Physician Practice Startup Guide
Your complete guide to practice establishment
Building Your Practice From Scratch
Starting your own medical practice offers maximum control over your clinical environment, patient relationships, and income potential. While more complex than joining an existing practice, the rewards - both financially and professionally - are substantial. Consider our guides on incorporating your practice and tax planning for owners.
The Canadian Medical Association reports that approximately 40% of family physicians and 30% of specialists own their practices. Proper financing and cash flow management are essential for success.
This guide covers every aspect of establishing a new medical practice, from initial planning through your first year. Don't forget to review insurance coverage for practice owners.
Typical Start-up Costs (2026)
| Category | Typical Range |
|---|---|
| Leasehold Improvements | $20,000 - $60,000 |
| Medical Equipment | $10,000 - $30,000 |
| EMR System & IT | $5,000 - $15,000 |
| Furniture & Fixtures | $5,000 - $15,000 |
| Working Capital (3-6 months) | $30,000 - $60,000 |
| Legal & Accounting | $5,000 - $10,000 |
| Total Estimated | $75,000 - $190,000 |
Key Setup Considerations
Location & Patient Demographics
Analyze population growth, age demographics, competition density, and proximity to hospitals. Underserved areas may offer provincial incentives worth $40,000-$120,000.
Provincial Billing Setup
Each province has unique billing codes and fee schedules. OHIP in Ontario, MSP in BC, AHCIP in Alberta. Understanding billing optimization is critical for practice viability.
Incorporation Strategy
Most physicians should incorporate before or immediately upon starting practice. Professional corporations enable income splitting, tax deferral, and creditor protection.
Staffing Requirements
Plan for 1-2 MOAs (medical office assistants) per physician. Budget $45,000-$55,000 per FTE including benefits. Consider virtual reception options for cost savings.
Practice Launch Timeline
Incorporate professional corporation, obtain CPSO/provincial college business authorization, secure malpractice insurance, and open business banking.
Identify target location, negotiate lease terms (aim for 5-year with renewal options), plan leasehold improvements, and engage contractor.
Complete renovations, install EMR system, register for provincial billing, purchase equipment, and hire staff.
Open doors, begin seeing patients, refine workflows, build patient roster. Expect 6-12 months to reach full capacity.
Pre-Launch Checklist
Legal & Administrative
- Professional corporation registered
- Provincial billing number obtained
- Malpractice insurance secured
- Business insurance in place
Operational Readiness
- EMR system configured
- Staff hired and trained
- Phone system operational
- Workflow protocols established
Common Start-up Mistakes
Underestimating Working Capital
Provincial billing can take 30-60 days for payment. Budget 3-6 months of operating expenses ($30,000-$60,000) to cover the gap between opening and steady cash flow.
Delaying Incorporation
Operating as a sole proprietor even briefly means paying personal tax rates (up to 53%) instead of corporate rates (12-15%). Incorporate before seeing your first patient.
Oversized Initial Space
Leasing more space than needed "for future growth." Start with what you need for 2-3 years and expand later. Excess space costs $15-$40/sq ft annually in rent alone.
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Ready to Start Your Practice?
Starting a medical practice is a complex undertaking that requires careful financial planning. We help physicians navigate every aspect of practice establishment.
Let's discuss your practice vision and create a comprehensive launch plan.