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10 Ways to Advertise Your Business for Free

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Your budget as a small business owner may not always have room for advertising, but you still need a strategy for building brand awareness with potential customers. Thanks to online resources and digital tools, there are plenty of ways to advertise your business without spending a single dollar. And don’t worry, you’re not alone in looking for low-cost marketing hacks — 42% of small businesses invested only 3% or less in marketing last year, according to small business software company Wasp Barcode Technologies. Here are 10 options to get you started.

1. Social media

Small business owners can create free pages and accounts for their businesses on Facebook, Twitter, Instagram and other social media platforms. You can create posts to promote your business, and most platforms may offer special insights for business account holders. For instance, Facebook and Instagram let you explore the reach of your posts, including impressions, interactions and the number of times people follow the link to your website. Such tools are free, though it will cost to place ads on social media platforms that may reach more people.

By the way, even though it costs to use Google Ads, it’s free to use the search engine’s analytics to see who’s visiting your business’ website and what customers do when they get there.

2. Email marketing

Some email marketing platforms offer free services or a no-cost trial period. Using a free service like MailChimp, you could send messages about your business to anyone on your contact list, as long as it doesn’t exceed 2,000 names. Email marketing platforms not only allow you to send thousands of emails notifying your customers of deals, news or changes, you can also track which ones draw the greatest response. You’ll know when customers open an email — or delete it — and even when they click on a link to buy.

3. Review websites

Review sites like Yelp can get your business name in front of many potential customers. To use these sites to your advantage, you should make sure your profile accurately reflects your business and brand. Yelp encourages business owners to respond to customer comments with a direct message or public comment. Uploading photos, links and hours of operation to your business’ Yelp profile would help customers find you. Yelp also offers analytics and tracking to provide insight into how users engage with your business.

Looking for business financing? Check out our top picks for small business loans here

4. Online listings

Online platforms like Thumbtack connect businesses with people searching for certain services. Creating a listing for your business would put your company in front of people in your area looking for your specific services. Registering your business with Thumbtack is free, and you’d only pay when a customer reaches out to you to schedule an appointment or request a quote.

5. Local directories

Make sure your business is registered with free local business directories and that all listed information is accurate. If you are willing to pay some fees, you could also register with your local chamber of commerce or the Better Business Bureau.

6. Media opportunities

Responding to reporter inquiries would help you get your name – and your business’ name – in front of an audience. Signing up for a sourcing service like Help a Reporter Out would give you the ability to connect with journalists who are covering topics related to your industry. You may be able to get featured in smaller and larger publications.

7. LinkedIn Groups

LinkedIn Groups allow people to connect over a shared interest or industry. You could join a group and start or contribute to conversations, forming connections that may be valuable to your business. If you’re willing to jump through a few more hoops — and are a freelancer experienced in your field — you could apply to become a LinkedIn ProFinder. ProFinder connects consumers with professionals in such fields as accounting, software development and business consulting. The service is free to try, but a Premium Business subscription is required after the first 10 proposal responses.

8. Free samples or coupons

Free trials or samples would give prospective customers a risk-free opportunity to interact with your business, which could lead them to feel more comfortable purchasing something down the road. Giving out coupons could generate return visits to your business and help you expand your customer base.

9. Community events

Getting involved in your community would allow you to connect with potential customers in your immediate area. While you’d likely have to pay to sponsor an event or set up a booth, simply attending could be a useful networking opportunity. Be sure to choose events that your target customers would most likely attend.

10. Become an industry expert

To build credibility, you could set up a blog on your website to showcase your industry knowledge. You could explain trending topics in helpful posts that address common challenges in your field. Contributing to trade publications and making guest speaking appearances at educational institutions or local events would help you establish yourself as an expert and bring attention to your business.

You don’t need to have a large advertising budget to market your business — you just need to think creatively about the resources at your disposal. Taking advantage of social media and free online resources would help you build awareness of your business without breaking the bank. You could focus on connecting with your local community or broaden your reach outside of your area. If you remain resourceful, the opportunities to advertise your business could be endless.

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

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The Complete Guide to Starting and Owning 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 is a writer at MagnifyMoney. You can email Melissa at [email protected]

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Small Business

Understanding Burn Rate & How to Calculate It

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Getting a business up and running can be exciting for entrepreneurs, but it’s not as thrilling to think about the money you’re spending in the process. Keeping an eye on your burn rate can help you make sure your cash isn’t flying out the window faster than you realize.

While startups use burn rate to figure out how much capital is needed to launch their businesses, companies of all types and sizes can rely on the same calculation to manage spending and costs, no matter how long they’ve been established. Continue reading to find out how understanding burn rate can benefit your business.

What is burn rate?

Burn rate is the degree to which a company spends its cash during a specified period of time, said Jack McGourty, a professor and director of community and global entrepreneurship at Columbia Business School.

“How much money are you burning through, especially as it relates to any money that is coming into the company through operations or loans?” he said.

For startups, burn rate can indicate how much financing the business could secure from sources like investors. Venture capitalists may provide funding based on how fast the business plans to spend it.

According to McGourty, burn rate could also forecast when a new business will become profitable. As he noted, you’d want to determine when you plan to hit revenue goals that match or exceed your burn rate. He added that established businesses can use this approach to find out when a new business initiative or product line will begin making money, compared with development costs. You could calculate the individual burn rate of the new vertical.

“Think of the burn rate, whether it’s a new company or an existing company, as the pace that it’s spending whatever money they’ve set aside to fund this new venture,” he said.

How to calculate burn rate

Burn rate shows your company’s negative cash flow and is typically calculated on a month-by-month basis using the actual amount of money in your account. Your burn rate would be expressed as a figure, such as the specific amount of cash that you’re spending, McGourty said.

You can find both net burn rate and gross burn rate, depending on the information you’re seeking. Gross burn rate would show your company’s operating expenses, while net burn rate would illustrate how fast the business is losing money.

Gross burn rate

Your gross burn rate is simply your operating expenses. You would add all operating expenses, like rent, utilities and other overhead. The total would indicate how much money the business is spending on a monthly basis, regardless of revenue.

Net burn rate

Revenue would come into play when calculating net burn rate. You would subtract your total monthly operating expenses from your monthly revenue to find out how much cash the business needs to stay open each month, which would be your monthly operating losses.

For example, say your business generates $2,500 each month but you need $5,000 to cover your monthly operating expenses. You would have a net burn rate of $2,500. Until the business begins generating positive cash flow where revenue exceeds expenses, your net burn rate would be high, McGourty said.

Net burn rate would give you a better idea of how much money you’re losing each month, which would indicate your runway, or how long the business could survive based on your current spending rate. To calculate your runway, you would divide your cash by your monthly losses. For instance, if you have $50,000 in the bank and you spend $5,000 each month without bringing in additional money, your funds would run dry in 10 months.

Similar calculations to know

There are several ways to analyze your company’s finances to watch your spending as it relates to your revenue. Here are a few other accounting terms and formulas to understand as a small business owner.

Operating cash flow

The amount of money generated through regular operating activities in a specific period of time is considered operating cash flow. You would add your net income and any non-cash expenses, like depreciation of an asset, then subtract any increases in your working capital, which is the money allocated for short-term bills and regular business operations.

Operating cash flow = (Net income + Non-cash expenses) – Increases in working capital

Break-even point

The amount of revenue you need to generate or the number of product units you need to sell to cover the cost of making the sale would be your break-even point, or BEP. The BEP would indicate a period of time when revenue equals expenses. It would also show when or if a product or service could become profitable. You could find your BEP in terms of product units or dollars. The unit-based calculation would be necessary to complete the dollar-based formula.

To calculate the break-even point in units:

Break-even point [units] = Fixed costs per unit / (Revenue per unit – Variable cost per unit)

To calculate in dollars:

Break-even point [sales in dollars] = Fixed costs per unit / (Sales price per unit x BEP in units)

What your burn rate says about your small business

Without money to cover operating expenses, a business likely won’t survive. Calculating your monthly burn rate would show you how fast you’re depleting your cash, and whether that rate is sustainable for the business, McGourty said.

“If you’re spending money faster than you’re making it, there’s going to be an end in sight,” he said.

Once you understand how much money you need to operate the business, as well as the speed at which you spend that money, you would be in a better position to ask for the appropriate amount of financing from a small business lender or investor, McGourty said. Based on your analysis, you would know how long that funding would last.

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How to improve your burn rate

Increasing revenue would ultimately improve your company’s burn rate, McGourty said, as would reducing your expenses. Here are a few strategies for improving cash flow to lessen the amount of money you’re burning through each month.

Customer retention: Consider ways you can encourage your existing customers to make more purchases, whether it’s through upselling or creating a new product line, McGourty said. It’s typically more profitable to retain customers rather than to find new ones, which often requires additional – and sometimes costly – marketing efforts, McGourty said.

Assess your accounts payable: You may be able to adjust your payment schedule to vendors, such as moving from a 30-day billing cycle to a 60-day schedule, McGourty said. This change could help you better manage cash flow each month.

Reduce operating costs: Analyze your variable and fixed costs to see what you can cut, said McGourty. For instance, you could try to negotiate a better price with one of your vendors, or you could move into a smaller office space with lower rent.

Manage sales cycle: The time it takes for you to close a sale can affect your cash flow and burn rate, as you would be spending money and resources on engaging the customer until they pay you, McGourty said. Try to reduce the amount of time it takes for a customer to buy an item or pay you for a project after your first interaction.

As a small business owner, you should regularly engage in this type of evaluation of your costs and spending habits, McGourty said. Analyzing burn rate in addition to your routine calculations can give you a clearer look at how fast you’re draining your cash reserves, so you can reduce that spending before it’s too late.

“You always want to monitor expenses,” he said. “It’s so important that [business owners] understand how much cash they need before they break even, so they have enough money to sustain the basic expenses in the meantime.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie
Melissa Wylie |

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

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