Starting a medical practice has never been easier. Practice Setup LLC offers a complete line of services to see your project through from budget and financing to opening the doors on your new facility. We understand the difficulty in maintaining your practice while starting a new medical practice. At Practice Setup LLC, we manage your project so you can manage your practice.

At Practice Setup, our team of professionals assists each physician in developing a comprehensive Pro-forma Financial Analysis which provides the most critical tool for your company’s future—a strategic financial plan.

Since a start-up medical practice has no historical financial information, simplified Pro Forma’s are estimated statements that are typically projected for 3 years. They demonstrate the best case, worst case and most likely financial scenarios of a new practice, clinic, healthcare entity, etc. Computerized spreadsheets are ideal for this task. Other relevant financial information may be included, as needed.

By allocating a practice’s profit or loss into operating groups, banks or investors can isolate profitable revenue centers and isolate unprofitable costs drivers. In certain managed care contracts, an analysis to identify unit or per dollar revenues, gross profits and/or gross margins, is vital. Other non-cash expenses (i.e., depreciation, amortization and deferred taxes) are then deducted from revenues to determine overall net income. All is included in the income statement.

The Statement of Cash Flow (SCF) projects estimated cash flows by month, quarter and year, along with the anticipated timing of cash receipts and disbursements. The office’s bills and obligations are paid out of cash flow, not net income. It is very important for accrual based accounting practices; especially in terms of Medicare, Medicaid, MCOs, PPOs and HMOs producing insurance payment time delays and other aged accounting methodologies. Cash flow reflects the internal generation of fund available to supply operating capital.

The Balance Sheet (BS) forecasts the financial condition, assets and liabilities, of an office at a singular point in time. It projects the ability to meet financial obligation and the capacity to absorb financial setbacks without becoming insolvent.

This is a fourth new financial statement, but it is not usually a pro-forma statement since little cash is generated from a new medical practice.

Our CFO will typically create the above statements for a start-up medical practice and continue with the mature business entity.

When considering the development of your new medical facility, the most costly, construction costs will be the largest capital cost and represent the largest portion of the financing for the project. If the facility is financed by a loan which must be repaid over a period of years, the amortization of the loan and the interest will also represent a large part of your recurring costs.

It is therefore critical that you assess the impact your construction program will have on both your short and long-term financial objectives, and that you don’t construct a facility so large that it will sap the profitability of the center. It is also important that you understand the complexity of building such a center. At Practice Setup, we have seasoned and knowledgeable professionals to help each physician understand the complexity of the proposed project and keep expectations and reality in check.

Within the Practice Setup Team, we have both bankers and financial analysts that take the physician thru the financing process. Whether the physician would like to work with the larger institutions, like Bank of America or Wells Fargo, or smaller local banks, or even the Federal side (SBA), Practice Setup will help with the step by step process to insure the physician will spend more time growing their practice and less time fighting their way thru the paperwork.