Physicians dedicate years to mastering the art and science of healthcare. However, navigating the business of medicine is an entirely different challenge, one that many doctors are never taught to handle in med school. For most physicians, business concepts such as financial planning, marketing, or leadership aren’t part of their core training. Yet, as more doctors continue their careers and look for new medical opportunities to grow their impact and income, the need for entrepreneurial and leadership skills becomes apparent.
The Sermo community provides valuable insights into this trend. When asked, “Do you anticipate starting, or have you already started, a medical business?” physician responses revealed a mixture of ambition and hesitation:
- 27% currently run a medical business
- 12% plan to start one in the next 1-3 years
- 10% anticipate starting one within 3+ years
- 45% have no interest in starting their own medical business
- 6% chose “Other”
These results highlight how the field of medical entrepreneurship appeals to some, but also indicates a lack of preparation and resources for many doctors. For physicians entering the entrepreneurial space, possessing the right business skills makes all the difference. This article explores the key skills that doctors need to run a successful business:
10 Essential business skills doctors should learn
To thrive in both medicine and business, mastering several key skills is essential. Here are ten business-related competencies that every doctor entering entrepreneurship should develop, based on peer-reviewed research and insights from the Sermo community.
Financial management
Financial knowledge forms the foundation of any business. A recent Sermo poll revealed that physicians believe the biggest challenge (with 46% of the vote) in starting a medical business is upfront costs such as equipment, leases, etc. Understanding budgeting, profit margins, and expenses enables physicians to manage their practice revenues and costs effectively.
Remarkably, 74% of physicians wished they had learned financial management earlier in their careers. Whether setting fees or evaluating return on investments, financial literacy plays a pivotal role in success.
An infectious disease doctor explains on Sermo, “Biggest hurdle: being independent, as many practices are hospital-owned. Funding: do it yourself, so you don’t owe anyone. Let an outside agency do billing; it’s one less headache. Success is if you can remain independent in this day and age.”
Business strategy & planning
Every venture begins with a vision and is then executed through a well-defined strategy. Crafting comprehensive business plans empowers doctors to chart their goals and address potential operational hurdles.
When Sermo asked physicians whether they have a business plan for their medical practice, half said yes, nearly a third said no, and 19% reported not owning a practice. According to Sermo insights on professional strategy, physicians who focus on planning are more likely to find sustained growth in their medical businesses.
Legal & regulatory compliance
Only about 37% of U.S. medical schools offer formalized coursework specifically addressing legal or regulatory issues in medicine. Some schools incorporate legal topics into courses like ethics or health economics, but even then, the focus is often more on malpractice than on regulatory compliance and broader legal concepts relevant to medical practice. That’s why 36% of physicians in our Sermo survey wished they had learned these skills earlier. For any medical entrepreneur, navigating legal landscapes is crucial. Compliance with healthcare laws, such as HIPAA, prioritizes patient confidentiality, while local licensing protects physicians from liability.
Marketing & branding
Nearly 75% of patients use online reviews as the first step when searching for a new physician. With modern patients actively comparing healthcare providers online, marketing and branding are indispensable. Interestingly, 22% of surveyed U.S. physicians wished they had learned marketing and patient acquisition earlier in their careers.
Physicians who leverage digital marketing quickly become the go-to choice in their area, creating a consistent pipeline of patients. To successfully attract new patients, define your target audience, get active on social media, join professional networks, and gather strong patient reviews.
Leadership & team management
Building resilient teams is often one of the biggest challenges in medical entrepreneurship. The average turnover rate in the U.S. healthcare industry is a staggering 18% in 2023-24, and employee engagement continues to decline, signaling possible turnover increases in 2025.
Physicians must learn to hire, train, and manage staff effectively while fostering a positive workplace culture that delivers exceptional patient outcomes. Interestingly, 44% of surveyed physicians highlighted leadership skills as a key area many doctors feel they overlooked early on.
Operations & workflow optimization
According to our poll, 4 out of 10 physicians reflected that technology and operations optimization skills would have made a significant difference in their early practice. Efficient workflows reduce burnout while boosting service quality. For example, optimizing business coding and billing enhances revenue, clarifies salary calculations, and lessens administrative burden. Physicians must analyze patient flow, appointment scheduling, and resource utilization for optimal practice management.
Technology & innovation
Patient expectations for digital solutions have risen sharply, driven by the consumerization of healthcare. Patients want faster access, transparency, and personalized care, which can be enabled by technology such as AI, telehealth, and patient portals. Physicians who keep up to date with new tech trends position their practices at the forefront of patient care and satisfaction.
Sales & customer service
Patients are the heart of every practice. Understanding the art of communication and empathy translates into better service delivery and stronger patient retention. Despite healthcare becoming increasingly technological and administratively driven, the humane component of medicine remains critical to treatment and successful outcomes. Good bedside manner positively impacts clinical outcomes. When patients feel they’ve been validated and heard, they are more likely to provide information that will help them and be more compliant with treatment, and less anxious to take the physician’s advice.
Whether you own a practice or not, developing strong sales skills is critical. This isn’t about pushing unnecessary procedures, but about effectively communicating the value of care, overcoming skepticism, building trust, and fostering patient loyalty. A physician’s ability to “sell” the importance of preventative care, adherence to treatment plans, or lifestyle changes directly impacts patient outcomes and overall satisfaction. Furthermore, these skills are invaluable in navigating referrals, collaborating with specialists, and even advocating for resources within larger healthcare systems.
Risk management & crisis planning
Every business faces risks, but in healthcare, risks encompass compliance failures, investing in insurance to protect against malpractice claims, and revenue disruptions. Having a contingency plan in place enables practices to handle these challenges effectively and protect their ability to continue practicing medicine.
Scaling & business growth
Once a practice stabilizes, scaling becomes the next natural leap. To maximize impact and revenue, physicians must consider scaling their businesses, as evidenced by a recent survey where 68% of healthcare leaders identified growth as a top strategic priority for their organizations.
This expansion can range from increasing patient capacity to diversifying services such as offering telemedicine, advanced healthcare procedures, or upgrading EHRs, often leading to a significant boost in practice valuation and impact. Without essential business training, doctors risk losing operational efficiency or competitive advantage.A Sermo member and physiatrist weighs in on the importance of business strategy. “Starting a medical business is challenging but satisfying. With many existing businesses, growth and maintenance are difficult, potentially compromising professional performance for profit. Remember, medicine is a service; profit and reputation should not taint a doctor’s work. When establishing a medical business, carefully assess population and health sector needs, maintain strong training, update knowledge, and secure financing, all while adhering to medical ethics and prioritizing patient health and well-being.”
Why is it important for doctors to have business skills?
Physicians are at the intersection of medicine and business—both require strategic, decisive actions. “The complexities of delivering medical care are rapidly changing,” says Dr. Richard Pitts, senior medical director at St. Joseph Heritage Healthcare. “There’s a constant pressure to find more effective ways to deliver healthcare while improving quality and still holding the line on costs.”
Doctors with business acumen are better equipped to run efficient practices, reduce costs, and improve patient satisfaction. Even for those uninterested in entrepreneurship or doctors looking to transition into locum tenens positions, key skills like financial literacy, marketing, or leadership can benefit their professional roles and career growth.
Ultimately, blending a business mindset with medical training addresses not only challenges but also creates opportunities for improved care outcomes.
New practice models
When physicians consider opening a practice, they typically choose from traditional models such as solo practice, group practice, hospital employment, or academic medicine. Each offers varying levels of autonomy, administrative responsibility, and income stability. However, the healthcare landscape is evolving with innovative practice models offering fresh opportunities for doctors. Here’s a brief overview of two collaborative models to consider, which may offer new ways to share resources, coordinate care, and improve financial outcomes:
Accountable care organizations (ACOs)
ACOs are groups of healthcare professionals, hospitals, and doctors that work together to provide high-quality, coordinated service and healthcare. ACOs enhance health outcomes and manage costs, providing efficient and comprehensive care to targeted populations such as those in a specific region or with a chronic condition.
Independent physician associations (IPAs)
Independent physician associations (IPAs) are separate healthcare business entities owned by a network of independent physician practices. IPAs offer large-group benefits like contract negotiation and access to secure EHRs, while physicians retain independence and control over their compensation. For example, an IPA might negotiate a higher reimbursement rate with an insurer on behalf of 300 individual providers in the network.
Healthcare policies influencing these models
Regulatory frameworks increasingly impact practice profitability and operability. Below are key policies that may influence the decision on what type of practice is best for you:
- HIPAA: the Health Insurance Portability and Accountability Act was passed in 1996 to reform the health insurance industry by increasing accountability. The cost of HIPAA compliance has risen considerably over time. Estimates in 2025 indicate that healthcare organizations may spend between $80,000 and $120,000 or more on compliance annually, depending on their size, complexity, and current security posture. This includes expenses for risk assessments, staff training, policy creation, security upgrades, audits, and potential consultant fees.
- MACRA: the Medicare Access and CHIP Reauthorization Act (MACRA) significantly impacts healthcare businesses’ profitability and operations by fundamentally changing how physicians and other clinicians are reimbursed under Medicare, shifting the focus from volume-based to value-based payments. MACRA repealed the Sustainable Growth Rate (SGR) formula, removing the previous threat of abrupt payment cuts (such as a scheduled 21.2% cut in 2015), and replaced it with a more stable reimbursement system that initially provided modest annual increases or freezes, improving payment predictability and protecting physician revenue from sudden drops.
It introduced the Quality Payment Program (QPP) with two tracks: the Merit-Based Incentive Payment System (MIPS), which blends traditional fee-for-service with performance-based adjustments, and Alternative Payment Models (APMs), which involve risk-sharing and value-based payments. These payment models tie reimbursement to quality and value metrics, which can enhance or reduce profitability depending on performance. - Primary care first: this model supports pay-for-performance arrangements by providing a Performance-based Adjustment that links financial incentives to patient outcome measures like hospital use and per capita costs, adjusted for patient risk. Practices must also meet quality standards based on key clinical measures (e.g., patient surveys, disease control, cancer screenings, or advanced care planning).
Performance-based payments incentivize providers to deliver higher-quality care efficiently, potentially reducing avoidable hospitalizations and overall costs, which can improve practice margins. However, failing to meet performance standards can result in negative payment adjustments, representing financial risk for practices. - CPC+, Medicare Advantage: the Comprehensive Primary Care Plus (CPC+) program and Medicare Advantage (MA) programs impact healthcare businesses’ profitability and operations by shifting payment models, incentivizing high-quality care, enhancing patient management, and requiring operational adaptations to comply with evolving regulations.
Understanding ever-changing laws equips doctors to leverage policies that promote both patient well-being and practice sustainability.
How to open an independent practice
Below is a simple checklist to guide you in the journey to open your own practice:
1. Create a business plan
A detailed business plan sets the foundation for your practice by outlining your goals, services, financial projections, and target patient base. This plan should address competitive analysis, staffing needs, and marketing strategies. Experts recommend updating the plan regularly as your practice grows and the healthcare landscape shifts. Solid business planning helps anticipate challenges and secures stakeholder confidence.
2. Secure financing and funding
Securing adequate financing was cited as the third biggest challenge of starting a practice, with 14% of physicians choosing it. As a general surgeon on Sermo discusses, “my plan for private medical practice is to first develop my capital base and then invest in the establishment of my health facility since it’s capital-intensive.”
Sermo asked physicians where they believe medical practices are best positioned to find funding. Here’s how they responded: 33% recommend medical practice business loans, followed by business lines of credit at 19%, and SBA loans at 14%. Equipment financing accounts for 11% of votes, short-term loans for 9%, and practice acquisition loans for 7%.
Consider evaluating each option available to you for rates and flexibility. Calculate your startup costs for equipment, renovations, payroll, and ongoing operating expenses. A clear financial plan will help you avoid cash flow crunches and sustain your business through its critical early stages.
3. Choose a legal business structure
Selecting the right legal structure—such as an LLC, S-Corp, or partnership—has implications for taxes, liability, and operations. Consult with legal and accounting professionals who understand the medical business to determine the best fit for your circumstances. Register your business, secure a tax ID, and ensure to comply with all state-specific requirements.
4. Obtain necessary licenses and certifications
Healthcare is tightly regulated, so verify that you and your facility meet all local, state, and federal licensing and certification requirements. This includes medical licenses, DEA registration, CLIA certification (if you operate a lab), and any necessary business permits. Staying current with compliance requirements will prevent costly delays and disruptions.
5. Find a suitable location and set up equipment & technology
Location is key for patient accessibility, growth, and reputation. Consider visibility, parking, demographics, and competition in your area. Once secured, carefully select and install medical equipment and technology to enhance efficiency and aid regulatory compliance. Invest in electronic health record (EHR) systems, billing software, and reliable IT support from the outset.
6. Hire and train staff, establish billing, and launch operations
12% of physicians say staff hiring and training is their biggest challenge in opening a practice. As a Sermo member and anesthesiologist explains “I believe that hiring and retaining talent that can tackle problems and act somewhat independently is the key to a successful practice.” Recruit staff who are not only qualified but also share your vision for patient-centered care.
A strong onboarding and training process helps embed your values and ensures regulatory compliance. Establish clear billing and insurance procedures to keep revenue cycles healthy. Before launching, run through operational workflows—from appointment scheduling to patient discharge—to iron out hiccups and provide the smoothest experience for your patients.
7. Develop a marketing strategy
Our Sermo poll found that establishing a patient base is the second most difficult business challenge, with 18% of physicians choosing it. Creating a robust marketing strategy involves defining your target audience and tailoring your services to meet their needs.
Physicians should leverage digital platforms, including social media, a professional website, and a newsletter, to build an online presence and share valuable health information. Actively seeking and responding to patient reviews and leveraging a patient referral program can significantly enhance your reputation and attract new patients. Finally, networking with other healthcare professionals and participating in community health events can further expand your reach and patient base.
8. Maintain operations efficiently
Continuously monitor and refine operational workflows to guarantee efficiency and patient satisfaction. Implement robust electronic health record (EHR) systems and billing software to streamline administrative tasks and optimize revenue cycles. Regularly review data on patient flow, appointment scheduling, and resource utilization to identify areas for improvement and optimization.
Foster a culture of continuous improvement, empowering staff to identify and implement solutions that enhance service delivery and reduce bottlenecks. Proactively address any operational hiccups to provide a seamless experience for both patients and staff.
For an in-depth step-by-step guide on successfully opening your practice, see Sermo’s physician resources.
The takeaway
In an evolving healthcare landscape, physicians are increasingly recognized as not just healers but also as leaders and innovators. Integrating business acumen with medical expertise is no longer optional, but essential for success and sustainability. Understanding financial management, strategic planning, legal compliance, and effective marketing allows physicians to run efficient practices, control costs, and enhance the patient experience. These skills are crucial for those pursuing entrepreneurship, but they also significantly benefit doctors in traditional roles, improving their professional effectiveness and job satisfaction.
Not every physician needs to develop the same level of expertise in each business skill covered in this article. The importance of certain skills will depend on your role, practice setting, and career goals. For instance, if you’re part of a large healthcare organization, you might focus more on leadership and communication within a structured system. On the other hand, if you’re running or starting your own practice, you’ll likely need to go deeper into areas like financial management, legal compliance, and daily operations. The key is to identify which skills are most relevant to your situation so you can focus your learning where it will make the biggest difference—for both your patients and your practice.
Sermo is a global community where physicians can connect and share invaluable business tips and skills. Sermo can support physician entrepreneurs through networking, expert insights, and peer discussions. Sermo helps doctors gain practical business knowledge from real-world experiences. By leveraging the collective wisdom of over 1 million verified physicians, new members can acquire the knowledge and confidence needed to navigate the complexities of the business side of medicine.
Join the Sermo community today to connect with peers, gain expert insights, and master the business skills essential for success in healthcare.
