Building a General Practitioner (GP) clinic in Malaysia can be an exciting but challenging process. Two of the most critical factors in starting a GP clinic is the cost of capital and the running cost. The cost of building a GP clinic can vary significantly, depending on several factors such as the location, size of the clinic, and the equipment and services offered. In this article, we will take a closer look at the capital cost items involved in building a GP clinic in Malaysia and provide you with an estimate of how much it would cost.
Capital Expenses – The Cost of Building A Clinic
Renovation:
The cost of renovation is one of the biggest expenses when starting a GP clinic. The cost can range from as low as RM100,000 for a simple renovation to as high as RM1 million for a boutique clinic. The cost of renovation depends on various factors such as the size of the clinic, the quality of materials used, and the level of customization required. It is important to work with an experienced contractor who can provide accurate estimates and ensure that the renovation is done according to plan.
Rental Deposits:
Rental deposits are a standard requirement for most commercial properties in Malaysia. The deposit amount can vary between districts and ranges from RM3 to RM7 per square foot. For example, if the clinic is 1000 square feet and is priced at RM3 per square foot, the rental would be RM3,000.
Company Set Up Fees:
In Malaysia, the cost of setting up a company can vary depending on the type of company and the services required. The cost can range from a few hundred to a few thousand ringgit.
CKAPS Fees:
All healthcare clinics in Malaysia must obtain approval from the Ministry of Health’s Private Medical Practice Control Section (CKAPS). The CKAPS fees for registering a new GP clinic is RM1500.
Local Council Fees:
Local council fees may vary depending on the location and size of the clinic. The fees may include permits for signage, advertising, and waste disposal.
Lease Prepayment:
Medical equipment are typically leased over a period of time. Generally the lease period will be over 5 years though some banks may have financing products that extend the lease tenure to 10 years. Whenever equipment is leased, leasor will have to pay two months of instalment upfront. These are termed ‘lease prepayment’.
Non-Medical Equipment:
Non-medical equipment such as computers, printers, and office furniture may also add to the cost of setting up a GP clinic. The cost of this equipment depends on the type and quantity of equipment needed.
Medical Equipment:
Medical equipment is a significant expense for a GP clinic. The cost of medical equipment can range from a few thousand to several hundred thousand ringgit. A down payment of 10% is typically required for medical equipment purchases.
Security System:
A security system, such as an alarm system, may be necessary to ensure the safety of staff and patients. The cost of a security system can vary depending on the type and size of the clinic.
According to a guidebook published by MOH, the estimated cost of setting up a GP Clinic is Malaysia ranges from RM 375,000 to RM 445,000.
The estimated cost of building a GP clinic base on MOH’s 2024 guide book.
The Cost of Running A Clinic
In addition to the capital cost, it’s also important to consider the running cost of the clinic. This includes the monthly expenses necessary to keep the clinic running, such as:
Rental: This includes the monthly rent paid to the landlord.
Salaries and Statutory Contributions: This includes the monthly salaries of the staff, as well as the necessary statutory contributions, such as EPF and SOCSO.
Utilities: This includes the monthly cost of electricity, water, and internet and phone bills etc.
Software: Clinic Management System
Other Monthly Expenses: This includes the cost of other necessary expenses such as lease financing, waste management fees, audit and secretarial fees etc.
Drug Expenses: Although drug expenses are typically considered part of operating costs, it’s important to include them in the initial capital expenses as you’ll need to have sufficient inventory to start treating patients. As the clinic begins to generate profits from selling drugs, these expenses will be considered as goods sold rather than part of the initial capital expenses.
To ensure that the clinic has a smooth start, it’s important to have a running cost runway of at least six months to a year. This means having enough cash flow to cover all monthly expenses without any revenue in the beginning. Read why clinics fail here.
In conclusion, the cost of building a GP clinic in Malaysia can vary significantly depending on several factors, including the location, size of the clinic, and the equipment and services offered. The lowest start-up cost in Malaysia for a GP clinic is around RM250,000, while the highest can be as much as RM445,000. It is essential to identify the capital cost items involved in building a GP clinic to better estimate the total cost. It is also important to work with a reputable contractor and supplier to ensure that the costs are reasonable and that the clinic is built to meet regulatory requirements. With careful planning and budgeting, building a GP clinic in Malaysia can be a rewarding and profitable venture.
If you are thinking of setting up your GP Clinic, check out the GP Clinic Solutions Hub – everything a doctor needs for building and running a GP clinic: services, clinic management software, financing, medication, equipment, articles, workshops, and more.
Read the step-by-step process on how to build your GP Clinic.
