I am presenting my startup costs here, to give some ideas for those providers who are considering starting their own family practice, or for those who say it can’t be done anymore.

To become a business, I spent $50 for the state LLC filing, and $12 for business cards. I already had my medical license and DEA from residency, so the only certificate I needed was a $200 CLIA waived certificate so I could do in-house labs. One-year insurance was $400 for business liability, $333 for workers comp, and $900 for malpractice. Yes, only $900, for family medicine, without OB, in my state, in the first year out of residency. My “mature” policy after a few years open is now about $9K per year.

Most of my medical supplies and office furnishings cost $640 on Craigslist, including $60 for a used kitchen fridge, which was acceptable for vaccines. The U-Hauls and gas to move all this were $165. Other supplies included $68 for a thermometer and scale at Target, $127 at Walmart for various office supplies, $134 for a scanner at Office Depot, and $30 for a used router.

For my startup costs, I’ll include $1,800 for my laptop, although I use it for personal stuff half the time. If you already have a decent computer, you can exclude this cost in planning.

Rent was $1,000 per month for more room than I needed, and became $3,000 with first and last and deposit. Office improvements were $140 for plants and other decor, $212 for paint at Home Depot, and $20 to feed my friends who painted. Utilities were $55 for a VOIP device, $266 for Internet installation plus first-month service, and $10 for the first month of efax service.

Hiring a medical assistant cost $50 for ads, and about $2,500 for the first-month salary + taxes + benefits. In retrospect, I didn’t need an MA at first, because I was only seeing a few patients a day, so I am leaving this cost out of the total. I wouldn’t have this expense if I had to start over, instead I would wait a few months until I was busy enough, and then hire an assistant.

I spent $1,700 on vaccines, all of which got reimbursed by payers later, but I will include it here as an up front cost.

Things I got free were my EMR (Practice Fusion), a front desk computer and a printer (the lab company gives these free for some reason), and utilities (included in my rent). Most importantly, I didn’t pay consultants for many things that I figured out myself, including everything from business setup, to computer network setup, to cleaning toilets, to the whole revenue cycle, to taxes and employee benefits. There are no lack of professionals, in varied fields, who will try to sell you some expertise. The more you figure out yourself (or with minimal effort from your friends), the more you can troubleshoot later, or the better you can manage others later when you pay them to do these things. Being a “jack of all trades” may come naturally to family doctors.

If you are keeping track, the above total is about $10,500. Depending on how you like to account for things, as little as $3,500 of that can be considered up-front or sunk costs, while the rest (rent, insurance, vaccines) are recurring or reimbursable expenses. Even half of that $3,500 was for my computer, which you may have already. So at minimum I spent maybe $1,700, and at most I needed about $11K to start my own practice

These numbers do not include board certifications, society memberships, or hospital privileges, since you don’t need these in private practice. They also don’t include any of your personal monthly living expenses, such as student loan payments. Everyone’s situation varies, but it seems that those with enough business mind to hang a shingle are the same ones who don’t have out of control personal finances (even if their student debt is 250K).

These numbers also don’t include regular expenses that came later, everything from billing software (I don’t outsource billing) to unemployment taxes to my liquid nitrogen monthly service. I’m only trying to detail my example of up front costs here, not ongoing expenses.

My first-month gross income was $200, and my second month was $1,600. My expenses were a few thousand a month, so I didn’t break even on a monthly basis until month three. By month seven, I had paid off the original $11K and the first few months deficit, all of which total was maybe $20K. By ten months I was making as much per month as I could if employed elsewhere (including benefits), and by 15 months I had erased any amount that I had lost by taking no pay for a few months, versus if I had just maintained a job the whole time. My numbers have continued to climb since then, and I now have six staff, including another provider; we see 160 visits a week and have done 15,000 visits of 4,000 patients since opening .

I won’t try to address strategies for building a patient base, but considering the shortage of primary care doctors, if you can’t readily make a living in this business, then you are either targeting too rich of a demographic, are in a saturated location, or your monthly expenses may be too high.

I will, however, note that my numbers may seem low, which is my whole point here. I cringe when I hear stories of $100K loans to start a family practice, a specialty that takes little more than a desk and your brain. These numbers may vary for you, for many reasons, but I am just trying to give one example here, my own actual numbers.

Most of my inspiration for these concepts came from the IMP movement, which is worth checking out whether you are considering the jump or are a seasoned practice owner. Opening shop isn’t a vacation — you will probably work a lot more (at least at first) than as an employed doc, but it is more fulfilling, kind of like taking care of your own baby vs. babysitting someone else’s, or planting your own garden vs. working someone else’s. Despite the horror stories of paperwork and red tape, I think a majority of small business owners find the autonomy, pride, and fulfillment hard to beat.

I put these numbers together because before I got started, reading concrete examples from others made the possibility seem more real, and gave me a starting point. I hope that my numbers can provide some motivation to others.

P.J. Parmar is a family physician at Ardas Family Medicine, Aurora, CO, and blogs at P.J.! Parmar.

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