Starting out a success

Is it possible for a start-up to be profitable from the beginning? If so, how?

For a start-up practice to enjoy positive cash flow right out of the gate, the owners will need three things: an impressive and immediate level of revenue, tight control on expenses, and no debt financing, says Tom McFerson, CPA, an accredited business valuator and a partner with Gatto McFerson in Santa Monica, Calif. Here's how McFerson says a practice could achieve these goals:

• Ahigh-quality marketing campaign coupled with an owner who possesses alarge client following could achieve the revenue requirements.

• Moderation with the facility and accurate staffing could satisfy the expense requirements.

• A large, personal capital investment would help an owner avoid debt financing.

"Is it possible? Yes. Is it probable? No," McFerson says. His advice: "Set a more reasonable four- to six-month goal to get your start-up practice out of the red and into the black."