Practical steps to starting your own practice
There’s a long list of things to think about when setting out in business. Here, private practice owner Frank Care shares some tips and advice from his experiences.
About 20 per cent of businesses will fail within the first year of operation, according to data from the Australian Small Business and Family Enterprise Ombudsman in 2020. By the second year, this figure increases to 30 per cent.
Half of all startups will have failed by the end of year five. And at the 10-year mark, only 30 per cent of businesses will remain operational.
While these are sobering statistics, understanding why businesses fail and educating yourself about the key drivers of a successful business are crucial.
Starting a small business is an exciting and rewarding opportunity.
While the rewards and upsides to starting a business are unlimited, the risk of failure and subsequent reasons for failure is something every new business startup owner needs to carefully consider.
Here is some practical advice about navigating your business startup.
Starting with the why
Starting your own small business is an exciting and life-changing decision. You are responsible for your day-to-day work schedule and the buck stops with you.
There are various reasons people start a small business, including the following.
Autonomy: You dictate where you want to work, you decide what your business should look like, you determine how big you want your business to be and you decide how often to work ‘on your business’ versus ‘in your business’.
Work-life balance: This allows you to take control of your day in a holistic manner. You can structure your weeks according to how you wish your lifestyle to look and you have better control over balancing family and work duties.
Wealth: Starting your own business gives you greater control of your wealth generation. The income generation allows you greater freedom to invest in active versus passive income streams and your lifestyle choices increase with more income.
Security and stability: Knowing you have a successful business gives you income stability. You are your own boss and no-one can take away your job. Ultimately, you oversee your career and its success.
Personal challenge and satisfaction: Get ready to step up from a clinician to a manager/business owner and you create a job that brings you a high degree of satisfaction.
Running a successful business is not just a job but a vocation.
It is important that you take some time to reflect and ask yourself whether some of those reasons apply to you, how you would prioritise them from most important to least important and whether there was anything missing from the list.
This exercise is important because it allows you to determine the main motivating reasons for starting your business.
It is also useful to have these reasons written somewhere private so that you remain on target as you pursue your goals.
Making a start
Writing a business plan is a sensible way of commencing your small business journey. It helps consolidate your vision and the actions required to achieve it on paper.
The business plan also serves as a document for communicating your vision easily and effectively to others.
The following are some of the things that you need to consider in your business plan.
Executive summary of your business: This should include key financial targets, your business ‘break-even’ point, how much money you need to start your business, your location and fit-out requirements will be, how you will ‘dress’ your business so it is appealing to your desired demographic, what hours you will operate the business and what services you will provide, if beyond physiotherapy only.
It is advisable to consider what other services your demographic might expect, what products you might sell, who your suppliers might be, who will fit out your business and where you might purchase your clinic equipment, office and retail supplies.
Marketing: You will need to do a market analysis and ask yourself how well you understand your industry, what gaps you discovered in the market, whether you have done enough research to identify your niche. You should investigate market segmentation and consider how your business model will target your desired demographic.
You must look at the local competition and think about who else is providing a similar service to you, whether they are a threat, how you will differentiate yourself from your competition, what your pricing is and how your price point will convey excellent value for money.
Staffing plan: Staff requirements and hiring are also very important considerations. Give thought to how you will source your prospective staff, establishing a criteria to identify which staff would best fit your team culture and identifying objective markers to determine the right time to hire, how you will undertake staff training and ongoing support and how you will support and develop your staff to be the best they can.
The business plan is a dynamic document. It can be thought of as a ‘live’ road map to help you navigate towards your business vision.
As the cliché goes, ‘If you fail to prepare, you prepare to fail’. It is okay if you don’t have all the answers from the start.
Part of your business preparation involves you searching and discovering the answers to these questions and, in doing so, uncovering things that you would have otherwise missed.
You should refer to your business plan often and update it accordingly.
Part of your due diligence includes reassessing the competitive environment you work within, considering new strategies to help reach your destination and modifying protocols to help deliver the very best customer service. There are various business plan templates available online that can help you make a start.
Location is key
A thorough search strategy and well-planned negotiation with an agent will help locate the right site for your business. The right site can be the ‘X factor’ in your success.
Searching for the right site is a task that requires patience and thoroughness.
You should consider writing a property brief that summarises the type of property you require and on what terms.
The purpose of this exercise is to keep your decision objective, avoiding decisions based on ‘gut feel’ only.
You may also consider giving this document to a commercial agent who may assist in your search. This is advantageous as they may propose commercial sites not yet listed.
When creating a property brief you should consider the following.
Your company profile: What are the services you will deliver and how do you wish to brand your business? What influence will this have on the site’s profile (eg, warehouse versus office or showroom)?
Space requirements: You need to consider what size space you require, how many car parks are needed, how you will meet disability access requirements, needs. Agents will always ask you to put a proposal in writing. It is important to clearly list your terms of lease with clauses.
Clauses are very common in commercial negotiations and will be familiar to your agent.
These include subject to council approval, subject to finance and subject to building inspection. These clauses will safeguard you from issues surrounding these potential hurdles.
Once you have submitted your proposal and negotiated the terms for lease, your agent will proceed with preparing a lease contract.
It is strongly advised that you engage a solicitor who specialises in commercial leases. Any issues raised by your solicitor can be discussed and rectified with the agent prior to signing any contracts.
Taking the plunge
Are your personal circumstances conducive to starting a business now? Is now the right time for you to take this important step? Once you have written your business plan and given serious thought to what your business will look like, you can determine whether now is the right time to start.
A financial forecast of your business forms a crucial part of this decision.
Doing a forecast, with the oversight of an accountant, will give you a good idea of your business startup costs. Some questions you’ll need to answer include:
• can you fund this project from your own equity?
• will you need help from a bank?
• will a bank willingly fund your project?
Get ready to step up from a clinician to a manager/business owner and you create a job that brings you a high degree of satisfaction.
Your personal financial situation and day-to-day personal expenses will determine if you are financially ready.
Do you have enough cash saved to meet your personal expenses before your business reaches the break-even point?
Do you have a contingency if you don’t break even in your expected time frame? Do the present circumstances concerning your family situation allow you to take that next step?
Experience and credibility
Having enough experience and knowledge before entering your own business is an important competitive advantage.
While there is no rule book to determine this, it is useful if you have worked in an environment where you have experienced various roles such as those you propose in your business.
This will give you confidence that you understand the mechanics of a small business and the relationships between these roles.
Taking the next step
Starting a small business is a life- changing event. The rewards and reasons for starting a business vary from person to person.
It’s important you understand your reason for starting a business. Is it financial? Greater autonomy? A personal challenge? Work-life balance?
Once you’ve ascertained your reason, start putting together a plan on paper as to how your business will help you achieve your personal goal.
Make sure you can clearly and concisely articulate what your business’s mission is and what it will look like. How will it fill a gap in the market?
Remember location: do a thorough search for a site that will complement your vision. How will your site appeal to your desired demographic?
Finally, are your personal and financial circumstances conducive to starting a business now? If you trust your instincts and believe you are ready to take the next step, then go for it.
Starting a business will be one of the most rewarding steps you can take.
For further reading and information, click here or search your state government website.
>> APA Sports & Exercise Physiotherapist Frank Care MACP is a co-director of Evado Studios, which has practices in Victoria and New South Wales. Frank consults with aspiring physiotherapists who are starting their own practice.
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