How to Open a Health Clinic: Planning, Financing, and Compliance

Whether you've always dreamed of opening a clinic or if you've grown your way into it by filling your schedule, it's a massive and exciting decision. There's lots of advice on how to open a clinic by people with varying degrees of qualification.  

Consider this blog series your safe jumping-off point for learning what's involved when you open a health clinic. Bonus: you'll also hear from real-life practitioners and experts about the lessons they learned. 

Clinic foundations in three steps

This blog series takes you through the process in three simple stages:

1. Planning, financing, and compliance to stay organized and on the right side of regulation.
2. Logistical considerations like location, operations, and team management.
3. Marketing your clinic and retaining clients since filling up your associates' schedule is different from filling up your own. 

Critical considerations before opening a clinic

Dr. Jaime de Melo, BSc, ND, is the co-founder and CEO of Evolve Medical, an online group practice that offers care from nurse practitioners and health coaches. He says there were plenty of unexpected challenges regarding how to open a health clinic.

"One of the challenges we faced was learning how to effectively market our business. Landing on our current team and business model also took a lot of time and tweaks."
‍Jaime de Melo, Bsc, ND

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So before you open a health clinic, you need to do some planning. Don't worry; plans can evolve as your business does. The key is to get started. 

Create a business plan

Writing a formal business plan for your new clinic is important for long-term success. Your plan will provide the foundation of your business and a blueprint for moving forward. 

Here are some key components you should try to include in your business plan: 

• Ideal clients: Outline the people your business will serve and the problems you intend to help them solve. It's also helpful to consider how you'll reach new clients through marketing. 

• Values, mission, and vision: Determining what you stand for, why you exist, and how you intend to grow provides a compass to keep you and your team focused on the right activities. It can also help you pitch to local business accelerators. For example, helping people with diabetes control their blood sugar and their health so they can play with their grandchildren is a compelling mission for funding programs.

• Market and competitive analysis: How big (and crowded) is the market for your offering? Competition isn't a bad thing—it indicates that there is a market for what you offer. However, consider how you differentiate your offering from your competitors so that your business can last.

• Finances: If you've ever watched Dragon's Den or Shark Tank, you'll know that potential investors are deeply concerned about financial questions. Your business plan should map a detailed projected financial outlook to demonstrate viability.  

How to get startup funds to open a health clinic

Opening a new clinic will require substantial equipment, facilities, technology, staffing, compliance, and marketing investment. You can ease your financial load by exploring different avenues for funding. 

• Targeted programs are available depending on where you intend to set up your business. For example, you can seek support from the US Small Business Administration (SBA). Canadian entrepreneurs can explore FedDev funding, and small business owners in Europe can consult the European Commission for information on setting up a small business, competition rules, funding, and more.

• Many accelerator programs and organizations provide support, resources, and mentorship to early-stage startups and small businesses. Many are geography-based, but you can explore higher-ed programs and brand-sponsored accelerators. 

Most small business accelerators also offer free online tools and guides on conducting market research, evaluating your market size, and securing funding. 

• Make sure to explore more niche funding and support, too. For example, Ladies Who Launch is an organization that gives US-based small business entrepreneurs access to a close-knit networking community, along with free, high-quality educational resources and capital opportunities.  

• At a local level, you can consider joining your Chamber of Commerce for professional development, networking, and access to other local perks and programs. 

Performing targeted internet searches will uncover resources you can tap into when researching how to get startup funds to open a health clinic. Remember to lean into your network to learn from your peers. (Psst: check out the Practice Better Community; it's free to join! Chat groups organized around geography and business type can also provide an excellent source of peer insights on how to open a health clinic.) 

Legal and regulatory compliance

If you open a health clinic in a particular geographic area, you need to adhere to the region's specific rules and regulations. There are resources to help determine if you have the appropriate licensing and credentials: 

• In the US, each state determines which professions require a license to practice.
  • You can check with your professional association to learn about specific licensing requirements. 
  • You can also check with state regulators or tap into insights from a reputable third party. For example, The Holistic Council monitors the nutrition and wellness practice laws in all 50 states. 

• The Government of Canada offers guidance and resources for alternative or complementary healthcare businesses, and many provincial associations offer insights into specific regulations and requirements regarding the scope of practice. 

How will you legally structure your business?

The legal structure of your business affects many areas, including taxation, management flexibility, and operational complexity.

For example:

• A sole proprietorship is a simple structure that offers complete control and easy setup. However, choosing this model also means you're personally liable for any business issues or debts. 

• A Limited Liability Company (LLC) provides some liability protection to its owners, meaning personal assets are usually protected from business debts and lawsuits. The tradeoff for this protection is that an LLC is more complex to run.

Consulting with qualified legal and financial professionals can help you navigate the different options and complexities to ensure you choose the best structure for your clinic. 

Don't forget about privacy

Ensure you know the relevant laws and regulations to protect your clients' information, safeguard access to quality healthcare, and sniff out fraud or abuse.

Sharon Vanin, who is a lawyer, nutritionist, and founder of Thrive Legal Care, says both the clinic owner and the practitioner are responsible for maintaining privacy and security.

As a clinic owner, you have legal responsibility for safeguarding not only your own patient/client files, but also those of the other practitioners working in your practice....At the same time, each individual practitioner has their own legal obligations to ensure they are complying with privacy requirements.

Sharon Vanin

On the privacy front, different countries have unique rules and regulations around protecting your patients' sensitive health data. Your clinic will need safeguards in place to ensure you stay compliant, whether that's with HIPAA (Health Insurance Portability and Accountability) in the US, GDPR (General Data Protection Regulation) in Europe, or PHIPA (Personal Health Information Protection Act) in Canada. 

Joe Taiabjee, VP of Technology at Practice Better, is a privacy and security expert. He says, "It's much easier for a solo practitioner to ensure that patient information stays secure. The moment information is shared within a clinic, the clinic as a whole is responsible for HIPAA requirements. Adding staff members for administative work increases the risk and responsibilities for keeping that information safe."

Joe recommends that clinic owners have compliance agreements (also known as a Business Associate Agreement) in place for all software and ensure all staff are trained in HIPAA and security awareness, or the equivalent where you live.

With a clinic, data privacy and security are now everyone's responsibility. As the clinic owner, you're the main person accountable for data safety. Ensuring your staff is trained in your jurisdiction's data regulations is your responsibility, so ensure you research what's required. 

Possibilities await your next business adventure

When you decide to open a clinic, many opportunities and possibilities lay ahead. It's not a solo sport. While you might be the only clinic owner, resources and communities are available to provide different types of support: financial, administrative, and even emotional. You just have to look for them along the way.

Head over to the next post in this series for insights into clinic logistics and operations, including how to manage a team.