Common Pitfall in Medical Clinic Feasibility Assessments
- Admin
- May 6
- 3 min read
Understand how underestimating fixed and variable costs can jeopardize the success of your project — and learn how to avoid it through reliable strategies.
Understand how underestimating fixed and variable costs can jeopardize the success of your project — and learn how to avoid it through reliable strategies.
When opening a medical clinic, many healthcare entrepreneurs conduct a financial feasibility study to validate the project. However, a recurring mistake puts the business's sustainability at risk: underestimating fixed and variable costs. This seemingly simple oversight is one of the leading causes of financial imbalance during the early years of operation.
In this article, we will explain how to correctly identify these costs, highlight the most commonly overlooked ones, and show how to avoid them when planning your clinic.
1. What Are Fixed and Variable Costs in a Medical Clinic
Fixed costs are those that remain stable regardless of the number of patient visits. Variable costs, on the other hand, fluctuate according to the clinic’s activity level. Understanding this distinction is essential for calculating the break-even point and avoiding cash flow surprises.
Common fixed costs:
Rent
Administrative staff salaries and taxes
Licenses and fees (health surveillance, municipal permits)
Management software and systems
Accounting and legal advisory services
Common variable costs:
Disposable materials and medical supplies
Outsourced diagnostic tests
Service-based commissions
Electricity, water, and other utilities
Payment gateway and platform fees
Practical tip: Create a clear breakdown of all fixed and variable costs in your feasibility spreadsheet. This will simplify financial simulations and support strategic decisions regarding patient volume.
2. Main Mistakes When Estimating Clinic Costs
It is common for entrepreneurs to focus only on the most obvious costs, such as rent and salaries, while ignoring less visible but equally important expenses. This leads to distorted financial projections.
Most frequent errors:
Failing to account for mandatory labor charges and benefits
Ignoring annual adjustments in supply and service contracts
Overlooking preventive maintenance costs for equipment
Omitting marketing and patient acquisition expenses
Overestimating the profit margin per appointment
Practical tip: Simulate worst-case scenarios with rising costs and lower-than-expected revenue. This helps you build a financial safety net during the planning phase.
3. How to Fix and Prevent These Mistakes
The best way to avoid future problems is to conduct a comprehensive financial feasibility study with the support of specialized professionals. This includes detailing all expenses, projecting cash flow, and validating pricing structures based on real costs.
Best practices for accurate planning:
Hire an accountant specialized in the healthcare sector
Use software that breaks down per-service costs
Periodically update spreadsheets with actual expenses
Review supplier and service contracts for annual adjustments
Benchmark with clinics of similar size and scope
Practical tip: Update your financial planning every quarter. Markets evolve rapidly, and tracking real costs protects your clinic from unexpected financial shocks.
4. Real Impact: How These Errors Affect Your Clinic
When costs are underestimated, a clinic can operate at a loss even with a fully booked schedule. The projected profit fails to materialize, working capital is drained quickly, and the owner may be forced to take out loans or cut critical investments.
Practical example: A clinic projected a 25% net margin based on incorrect cost assumptions but ended up with only 8%, compromising ROI for nearly two years.
Practical tip: Optimistic margins are only sustainable with strict cost control. Track your key financial indicators monthly and reassess whenever operational changes occur.
Conclusion
Underestimating fixed and variable costs in the feasibility study is a silent error — but one that can render your clinic unviable within the first few months. By recognizing and correcting this early, healthcare entrepreneurs gain clarity, confidence, and the foundation for sustainable growth.
Solid financial planning isn’t a luxury — it’s a prerequisite for success in the competitive medical clinic market.
For more information on how we can support your clinic or healthcare practice, feel free to contact us!
