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Medical practice business plan

Ivana Karafiloska
November 3, 2025
Reviewed by: Teodor Jurukovski

You’ve worked hard, built up an incredible clinical skill set, earned a loyal client base, saved some money, and there’s no better time to open your own practice.

But while your clinical expertise is indispensable, it alone isn’t enough to guarantee success.

What really separates the practices that thrive from the ones that struggle (or even close their doors) comes down to one thing: a solid business plan.

A thoughtful business plan helps you secure funding, avoid common operational pitfalls, stay compliant, track progress, and scale.

What is a medical practice business plan

A medical practice business plan is your operational and financial roadmap. It lays out who you’ll serve, how you’ll deliver care, what you’ll charge, how you’ll staff and run the clinic, and how you’ll measure success. 

It’s a document that aligns the team, clarifies decision-making, and creates measurable milestones for growth.

Here’s why you need one:

  • Funding and credibility — Lenders and investors want to see market validation, a financial plan, and a clear plan for the use of funds.
  • Operational clarity — Writing the plan forces you to define workflows, staffing, policies, and technology choices in detail.
  • Growth tracking — It establishes measurable benchmarks so you can track performance and make necessary adjustments for sustainable growth. 

In short, a business plan keeps you on course. It’s your compass, preventing you from wandering aimlessly and helping you make confident, informed decisions.

Why planning matters for clinics

While U.S. labor statistics show that around 70–80% of new businesses survive their first year, a notable share still struggle to make it past the early stages.

Often, the culprits are poor planning, undercapitalization, and a lack of market research. A solid business plan helps reduce those risks by forcing you to confront cash requirements, regulatory obligations, and operational realities before you open your doors.

And those aren’t the only reasons you need one. You also need it for:

Risk mitigation

A well-crafted business plan helps you spot potential problems before they become real headaches. By analyzing your market, competition, and financial needs, you can uncover weaknesses early and address them before they turn into crises.

Compliance support

Your plan also keeps you on the right side of the law. It prompts you to think through key legal and regulatory requirements, like HIPAA, OSHA, or CQC, right from the start. This builds a culture of compliance that protects both your practice and your peace of mind.

Operational resilience

Clearly defining your standard operating procedures and staffing models keeps your team aligned and your operations smooth. That consistency reduces confusion, maintains efficiency, and ensures your patients receive the best care possible.

Foundation for expansion

Think of your business plan as a framework that grows with you. If your practice succeeds and you decide to expand into multiple locations, you’ll already have a strong foundation.

10-step medical practice business plan

Source: Pabau

So, whether you’re launching a solo micro-practice or managing a large, multi-location clinic, thoughtful planning is the foundation of long-term success.

Step 1 — Define your vision and care model

It’s easy to think this step can wait until after the logistics are sorted. But that’s a mistake. Defining the why and how of your practice is the foundation of your entire business plan. It’s the root that everything else grows from, and it needs to be planted firmly.

Here’s how to do it:

    1. Clarify your mission and patient promise — Define the kind of experience you want every patient to have: fast-access urgent clinic, a boutique specialty practice, or a family-focused primary care clinic. Write this as a short mission statement as a ‘patient promise’.
    2. Define your unique value — Identify what sets you apart: shorter wait times, extended hours, specialized procedures, concierge-style service, or a holistic care model and explain the benefit.
    3. Pick your delivery model — Will you see patients in person, go hybrid with telehealth, or offer mobile/outreach services, such as home visits or community clinics? But also keep in mind reimbursement and regulations. Telehealth is great for reach, but insurance policies and state rules vary.
    4. Set goals that keep you on track — Think about insurance, reimbursement, and regulations. Your goals need to be ambitious but realistic.

A clear, well-defined vision keeps your practice focused, aligned, and true to its purpose, no matter how much it grows.

Step 2 — Validate market demand and location

This step is all about making sure there are enough patients in your area who are willing and able to pay for your health services. 

Here’s how to approach it:

  • Analyze the market: Research local demographics, dominant employer groups, and the typical payer mix (percentage of Medicare, Medicaid, and private insurance) to confirm financial viability.
  • Map competitors and referral sources: Identify existing providers and understand their strengths and weaknesses. Crucially, map out potential referral sources, such as other specialists, to build relationships.
  • Select a strategic location: Use drive-time and accessibility data (parking, public transport) to ensure your location is convenient for your target market.
Healthcare provider's location access stats

Illustration: Pabau / Source: Accenture

Location plays a big role in whether patients choose your practice. In fact, a research report from Accenture found that around 70% of patients prioritize location access when choosing their healthcare provider, making it essential to select a site that is convenient, accessible, and easy to reach by car or public transport.

Setting up a medical practice in the UK is as much about strong administration as it is about clinical expertise. Getting your legal, compliance, and insurance foundations right from the start ensures you can focus on patient care without unnecessary risks or interruptions.

  • Choose a legal structure: Decide whether your practice will operate as a sole trader, partnership, or limited company. Your choice will affect liability, tax obligations, and ownership arrangements.
  • Plan registrations and credentials: Start the process of registering with NHS Digital (if relevant) and ensure all clinicians have up-to-date GMC (General Medical Council) registration. Obtain any required local and professional licences, certifications, or accreditations. For instance, in the UK, you must be CQC compliant, as providing regulated healthcare services without Care Quality Commission (CQC) registration is a criminal offence.
  • Secure insurance and indemnity requirements: Protect your practice and your team with the right coverage, including malpractice insurance and professional indemnity (for clinical liability) as well as business insurance such as public liability, employer’s liability, and property insurance. 

By establishing these foundations from the start, you’re not compromising the safety of your patients, your team, or the future of your practice. 

This step of your business plan is critical and should never be taken lightly. If you’re unsure how to navigate it, hiring a professional can help ensure your practice is built on a solid, secure foundation.

Step 4 — Define services and pricing strategy

Once you’ve clarified your vision and validated your market, the next step is to define exactly what services your practice will provide and how they will generate sustainable revenue. 

So, start by building your service list around three things: 

  • What your local community needs
  • What your team does best
  • What’s financially viable

This will help you decide whether your focus will be on chronic disease management, specialist consultations, wellness and preventative care, or something more niche.

Next, decide how you’ll price and bill your services. Will you operate on:

  • A cash-pay (self-pay) model, where patients pay directly out of pocket at the time of service, or
  • Work with insurance payers, meaning you’ll bill insurance companies using medical codes (like CPT or ICD codes) for reimbursement.

In the UK, accurate coding is key to getting paid correctly and staying compliant. Procedures are usually recorded using OPCS-4 codes, and diagnoses with ICD-10 codes. Getting this right from the start saves endless headaches later.

Also, setting smart pricing strategies can help you set your service prices based on factors such as demand, seasonality, staff expertise, and client behavior.

Finally, take time to plan your appointment structure. Set clear appointment types and durations. For example, follow-ups will be 20 minutes, and 40 minutes for new patient consultations. This might seem like a small detail, but it has a big impact on patient flow, clinician workload, and your financial performance.

When you define your services and pricing clearly from the start, you’re setting up your practice to deliver care efficiently without compromising quality, staff wellbeing, or profitability.

Step 5 — Build operations, staffing, and workflows

This step is all about outlining the day-to-day reality of your practice, ensuring that everyone knows their role and that every process runs like clockwork. 

So here’s how to get started:

  • Outline roles and staffing needs: Think about who you need on your team and how many staff members are required in each role.
  • Map core workflows:  Walk through how patients will move through your practice – from scheduling appointments and intake/consent, to billing, and follow-ups. Using a patient management system can make this process much easier. It guides practitioners step by step through each patient pathway, automates reminders, and securely stores forms, patient history, and photos, ensuring nothing is missed.
  • Emphasise compliance and SOPs: Set up standard operating procedures for all key processes and schedule regular checks to stay compliant. 

When your operations are well-organised, you free yourself to focus on patient care, growth, and delivering the kind of experience that keeps patients coming back. 

Step 6 — Select technology and systems

For practices, technology isn’t just a nice-to-have anymore. 

Take it from me: two years ago, I used to book all my appointments over the phone. Now, I practically cringe at the thought of calling just to schedule something. Like many patients today, I prefer booking online, on my own time, usually after 9 p.m., once my kid’s asleep.

But not every system will do. If it’s clunky, confusing, or time-consuming, most patients will quickly lose patience. The right technology should make life easier for you, your team, and your clients.

So when choosing a platform for your medical practice, here’s what to look for:

  • Online scheduling – so clients can book appointments anytime, without calling.
  • Comprehensive EHR – to securely store and access all patient information in one place.
  • Client cards – giving you full visibility into each patient’s history, allergies, medications, and preferences.
  • Integrated billing – ensuring every transaction is secure and easy to track.
  • Patient communication tools – including SMS and email reminders, follow-ups, and even telehealth options.
  • Scalability – your system should grow with you, supporting more clients, staff, and locations as your practice expands.

That’s why it’s often best to choose an all-in-one practice management system rather than juggling multiple platforms.

A great example is Pabau, an all-in-one software designed specifically for medical practices. It includes everything above and more, like:

  • Centralized prescriptions feature, where you can create, send, and track all prescriptions in one place.
  • An AI scribe tool that listens to your consultations and automatically writes up notes.
  • Smart reporting that lets you track performance and generate insights with one click.
  • Built-in marketing tools like bundles, packages, loyalty programs, and gift cards to boost retention.
  • An AI-powered tool for generating letters and for automatically identifying medication risks and contraindications. 

Source: Pabau

With the right system in place, your team stays organised, your patients enjoy a smoother experience, and your new practice runs like a well-oiled machine. 

Step 7 — Create financial projections and secure funding

Before you open your doors, you need a clear forecast of how much it will cost to get started, how long your funds will last, and when your practice will start turning a profit. This means you should: 

  • Estimate startup costs: Detail all one-time expenses: medical equipment, leasehold improvements, legal fees, EHR setup, and licensing.
  • Calculate working capital: Determine how much cash you need to cover operating expenses like rent for your office space, payroll, utilities, software, and marketing strategy until the practice becomes cash-flow positive.
  • Break-even and runway: Calculate the month when revenues cover fixed + variable costs and ensure you have at least 6–12 months of runway beyond that to absorb slower-than-expected growth.

Finally, when all of this is calculated, you need to explore your funding options. You can consider a bank loan, equipment financing, investor backing, or your own capital. And lastly, you should plan how you’ll manage cash flow to stay secure and confident as your practice ramps up.

Step 8 — Develop marketing and patient acquisition strategy

A medical practice that isn’t visible won’t attract any patients. And with a solid marketing plan, you can bring it closer to your future patients: 

  • Build a professional website that clearly lists your medical services, team bios, and booking options.
  • Optimise for local SEO — update your Google Business Profile, encourage reviews, and make sure your clinic appears where patients are searching.
  • Host open-house events or educational sessions to build trust and connect with your community and referral partners.
  • Be active on social media — Share patient stories and results (with consent), case studies, testimonials, and educational content that will help people see your impact.
  • Use automated recalls and promotional email campaigns to stay connected with patients, remind them of follow-up appointments, and share updates about new services or seasonal offers. Combine this with patient feedback and surveys to understand satisfaction levels and identify areas for improvement.

Here’s, for example, how one GP promoted its services for men’s health week:

By showing up consistently, educating patients, and building genuine relationships, you’ll attract patients who will help you get your business off the ground and start on the right foot.

Step 9 — Implementation timeline

A successful launch depends on a clear, structured timeline that shows you what to do and what to expect at each stage. Here’s an example of a simple way to map it out:

  • Planning phase (6–4 months out): Finalize your business plan, secure funding, choose your location, and start the credentialing process.
  • Launch phase (3–1 months out): Sign the lease, order equipment, hire key staff, set up IT systems and workflows, and kick off marketing campaigns.
  • Post-launch phase (first 6 months): Track financial and operational performance daily, refine workflows, provide additional staff training where needed, and measure patient satisfaction.

With a timeline like this, you’ll always know what steps to take next and can move forward confidently.

Step 10 — Tracking success and optimising your plan

Launching your practice is just the beginning. To ensure long-term success, you need to track how well it’s performing and make adjustments along the way. Start by defining key performance indicators (KPIs) across three areas:

  • Financial metrics (like revenue, costs, and patient acquisition)
  • Operational efficiency (appointment utilisation, staff productivity, workflow bottlenecks) 
  • Patient satisfaction (feedback, reviews, and repeat visits). 

Regularly reviewing these KPIs allows you to spot trends and refine your processes before small issues turn into big problems. 

Using practice management software with built-in KPI dashboards can make this even easier, giving you real-time visibility into your clinic’s performance, highlighting what’s working and what doesn’t. 

Launch with confidence

There you have it! Follow these 10 steps and you’ll be well on your way to not just opening your practice, but making it thrive for years to come. Using integrated, all-in-one tools like Pabau can make executing your business plan much easier by centralising all your essential functions:

  • EHR and scheduling: Manage medical records and your entire appointment book in one place.
  • Practice management: Streamline administrative tasks and staff workflows.
  • Billing and patient communication: Simplify complex billing processes and keep patients engaged with automated reminders and follow-ups.
  • Client records: Maintain detailed, compliant patient profiles that consolidate all clinical and financial history.

With the right system in place, you can focus on providing excellent care while your practice runs smoothly behind the scenes. If you want to see Pabau in action, book a live demo with our team today.