Freelance MD, a community of physicians that gives you more control of your career, income, and lifestyle. Join us. It's free, which is a terrific price. Grab Some Free Deals
Search Freelance MD

Freelance MD RSS    Freelance MD Twitter     Freelance MD Facebook       Freelance MD Group on LinkedIn      Email


2nd MD Special Offer

ExpedMed CME

Medvoy Society of Physician Entrepreneurs

20 Newest Comments
Newest Nonclinical Physician Jobs
This area does not yet contain any content.
« Finding The Non-clinical Sweet Spot As A Physician | Main | Stranger In A Strange Land: The Reality Of Moving To A Small Town »

Physician Business: The Perfect Model

If you're designing a business as a physician, what will you need?

We all know certain questions will be on the board exams. When it comes time to take the orals for the Board of Physician Entrepreneurs exam, count on this one:

A business model describes the interaction between your suppliers, your custmers and your business and how you will make a profit. The following is an example of a near perfect business model:

  1. Alessandra Ambrosio in a push up bra.
  2. Mark Wahlberg in his briefs
  3. My healthclub
  4. Someone sending you certified checks to a post office box

There are several elements to the perfect model.

  • Network effect
  • Viral
  • Natural monopoly
  • No inventory
  • No COGs
  • No supply chain
  • Your customers do your marketing for you
  • Your customers do fulfillment for you

    Or how about :

  • A killer application - Exactly meets the target market’s needs in a way that no other offer does. If possible it is twice as good at half the price of current offerings. e.g. matchmaking sites, email, Instant messaging.
  • ‘Bleeding obvious’ - Obvious benefits to the market prompting the response ‘Why didn’t I think of that?’ - e.g. pre-packaged fresh squeezed juice at railway stations.
  • Price is not an issue  - Price is not an issue because the target market totally sees the value and have the means to buy the product without hesitation. – e.g. high fashion, plastic surgery.
  • Price is not calculated based on costs - Huge margins – in a 'bricks & mortar' business you buy for 1 sell for 10. Price is based on what the market is prepared to pay not as a markup on costs – e.g. Fine dining in a top restaurant for an anniversary.
  • Minimal initial personal investment - Either it is a low investment venture or funders will put up 90% of the money for a 10% stake – e.g. internet business or sell under license.
  • Pent-up demand - Customers have been waiting for some time for someone to finally offer this product. No need to educate the market with expensive advertising or employ copious sales people – e.g. online airfare booking and payment.
  • Lasting window of opportunity - Plenty of opportunities for repeat business or there is a steady stream of new customers each year. The product is not a fad or dependant on a technology that will soon be superseded.- i.e. best coffee in the city or education products for school leavers.
  • Highly addictive - One purchased your customers cannot imagine life without it – e.g. iPOD.
  • Significant competitive edge - You have something exclusive that no other business has access to. e.g. Patent, exclusive agreement with unique resource (supplier, person, materials), skill & know how, exclusive access to a special market)
  • Monopoly - You have a monopoly in a target market that is completely supported by your customers. – e.g. only hotel in town with a liquor license.

    Before the Internet, I would have answered 4. Of course, with PayPal, Groupon, virtual gaming points and instant credit, who needs checks any more? Think about how the healthclub model works.

    You are so guilty about slacking off for the entire year, you decide to pay an up front sign-on amount for the privilege of belonging. What's more, you give the club the right to automatically take money out of your checking account and send it to the club whether you use their product or not...which, according to research , you won't by March 1. Is this starting to sound a little like concierge medicine?

    One of the top 10 reasons why businesses fail is an inadequate business model. Either you don't get your money after the sale  (fee for service) in time or you have to pay your suppliers in advance (EMR vendors).

    Creating a business that has a drop dead value proposition that satisfies a huge unmet need is only part of the equation. You need a business model that works. Just ask the owner of the Cherry Creek Athletic Club parked in his Mercedes in his personal space.

    Reader Comments

    There are no comments for this journal entry. To create a new comment, use the form below.

    PostPost a New Comment

    Enter your information below to add a new comment.

    My response is on my own website »
    Author Email (optional):
    Author URL (optional):
    All HTML will be escaped. Hyperlinks will be created for URLs automatically.

    Join Freelance MD

    Freelance MD is an active community of doctors.

    All rights reserved.