There are very few things when starting a new practice that we would identify as “easy”, the only thing truly easy about a new medical practice, is how easily you can screw up and be working for a hospital or large group again. Our hope with this article is to review some “easy”, yet effective ways to mitigate your risk and increase your chances of real, long-term success. With that being said, this article is still likely to bore or seem like a waste of time to some readers, but I can assure you that if these simple strategies are applied to your new business, you’ll have to try really hard to fail.
To begin, if you haven’t read The Lean Startup by Eric Ries, it’s definitely worth your time. One of the topics covered in the book is the development of an MVP or minimally viable product. Seems simple enough, make sure you’re offering something that works and that people want before building a business around it. Simple, but often overlooked, which is why few businesses actually make it beyond the first two years. In the same way you’d validate a new product before launch, that’s precisely what you should try to do with your new practice. By the end of this article, you’ll be equipped with the tools and strategies to answer this question with actual data.
Do you have an MVS?
Before we go any further, take a minute and put on your product glasses, now view your practice as a new Amazon widget and ask yourself if you’d buy it and if so, why you’d buy it over the countless other similar products available. This is the first question that must be answered without equivocation and with passion that exceeds Harry Potter fans on the night of a new release.
Do you really feel the community would value what you’re offering?
Obviously, you’re going to be a little biased when it comes to your belief in this new business, so how about you ask a few people that aren’t afraid to tell you the truth. When I’m launching a new business/product/service line, I always put together a small committee comprised of people that I trust and that aren’t afraid to tell me what I don’t want to hear. If you’re a specialist, ask some potential referral sources if they feel there’s a need in the community for what you’re offering. Seems so simple but you’d be surprised at how many new practices fail to actually talk to colleagues that their new business will eventually rely on.
Practice Validation Through Analytics
When testing an MVP, you will have a marketing budget to split-test the various iterations of your new product which gives you the data necessary to ensure you’re only bringing the best product to market. While it’s impractical to split-test iterations of your new practice, what you can do is test the market’s interest (and therefore the feasibility) of your location and any unique or direct to consumer services offered by your practice. There are ways to measure interest regardless of the specialty of your new practice but it can sometimes be difficult to figure out how to do it if you’re new to this.
Below are a few examples of what you can do:
Run 2-4 different Google or Facebook ads marketing your new practice. It could read something like this for a pulmonologist:
- “COPD Treatment & Second Opinion- Visit Dr. Pulmo’s New Office” (Address to follow).
- You would run the same ad with three different locations, using the exact same marketing verbiage but with the different addresses.
- “Trouble Breathing or Sleeping- Visit Our New Office Today”. You would then do this same ad using the various different addresses or just use targeting to only target certain zip codes.
- Play around with the services offered in your ad to test the various services offered by your practice. You would then try different services offered by your practice with each potential location. This will tell you which office/service combination receives the best response.
- In the same manner you split-test product iterations, you would build a website with each ad linked to a page specific to that location. You would have a form that allows patients to submit a consultation form after which they would receive an automated email with your expected date of opening. Google can actually set up different tracking phone numbers for each ad if you really want to measure interest. You would review the analytics provided through your website and advertising medium to see how patients are reacting to your ads. This seems like a lot of work but isn’t your new business worth it?
You Have the Data- Now What?
At this point in the process, you should be getting excited about the potential you now possess. Instead of taking stabs in the dark like most new practices, you have actually have data that almost guarantees market interest in your new practice. Validated, current market interest confirms that you have an MVS.
Now, we all know that areas change over the years so it’s not just about what the data says today but what it’s likely to say in the future. In addition, the demographic makeup of an area may not work for your practice. A couple examples of an inappropriate demographic composition would be a cosmetic practice opening in an area that is primarily Medicaid or a dermatology office opening in a college community instead of an area dense with retirees. The data helps ensure the area you’re considering has enough market interest but doesn’t necessarily mean that it represents the best opportunity for your new practice. If you haven’t already read our article on selecting your practice location, we recommend reading this and downloading our practice location analysis. These resources will fill in some of the missing elements when determining your location. In addition to the selecting the best location article, we also recommend reviewing our article regarding the costs of starting a new medical practice. We’ve provided links to both of these below. We hope this article gave you some ideas on ways to mitigate the risks of starting a new medical practice.