When planning your career as a pediatrician, the first thing you probably want to look at is the average pediatrician salary. However, you have found that there is a wide range within the field based on where you work. Variables in salary will include such things as working for hospitals, clinics, and private offices as an associate.
Of course, you can always go into private practice where the earning potential can be even higher still. Even so, when looking at this, is it financially feasible to even consider going into business for yourself? Is there financing and funding available and will it be cost-effective? That’s one of the main questions you’ll need to ask before committing to any one career path as a pediatrician.
Financing a Private Practice
When determining whether or not you want to set up in your own practice, you must always consider cost vs. rewards. Some doctors begin in hospitals and other medical offices to establish a following while others jump right into private practice upon passing the boards. That decision is up to you, but in most cases, doctors who have gone down that route admit they wish they had taken the slower, but surer, route.
Being mentored by well-established doctors does have its rewards, one of which is learning from a seasoned physician. Another is building a bit of cash necessary when seeking financing. Most conventional loans will only finance a certain percentage of the capital needed for a startup, so there is that. There is also the fact that it may take a year or two to establish a large enough patient base to realize a profit.
Cost vs. Reward is often the determining factor when considering private practice.
Where to Find Financing for Medical Practices
There is also the question of finding lenders who will finance a medical practice. Some conventional lenders will not finance small businesses at all, let alone offer medical practice loans. You can, however, find lenders who are willing to underwrite loans to a pediatrician, but the first thing you must be able to do is to show them a sound business plan.
This is another area where experience comes in handy. If you have a large patient base where you are currently working and can show that you have become a well-trusted physician, you stand a better chance of finding financing. When it comes to business loans, there can be a great deal of risk involved for the lender and why you will often find strict requirements before a loan will be agreed.
The Bottom Line
If you feel you are ready to go into private practice as a pediatrician, remember that lenders look at risk much like insurance companies do before underwriting policies. The bottom line is that you should be able to substantiate a low amount of risk if you have any hope of getting the funds you need to set yourself up in business.
Always check out lenders who are willing to finance medical practices before looking elsewhere. If all else fails, you may want to open the floor to investors for a stake in the business, but that’s a subject for another day. For now, look at cost vs. reward of private practice to see if this is even something you want to pursue.