South Africa’s doctors are world-renowned for their quality of training and medical ability. But they are increasingly being challenged to up their business game as well and embrace a more business-oriented approach to remain competitive and future-proof their practices in a post-pandemic world.
In fact, medical professionals are entrepreneurs in their own right, and should be seen – and supported – as such, says Ryan Cohen, co-founder and Chief Relationship Officer at alternative lender Merchant Capital.
“Doctors often say things like ‘I’ll let someone else worry about my bookkeeping’, or ‘I’m too busy to worry about invoicing.’ The fact is that they need to take a far more business-like approach to their practices to build into the future, and fully understand how concepts like cash flow and working capital can impact their practices,” he said.
Speaking at a recent conference of the Islamic Medical Association (IMA), Cohen said many medical professionals were increasingly looking for ways to grow their businesses. These could include moving premises, studying further, or acquiring new equipment to help them to add efficiencies or enhancements to their practices.
He cited common financial mistakes that medical practitioners make, including confusing turnover with profit, obtaining financing facilities that are larger than what the practice can afford, and using the wrong financing option – for example, using short term cash to fund the purchases of medium term assets.
Mohammed Ameen Hassen, the head of Shari’ah Banking for Standard Bank, highlighted several actions medical professionals could take to future-proof their businesses. These include getting their expenses under control, identifying alternative revenue streams, negotiating better terms with suppliers and matching the right finance option with the appropriate use case.
Funding has long been a challenge for Muslim medical professionals looking to grow their practices. Until recently, Shari’ah solutions were either non-existent or an administrative nightmare, which meant many practices would simply go without funding, limiting their growth in the process.
However, a new generation of fintech-based working capital products has the potential to transform the lives of local medical professionals, as they have for thousands of retailers and SMEs. In Merchant Capital’s 10-year existence, more than 20 000 SMEs have grown their businesses through working capital worth more than R4 billion.
“Conventional funding solutions don’t always recognise the unique challenges required to get medical practices – and particularly Muslim practices – on track. Medical professionals’ time is valuable, and they need seamless and supportive business financing that allows them to focus on their patients and secure their growth ambitions for their practices,” said Hassen.
To date, more than 1 000 doctors have taken up financing through this product, with around R150 million in funding being deployed.
At the conference, Merchant Capital and Standard Bank unveiled a fully Shari’ah compliant financing solution that will now give Muslim medical practitioners access to working capital financing for the first time.
“As more medical professionals look to build their practices, they’re increasingly looking for financing solutions that can help future-proof their businesses,” said Cohen.