Checking accounts – business and personal

When you start up as a sole proprietor, be sure to get and use a separate checking account for your business.  Even though “you are the business” your accounting will be much easier and more evident at tax time if you keep business and personal expenses separate.  If you need to take money from your business, use a business check made out to your name and marked as “draw.”

This is even more important if you are an LLC or a Corporation.

Independent Contractor question

I was asked if a new DC needed a separate name to set up as an Independent Contractor.  The answer is “Yes.”  The key word here is “independent.”  If you are truly an IC, you are a separate business from the other doctor.  Thus, you need a separate name, business checking account, EIN, everything.  Bookkeeping should be done separately, with your patients distinguished from the other doctor’s.  You can use the same phone line; I would suggest having it answered as “XYZ Chiropractic and ABC Chiropractic” (both names).  Better yet, pay for another line.  See the dcp4ps web page (under 10000 decisions) for more information.

Internet sites for creative services

You want to create a logo and stationery for your practice.  Or, you want to create an advertising campaign.  But you don’t want to pay tons of money for these services.

Here’s a suggestion:  Get these services online.  Here’s how it works:

Go to a website called “elance.com” (E-as in electronic (internet); lance as in freelance) and post the work you want done.  Freelancers bid on your job, telling you their background and how much they will charge you.  You can look at their ratings from previous jobs and their portfolio of work.  You choose one, communicate by email, and you only have to pay when you are satisfied with the work.

If you want web design work done, you might check out “rentacoder.com” which works the same way.  At this site, you put the agreed-upon fee into escrow, only releasing it when you are satisfied with the work.

I have used both services and found them extremely helpful (and surprisingly inexpensive). Some of the coders and designers are from other countries, but language doesn’t seem to be a barrier.  I used a coder from Bulgaria and he wrote English very well.

If you try either of these and have good or bad experiences, post a comment and let us know what happened.

US government census search page

In your search for information about the town you’re going to, check out the US Census Department’s “AmericanFactFinder” page.  It is at http://factfinder.census.gov .  Look up a US city and you’ll find lots of great information about the people there. Here are just a few of the population characteristics you will see:

• Percentage of the population who are high school grads and college grads
• Mean travel time to work – provides information about whether these people work in town or commute to a larger city
• Median household income compared to US average, so you can see how much this income is above or below the average
• Same thing with median value of homes, compared to US average
• Number of households
• And more. If you click on “show more” on some of the topics, you will receive much more information.

Note: The information is from the last census, in 2000, so much of the information is over 5 years old.  BUT, it stil lhas value.

One interesting statistic I found on chiropractors, from the 2002 Economic Census:

In 2002, there were 34,358 chiropractors in the U.S.  Of these, over 17,000 (about half) were etablished as corporations, 41% were established as sole proprietorships, and all but a few of the rest were partnerships.  Average revenue for chiropractors (gross?) was about $250,000.  Chiropractic offices have, on average, three employees in their offices.

Are non-compete clauses illegal?

Not “illegal,” just often not “enforceable.”  Let me explain…

Let’s say you have a non-compete clause in an associate contract.  You leave the practice and start your own.  The other doctor thinks you’ve violated the non-compete.  He will get an attorney and will most likely attempt to get an injunction against you, to stop you from practicing until the issue can be settled.  Yes, he can do that, to protect himself from further “damage” by your “stealing” his patients. 

When the issue gets to court, the judge or jury will review it based on the principle of “restraint of trade.”  Is this clause so restrictive that it’s unreasonable, that it unreasonably prohibits you from practicing chiropractic.  An example of a VERY unreasonable non-compete would be 150 miles and 10 years.  Way out of bounds!  But most cases are not so obvious.  What is “unreasonable” restraint of trade depends on the area. What is unreasonable in a large city might not be unreasonable in a rural area. It’s very difficult for a court to determine what’s reasonable.  So it’s non “illegal,” it’s just very difficult to enforce a non-compete clause.  And, of course, while the whole thing is being sorted out, you may not be able to practice.

The best advice I can give you is this:  If you are associating with someone and want to leave, set up your practice far away; don’t go ANYWHERE near that practice.  And make sure your advertising doesn’t reach the other doctor’s patients.  This could be considered “indirect” solicitation and can cause the other doctor to come after you.  I usually urge people not to go into an associate agreement if they are planning on practicing anywhere nearby, just for this reason. 

I will be writing an article soon on what I call the “principle of abundance” – why are we so concerned with other doctors stealing patients, when there are plenty to go around?  Another day…another post.

Jean 

Giving up

Ok, this is a tough one.  I was working with a grad who was terrified of starting into practice.  He looked into a practice to buy and the first bank he encountered turned him down.  So he gave up and he’s looking for an associate position.  He figures he’ll work for someone else and save money to start his practice.

I wish it were that easy.  I’ve seen MANY associate contracts, and I have yet to see one that will provide the kind of income that will allow someone to save money for practice.  Most associate contracts provide a very small base plus incentives.  In order to get the $$$ incentives, the associate has to work 50-60 hours a week — full time in the office plus many hours scouting patients FOR THE HIRING DOCTOR!!!  After a year or so of that abuse, the associate has little in the bank and lots of experience working for someone else.  He or she knows exactly what he/she DOESN’T WANT, but stil lhas no clue how to start into a practice.  The associate watched someone run a practice, but never saw the startup.

I generally don’t give advice, because it has one of three results (two of which are negative):

1.  The person doesn’t take the advice, in which case, why bother giving it

2.  The person takes the advice and doesn’t succeed, blaming you for bad advice.

3.  The person takes the advice and succeeds.  Believe me, this person would have succeeded ANYWAY.

Enough of the negative.  Let’s look at the positive.  Give me THREE good reasons why you should not start your own practice right away.  I’ll give you FOUR good reasons why you should… Post here….