Avoid unexpected troubles because of wrong decisions
Managing clinic is easier than managing hospital, similarly managing 20 bed small hospital is easier than managing 100 bed big hospital. With increasing capacity, increases the challenges of successful management. Many doctors without realizing this venture into projects which they would not have realized challenges of operations.
One of our Doctor client had a standalone clinic and after discussing with their new partner, decided to venture into a small hospital project. Without a proper plan, they went in for personal loan to start building the hospital. They started understanding the challenges when they realized the fund is not sufficient to complete the project. They were now looking for bank loan for the project. The bankers said, the personal loan can be considered as equity but without proper report, they find it difficult to fund.
Now the promoters are looking for investors, but since the firm is partnership entity, they asked them to convert into private limited to think of investing. Our clients are totally confused and stuck in between.
What are the take home message?
- They would have worked on the financial feasibility of the hospital. With this they will be able to understand what is the funds needed to complete the project. At least work on the business plan for your hospital
- Approach banks with this report to understand the funding options.
- If the funding options are limited, they could think of investment.
- If investment from friends / families / firms, then to register a company to bring in transparency.
- All these would never give them confidence to avail personal loan for this purpose.
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