Great observation! And a challenge that I suspect many would-be entrepreneurial physicians face when filled with the urge to start a business.
While the question was too big for me to answer in one email, I found it encouraging that this person was even thinking about addressing steps that so many physicians and wannabe entrepreneurs fail to examine and optimize:
- having a viable business model
- then creating a business plan, however simple, to address the needs of a start-up business.
A long time ago, I wrote an article on what constitutes a basic business model. In short, you need to identify your:
a. Sources of revenue - what are all the sources of income for your business? Fees, sales of products, rental income etc.?
b. Cost drivers - identify your fixed and variable costs
c. Sources of capital for start up - money you put into your start-up, investment income etc.
d. Critical success factors - those items you would ideally monitor on a "dashboard" that indicted the health of your business
e. Risk factors - those factors internal to and external to the business that you need to be aware of and to mitigate.
By balancing all these factors in a way that makes coherent sense, you have yourself the beginnings of a viable business model!
Once you have your business model, then it's time to flesh it out in a business plan. Back of a napkin, on a scrap of paper, confining it to one page (a la One Page Business Plan) or using a high-priced software tool – the options are wide and the methodology less important than the thought that went into it!
My next articles will focus on (1) how to narrow down your ideas and (2) what I mean by a business plan.
Until then, I'm happy to back in the Land Of Blog!
Philippa Kennealy ran a private family practice, and a hospital, before building her coaching business helping MDs launch and run successful practices and businesses. Visit her online at www.entrepreneurialMD.com to learn more.