By: Justin Irizarry
Opening a medical franchise can be a rewarding endeavor that benefits your community at large. As with any business, you’ll need capital to get your location up and running. This is where lots of entrepreneurs can get into trouble if they don’t have a financial plan and budget in place. Making sure you stay away from some of the biggest financial mistakes businesses make is key to the success of your medical franchise. Here are some things to avoid when it comes to your business’s finances.
Wasting Unnecessary Funds
While having top-of-the-line products for your medical franchise is nice, don’t feel like you have to have the best of the best for everything your business needs. Starting a healthcare franchise is expensive enough. Don’t spend your much-needed capital on expensive devices and products that not even established franchises are using. Focus your funds on devices that you’ll use frequently instead of buying expensive machines, like MRI machines, straight out of the gate. Also, be sure to not spend too much on furniture for the location. You want to make it professional and comfortable but it doesn’t have to be a showroom.
Underestimating Financial Needs
Of course, as with opening any new business, having a business plan for your medical franchise is key. However, once you have your plan in place, you truly need to estimate the financial needs of opening a location. Once you have an estimate, a best practice is to double it. Most people are more financially optimistic than realistic when it comes to opening a new business. Having enough money squared away to handle unexpected expenses is better than having to scramble to find additional funds when you’re in the middle of building or ready to open. Or, worse yet, if your medical franchise has already opened and something unexpected like a competing franchise opens nearby dampens your projected revenue. Having a financial backup is crucial to survival and success.
Not Keeping Up with Billing
After you’ve opened your medical franchise, keeping up with your billing is important to keep your cash flow and finances in check. Money can fall through the cracks when your billing and records are behind and that impacts your overall revenue. As a medical franchise start-up, you must have experts in the seven Cs of billing:
- Contract negotiations
- Claim submission
- Claim formatting
Don’t try and learn the ins and outs of billing yourself. Hire people who are experts in the category. Finding an experienced medical franchise biller can be difficult but it will pay off in the end. If you can’t find an expert biller, then outsource the job. You have too many things to worry about when it comes to operating your business. Don’t get stuck with lost revenue and more headache to take on billing, too. Because the industry is booming, there are several companies who offer professional staffing services catering toward medical franchises.
Avoid getting a rough start when it comes to your medical franchise by following a few simple rules. Having your finances in order can be the difference between quick success and failure before and after you open your doors.
Justin holds a B.A. in Economics from Cornell University, where he was a 4-year varsity baseball scholar-athlete, and a M.B.A. from The Wharton School at The University of Pennsylvania, where he was a Joseph Wharton Fellow. In addition, he has earned the right to use the Chartered Financial Analyst® (CFA) designation, the most respected and recognized investment designation in the world. Justin has more than 13 years of experience acting as a trusted advisor and interim executive for a wide range of companies. His diverse business experience has led him to advise for boards of directors and senior management teams in the education, information, digital real estate, medical, and technology industries. Justin started his career on Wall Street with the Education and Information Group at Scott-Macon, Ltd. As the Vice President of Scott-Macon, he was responsible for sourcing and executing transactions in the $50 – $300 million range. Justin joined OrthoNOW® in 2010 and started the Franchise with Dr. Alejandro Badia in 2012. In addition to his role as Co-Founder &CFO, he serves as the Director of Operations of OrthoNOW® Doral.
Justin remains active with his alma mater and serves as a volunteer mentor to incoming freshman as part of the university’s Alumni-Student mentoring program and as a university interviewer for South Florida applicants to the university. Justin was recently named a Top 40 Under 40 by South Florida Business Journal for his contributions to the South Florida community as the CFO and Co-Founder of OrthoNOW®, the nation’s only network of orthopedic urgent care centers, and for his work in developing and activating a business model that changes how South Floridians access expert orthopedic care on-demand and at a cost-effective rate.