Starting a Micropractice: A Physician's Guide
- Nisha Mehta, MD
- Dec 16, 2024
- 16 min read
Updated: Oct 10
We talk a lot about creating the life in medicine you want on your terms. Many members of our online physician community are interested in shifting practice environments and exploring private practice, but may not be interested in a conventional insurance based private practice with many physicians. This may be because they want a smaller practice with more flexibility, because the prospect of taking on a lot of debt to start a larger practice from the getgo may be too daunting or risky, or because they may not have access to the capital necessary to start a private practice. Additionally, some physicians are not ready to commit full-time outside of their regular clinical job, but want to start a small practice on the side. One of the biggest benefits of a micropractice is that as you don’t mind getting involved in every aspect of running the practice, it is possible to keep costs so low that you truly can practice as much or as little as you want. Starting and running a micropractice can be a great way to enjoy the pros of private practice while keeping overhead costs low, and many physicians choose to stay in this model for the long haul. Below, we guide you through what to expect when opening a micropractice and how to get started.
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What is a medical micropractice?
A micropractice is a small scale private practice, where you can provide a full suite of services, but with limited or no additional staff and by minimizing overhead. As staffing is frequently the highest contributor to overhead in many practices, by limiting staffing compared to a traditional private practice, a micropractice can keep operating costs lower. This will not only make it possible to have to see less patients to be more profitable, but can help optimize your potential income as a physician entrepreneur.Â
As long as you don’t mind handling multiple responsibilities on top of your clinical role treating patients, much more of the money that you receive for your services will end up in your pocket in a micropractice setting. You will handle many of the other aspects of daily operations that are typically covered by other personnel at larger practices. This could include performing roles that a front desk assistant, practice manager, billing and coding department, and even the cleaners may perform, such as:
Checking patients in and collecting payments
Paying practice bills
Handling the processing of payroll
Cleaning the office
IT for computers/equipment
Bookkeeping
Scheduling
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Gusto (affiliate link) has been highly reviewed by many of our members, and includes options for managing payroll and benefits.
Quicken offers personal and business finance tools, perfect to help self-employed physicians and those with side gigs. Use our affiliate link for 50% off Quicken's suite of products.
Advantages of a micropractice
As alluded to above, the pros to a micropractice include:
Minimal overhead operating costs. As alluded to above, by keeping staff to a minimum and taking on multiple roles yourself, you can reduce your practice overhead.
Potential for a higher ROI. By keeping operating expenses to a minimum, you can keep more of the revenue you generate as profits to provide a higher salary/income.
High flexibility. With a micropractice, you have complete control over the practice, providing the flexibility to start a full-time micropractice or to practice as a physician side gig. You can set your hours and schedule around your life and terms.
Full autonomy. You also have complete control over decision making at the practice.
Lower financial barrier to entry. Starting a traditional private practice can cost hundreds of thousands depending on your scale. By starting small with a micropractice, you can minimize your upfront capital requirement, which can allow you to transition to private practice sooner and grow along the way.Â
Disadvantages of a micropractice
Of course, as with any practice environment, there are also cons to a micropractice, including:
Increased administrative burden. By trading your time and energy to minimize overhead, you assume the day-to-day responsibilities of running a business that additional staff would otherwise cover for you. Some doctors prefer to stick to the clinical aspect of medicine, or find that it is more profitable even if running a larger payroll.Â
Financial risk. While a micropractice requires less startup capital than a traditional private practice, there is still an upfront investment required to starting a practice, which comes with inherent risks. Below, we discuss how to get your micropractice up and running to help keep this as low as possible.
Less day to day support. While a micropractice can offer high flexibility and autonomy, you lose the support of additional staff. If your micropractice offers concierge services, for example, you may have more on-call responsibilities and less flexibility than you’d prefer. Running a micropractice can also limit your patient volume as you grow, as you won’t have additional staff to help patient intake, scheduling follow ups, etc.Â
Limited scalability at first. With a micropractice, you can only juggle so much. The more you do by yourself, the more you increase your chances of physician burnout. This can limit your potential income until you’re ready to scale up your micropractice, depending on your goals with the practice.
Keyperson risk. One of the biggest risks in running a solo practice, especially as a micropractice, is that everything comes to a halt if you are not able to do your job. If you have a personal emergency, get sick, or otherwise need a vacation or break, there may be nobody else to maintain operations in the interim. While your overhead is low, it will still need to be paid, and you may have to make other arrangements for your patients, running the risk of losing them. Some doctors running micropractices have backup plans in place for this scenario with other colleagues or offices.
Starting a micropractice
A micropractice has a lot of overlap with starting a private practice, with the notable exception of interviewing and hiring staff.
As part of your preparation, make sure you run a business proforma considering the following:
What business model do you want to run? Telemedicine only? Hybrid? Insurance-based or cash pay? Do you want to do direct primary care or offer concierge services?
What is the demand for your services? Analyze your competition in the current market to help you determine what niche you can fill.
What is your budget? How much capital do you already have, and how much will you need to secure?
What services do you want to provide? In addition to standard patient appointments, do you want to offer additional ancillary services to potentially add additional income? What are the financial implications of these potential services you’re considering? Some you can easily add without a large upfront overhead cost, like offering cash-pay labs for cash pay or HDHP patients. Others, such as imaging services, take significant capital for equipment.
What schedule will you offer? Do you plan to run a traditional practice with Monday-Friday day hours, extended hours after work or weekends for cash pay patients? Putting together your patient scheduling template can help you determine your potential proforma based on how many patients you’ll see a day.Â
Once you have a solid business proforma, you can secure any financing required and continue with the next logistics for your micropractice, including marketing, choosing a location, and setting up your practice.
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Lab services: We have partnered with Ulta Lab Tests to help physicians provide affordable and high-quality lab testing for their self-pay patients while improving revenue streams for their practice. Ulta Lab Tests offers access to 2,000+ tests and panels at wholesale prices, with testing available at over 2,100 patient service centers, through mobile phlebotomy, or via in-house specimen collection. As a perk to PSG members, they are giving away 50,000 free CMPs to offer your patients. Registration is free and there are no subscription fees or minimum orders, helping keep overhead costs low while providing added services to patients. Learn more and sign up through our PSG affiliate link. By charging a fixed consultation fee for reviewing lab results or offering patient consultations, you can generate additional revenue while maintaining patient care quality.
Financing: For over twenty years, Bank of America Practice Solutions has helped doctors across the nation reach their goals through smart financial solutions1 and expert guidance. They can provide customized financial help for your short-term needs and long-term aspirations, including new practice start-ups, improvement and expansion financing, and equipment financing. To learn more, reach out to Paul Belau, 614.679.5321 or paul.belau@bofa.com. 1 All programs are subject to credit approval and loan amounts are subject to credit worthiness. Some restrictions may apply. Bank of America is a registered trademark of Bank of America Corporation. Bank of America Practice Solutions is a division of Bank of America, N.A. ©2019 Bank of America Corporation | MAP#3249875 Learn more at bankofamerica.com/practicesolutions Disclosure: Bank of America is a sponsor of our Private Practice Education Series and partner of ours, which means that we may earn a referral fee if you decide to contact them.
As you plan your micropractice, don’t forget to check any restrictions you might have in place that can impact your pro forma. For a side gig micropractice in particular, start with double checking the noncompete clause of your employment agreement. While a micropractice can be a great way to bring in additional income, you don’t want to jeopardize your steady income. If you, like many physicians, have a noncompete clause, and you aren’t sure if your planned micropractice will break the terms of your agreement, a local contract attorney can review and assess your noncompete.
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Explore our database of contract review and healthcare attorneys for doctors
Learn more about setting up an LLC
Choosing a location for your micropractice
Location, location, location is as important for a practice as in real estate. As you prepare to open your micropractice, research where your target patient population is.
Assessing cost is critical when determining your location for hybrid or in-person services. We’ve covered choosing a location for your private practice in more depth separately. For the TL;DR:
For a micropractice, you may not need a dedicated office building that you lease directly. You may want to consider subleasing space from another practice instead. This could have an added benefit of potentially providing a referral relationship, depending on their specialty.
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Visit our resources and perks for physicians in private practice page to explore office space available to rent
If you’re providing telemedicine services only, you’ll want to make sure you have a platform that is reliable and easy to use, and where patients can easily find you. Having a robust marketing plan for your practice can help here. Explore how to start a telemedicine practice.
Preparing your micropractice for opening day
There are two primary types of logistics for getting a micropractice up and running: the practice itself to see patients, and the business side of a practice with the legal entity formation.
Setting up the business side of your micropractice
There are several types of entities you can run your micropractice through. An LLC (limited liability corporation) is a common one, as it offers a lot of flexibility, which can be useful as your micropractice grows and scales. But an LLC isn’t always necessarily the best fit, particularly if your state requires that you have a PLLC, or if it makes more sense to set up as an S-corp for tax reasons. An attorney and/or a qualified tax professional can help you choose the right entity and can ensure you cover all the legal paperwork and reporting requirements, such as the Beneficial Ownership Information (BOI) report filing requirement.
Learn more about:
Along with the entity structure, you’ll want to assess credentialing and licensing needs. If you’re looking at starting a telemedicine micropractice, it can be beneficial to get licensed in several states, especially through the Interstate Medical Licensure Compact (IMLC) to widen your target patient population.
If you’re planning on offering cash pay services only, credentialing may not be a concern. But if you’re hoping to open a more traditional clinical micropractice that accepts insurance, credentialing can take a while, so it’s worth getting started early.
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BlueShift Licensing offers concierge licensing assistance and does the majority of the work so you can focus on other aspects of your micropractice. The founder, Jen, is highly experienced and has helped so many physicians and companies get their licensing completed efficiently. They do licensing in all US states. Email Jen at jen@blueshiftlicensing.com to get started. Make sure to mention PSG for 10% off of licensing and credentialing related services through our advertising relationship!
Learn more with our guide to physician licensing
Learn more about tips and tricks for credentialing and contracting with insurance companies and payors
Learn more about starting a telemedicine practice
If you’re doing a micropractice as a side gig and won’t have a brick and mortar office location, you likely won’t want to list your physical address. Consider getting a post mail box you can use as your legal business entity.
In-person or virtual, you likely won’t want your cell phone number out there as the primary point of contact. A separate virtual phone number, such as a Google Voice number, can offer additional privacy while still minimizing overhead costs of getting a second cell phone or business lines.
Preparing for the opening of your micropractice
There are many decisions to make when preparing to open your micropractice.
Equipment. Many physicians who have started micropractices point to equipment as an important consideration in your pro forma. Additional equipment can add potential ancillary income, but this might not be the best strategy from the start. Assessing new versus used equipment can make a large difference as well. Opting for used equipment when possible can vastly reduce your startup costs. Remember, you can always scale later as your micropractice grows.
Determine what to outsource. While a micropractice won’t have full-time staff, there may be some (or many) administrative duties that you’d prefer to outsource in a cost-efficient manner until you’re ready to scale. Utilizing health tech solutions can also help you create a more efficient micropractice.
Common services that physicians consider outsourcing include front desk operations, billing and coding, marketing, accounting, and administrative tasks. A virtual employee can be a great addition to a micropractice to help reduce the administrative burden while keeping staffing costs significantly reduced. You can start with a part-time virtual assistant and scale up as your micropractice grows. While a full-service billing and coding service might not make sense when you’re getting your micropractice off the ground, you may be able to outsource some of this work to a VA as well.
An AI scribing service can also be immensely helpful for charting without having to hire a medical assistant for your micropractice.
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GSD Associates provides full-time and part-time virtual assistants for a comprehensive range of administrative, sales, marketing, and management services, with a focus on enhancing efficiency and productivity. Their mission is to streamline and optimize business management for physicians and other professionals, offering efficient solutions that free up valuable time and resources. Use our PSG partnership inquiry form for 10% off your first year of services.
We have a partnership with Abridge, founded by one of our physician members, where members can get 50% off AI scribing services, bringing the price down to only $99 dollars per month. You can try this free for one month without inputting payment information through our affiliate link with code PSG50.Â
​Edge Health provides college educated remote employees that work full time for your practice. They perform tasks such as primary or secondary phone support, billing, claims, insurance verifications, scribing, social media, and other tasks. Practices tend to use the services in multiple different ways. They are trained prior to starting in your office, and the cost is substantially less than what you would pay an in-house employee. To learn more about Edge's services and schedule a demo, and receive $500 off each of your first 3 months, connect through our affiliate link.
OpenEvidence is the leading AI-powered medical information platform for physicians. It is free and unlimited for physicians, and built from the ground up to give trustable, verifiable information. Every response is grounded in the high quality medical literature, spanning everything from clinical trials to meta-reviews to guidelines. Sign up today through our affiliate link.
Explore how much you should be paying for an external billing company
Learn more about how physicians use virtual assistants in clinical settings
Learn more about ways to reduce private practice overhead, including outsourcing
Explore marketing resources for your micropractice below.
Set up your insurance coverage. Don’t forget to get any necessary business coverage as you set up your micropractice. Most notably, you’ll want to make sure you have proper malpractice insurance coverage in place. Having coverage through your employer for your primary job doesn’t mean you’re automatically covered for any additional work you do outside their setting. Malpractice insurance can be expensive, especially for a micropractice, but there are unique solutions specially designed for the micropractice setting to again help minimize overhead expenses at the start. As your micropractice grows, you can explore other malpractice insurance resources for doctors.
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We have partnered with doctor owned AutonomyMD to provide physicians access to an affordable, subscription based malpractice insurance. For $150/month on an annual contract, get a PSG special perk of 30 visits (up from 25) per month and a HIPAA compliant app to document visits. Start a micropractice and scale affordably. Sign-up through our partnership form to receive the exclusive PSG perk.
You may need additional insurance as well, depending on your scale, such as general liability insurance and health insurance.
Marketing your micropractice to get patients
You want to build a good reputation to grow your micropractice. There are several different ways to market your micropractice, and we’ve covered them in depth in our guide to marketing a private practice.
If you are branching out into a micropractice to replace your previous clinical job, one of the best ways to market your micropractice is to your current patients (especially the ones you’d love to keep on your roster). As we mentioned above though, be careful of any noncompete or nonsolicitation clauses in place by reviewing your termination clauses as you navigate this potential marketing strategy.
You’ll want to make it easy for prospective patients, both current and new, to know where you’re going and how to reach you there. This is true for both telemedicine and in-person micropractices. Every micropractice should have a website. Business cards and even a brochure detailing the services you’ll be providing can be useful to have on hand as well.
Along with keeping your current patient roster, consider your referral networks. Try to keep your referral base from specialists if at all possible as well. If you’re just starting out, or hoping to grow, it can be worth the time investment to network with colleagues in your area to build those relationships up for future referrals. Your business cards and brochures can help here.
Along with an online presence with a website, you want to be easily searchable online when physicians are looking for recommendations for doctors in their local area. Digital marketing can help your Google ranking, as can taking the time to make sure your micropractice is even listed and searchable with Google. As your micropractice opens and grows, pay attention to patient reviews online, as these can heavily factor into referrals from your online presence.
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Artillery designs attractive websites that are pretty reasonable in price (usually 2-5k depending on complexity). Mention PSG for $200 off.
GMR Web Team offers a comprehensive suite of digital marketing solutions for physicians, including SEO, content creation, website design/management, and more. GMR can help you build a strong online presence, cultivate patient loyalty, and achieve sustainable growth for your practice. PSG members receive 20% off blog writing services, website design, and website hosting when they sign up through our affiliate link.
Squarespace offers a really easy way to create websites with stylish templates yourself. Mention code PARTNER10 for 10% off through our affiliate link.
Moo allows you to make business cards and other advertising materials, as well as branded physical merchandise. They are visually appealing and memorable and can be great for giving out as you network. Get 25% off your first purchase through our referral link.
RepuGen is a powerful online reputation management platform designed to enhance patient acquisition and drive business growth, while integrating seamlessly with existing systems. Its automated patient feedback collection and review generation helps practices build positive online reviews and reduce negative reviews. PSG members receive 50% off the integration fee, as well as the Testimonial Widget and CommentWiz tools for free when they sign up through our affiliate link. Learn more and schedule a free demo today.
How to handle bad online patient reviews that can affect your marketing strategy
Collecting payments for your micropractice
Before you schedule your first patient, you’ll want to make sure you’re set up to easily collect payments. Whether you’re cash-pay or insurance-based, ensure you’re billing correctly and tracking payments to keep expected cashflow coming in.
Credit card processing is an easy and convenient way to collect payments, but it isn’t always the cheapest option, especially for a micropractice. Credit card fees can often be ~3% or more of a transaction, so offering patients alternatives can be a great way to reduce overhead costs. Let patients know ahead of their appointment if you prefer physical cash payments or checks so that they can come prepared. Cash apps such as Venmo and Zelle can be an easy way to collect payments for a micropractice as well.
Make sure you collect copays and deductibles (or visit costs for cash-pay services) up front. It’s much easier to track down and adjust payments later than to chase after patients, especially new ones, from the start. As we mentioned above, a virtual assistant may be able to help you with billing, coding, and accounts receivables.
Whatever system you put in place, make sure you have a corresponding accounting system in place. This will keep your receivables tighter, help you determine your estimated quarterly taxes, and make it easier to file your tax return.
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Square allows you to accept payments before or after patient visits with any card (including HSA and FSA linked cards) without any hidden fees or long-term contracts. They also offer 24/7 phone support. PSG members get a hardware discount and an opportunity to explore lower processing fees through our group affiliate link.
Quicken can help you manage your self-employed finances seamlessly and PSG members receive 50% off their entire suite of products through our affiliate link.
Learn more about medical billing and coding
Learn more about side gig finances and self-employed income
Conclusion
Starting a micropractice as either a side gig or a way to branch into private practice full time is an exciting opportunity. We hope the guidance above helps you determine ways you can minimize your upfront startup costs to keep your overhead low, allowing you to maximize potential profits. As you find success with your micropractice, you always have the opportunity to expand and grow intentionally.
Additional resources for doctors in private practice
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