THE KEYS TO STARTING A PRIVATE PRACTICE Part I: Thinking Like a Businessman A Presentation of the AACAP Member Benefits Committee

John E. Dunne, MD Co-Chair, Member Benefits Committee Christensen Road, Suite 217 Tukwila, WA

A Private Practice is a Business Providing a service for a fee Providing a service for a fee What services, i.e., general or selective? What services, i.e., general or selective? What fees? What fees? Where will you set up your practice? Where will you set up your practice? Location, location, location Location, location, location Willie Sutton’s law Willie Sutton’s law

What Not To Do Don’t set up near where you trained; i.e. don’t set up where there’s a high concentration of child psychiatrists Don’t set up near where you trained; i.e. don’t set up where there’s a high concentration of child psychiatrists Don’t set up just because it’s near where you live Don’t set up just because it’s near where you live Don’t join a group practice just because they want you Don’t join a group practice just because they want you

What To Look For A place that has a need for a child psychiatrist and families that can afford to pay for private services and are inclined to seek them A place that has a need for a child psychiatrist and families that can afford to pay for private services and are inclined to seek them Higher SES Higher SES Quality health insurance Quality health insurance A place that fits your own needs and interests A place that fits your own needs and interests Proximity to family and friends Proximity to family and friends Personal interests Personal interests

Locating an Area Where are the families you will be serving? Where are the families you will be serving? Look at median house prices Look at median house prices Proximity to colleges or universities Proximity to colleges or universities How long will it take for most families to get to your office? How long will it take for most families to get to your office? Convergence of major highways or surface streets Convergence of major highways or surface streets

Associating with Other Professionals Co-tenancy Co-tenancy Each professional has separate practice but share space and certain expenses Each professional has separate practice but share space and certain expenses Are these professionals you want to be associated with? Are these professionals you want to be associated with? Do you share similar expectations, goals, financial realities? Do you share similar expectations, goals, financial realities? Group practice Group practice Contractual arrangements, degree of control over work load and patient population Contractual arrangements, degree of control over work load and patient population Financial arrangements Financial arrangements

Renting an Office Avoid medical office space if possible Avoid medical office space if possible Look for a Class A building that’s well maintained Look for a Class A building that’s well maintained Proximity to other mental health or primary care professionals Proximity to other mental health or primary care professionals Amenities such as free parking, appealing landscaping Amenities such as free parking, appealing landscaping Negotiating a lease Negotiating a lease

Negotiating a Lease Utilize a commercial realtor Utilize a commercial realtor Begin looking 4-6 mo. prior to occupancy Begin looking 4-6 mo. prior to occupancy Expect concessions, more with a longer lease Expect concessions, more with a longer lease Build-out requirements and costs Build-out requirements and costs Anticipating future practice needs Anticipating future practice needs Larger than standard office size, sq ft Larger than standard office size, sq ft Sound proofing – walls, ceilings, doors, and windows Sound proofing – walls, ceilings, doors, and windows Admin office, break room, storage, running water? Admin office, break room, storage, running water? Costs are amortized over the life of the lease Costs are amortized over the life of the lease

February 16, 1 PM EST Part II Financial Planning and Marketing February 23, 1 PM EST Part III The Nitty-gritty