I started my practice seven days after completing my dermatology residency and am now the owner of two practices in Southern California. I’m here to tell you there’s no magic. It’s a lot of hard work and personal time, but worth it. One large part of making the decision for me was knowing it would be easier to go from a resident’s salary to a start-up business with negative income, rather than getting comfortable with a large salary at a job and then working backwards financially. I can now say that the sacrifices I made were worth it. If you’re considering opening a practice, here are my top tips for success:
Tip #1: Be willing to stretch your ideal location.
Location is the most important thing in terms of rapidity of financial success. While I wanted to open a practice in LA, I knew it made no practical sense. One building I saw housed 41 dermatologists. How in the world could I start a practice from scratch and have patients?
Google was my best tool. I wanted to focus on treating skin cancer, I searched the demographics for locations around me that had an older population with a higher per capita income. I wanted a nice area and ended up in Palm Desert, California, two hours outside of LA. I built that practice up for six years and then was able to open a second location by the beach.
Find a location that isn’t already saturated with dermatologists. Opening up in a saturated area will delay your financial success. The only time this is not the case is if you are already working for someone and have an established base of patients who will follow you.
Pro tip: Call around. Before you start your practice, call the other dermatology offices in the area and ask when is the soonest you can schedule a regular appointment and a cosmetic appointment. Ask about their pricing. Get a clue of what’s appropriate for that location. If you can get in at 10 a.m. the same day, then that’s probably not where you should be opening up.
Tip #2: Don’t destroy yourself with overhead.
Find an office space that’s not going to beat your budget. Do not think that if you build it they will come. Initially get an office space that you can comfortably afford. If you are going to start from scratch out of residency, rent your office space and then when your lease is up, buy a space. If you have been working and have saved money, find an office space you can afford to buy since you will probably have an established patient base. If you are planning on working for more than 10 years, it makes more sense to buy in most locations.
Don’t overhire staff – keep your overhead manageable. Initially, you are losing hundreds of thousands of dollars, and payroll is where most of the budget goes.
Tip #3: Moonlight to pay the bills.
I had a second job in the first year of opening my practice because I could not afford overhead otherwise. I worked four days a week at a practice three hours away. I put 1,000 miles a week on my car just for work, not counting social driving! During that time, I worked two days a week at my own practice. After 6 months, I worked three days a week at each job, and at a year I left the other practice to work four days a week at my own.
Tip #4: Network every single day.
In the early days of my practice I went out to dinner almost every single night. I would take out primary care doctors just to stay hi. Every single day and night for the first year I networked. My advice is to put yourself out there. Go to all the dinners and functions. How else will people know you?
Tip #5: Don’t discount other dermatologists as a referral source.
I went to drug rep dinners in my area and met nearby dermatologists, and those became huge initial referral sources. I had other dermatologists referring to me because they didn’t have room in their practices or there were conditions they were not interested in treating. We also helped each other by covering when we would take vacations, by sending to each other for follow ups of patch tests, etc.
Tip #6: On the hard days, remember what you’re working for.
The number one reason for me was autonomy. I love having the freedom to change office policies and add procedures or equipment. I also love making my own hours.
I highly encourage dermatologists completing residency to start their own practice. In my opinion it is the best thing you can do for yourself. It is incredibly time consuming, and can be stressful, but it is very rewarding and will afford you financial freedom in the long run.
