16th May 2008
The reason new practices fail … too much spending, not enough income
This is a sad story I saw about a new DC in Wichita, Kansas . Reading between the lines, it sounds like he got in too far with a lease commitment, then he couldn’t get patients in the door fast enough (or he couldn’t get them to pay) to meet his commitments. If he had borrowed a little more and spent a little les on startup, he might have had enough money to pay his bills while he was building his patient base.
This is a classic example of “lack of capital.” It can happen any time, but is most common in the beginning. How do you overcome it? A wise chiropractor told me “DSATM - Don’t Spend All the Money.” In other words, dole out your loan proceeds very carefully, not spending on all your “wants” but focusing on the minimal needs you have in startup and the requirments to pay back your loans and make required payments (like the lease, utilities, etc.). Then you’ll (hopefully) have enough money to pay your bills while you work to build up a good patient base.
This young doctor sounds optimistic. I would encourage him to try again. What do you think?
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