Wait to Start a Second Urgent Care Center?
Mistake #25: Starting a second urgent care too soon
Recently, we have seen enthusiastic entrepreneurs planning a second urgent care center before even starting a first clinic. The business plan for the first clinic includes a second and maybe even a third clinic within the first twelve months of operation. These entrepreneurs see other successful urgent care businesses operating three to ten centers. They see what they have accomplished, and they seek to emulate their success. Now, there is nothing wrong with having a big vision, but you must make sure that you develop a solid foundation before you build a multi-site urgent care business.
It is important to make sure that you have a good, working prototype before you multiply the number of clinics that you are operating. With any prototype, there are always flaws and problems that need to be worked out. You need to make sure that you first work out the flaws and problems before you open a second clinic. Why? If you have not worked out the problems with your original clinic, your second clinic will double the mistakes in your model. Fixing problems will be even more difficult while you are trying to operate two centers, manage two groups of physicians, and market to two different communities. Your second clinic will double your problems, double your staff issues and double your financial losses. A premature second clinic may be more likely to double your chance of failure, rather than double your chance of success.
On the first month that your new urgent care center turns a profit, you are ready to start thinking about a new urgent care center. Too many people see other multi-center urgent care businesses and think that the key to success is opening several centers. The truth, however, is that opening a second urgent care center prematurely can drain your focus, energy and checkbook when you need to be single-mindedly working and investing in your new urgent care center. When your first center is profitable, you have a working prototype that can help fund a second center, and you know how much personal and financial sacrifice it takes to get an urgent care center off the ground.
In 2006, Practice Velocity was visited by a founder/owner of a well-known national fast food chain. He was investigating whether his vast experience in multi-site restaurant chains might help him succeed in developing a chain of urgent care centers. During his visit, he told us a story that we found quite instructive. When his team opened the first restaurant, designed to be a prototype for a new chain, they did made so many mistakes that they closed down the restaurant. Then they immediately opened the first three wildly-successful restaurants in the new chain. When I asked, "Why three?" He answered, "Well, we had learned what not to do." Since he had hundreds-of-millions of dollars, he could afford this brashness. Since a millionaire with decades of experience can fail miserably in setting up a prototype, how much more important is a prototype urgent care for someone just entering the business.
So, our suggestion is this--make big plans, dream big dreams and work hard on perfecting your model. Don't be afraid to think about operating a multi-site urgent care and serving your entire community. But wait until your first center is a success before buying land, writing a business plan or spending time investigating other sites for an urgent care center.
