Gynecology Clinic Running Costs
Initial monthly running costs for a Gynecology Clinic in 2026 are projected to be around $159,000 to $165,000 This high fixed cost structure, dominated by specialized payroll and facility expenses, means you need significant patient volume quickly Payroll alone accounts for roughly $96,000 per month in the first year, representing about 60% of total operating expenses Fixed overhead, including $12,000 for rent and $3,000 for malpractice insurance, adds another $22,500 monthly Variable costs, such as medical supplies (70% of revenue) and lab fees (50% of revenue), total about 12% of revenue Given the projected $214,400 monthly revenue in 2026, the clinic is expected to operate at a loss initially, requiring a minimum cash buffer of $250,000 until the projected break-even in February 2027 This guide breaks down the seven critical recurring expenses you must model precisely
7 Operational Expenses to Run Gynecology Clinic
| # | Operating Expense | Expense Category | Description | Min Monthly Amount | Max Monthly Amount |
|---|---|---|---|---|---|
| 1 | Staff Payroll | Labor | The largest expense is staff compensation, totaling ~$95,833 monthly in 2026 for 12 FTEs. | $95,833 | $95,833 |
| 2 | Facility Rent | Fixed | Rent is a major fixed cost at $12,000 per month, locked in from 01012026 through 31122030. | $12,000 | $12,000 |
| 3 | Medical Supplies | Variable | These variable costs are projected at 70% of revenue in 2026, equating to ~$15,008 per month. | $15,008 | $15,008 |
| 4 | Lab Testing Fees | Variable | Lab fees represent 50% of revenue, costing ~$10,720 monthly in 2026, scaling with visit complexity. | $10,720 | $10,720 |
| 5 | Insurance | Fixed | Mandatory insurance costs total $3,500 monthly, split between malpractice ($3,000) and general coverage ($500). | $3,500 | $3,500 |
| 6 | Tech & Software | Fixed | Critical technology expenses include $2,500 for EHR software plus $1,200 for IT support, totaling $3,700. | $3,700 | $3,700 |
| 7 | Billing Fees | Variable | These variable administrative costs are estimated at 40% of revenue in 2026, or ~$8,576 per month. | $8,576 | $8,576 |
| Total | All Operating Expenses | $149,337 | $149,337 |
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What is the total monthly running budget needed to sustain operations before achieving profitability?
The initial monthly operating budget for the Gynecology Clinic must cover the average monthly deficit of about $21,750, meaning you need at least $65,250 to $130,500 in starting capital for a 3-to-6-month runway to absorb the projected first-year EBITDA loss of $261,000.
Monthly Cash Needs
- Calculate the average monthly operating deficit: $261,000 divided by 12 months equals $21,750.
- Fixed costs, like facility leases and core administrative salaries, must be covered monthly regardless of patient volume.
- Variable costs scale directly with service delivery, including medical supplies and insurance processing fees.
- Aim for a 3-month runway covering the deficit, which requires $65,250 cash on hand defintely.
Covering the Initial Loss
- The total capital stack must absorb the projected $261,000 EBITDA loss expected in the first year of operations.
- A 6-month runway provides a safer buffer, demanding $130,500 just for covering the running deficit.
- Since revenue is fee-for-service, operational efficiency dictates how quickly you shrink the monthly cash burn rate.
- To gauge operational success in this model, review What Is The Most Critical Measure Of Success For Your Gynecology Clinic? before setting the final capital raise target.
Which two recurring cost categories represent the largest percentage of total monthly expenses?
Payroll and facility rent are the two largest recurring costs for the Gynecology Clinic, consuming nearly 68% of total monthly operating expenses. This concentration means managing staffing efficiency is your primary lever for improving margins, a key consideration when looking at overall clinic economics, such as how much the owner of a Gynecology Clinic typically makes How Much Does The Owner Of Gynecology Clinic Typically Make?
Payroll Cost Breakdown
- Payroll expense sits at $95,833 monthly.
- Here’s the quick math: That’s 60.24% of the $159,069 total operating costs.
- Focus on optimizing practitioner schedules to boost utilization.
- If onboarding takes 14+ days, churn risk rises.
Rent and Total Burden
- Facility rent is a fixed cost of $12,000.
- Rent accounts for 7.54% of total expenses.
- Together, these two categories represent 67.78% of spending.
- These two categories defintely dominate the cost structure.
How much working capital is required to cover the burn rate until the projected break-even date?
You need enough working capital to cover the monthly operating deficit for 14 months, ensuring you never dip below the critical $250,000 minimum cash reserve in January 2027, which directly relates to Is The Gynecology Clinic Currently Achieving Sustainable Profitability?. The key is stress-testing this runway against slower-than-expected patient adoption; defintely plan for a longer ramp.
Runway Stress Test
- Model the cumulative operating loss over the full 14-month break-even window.
- Calculate required capital based on a 20% lower monthly revenue assumption.
- If patient volume growth stalls, determine the exact month cash hits zero.
- Review all fixed costs now; they must be reducible if the ramp slows down.
Liquidity Floor Management
- The $250,000 balance acts as your emergency buffer, not operating cash.
- Establish a hard trigger point for seeking bridge financing or cutting discretionary spend.
- Track monthly cash burn rate weekly; don't wait for the monthly accounting close.
- This floor must cover at least three months of fixed overhead in a worst-case scenario.
If actual patient volume is 20% lower than forecast, how will we cover the increased monthly deficit?
If actual patient volume falls short by 20%, you must immediately activate cost controls and secure contingency financing to protect the projected 34-month payback timeline; planning these steps now is crucial, much like determining the initial setup detailed in How Can You Effectively Launch Your Gynecology Clinic?
Activate Cost Triggers Early
- Set a hard trigger: if actual volume is below 80% of forecast for two consecutive weeks, stop non-essential spending.
- Delay hiring the next Gynecologist Staff FTE (Full-Time Equivalent) until volume recovers to 90% of target.
- Immediately review marketing spend; cut channels showing a Customer Acquisition Cost (CAC) above the target threshold.
- Freeze all non-critical capital expenditures, like upgrading office furniture or software licenses you defintely don't need right now.
Cover the Monthly Deficit Gap
- A 20% volume reduction means you must cover the resulting revenue shortfall from day one.
- Calculate the required monthly cash buffer needed to sustain operations for an extra 6 months beyond the original runway.
- If your initial capital raise covered 18 months of runway, the deficit coverage plan must extend this to 24 months minimum.
- Secure a line of credit or a bridge loan commitment before the deficit hits, making sure the terms don't penalize early repayment if volume rebounds.
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Key Takeaways
- The projected initial monthly operating budget for a new Gynecology Clinic in 2026 averages $159,000, with specialized staff payroll constituting the largest single expense at approximately 60% of total costs.
- Due to initial deficits, a substantial working capital reserve of at least $250,000 is mandatory to cover the burn rate until the projected break-even point in February 2027.
- Variable costs, particularly medical supplies (70% of revenue) and external lab testing (50% of revenue), present significant scaling challenges that must be closely monitored as patient volume increases.
- Fixed overhead, including $12,000 in rent and $3,500 in mandatory insurance, contributes heavily to the high fixed cost structure requiring rapid patient volume acquisition to meet the 14-month profitability timeline.
Running Cost 1 : Staff Payroll and Benefits
Staff Cost Reality
Staff compensation drives your largest operating cost, hitting about $95,833 monthly in 2026 across 12 full-time equivalents (FTEs). This figure heavily weights toward clinical leadership, as the Senior Gynecologist alone commands $20,833 per month. You need tight control over headcount planning to manage this fixed commitment.
Headcount Budget Inputs
This $95,833 projection covers salaries, payroll taxes, and benefits for all 12 planned staff members for 2026. To estimate this, you need specific salary benchmarks for clinical roles, like the $20,833 for the lead physician, plus standard employer burden rates (e.g., 25% for taxes/benefits). This is your primary fixed labor commitment.
- 12 FTEs planned for 2026.
- Lead physician cost: $20,833/month.
- Includes payroll taxes/benefits.
Managing Labor Spend
Since clinical staff is high-cost, optimize scheduling to maximize revenue per provider hour. Avoid hiring support staff until patient volume justifies it; use outsourced billing (which is 40% of revenue) instead of hiring internal staff too early. If onboarding takes 14+ days, churn risk rises.
- Tie new hires to utilization targets.
- Outsource non-core functions first.
- Benchmark physician compensation rates.
Key Compensation Risk
The high fixed cost of $95,833 means your clinic must maintain strong patient flow to cover payroll before variable costs like supplies kick in. A slow ramp in Q1 2026 will quickly erode cash reserves because these salaries are due regardless of collections.
Running Cost 2 : Clinic Facility Rent
Rent Floor
Facility rent sets a high floor for your operating expenses at $12,000 monthly. This cost is fixed for five years, running from 01012026 to 31122030, meaning volume defintely doesn't change this liability. You must cover this before considering growth.
Rent Commitment Details
This $12,000 covers the physical space for your gynecology clinic operations. It’s a pure fixed cost, meaning it doesn't scale with patient visits or revenue, unlike supplies or lab fees. You need the lease agreement details to confirm the five-year term starting January 1, 2026.
- Cost is $144,000 annually.
- Term length is 60 months total.
- No volume discounts apply.
Managing Fixed Rent
Since rent is locked in, managing it means ensuring revenue quickly covers it. Avoid signing long leases before validating patient demand in your target zip codes. If you overshoot space needs, subleasing unused exam rooms is a potential, though complex, mitigation tactic.
- Confirm lease exit clauses early.
- Factor rent into minimum required visits.
- Don't overbuild capacity now.
Rent vs. Payroll Load
Because staff payroll is $95,833 and rent is $12,000, your required monthly contribution margin just to cover these two items is over $107,833. Every procedure must generate enough margin to service this baseline before you see profit.
Running Cost 3 : Medical Supplies Consumed
Supply Cost Hit
Medical supplies are your largest operational variable cost, projected at 70% of revenue in 2026, equating to roughly $15,008 monthly based on current revenue forecasts. You must manage inventory tightly, or this cost will quickly erode your contribution margin.
Inputting Supply Costs
These costs cover all consumables used during patient care, like gauze, speculums, and diagnostic kits. To estimate this accurately, you need usage data tied to specific service codes, not just purchase orders. If revenue hits $21,440 per month, supplies total $15,008. Honestly, tracking usage per procedure is the key input here.
- Track usage per procedure type.
- Use supplier volume discounts.
- Factor in inventory shrinkage.
Controlling Supply Spend
Since supplies are 70% of revenue, even small efficiency gains yield big cash savings. Negotiate tiered pricing based on projected annual volume, not just immediate needs. Avoid small, frequent orders; they always carry a premium. Defintely centralize purchasing to prevent staff from buying outside negotiated channels.
- Standardize kits across procedures.
- Review supplier contracts quarterly.
- Centralize purchasing authority now.
Margin Pressure Point
Watch supplies (70% of revenue) alongside external lab testing fees (50% of revenue). If your service mix shifts toward more complex diagnostics, these two variables will balloon faster than you can raise prices. This relationship dictates your true gross margin floor.
Running Cost 4 : External Lab Testing Fees
Lab Fees: 50% Revenue Share
External lab testing costs are 50% of total revenue, amounting to roughly $10,720 per month projected for 2026. This expense scales directly with the complexity and volume of patient visits you handle. You can't escape this cost if you want comprehensive diagnostics.
Cost Drivers for Testing
This expense covers sending patient samples off-site for specialized analysis, like blood panels or pathology reports. Estimation requires knowing your patient volume and the average number of tests ordered per visit multiplied by the contracted unit price. It’s a direct cost of service delivery.
- Inputs: Patient volume and test complexity.
- 2026 Estimate: $10,720 monthly.
- It’s 50% of revenue.
Managing Lab Spend
Since this cost scales 1:1 with volume, your main lever is contracting, not cutting visits. Negotiate tiered pricing based on projected annual throughput, aiming for 5-10% savings on standard panels. Avoid ordering tests without clear diagnostic value; every test adds revenue but also adds 50 cents to this specific cost line.
- Negotiate volume discounts early.
- Standardize preferred testing panels.
- Audit unnecessary add-ons.
Margin Risk Alert
Because lab fees are 50% of revenue, any pricing pressure that lowers your fee-for-service rates without reducing test volume immediately halves your gross margin on those services. This defintely crushes profitability.
Running Cost 5 : Malpractice and Business Insurance
Mandatory Insurance Outlay
Mandatory insurance coverage for the clinic requires a fixed monthly outlay of $3,500. This covers both professional liability and general operations risk. The bulk, $3,000, is dedicated to malpractice protection for the practitioners. You need this locked in before seeing the first patient.
Cost Inputs and Budgeting
Malpractice insurance protects the practice against claims of negligence or error in professional services. General business coverage handles property damage or slip-and-fall incidents. This $3,500 monthly cost is a fixed overhead, not tied to revenue volume. You must secure quotes based on the number of providers and expected service complexity.
- Malpractice Coverage: $3,000 monthly.
- General Liability: $500 monthly.
- Fixed operational expense for 2026.
Managing Premium Spend
Since malpractice premiums scale with provider specialization and claim history, focus on rigorous compliance and documentation. Avoid common mistakes like letting coverage lapse between providers or during staff changes. Bundling general liability with malpractice might offer small discounts, but compliance is non-negotiable for a gynecology practice.
- Ensure provider credentials stay current.
- Review limits before any policy renewal date.
- Don't skimp on general liability minimums.
Risk Context
This insurance cost sits alongside high fixed rent ($12,000) and significant staff payroll ($95,833). If patient volume is low, these fixed insurance costs will pressure contribution margin quickly. Defintely budget for annual premium adjustments that usually exceed standard inflation rates.
Running Cost 6 : Technology and Software
Tech Spend Baseline
Technology is a fixed monthly commitment covering patient data management and security compliance. You must budget $3,700 per month for essential software and support before seeing the first patient. This cost is non-negotiable for operating a modern clinic.
Tech Cost Breakdown
This $3,700 monthly technology expense covers two core operational needs for the clinic. The Electronic Health Record (EHR) software costs $2,500 monthly for patient charting and records. The remaining $1,200 covers necessary IT support and security protocols to protect sensitive patient data.
- EHR software: $2,500/month
- IT/Security: $1,200/month
Managing Software Costs
Reducing EHR costs means avoiding feature bloat or under-utilizing expensive licenses. If you onboard fewer than the projected 12 FTEs initially, negotiate seat licensing down immediately. Always check if bundled IT support covers compliance audits, which could reduce external consulting needs.
- Audit license utilization quarterly.
- Bundle IT support contracts.
- Review vendor security certifications.
Compliance Risk
Underfunding IT support is a major risk in healthcare; a single data breach due to poor security protocols can cost far more than $3,700 in fines and reputation damage. Treat this expense as critical infrastructure, not overhead.
Running Cost 7 : Billing and Collections Fees
Billing Cost Impact
Billing and collections fees hit 40% of revenue in 2026, translating to about $8,576 monthly. This cost covers the heavy lifting of processing insurance claims and securing patient payments for services rendered. That's a significant variable drag on gross margin.
Inputs for Billing Fees
This 40% fee directly funds the administrative engine needed for revenue capture. It covers third-party billers or internal staff handling insurance submissions, denials management, and patient invoicing follow-up. The key input is total monthly revenue; if revenue doubles, this cost doubles too.
- Cost is 40% of gross revenue.
- Estimate is $8,576 per month in 2026.
- Covers insurance claim processing complexity.
Controlling Collections Spend
Managing this variable spend means optimizing the revenue cycle management (RCM) process. If your current collections rate is low, you pay more for the effort required to chase down slow payers. Focus on clean initial claims submission to cut down rewok costs.
- Benchmark RCM cost against peers.
- Incentivize clean claim submission upfront.
- Negotiate fee structure based on success rate.
Prioritizing Cash Flow
Since this is 40% of revenue, it dwarfs fixed overhead like rent ($12,000). You must aggressively track Days Sales Outstanding (DSO) to ensure the $8,576 spend is efficient. High DSO means you are paying high fees to collect old money.
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Frequently Asked Questions
Running costs start around $159,000 per month in 2026, heavily weighted toward payroll (60%) You must budget for high fixed costs like $12,000 rent and $3,000 malpractice insurance;