Business planning for general practices
Have you ever taken a wrong turn and ended up completely lost? Perhaps you kept going the way you were in an attempt to correct your error and get back on the right track, leading to even further confusion. It is likely turned to a GPS system to help you get back to where you needed to be.
Think of a business plan as your practice’s GPS system. A reassuring guide that identifies where you are, examines available options, and ultimately, calculates the best route to get you to where you want to be.
Whether your practice is brand new or has been running for decades, developing a business plan is more than RACGP Standards 5th edition requirement (Criterion C3.1 – Business operation systems). It can be a crucial part of your practice’s success. A business plan will support the future direction, sustainability and growth of your practice and is the key to a more efficient and productive practice.
Developing a business plan, particularly an initial one can be daunting and time-consuming. However, the task can also be extremely rewarding and provides an opportunity for you to take a big picture look at your practice to see what’s working and what could be improved.
AGPAL clients have access to a business planning package within their AGPAL accreditation hub, just search ‘Business plan’ in the Education & Resources Library! The plan contains ready-made, customisable template, Excel spreadsheets for a break even calendar, cash flow table and risk assessment table and information on how to market your practice.
Tips to consider
The importance of research in business planning is an immensely important process. It is useful to gain an understanding of your current position and to identify whether there are any opportunities available to you. To assist you in doing so, you can start by answering questions such as:
- Who are our competitors?
- Where does our practice fit in the marketplace?
- What do we want to achieve?
- Who are our clients?
- Are there any members of our community we could better service?
- What makes our practice stand out from the practice down the street?
- Are we meeting the needs of your community members?
- Are there any areas of our business we could be doing better?
If you are a newly opened practice, it is highly likely you covered these questions recently. But these are just as relevant for practices that have been operating for many years. New practices may have opened in your area, new housing developments could provide new opportunities, or the demographics of your patients may have changed. Ensuring your research is accurate and up-to-date will allow you to have a better understanding of your practice and where you should be heading.
Be realistic with time
Good business planning takes time and should be carefully undertaken to ensure you can create the best goals and outcomes for your practice. It’s an activity that needs dedicated effort and not something that can be completed in a couple of hours at the end of a busy day or when the practice has a lull in patients.
Developing a business plan includes looking at a wide range of areas including legal, financial, human resources, and services to name a few. Just like the range of issues present in your patient population, some parts of the plan will be easy to identify while others will need further investigation.
Once you’ve worked out which parts you are going to include don’t be afraid to jump between the sections of your business plan. Some sections will be easier to complete than others and you can always go back to the other sections later. If you are unable to complete the process yourself, you may like to get additional help from a business planning professional.
Make your business plan specific to you
This may seem like an obvious tip but a lot of practices will look to competitors to find out what they’re doing rather than examining what they want to achieve and the best way to make this happen. Every practice is unique offering different services, professionals with different interests and specialties, and a patient population with its own individual needs. Your business plan should encompass all of these unique elements instead of simply copying what others are doing.
Identify the areas your business plan will address
The actual format of your business plan can take many forms but generally will include your practice’s vision, mission, values, objectives, strategy, governance structure, roles and responsibilities, reporting and monitoring systems, processes and timelines, financial status, and budget. Always leave your summary to last as you’ll be in a better position to write a concise overview once you are clear about the details.
Involve all staff members in the process
The amount of input from staff will depend on their position within the practice. However, involving everyone in some way will ensure greater commitment and dedication to the overall objectives identified. Staff may also be able to identify new issues, options, and opportunities that you hadn’t thought of previously. It also provides the opportunity for collective contributions, improving the morale demonstrated when working toward a common goal.
Just like when meeting new patients, your business plan also needs to make a good impression so language and presentation should be professional. To minimise errors and make sure your business plan makes sense, it is also a good idea to have someone impartial proofread your document. The more thought-out, clear and concise your business plan is, the more likely decision-makers or those assisting in the implementation of the plan are going to be on board and support its success.
A business plan should be a living document rather than something you write then forget. Your practice, clients, market and competitors are constantly evolving and it is vital that your business plan does the same. Your business plan should be reviewed several times a year and when the circumstances of your practice change to ensure you are on track with your goals and provided with the opportunity to make updates, changes and improvements based on experiences, learnings and situations encountered along the way.
In addition to these seven tips, there is plenty of free advice available online. The Department of Industry, Innovation and Science has useful tips, templates and resources to support your team in better understanding this process and creating a winning business plan.
Meeting the 5th edition requirements
In addition to the benefits of business planning identified in this article, undertaking this process also supports you in meeting the new RACGP Standards 5th edition indicator requirements as part of your accreditation.
Indicators C3.1>A and C3.1B in the RACGP Standards 5th edition outline the following in regards to business planning:
C3.1>A Our practice plans and sets goals aimed at improving our services.
- plan and set business goals.
- write a statement of the practice’s ethics and values
- maintain a business strategy
- maintain an action plan.
C3.1B Our practice evaluates its progress towards achieving its goals.
- maintain progress reports about the business strategy or action plan
- create a strategy for continuous quality improvement
- implement quality improvement initiatives.