‘It’s always changing, and you never know who’s going to come in the door.’
 
‘Freedom in what you do’
More than 4000 kilometres to the west, Dr Jagadish Krishnan has built a mini-empire of clinics across Perth in seven years. He has 11 practices under his Perth GP business, with interests in dozens more.
 
One of Dr Krishnan’s goals is to help 100 GPs become practice owners in the next five years.
 
‘There’s a big fear amongst GPs – How will we manage the responsibility? Will it eat into my personal time? Will it turn my life upside down? – but that is alleviated by the benefits of owning a clinic,’ he told newsGP.
 
‘A lot focus only on the financial benefits, but it’s not just that. There’s a lot of pride in being an owner and having the complete freedom in what you do, not being dependent on someone else. You’re on the ground, seeing the needs of patients and of staff.’ 

Dr Jagadish ‘Jags’ Krishnan has a goal to help 100 GPs become practice owners in the next five years.
 
Dr Krishnan – who is better known as Jags – said he wanted others to learn from his own mistakes. A key tip he gives to would-be owners is to pass on as many costs in setting up a clinic as possible.
 
‘One mistake is investing huge capital at start-up,’ he said. ‘There is a chance to pass many costs on to a landlord because medical clinics are known to be good tenants who pay their rent on time.
 
‘You can normally find a long lease, so the landlord can recoup that cost. If you negotiate it well, you can pass on the costs of partitioning, air-con, carpets, cabinetry and so on.
 
‘I burned my fingers first and then learned the cleverer way.’
 
Dr Krishnan said a good rule of thumb for a start-up clinic is to aim for five FTE GPs, with roughly 50 square metres per FTE GP.
 
‘You can squeeze in at 40 square metres, but you really want a separate lunch room, a good waiting room, and a kids’ area. And that’s 50 square metres,’ he said.
 
Dr Krishnan said that researching a good location is as simple as looking for suburbs with high demand for GPs.
 
‘I use sites like HealthEngine to check if appointments are available. If you find a suburb with no availability, it might well be a good place [for a new clinic],’ he said.
 
He also stressed that knowing how to work a spreadsheet is vital for a practice owner.
 
‘Excel is the core skill you need to make business decisions carefully. Do a course, learn how to use it, plug in numbers and see how it looks as a trial budget before you start,’ Dr Krishnan said.  
 
Dr Krishnan said it is possible to start a five FTE GP clinic for as low as $200,000 if many of the early costs are passed to a landlord, or as high as $1 million if owners foot the entire bill themselves.
 
‘The goal is not to overcapitalise yourself,’ he said.
 
The most common question Dr Krishnan is asked by would-be owners is how many GPs are needed for financial viability.
 
Dr Krishnan has settled on five FTE GPs as a proven way to get to the ‘magic number’ of 750 appointments per week, which he says will mean financial viability. One FTE GP might see 30 patients a day, meaning 150 a week, with five FTE FPs enough to get to the target.
 
‘The number you are chasing – 750 – you can achieve that any way you like, but you have to get there to make it viable. It might take you two to three years to get to that point,’ he said.
 
Having five FTE GPs also helps to offset the challenge of staffing when doctors take leave.

A good guide, Dr Krishnan said, is one administrative staff member per 1.5 GPs, and one nurse for every four GPs.
 
‘Don’t underestimate a nurse’s input into a practice, especially if you’re in an area with high chronic disease,’ he said. ‘Nurses can contribute really well to the practice’s financials.’
 
Dr Krishnan said flexibility is the key in recruiting GPs.
 
‘It is critical – and the bottom line is, everything a GP needs to be successful makes a practice successful,’ he said.

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