Welcome

It takes years of education and residency training to become a physician. Eventually, the investment pays off financially with a rewarding practice, either with a medical group, a hospital or as a sole practitioner. Though the temptation to become one's own boss is out there, you must first decide whether or not you have the right temperament to be in business for yourself as business ownership includes both rewards and challenges. You can begin to explore business ownership by first taking the following quiz prepared by the American Medical Association:

Questions	Sole Proprietor	Group Practice Part-Owner	Employed
1. Do you prefer to make your own decisions?	Yes	Somewhat	No
2. Are you comfortable with making difficult decisions?	Yes	Somewhat	No
3. Are you organized and detail oriented?	Yes	Somewhat	No
4. Do you perform well under productivity incentives to see X number of patients?	No	Somewhat	Yes
5. Do you perform well when having your clinical utilization monitored?	No	Somewhat	Yes
6. Do you enjoy marketing and networking?	Yes	Somewhat	No
7. Are you willing to compromise on your objectives or settle on an issue?	No	Somewhat	Yes
8. Are you a competent record keeper?	Yes	Somewhat	No
9. Do you enjoy managing and leadership?	Yes	Somewhat	No
10. Are you good at containing expenses?	Yes	Somewhat	No
11. Do you have the mindset of a business owner who can focus on profits, in addition to patient care?	Yes	Somewhat	No
Total:

After totaling your columns, which is the highest? If you scored the most points on the first category, a sole proprietorship with you as the primary owner would be the best fit for you. As your practice grows, you can always bring additional physicians on in your practice, while you continue to act as “primary shareholder.”

Being your own boss, and starting your own practice is a challenging process, but the rewards can be worth it.

Source: Starting a Medical Practice, Second Edition, 2003, American Medical Association.

- Carolyn Ellis

Industry Snapshot: Medical Clinic

Health care expenditures in America reached $1.6 trillion in 2002, which translates to $5,440 per person. It is estimated that health expenditures will be $2.5 trillion by 2005. Hospitals received 31% of total expenditures, prescription drugs accounted for 11%, nursing home care received 7% of total expenditures, administration was 7%, other expenditures accounted for 22%, and physician and clinical services received 22% or $352 billion.

Take a look at our full industry report on medical clinics (PDF Format). If you are interested in other industry snapshots, visit our SBDC s Toolkit.

- Guillermo Barreto-Vega

Links of Interest

American Medical Association Bookstore
American Medical Group Association
U.S. Department of Labor: Health Care Investments

Did You Know?

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Are You Paying Attention to
Demographic Trends?

Just as important as tracking the general trends of your target demographic market for your product or service, is understanding the distance that people are willing to travel to purchase what you have to sell. Knowing this will help you understand your trade area and the best locations for your store.

On a basic level, products can be classified into three main categories: convenience, shopping, or specialty goods. Convenience goods are those items that are purchased on a frequent basis and are necessities for daily living - think groceries or gasoline. Because price is less important, people will travel only within their local area near their home or place of work or in transit between the two. Stores in this category must locate near areas of high household, employment, and/or traffic density. Shopping goods, on the other hand, are purchased less frequently. People are willing to travel further for these goods in order to compare price and quality. If you are selling products in this category (clothing, furniture, cars, etc.) you might locate your business in a visible location near complementary or competitive shops - thus allowing people to comparison shop or buy your products on the way to purchasing something else.

Finally, specialty shops are less dependent upon their location than they are the products and services that they provide. Specialty shops are those stores that sell a particular brand or offer a specialized service (such as a high end audio store or clock repair shop). People are willing to seek you out because of your expertise or specific products. Obviously, these categories are an oversimplification of a dynamic interplay of the science and art that goes into selecting a good location, but it is a start in understanding why businesses locate where they locate. So to begin choosing your site, you should know where your store fits in these three categories. In next month's column we will discuss further ways of understanding how far people travel for products and services in order to estimate trade area size.

- Mike Cline

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