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Starting a practice cold is a tremendous undertaking. It doesnt really matter where the practice is or who the doctor is, the time, tenacity, discipline, and responsibility demonstrated by doctors who have successfully opened cold is the same. Despite these common characteristics, I am amazed by some of the distinct differences among practices and their journeys to success with all of the decisions made along to way to grow the practice and make it as successful as possible. Without question, the start up practice that has fascinated me the most involves a practice started by a very good friend, Dr. B, whose start up was the polar opposite of mine.

When comparing my practice to his, we share many similarities. We have both experienced a tremendous amount of success and growth since the inception of our practices, and we both say, If I had it to do all over again, Id do everything exactly the same way. The biggest difference between my way of starting a practice and Dr. Bs way is the dissimilarity of our philosophies about borrowing money. I was determined to borrow as little as possible even if that meant growth at a slower pace while Dr. Bs focus was to grow his practice as quickly as possible despite the cost.

One of the questions that I am asked the most is how I managed my practice cash flow in the beginning. Without a doubt, this was the most stressful part of my start up. For me, I had no choice but to find a way to create a positive cash flow quickly since I was single, without additional household income from a working spouse. One of my objectives was to pay down my debt as quickly as possible, so I opted to work part time for a commercial chain in an effort to provide the cash flow needed to pay the bills. Unlike Dr. B, I chose to work 2 or 3 days per week outside of my practice to avoid going into further debt just so I could write myself a paycheck.

 

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There were some definite disadvantages of working outside of my practice such as missed opportunities with patients. As a result, my practice initially grew at a slower pace than Dr. B’s did because I wasn’t in the office every day to take walk-ins and emergencies. However, even though there were several missed opportunities that occurred during the three years that I worked part time outside of my practice, I absolutely believe that the cash flow generated by me supplementing my income created a greater number of advantages for my practice.

Very quickly (by the middle of my second year) I was tracking enough positive cash flow to invest in additional equipment for the practice. I never would have been able to do this if I had to depend on positive cash flow from the practice for my personal income. Four years after the start of my practice, I was able to purchase an office building and move my practice to a larger, more desirable location which ultimately allowed my practice to grow exponentially. This never would have been possible without that supplemental income since I used the savings accumulated from the practice’s positive cash flow for the down payment.

Dr. B on the other hand felt that the debt would take care of itself if he could focus on fast, accelerated growth. By being in his practice every day, he would have the ability to capture every opportunity that walked in to his office. In addition, he believed that the added time in his office would allow for more community networking and staff training opportunities. When we compare our practices, he definitely experienced faster growth than I did during his first three years, but his biggest disadvantage was his debt; he had significantly higher practice debt than I did after three years in practice.

When Dr. B and I compare our practices, we both to date have thriving, growing practices. While his practice grew a little faster in the beginning, I have managed to have a lot more borrowing power because of more equity and less debt. Both of us have purchased our own buildings, both of us continue to invest in new technologies for our practices, and both of us would tell you all, “If I had to do it all over again, I’d do everything exactly the same way.”

 


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