Expanding your hospital is certainly rewarding yet challenging at the same time. It allows you to extend your service portfolio, leading to better patient engagement and improved bottom-line revenues. That being said, being financially prepared is a major part of the job.
Finance, among other things, is a key consideration that you should ideally think about prior to moving ahead with the expansion plan.
Read on to know about the five necessary financial steps that should precede your go-ahead with the plan of expansion:
Chalk out a budget
As a first step, you will need to figure out a tentative budget to accommodate the entire process with ease. The sum you’d need to expand your hospital depends on various factors such as acquiring new premises, getting the best medical tools and equipment, piling on inventory and hiring competent staff, among others. You also need to factor in costs related to regulatory compliances.
Evaluate the budget and get it approved from other stakeholders. Make sure all bases are covered and arrange for the required documents to get the necessary permits.
Avail healthcare finance
Once you freeze the budget, the next step is to avail healthcare finance. Today, doctor finance is readily available from a host of financial institutions including non-banking financial companies (NBFCs).
Have alternate channels of finance to run current operations smoothly
You might have to divert revenues generated from current operations to ensure you can sustain the expansion phase without a hitch. However, this can create a temporary cash crunch in the existing system.
Therefore, it is essential to have an alternate source of finance as a cushion for such a probable shortfall. In fact, there are several financial avenues where you can keep this money and withdraw it when required. This move makes sure your present operations aren’t hindered due to lack of funds or working capital.
Prepare for unexpected expenses
While you will have planned for a lion’s share of the expenses, a few of them might come up unplanned as well. It would be prudent to stay ready with these abrupt costs beforehand. This is when the Flexi Loan facility of the Doctor Loans from Bajaj Finserv comes in handy.
With this facility, you can withdraw funds as and when required from the approved loan limit without having to make multiple applications. This facility aids you to meet sudden expenses which may crop up during expansion.
With Flexi Loan Facility, you are charged interest only on the amount borrowed and not on the entire limit. This reduces monthly EMIs to a great extent. You can also choose to pay the principal at the end of the tenor.
Carve out a repayment strategy
It is vital to have ready a repayment strategy so that you don’t end up defaulting at the time of repayment. To help matters, read up terms and conditions of the loan document properly, and choose the tenor and interest rate carefully.
This is because while a longer tenor brings down the EMI, it will simultaneously increase the interest outflows and vice-versa. Also, a high-interest rate pushes up EMIs. It is wise to opt for a lender that has the most flexible repayment terms and conditions on offer.
These necessary financial steps would not only help you start your expansion on a secure footing but also ensure you achieve your goal without any hassle.