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Small Business Grants: 10 Programs to Get Started

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Small business grants
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When you need funding for your small business, receiving money you don’t have to pay back would be the best case scenario. Various organizations award grants to small businesses without expectations of repayment. The catch: steep competition and stringent standards.

Government grants for small businesses, as well as corporate and private grants, are highly sought after, and are given to businesses that meet specific eligibility criteria. The application process can be time-consuming and competitive, but your efforts could pay off if your business is selected.

We’ll help you better understand what types of small business grants you may be eligible for, as well as a few programs that could be a good fit for your business.

Who can apply for small business grants?

Many grants are targeted toward certain types of businesses or owner demographics, such as women, minorities or military veterans. Grants could also be industry-specific, and recipients could be restricted in their use of funds.

Business grants can be separated into two general categories – grants from federal agencies and those from private groups or entities, including nonprofits.

Federal grants are available to all levels of government entities, like city or county governments or independent school districts, nonprofit organizations and for-profit businesses. Grants.gov provides a searchable database of federal grant programs. State and local governments also have grant and assistance programs for small businesses. In these programs, federal money is typically awarded through state agencies. Recipients are typically chosen based on statewide social or economic concerns. You can find resources for business owners in your state at USA.gov. It’s also possible your city or county could have available grants for small businesses, so check your local government websites as well.

Private grants are available from for-profit businesses or nonprofit organizations. Corporations and foundations offer private business grants to small business owners, and these programs are usually competitive and focus on certain types of business.

Government grants are usually distributed to businesses that could help advance certain causes or initiatives or stimulate the economy in a specific way. Private grants are typically awarded with similar intentions, and grant makers would select businesses that support a particular focus or goal.

How to apply

Grant eligibility requirements would be based on the goals of the organization: who they want to give money to and how they want that money used. You could also expect a grant application to ask for common business information including how many years you’ve been in business and your annual revenue.

You may have to disclose additional personal information depending on the grant program. Your gender or income level could be a factor. You could be required to submit a personal statement or resume, as well as a business plan and a proposed use for the grant.

10 business grant programs to get started

The competitive nature and strict requirements of grant programs could make it challenging to receive a small business grant. But if you are chosen as a recipient, you would have access to debt-free funding for your company. We’ve compiled a list of general small business grant programs for which you could apply.

Government business grants

1. Small Business Innovation Research Program

The Small Business Innovation Research program, or SBIR, encourages research and development among small businesses. Through the Small Business Administration-powered program, federal agencies allocate a percentage of their research and development budgets to eligible businesses. Participating agencies include:

Grants for first-time applicants could be up to $150,000. Recipients can then apply for a second grant up to $1 million.

2. Small Business Technology Transfer Program

The Small Business Technology Transfer program is associated with the SBIR program and promotes technological innovation in business. Five federal agencies participate in the SBA-backed program:

The program has the same maximum grant amounts as the SBIR program – up to $150,000 for new applicants and up to $1 million for recipients continuing in the program.

3. Environmental Protection Agency Grant Programs

In addition to providing grants through the SBIR program, the Environmental Protection Agency offers grants for a range of environmental activity, such as making improvements to air quality and public health. Grants are available to small business owners, as well as community organizations, tribal programs and college students.

4. Challenge.gov

Government agencies post contests on Challenge.gov to crowdsource innovative solutions. Small business owners, academic researchers, hobbyists and students have won past challenges, which come with prize money to carry out the proposed solution.For example, the Department of Health and Human Services is awarding a total of $400,000 to three winning ideas for improving Alzheimer’s and dementia care through technology.

5. State Business Incentives Database

To help business owners find local assistance programs, The Council of State Governments provides information on available resources through the State Business Incentives Database. For instance, the site lists the Kansas Tourism Marketing Grant Program designed to help businesses and organizations in the tourism industry with innovative marketing strategies.You can’t apply through the database, but it could be a valuable resource when searching for state grant programs.

Private and corporate small business grants

1. NASE Business Growth Grant

The National Association for the Self Employed awards $4,000 grants each month to business owners looking to grow their enterprises. Applicants must be members of the organization to be eligible. Purchasing an annual membership for $120 would allow you to apply immediately after joining, but you would have to wait 90 days to apply after buying a monthly membership for $11.95.

2. Tory Burch Foundation Fellows Program

The Tory Burch Foundation, created in 2009 by fashion mogul Tory Burch, awards $5,000 to women entrepreneurs as part of a one-year fellowship. Recipients also receive four days of workshops with experts in the Tory Burch office in New York, as well as one year of access to the foundation’s online resources and peer network. Each year, 50 fellows are chosen to participate in the program, and a select few are also invited to pitch their businesses to industry professionals.

3. FedEx Small Business Grant Contest

FedEx chooses 10 businesses each year to receive grants and FedEx Office services. One grand-prize winner receives a $50,000 grant and $7,500 in print and business services, while a second-place winner receives a $30,000 grant and $5,000 in print and business services. Eight additional winners each receive a $15,000 grant and $1,000 in print and business services. The general public can vote for contestants online, and FedEx selects winners from a pool of 100 finalists who received the most votes.

4. Street Shares Veteran Small Business Award

Business owners who are veterans, active-duty military members, spouses of military members or children of military members who died on active duty can apply for grants from the Street Shares Foundation. Eligible businesses must have some sort of social impact on the military community. The Street Shares Foundation awards a $15,000 grant to a first-place winner, while a second-place business receives $6,000. A $4,000 grant is reserved for third place. The Street Shares Foundation is a philanthropic branch of Street Shares, an online lender that specializes in loans for veteran-owned businesses.

5. Visa Everywhere Initiative

Visa awards business owners in the financial technology industry who pitch winning solutions to various business problems. For instance, Visa challenged applicants this year to create solutions that make it easier for consumers to access digital payment tools. Applicants’ ideas must be relevant to Visa’s business and should have the potential to add value to the company’s clients. The winning business receives $50,000 from Visa and a possible partnership with the company.

Alternatives to small business grants

Applying for grants may feel like a pointless effort because of tough eligibility requirements that are often tied to the agenda of the grant sponsor, whether it’s a federal entity or a private corporation. The way you use the funding could be regulated as well.

There are other ways to secure business financing if you would rather avoid the grant application process and competition for funding. Consider these alternatives, but keep in mind you would typically have to repay the money you receive, possibly with interest.

Small business loans

Different types of small business loans are available to meet your funding needs. You could take out a long-term or short-term loan and pay back the money over a set period of time. You may need a strong credit profile to qualify for a business loan, and lenders would also consider your business history, cash flow and assets that could secure the loan. If you need funding right away, you may want to consider a short-term loan rather than taking your chances on a grant. Short-term financing typically has fast time to funding because of minimal application requirements.

Crowdfunding

Small business owners can solicit funding from the general public through crowdfunding. Platforms like GoFundMe, Indiegogo and Kickstarter provide a platform for you to collect contributions for your business. Some platforms require you to offer products or equity in your company in exchange for funds, but others allow you to accept donations. Like applying for a grant, starting a crowdfunding campaign doesn’t ensure you’ll receive funding. It could take time to generate contributions, and you may not raise as much money as you’d like.

Microloans

Microloans are disbursed in small amounts less than $50,000 and are typically reserved for businesses involved in community development. Like many grants, some microloan programs target underserved demographics, such as the SBA Microloan Program that prioritizes low-income, women and minority business owners. A microloan may have higher interest rates than a traditional bank loan, and the small loan amount could result in a quick repayment schedule.

The bottom line

Small business grants are often referred to as “free money” from government entities or private organizations. Although you wouldn’t have to repay a grant, it’s not a handout for just any business.

Many grant programs are designed for certain types of businesses or business owners. You may have to meet strict requirements to be eligible. Competition is usually fierce for business grants, especially those from giant corporations like FedEx. Your chance of receiving a coveted grant could be slim.

However, if you do qualify for a small business grant, you would be able to fund your venture without the worry of paying off debt. There are numerous small business grants available both nationally and locally, so it could be worth your while to find grant programs that align with your business.

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Melissa Wylie
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Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]

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Most Profitable Industries for Small Businesses in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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The economy is growing and the market is (mostly) thriving, so if you’ve been thinking of launching your own small business into the world, the time just might be right. But if you’re an entrepreneur, there can be such a thing as too many ideas. You might have a dozen or more brilliant concepts but perhaps you don’t know how profitable a certain industry is likely to be.

We’re here to help. Working with data from the U.S. Census Bureau, Bureau of Labor Statistics and software company Abrigo, we’ve pulled together the most profitable small business sectors. Whether you’re a small business owner interested in where you rank or an entrepreneur doing market research, there are some important insights ahead.

Most profitable industries

The Census Bureau ranks, among other things, profitability by sector in its Annual Survey of Entrepreneurs. Here are the top 10:

Industry

% businesses reporting profits

Finance and insurance

73.1

Professional, scientific and technical services

70.9

Management of companies and enterprises

70.5

Real estate and rental and leasing

66.9

Health care and social assistance

65.9

Construction

65.1

Wholesale trade

63.8

Administrative and support and waste management

63.5

Manufacturing

61.7

Retail trade; accommodation and food services (tied)

60

Source: U.S. Census Bureau 2016 Survey of Entrepreneurs

Management of companies and enterprises topped the list as well when Abrigo looked at the most profitable small businesses by net profit margin for a 12-month period ending April 30, 2019. Net profit margin is calculated by taking a small business’ revenue minus all expenses, including interest and taxes. As part of its services to the banking and accounting industry, Abrigo collects financial information on private companies that is then anonymized and aggregated by industry.

Industry

Net profit margin (%)

Management of companies and enterprises

22

Lessors of real estate

20.9

Financial investment activities

19.4

Commercial and industrial machinery and equipment rental and leasing

17.7

Accounting, tax preparation, bookkeeping and payroll services

17.7

Legal services

17.4

Agencies, brokerages and other insurance-related activities

16.4

Activities related to real estate

15.7

Offices of real estate agents and brokers

13.9

Support activities for mining

13.3

Source: Abrigo

Fastest-growing occupations

Clues may also be gleaned from the Bureau of Labor Statistics’ employment projections in the decade between 2016 and 2026. Clean energy and health fields dominate this list of the 10 fastest-growing occupations:

Occupation

% change in employment

Solar photovoltaic installers

104.9

Wind turbine service technicians

96.3

Home health aides

47.3

Personal care aides

38.6

Physician assistants

37.3

Nurse practitioners

36.1

Statisticians

33.8

Physical therapist assistants

31.0

Software developers, applications

30.7

Mathematicians

29.7

Source: Bureau of Labor Statistics

Steps to getting started

But before you start a business, you’ll need to put in some leg work. We’ve rounded up four key steps that are essential to starting a business. Here’s what it takes to get your business off the ground.

1. Do your research

If you’re reading this article, congratulations. You’ve already started tip No.1: doing your research.

To start a business, you’ll need to do your homework — a lot of homework. That means thorough market and competitor research, as well as an analysis of financial feasibility, before you start making any business moves. You want a good answer to the question: “What does your business do, and what sets it apart from competitors?”

Some questions to get you started include:

  • What’s the demand for your product or service?
  • How big is your potential market?
  • Which competitors are already out there, and how many are there?
  • What do these consumers already pay for your product or service?

2. Make a plan

You won’t get very far without a well-researched, clear and solid business plan. This plan is a map — it will outline where your business is right now, where it’s going and how you will get there. If you’re not sure what a good business plan looks like, the U.S. Small Business Administration has a few templates and samples to help you get started. Most business plans will have the same information, but how you structure it will depend on how much detail you want to use.

3. Figure out financing

This is one of the most crucial steps to making a successful business. You need funding to grow, but you may not be able to get it as easily as an established venture. The first step is to figure out how much funding you need. That will determine where you get it from: if you’ll be self-funded, need to find investors, or apply for a loan. Your funding will obviously have an enormous impact on what your business will look like in the future, so it’s important to make figuring out how you’ll get capital one of your first steps.

4. Make it legal

This is not the most exciting part of starting a business, but everyone has to do it. You can make the process more painless by figuring out early what permits, licenses and forms you’ll need to fill out in order to become a business in the eyes of the law. Figuring out what paperwork you need early on in the process is one way to stay on top of things and make sure there aren’t any legal surprises later on.

A closer look at top industries

Specialized services

Industries such as legal services and mining activities are regular fixtures on the list compiled by Abrigo and formerly Sageworks — Sageworks became part of Abrigo after it was acquired in 2018 — said Libby Sharman, Abrigo’s vice president of marketing. One reason for this is steep barriers to entry or high degrees of education required. Keeping the talent pool small benefits these businesses.

They also may not require steep overhead costs, added Sharman. In the case of businesses involved in support activities for mining such as exploration, “they’re not necessarily buying and maintaining all the heavy equipment necessary for running a mine,” she noted. Low overhead costs may also apply to some of the professional industries on the list, firms where their primary expense is the people they have in revenue-generating roles. Without much overhead to account for, “they can have a higher than average profit margin. So many of these industries, legal, accounting, there’s so much training [for business owners] to get to that point, their experience is going to be a calculable asset relative to other small businesses.”

Machinery and equipment rental and leasing

“Construction may be a significant driver of profitability for this industry,” Sharman said. Smaller, local stores that provide machines to rent are more likely to be able to charge a slight premium because of their convenience or react quickly to the inventory needs of their local clientele. According to industry research firm IBISWorld, a key factor of success in this industry is the ability to control stock, so keep this in mind.

Construction equipment rental

This business provides construction equipment rentals to local contractors and property owners alike. Swift delivery and pick-up and a commitment to customer service will set you apart from larger competitors.

Medical equipment rental

Medical equipment rental businesses are also a part of this sector. Customers can rent everything from a hospital bed to a breast pump from these businesses.

Activities related to real estate

This has been one of the hottest growing sectors in the country recently, both for residential and commercial real estate (albeit one predicted to grow slightly slower in the near future, in the case of the latter). “These shops can also benefit from a low overhead since there is no inventory carrying costs or high-tech needs in the business,” Sharman said.

Under the umbrella of real estate are other types of work:

Property management

Property managers deal with the operation, control, and oversight of real estate, often acting as a go-between for landlords and tenants. The key to building a property management company is building a robust client base — so network, network, network.

Property appraisal

Property appraisal is generally an area of steady work (particularly if you live near a hot real estate market). Different areas and markets will often have different licensing needs, so make sure you do your research before beginning your training.

Traveler accommodation

This is the sector that includes short-term lodging. Aside from a place to sleep, these businesses might offer other perks like food services or recreational activities. Location is key for these businesses — hotels in touristy areas are always a good bet, but filling a niche in a less-trafficked locale means there’s less competition. U.S. travel bookings and revenue swelled to nearly $800 billion in 2017, according to Deloitte. Even though the accounting giant predicted growth in 2019 as well, it warned of challenges ahead. Here’s how small businesses can fit into this global business.

Bed and breakfasts

Bed and breakfasts aren’t always the cheapest option for accommodations, but they can offer travelers character and charm that chain hotels can’t compete with.

Resorts

Small, seasonal resorts occupy a similar niche to bed and breakfasts. “Given their smaller operating levels and boutique experience, they may be able to charge a premium to guests and avoid franchise fees, which protect their profit margin,” Sharman said.

Motels

Location and upkeep is everything — weary travelers are more likely to choose a well-maintained and attractive motel near major roads to turn in for the night.

The bottom line

No single factor will determine whether your small business is profitable. Decisions you make as a business owner, conditions in your particular city and in the country as a whole may affect the success of your enterprise. The important thing is to leverage your particular expertise and follow best practices for developing a solid business plan. These will help you weather the inevitable ups and downs of starting and running your own business.

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Kate Rockwood
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Kate Rockwood is a writer at MagnifyMoney. You can email Kate here

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The Complete Guide to Starting and Owning a Medical Practice

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Starting a medical practice
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After finishing medical school or practicing medicine for a number of years, physicians may want to take an entrepreneurial approach to their careers and start a medical practice. Yet this type of enterprise appears to be on the decline: less than half of doctors (47.1%) operated their own practices, the American Medical Association reported in May 2017, while only about one-third of physicians (31%) polled by the 2018 Survey of America’s Physicians stated that they were independent medical practitioners or partners.

There are numerous reasons why a physician would want to start a private practice, said David Zetter, founder and senior healthcare consultant at Zetter Healthcare Management Consultants and secretary-treasurer of the National Society of Healthcare Business Consultants. When a physician opens their own medical practice, they have autonomy to run the office how they see fit, and make changes to protocols or expand patient care without having to get approval from management.

“If they surround themselves with the proper experts to assist them, they can focus on the clinical side,” Zetter said.

In this guide, we’ll introduce you to the basic process of how to start a medical practice, from available financing options to extensive legal requirements.

Part I : How to start a medical practice

If you want to be your own boss instead of an employee in someone else’s practice, here are a few steps to follow to get your medical business off the ground.

1. Find financing.
Before jumping into the process, you should understand what financial resources are at your disposal to start your medical practice. You would likely need to obtain a loan or another type of business financing from a bank or an alternative lender. The type of practice you want to open would affect your costs: for instance, a psychiatrist’s office likely wouldn’t need as much financing because little equipment is required. We will discuss financing more in a later section.

Student loan debt may impact your borrowing power, particularly for recent medical school graduates — 75% of the Class of 2018 graduated with educational debt, leaving school owing about $200,000. The average physician earns $313,000, according to Medscape’s 2019 Physician Compensation Report, but some practitioners, like  public health or family physicians, will likely earn far less, and starting physicians may presumably come in on the lower end of the scale. You could check out our Ultimate Guide to Paying Off Medical School Debt.

2. Decide on your practice setting.

Your practice could be structured in one of the following ways, depending on your priorities as the owner:

  • Owner of a solo practice: As the sole owner, you would be entitled to all profits, but you would also bear its significant costs.
  • Equity owner of a group practice: This could be a mom-and-pop operation or a large group with many partners sharing in the profits and costs. Your level of equity would be determined by how your particular practice decides to divide income (and expenses).
  • Practice affiliated with a hospital or health care system: Your practice could form a partnership with a hospital but still retain its independence.

3. Get the required licenses.

The owner of a medical practice is required to obtain several licenses, which could include:

  • Medical license: Each state has its own requirements. Generally, physicians must graduate from an accredited medical school and complete residency training. You must also pass a standardized national exam, depending on your specific specialty.
  • DEA registration: Medical practices must register with the Drug Enforcement Administration if they’re planning to prescribe controlled substances. Your DEA application would depend on the type of practice you’re opening.
  • Dispensing physician registration: If you plan to dispense drugs, you would need to register with your state pharmacy board or another regulatory board. The license would be regulated at the state level.
  • Laboratory license: If a laboratory is a planned part of your practice, you would need to comply with the Clinical Laboratories Improvement Amendments. The Centers for Medicare and Medicaid Services oversee the program to monitor the quality of laboratory testing.
  • State based licenses: Your practice will need to be registered with the medical board in your state that governs your area of practice. You may need to register with the Secretary of State and Department of Professional Regulation in your state as well.
  • NPI number: Physicians must apply for a National Provider Identification number. The NPI number is mandated by the Health Insurance Portability and Accountability Act, or HIPPA.

4. Find a location.
Search for a location that’s far from similar medical practices, but still in an area with a moderate flow of traffic. The space should be big enough to store your equipment and supplies, and provide room for the business to grow. You could operate your business in a standalone building or a shared office space. The American Medical Association’s Health Workforce Mapper could help identify areas with shortages in certain medical specialties.

5. Work with insurance companies.
To accept health insurance, you need to go through the credentialing process with the insurance companies you expect to work with. Credentialing requires you to reach an agreement with insurance companies outlining how and when insurers will pay you. You cannot accept insurance payments from a company until you’ve completed the credentialing process.

Insurers would need to verify your professional and educational background, as well as your medical licenses, which could be a lengthy process, Zetter noted — “If a payer signs up a practitioner that is not legally licensed, they can lose their license to provide insurance.”

If you want to accept Medicare or Medicaid, you would need to enroll as a medical service provider. You can complete the enrollment process online here.

6. Obtain your own insurance coverage.
As the owner of a medical practice, you’ll mainly need two types of insurance – medical malpractice insurance and general liability coverage. General liability insurance covers the business, protecting you and your assets from liability. Medical malpractice insurance would protect you and other physicians against claims of bodily injury, medical expenses and property damage resulting from wrongful practices. The price of your insurance policies would depend on the type of practice you operate.

You may also want to consider purchasing:

  • Life insurance
  • Medicare supplement insurance
  • Disability insurance
  • Disability buyout insurance
  • Business overhead expense insurance

7. Buy equipment.
Like many aspects of your practice, the equipment you need would depend on your specific area of practice. For instance, you may need exam tables, supplies or X-ray or MRI machines. Equipment financing may be available to help you cover costs.

You would also need to purchase software to maintain electronic health care records, Zetter said. Health care providers rarely use paper records anymore, and most insurance companies require practitioners to submit electronic claims, records and statements, Zetter said. The cost of the software would depend on what you need. If you have a large number of patients or a sizeable collection of data, you may need a more robust — and more expensive — software system, he said. This software could also be federally mandated if you accept Medicare or Medicaid.

8. Hire employees.
Most medical offices have a receptionist or clerical worker on staff. You may need additional staff to handle medical billing and office management. Depending on your type of practice, you might consider hiring nurses and physicians’ assistants as well.

9. Set your price.
The price of your services would be dependent on market value, as well as Medicare reimbursements and what insurers are willing to accept, but you would still need to decide on the price range. Consider using market research data or hiring an expert to help you determine costs.

Part II : Financing a medical practice

Many traditional banks offer small business loans specifically for businesses in the medical industry. Bank of America, Wells Fargo and Chase, for example, have specific lending programs for physicians. You may be able to use your medical degree as collateral, and you could receive favorable rates and terms based on the risk of your business. The American Medical Association has partnered with Mirador to offer practice loans, as well as student loan refinance and home loans for AMA members.

You could obtain financing to cover real estate and construction costs. Equipment financing or leasing would help you either buy equipment upfront or lease assets over a period of time. You could also find financing to help you acquire another medical practice.

A lender may ask for:

  • Business entity type
  • Taxpayer identification number
  • Where and when you received your medical degree
  • Number of years in practice
  • Medical license number
  • Any professional trade association memberships

Pro forma financial statement. You may need to prepare a pro forma financial statement when applying for financing, Zetter said. A pro forma would outline your plans for the business in great detail to give the lender an idea of how you will manage the business and remain profitable.

“A pro forma is a crystal ball of exactly what is going to transpire,” Zetter said. “If banks have a medical or dental division, they’ll have no issue loaning money to a physician, as long as it’s managed properly. They’ll be able to understand that when you provide a pro forma.”

When starting a medical practice, you’ll need funding to cover expenses before and after you open, according to Zetter, as it could take three to six months to generate positive cash flow once the practice is up and running. You may want to consider a loan to pay for startup costs and a line of credit for operating costs like rent, utilities and payroll, he added.

Other financing options

  • Friends and family could be a funding option as well.
  • Home equity. You could also tap into your own resources and borrow from a home equity line of credit, which would allow you to lean on the value of your home and could be less expensive than other types of financing.
  • Private equity. Though it’s more common for private equity firms to acquire existing practices, it may be something physicians are considering if they are interested in expanding. However, some physicians are concerned that such investments put will put profits over patients, and about what could happen if a firm goes out of business.
  • SBA loans. Lenders approved by the U.S. Small Business Administration could approve you for an SBA 7(a) or CDC/504 loan to cover expenses like real estate, equipment and working capital. Check out our guide to understanding SBA loans.

Physicians often struggle to understand the financial side of opening a medical practice — a result of their hyper-focused medical training — so the significant amount of money physicians tend to earn could make them targets for people looking to take advantage. Before working with any type of financing institution, make sure the lender has your best interests at heart.

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Part III : Benefits and challenges of running your own medical practice

Striking out on your own to start a medical practice can be rewarding, but the endeavor also comes with challenges. Here’s what you can expect when opening your medical business.

Benefits of starting a medical practice

  • Freedom in the workplace. You’d be free to make executive decisions without the red tape or bureaucracy of upper management.
  • Flexible scheduling. Like any business owner, you would be able to set your own hours. Hiring additional staff members would ensure you’re able to step away from the practice from time to time.
  • Increased knowledge of medical practices. As the owner, you would need to be familiar with all aspects of the business, including staffing, billing and scheduling patients. You would become more knowledgeable about the industry as a whole.
  • Potential financial benefits. Owners of medical practices have the option to forgo dealing with Medicare and Medicaid — or even private insurance companies — by putting a subscription model in place for patients to pay the company in monthly, quarterly or annual fees. This would help you keep overhead costs low, putting more money in your pocket.

Challenges of starting a medical practice

  • Chasing payments for services. Patients may not always pay you upfront for your services. You may have to follow up with insurance companies to make sure you get paid, which could be time consuming and take you away from caring for other patients.
  • Managing the business. You may have firsthand experience in your designated medical field, but you might be unfamiliar with what it takes to keep a business running smoothly. Managing day-to-day responsibilities of a business owner, as well as managing people on your staff, could prove to be challenging.
  • Financial hurdles. It can be difficult for medical practices to make money at first. The business can be costly to set up, especially if you need expensive equipment. The location of your practice can also impact the overall costs, as it may be more expensive to own your space rather than rent.
  • Compliance standards and regulations. Independent physicians have numerous regulations to keep up with and strict compliance standards to meet. When starting a medical practice, be prepared for the following:
    • Medicare compliance
    • Occupational Safety and Health Administration compliance
    • HIPPA compliance
    • Medical coding compliance
    • Labor law compliance

Part IV : Resources for starting and owning a medical practice

Though physicians may not necessarily receive extensive business expertise during their medical school training, there are resources to help with the business side of their practices. In addition to organizations for medical specialties such as family medicine or pediatrics, here are a few organizations open to most, if not all, physicians:

American Medical Association — As part of its membership dues, AMA offers advice, advocacy and discounts on insurance and other services.

State medical societies — The Accreditation Council for Continuing Medical Education provides a list of state medical societies, which provide support to physicians in their particular communities.

Medical Group Management AssociationMGMA provides members, physicians or other professionals involved with practice management, with resources particular to running a medical practice.

American College of PhysiciansACP offers resources to help physicians manage the business and regulatory side of their practices.

The bottom line

Any entrepreneur must weigh the pros and cons of starting their own business. As the owner of a medical practice, you would have autonomy to provide treatment to patients in ways you believe are best. You can also set your own guidelines without waiting for approval from a superior.

But in addition to patient care, you would be responsible for the inner workings of the business, including administrative tasks. You could hire staff members to take on some of the workload, but you may still feel underlying responsibility to remain involved in all aspects of the business.

The financial and regulatory challenges of starting your own medical practice may seem overwhelming, but it could be worth the risk. Consider talking with a consultant or business adviser to help you take the right steps to start your own venture.

“Make sure you don’t miss anything,” Zetter said. “The more time you have, the more apt you are going to be in opening a clean, productive practice.”

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Melissa Wylie
Melissa Wylie |

Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]

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