For many doctors, a cash-only medical practice is the best way to make use of skills and training. This model has enormous advantages, including greater autonomy and profitability. But many physicians miss out on these benefits because they don’t know how to get started. In this post, we eliminate the confusion and lay out a clear path towards opening the practice of your dreams. Read through and by the end of this blog you’ll know how to start a cash-only medical practice.
Why a Cash-Only Medical Practice?
Before we get into the how, let’s take a moment to discuss the why. Why should you start a cash-only medical practice?
1. You’re a naturopathic physician.
Insurance companies rarely work with naturopathic medicine so the best (and sometimes only) way to get paid is to be cash-only.
2. You want to go beyond the disease-centered model.
The default medical model is disease first. It diagnoses an illness so that it can be billed to insurance. But many physicians feel limited by this model. Instead, they want to put their patient’s health first. That means treating the body in a holistic manner and seeking to optimize health instead of just minimizing disease.
3. You want more freedom in treatment options.
If you work with insurance, you’re only able to offer services you can bill for. Cash-only practices aren’t limited by this red tape. They allow you to do whatever is in your patient’s best interest when they need it.
4. You want a more profitable practice.
Some doctors might fear they’ll lose out on revenue by being cash-only. But the opposite is true. When you run a cash-only practice you’re able to set your own prices. You don’t have to let insurance companies tell you how much you’re worth or wait months before their payments come through. Plus, because you don’t need to spend as much time filing paperwork and billing insurance, you’ll be able to see more patients. And that translates to more revenue for you.
How to Start a Cash-Only Medical Practice
The challenge with starting a cash-only medical practice is that you also have to step into running a business. You’re no longer just a doctor — you’re an entrepreneur. That can be difficult at first, but it can quickly become rewarding if you take it one step at a time. Here’s how to get started:
1. Start Learning
The doctors I work with display an incredible ability to learn. I encourage them to lean into this.
Start reading books. Listen to podcasts. Ask other doctors questions.
This is likely new territory for you, but that’s okay. There’s a lot of great information out there. You don’t have to take it all in at once, but begin learning. Make notes and see how things work. Over time, you’ll build up a knowledge base that you can draw on to make wise decisions.
As part of this step, try to learn as much about your local market as possible. Discover any unique opportunities or challenges for your cash-only medical practice.
2. Seek Counsel
It’s exciting to go into business for yourself, but that doesn’t mean you have to go into business by yourself. Some people might choose to partner with another doctor to combine practices, but every doctor should be on the lookout for the right legal and financial partners.
I recommend you work closely with a business attorney. This person will know how to handle all the legal details of starting a practice. They’ll make sure you abide by all the regulations specific to your area and they’ll be able to coach you on major decisions like choosing the proper entity for your practice.
I also suggest you work with a financial professional (preferably a fractional CFO). The “business” side of medicine might be new to you, but this professional will have years of experience. They’ll be able to help you set up bank accounts, structure your books, establish a pricing structure and revenue model, and work through major money decisions. It is much easier to set these things up right at the beginning — instead of having to correct them later on — so ask for advice early and often.
3. Dream and Plan
Chances are you already have some idea of what you want your practice to look like and where you want it to go. But it’s important that you get specific early on.
Take some time to brainstorm your practice. Who do you want to serve? How many people do you hope to serve someday? What services will you offer? What kind of culture do you hope to create?
These answers will continue to develop over time, but by gathering your thoughts on them now you’ll help set a clear direction for your practice. (Note: we put this step after wise counsel so that your legal and financial professionals can speak into your plans.)
4. Organize Your Finances
With your business plan in hand, you can now take a careful look at your finances.
How much money will you need to get started? What ongoing expenses will you need to pay for? What type of salary do you expect to pay yourself? How much revenue will you need each month to stay in business?
Talk about these numbers with your Fractional CFO. They’ll be able to help you figure out how to fund your practice and decide on a sustainable revenue model.
5. Spend Money Wisely
Each new business has expenses, but you want to keep yours as low as possible. Think carefully before buying equipment or leasing an office space.
You don’t need to buy everything all at once. Only purchase what you need to get started. Where you can cut costs, do so diligently. Then when your business begins to turn a profit, you’ll know what things are worth paying for (and can pay for them without going into debt!). Again, a Fractional CFO can help you make these decisions.
6. Start Networking
To get your practice up and running you’ll need clients. That’s why it is important to begin networking as soon as possible.
Are there gatherings (in person or online) for people in search of your specialty? Make yourself a consistent presence in these communities. Are there other local providers you’d want to partner with? Introduce yourself.
7. Make it Legal
Now it is time to cross your t’s and dot your i’s. Register your business with the government. Get federal and state tax IDs. Then apply for licenses and permits. Your business attorney can be your guide here. Let them help you get your business licensed and legally protected.
Make sure you keep all of your relevant information handy. You’ll need certain numbers to open a bank account and pay taxes.
Congrats on Opening Your Practice
If you’ve followed the steps we’ve outlined above, you now know how to start a cash-only medical practice. This will take hard work, but if your heart’s in it, it’ll be one of the most rewarding things you’ve ever done.
Congratulations! And if you need any help getting from here to the ribbon-cutting ceremony, give Every Single Bean a call. We work with cash-only doctors every day and would love to help you make the most of your practice.