Medical Billing Business Plan

Example Medical Billing Business Plans for Starting a Medical Billing Business

A business plan for starting your medical billing business is a plan to succeed - or a road map to succeed.

It doesn't have to be a long or complicated document - just the what, when, and how you plan to accomplish your goals. Something to outline your business strategy. It should include:

• Mission statement
• How you are going do accomplish
• Start-up expenses
• Sources of funding
• Timeframe for turning a profit
• Marketing strategy
• Permits and Licenses
• Funding sources
• Estimated Income and plan to attain

Here's an example of the thinking that goes into developing a medical billing business plan. Your mission statement might go something like this:

Create medical billing service business by offering superior knowledge and service and utilizing state of the art billing systems. Reach net profit of $50K/year in 3 years.

So now you need to determine how to get there.

Estimate your income

First we need to estimate the anticipated monthly income for a client. The numbers I use here are strictly for illustrative purposes. The income can vary widely depending on location, size of practice, specialty, how long established, etc.

My experience has been that a single provider practice can generate a monthly fee anywhere from $1500 to $5000. Let’s be conservative and assume $2500 for this example. Depending on what type of billing system and configuration you go with, let’s say your monthly cost to serve this provider is $600. This covers clearinghouse fees, software maintenance and updates, phone and internet service, printing supplies, postage, licenses, marketing, training, etc.

Your net monthly profit = $2500 - $600 = $1900/month

Annually this is $22,800/year

You must remember that as you take on more clients, you likely will need help. The issues you have to deal with will double with a second practice. This is when you need to think about hiring some part time help. I had excellent results hiring stay-at-home moms in my neighborhood who wanted to earn extra money. This will add to your costs that you need to factor in as you bring on new clients.

For your second client, let’s say you estimate needing someone 15 hours a week – so you don’t have to work 80 hours a week! At $12 per hour this comes out to about $720/month. Again this can vary widely.

So now you’ve signed your second doctor. Let’s crunch the numbers again:

Income= 2 x $2500 = $5000

Expense = 2 x $600 + $720 = $1920

Net monthly profit = $3080 a month or $36960 a year

Your office expenses for a second practice probably won’t be as much as for the first ($660 for this example) but we’re just estimating here.

So at this rate it looks like to reach your goal of $50K/year net, you would need 3 clients averaging $2500/month.

Set Attainable Goals

A good approach here would be to set a goal of attaining 1 new provider a year. This is a very achievable goal and allows you to learn and develop your business.

To sign the first client I would recommend setting a goal of 6 months. You could then assign yourself action items to attain this goal.

They might look something like this:

• Call 5 practices a day
• Visit 2 health fairs and hand out business cards
• Place business cards in hospital physicians parking lot
• Deliver baked goods with marketing materials to 5 potential clients offices a week
• Attend monthly BCBS insurance seminar
• Mail out 20 letters a week to potential clients offering to perform a HIPAA compliance assessment

I just listed a few of the marketing techniques I used as examples. Your marketing strategies will vary depending on results.

Go to Microsoft Office Templates and type in "Business Plan". They have several great business plan templates and checklists in both Word and Excel formats. Remember your medical billing business plan doesn't have to be complicated.

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