1.  If I get paid a salary, am I an independent contractor?  No.  A salary is paid to an employee.  If you are an IC, you can (1) pay rent, or (2) pay a percentage of your collections to the other doctor.   If the doctor is paying you, it’s possible you can still be an independent contractor if

a.  You can do your own marketing and bring in your own patients, in addition to those you see for the other doctor

b.  You can control over how you practice.

Q:  If the doctor sets my hours, am I an Independent Contractor?

A:  IYes. if you agree to those hours, and you are free to either work additional hours or you are free to work in other chiropractic offices outside those hours. 

Q: Do I have to sign a non-compete if I’m an Independent Contractor?

A:  No, you should not have to sign a non-compete, since you’re independent and you can go where you want.  You most likely will have to sign (1) a non-solicit, agreeing not to steal the doctor’s staff or his/her patients, and (2) a non-disclosure/confidentiality agreement, in which you agree not to disclose any of the doctor’s proprietary information (like office procedures, how much the doctor grosses, special forms, etc.)

Read more about this subject in Planning for Practice Success. 

These are great.  I’m not kidding.  They are from a guy named Adrian Savage who has a blog called “Slow Leadership.”  Please read and think about these:

Most people learn over time, but often learning comes too late to be fully useful. There are certainly many things that I know now that would have been extremely useful to me earlier in my life; things that could have saved me from many of the mistakes and hurts I suffered over the years—and most of those that I inflicted on others too.

I don’t buy the romantic notion that my life has been somehow richer or more interesting because of all the times I screwed up; nor that the mistakes were “put” there to help me learn. I made them myself—through ignorance, fear, and a dumb wish to have everyone like me—and life and work would have been less stressful and more enjoyable (and certainly more successful) without them. So here are some of the things I wish I had learned long ago. I hope they may help a few of you avoid the mistakes that I made back then.

• Most of it doesn’t matter. So much of what I got excited about, anxious about, or wasted my time and energy on, turned out not to matter. There are only a few things that truly count for a happy life. I wish I had known to concentrate on those and ignore the rest.
• The greatest source of misery and hatred in this world is clinging to past hurts. Look at all the terrorists and militant groups that hark back to some event long gone, or base their justification for killing on claims of some supposed historical right to a bit of land, or redress for a wrong done hundreds of years ago.
• Waiting to do something until you can be sure of doing it exactly right means waiting for ever. One of the greatest advantages anyone can have is the willingness to make a fool of themselves publicly and often. There’s no better way to learn and develop. Heck, it’s fun too.
• Following the latest fashion, in work or in life, is spiritual and intellectual suicide. You can be a cheap imitation of the ideal of the moment; or you can be a unique individual. The choice is yours. Religion isn’t the opiate of the masses, fashion is.
• If people complain that you’re too fond of going your own way and aren’t fitting in, you must be on the right track. Who wants to live life as a herd animal? The guys in power don’t want you to fit in for your own sake; they want you to stop causing them problems and follow their orders. You can’t have the freedom to be yourself and meekly fit in at the same time.
• If you make your work your life, you’re making your life into hard work. Like most people, I confused myself by looking at people like artists and musicians whose life’s “work” fills their time. That isn’t work. It’s who they are. Unless you have some overwhelming passion that also happens to allow you to earn a living doing it, always remember that work should be a means to an end: living an enjoyable life. Spend as little time on the means as possible consistent with achieving the end. Only idiots live to work.
• The quickest and simplest way to wreck any relationship is to listen to gossip. The worst way to spend your time is spreading more. People who spread gossip are the plague-carriers of our day. Cockroaches are clean, kindly creatures in comparison.
• Trying to please other people is largely a futile activity. Everyone will be mad at you sometime. Most of the people you deal with will dislike, disparage, belittle, or ignore what you say or do most of the time. Besides, you can never really know what others do want, so a good deal of whatever you do in that regard will go to waste. Be comforted. Those who love you will probably love you regardless, and they are the ones whose opinions are worth caring about. The rest aren’t worth five minutes of thought between them.
• Every winner is destined to be a loser in due course. It’s great to be up on the winner’s podium. Just don’t imagine you can stay there for ever. Worst of all is being determined to do so, by any means available.
• You can rarely, if ever, please, placate, change, or mollify an asshole. The best thing you can do is stay away from every one you encounter. Being an asshole is a contagious disease. The more time you spend around one, the more likely you are to catch it and become one too.
• Everything takes twice as long as you plan for and produces results about half as good as you hoped. There’s no reason to be downhearted about this. Just allow for it and move on.
• People are oddly consistent. Liars usually tell lies. Cheaters cheat whenever it suits them. A person who confides in you has usually confided in several others first—but not got the response they wanted. A loyal friend will stay loyal under enormous amounts of thoughtless abuse.
• However hard you try, you can’t avoid being yourself. Who else could you be? You can act and pretend, but the person acting and pretending is still you. And if you won’t accept yourself—and do the best you can with what you have—who then has any obligation to accept you?
• When it comes to blatant lies, there are none more egregious than budget figures. Time spent agonizing over them is time wasted. Even if (miracle of miracles!) yours are honest and accurate, no one else will have been so foolish.
• The loudest noise in the world is the sound of people whining. Don’t add to it.

Lao-Tzu is the philosopher at the center of Taoism (pronounced dow-ism).  I have been reading his work lately and find it both inspiring and comforting. 

Here are a couple of examples that relate to your journey in startup of your chiropractic practice:

“If you do not change direction, you may end up where you are heading.”

“Be careful what you water your dreams with. Water them with worry and fear and you will produce weeds that choke the life from your dream. Water them with optimism and solutions and you will cultivate success. Always be on the lookout for ways to turn a problem into an opportunity for success. Always be on the lookout for ways to nurture your dream.”

An ant on the move does more than a dozing ox.    Lao TzuThe most famous quote by Lao-Tzu: “The journey of a thousand miles begins with one step.”

The answer to this question is, “Much more than you think you should.” A total of 40% of profits is a good round number, including both income tax and self-employment tax (Social Security/Medicare). 

As you set up the financial worksheets to go with your chiropractic business plan, you’ll see that you’ll need to start including quarterly estimated tax payments in your cash flow projections.  Even if you aren’t ‘making money’ (i.e., if your cash flow is still negative), you may end the year with a profit.  And you must have enough cash to pay the tax on that profit.  And don’t forget, as I stated above, you must also have enough money to pay self-employment tax. 

If your tax rate is 28% and self-employment tax is almost 16% (both figured on your profit), that’s 44%.  Yikes!  Start saving now, and get a good CPA to help you minimize taxes.

To learn more about startup financial strategies, read Planning for Practice Success. 

I was talking to a grad who had worked in an office as an associate for a year before starting her chiropractic practice.  The doctor she worked for told her to do things (insurance biling, in this case) in a certain way.  She found out through some investigation that what he was telling her was incorrect. 

I heard of someone else who got some bad advice. In this case, the advisor said that if Blue Cross/Blue Shield allowed 24 office visits a year, they could be for wellness care.  Wrong.  BC/BS didn’t allow the visits because they weren’t condition-based.  If you were relying on this advice and had billed BC/BS for lots of patients, you might have a very large bill to pay them.

Bottom line:  Take advice, but verify before you rely on it.  Do your homework.  It’s the only way you will know you’re right.

If you are considering an LLC for your chiropractic practice and you are working on the financial spreadsheets for your business plan, you may be wondering how to show the LLC.  Actually, it is pretty easy, if you use the Planning for Practice Success worksheets (you get these worksheets automatically when you purchase Planning for Practice Success. 

Here’s how it works:

When you set up your LLC, you become a Member, which is kind of like being a partner in a partnership.  You decide how much money you need each month for personal expenses (your “draw”) and you take out that amount from the business checking account and put it in your personal checking account.  You don’t need to be an employee unless your CPA or tax advisor says you should. 

At the end of the year, you are taxed on the profit of the LLC.  If you are a single member LLC., the profit goes on your personal income tax return (line 12 of Form 1040) and gets taxed along with your other income.

If your LLC has several Members, it is taxed like a partnership and profits are divided among the Members to go on their personal income tax returns.

That’s it.  So basically being an LLC doesn’t change anything on the financial spreadsheets you’re preparing as part of your business plan.

You’re ready to start your chiropractic practice and you have your business plan in hand, and your landlord is ready to do the build-out, but not until you have a loan.  So, how long will it take to get that business loan?  Well, it depends.  Here is an AVERAGE situation:

You take your business plan to several banks at the same time.  One says “OK, we can do this loan.”  If you’re lucky, they will do it without SBA.  Maybe they will take a co-signer, or you have enough to put down as collateral that you don’t need SBA. 

If you must use an SBA guarantee, the process can take an addiitonal 1-2 months (figure 2 months, to be safe).

If your paperwork is in order and the bank gets in gear, you can probably get a commitment letter within 30-45 days that you can take to your landlord.

If you are paying for some or all of the build-out, you’ll need some of the loan funds disbursed to you.  The bank will put them into a “draw” account for you.

So, if things go well (and they seldom do), you can get loan money within 2-3 months.  I have known people who got their loan within 30 days of applyinng, and I’ve known others who had to go through all kinds of stuff over 6 months!  Who knows?

Remember, I said “AVERAGE.”  One of my favorite sayings is “If you have your head in the freezer and your feet in the oven, on average, you’re comfortable.”

Point is- start NOW - it’s better to have the loan and not need it yet, than to be scrambling to get the loan at the last minute.

good luck

Read all about the startup loan process in Planning for Practice Success.

I talked to someone at DEX, which is the Yellow Pages used by Qwest. She said you first get a phone number. You can use a cell phone for the first year until you get your “real” number. You also can get a number through the local phone company, without an address. If you get a local phone number, the local phone company will call the Yellow Pages ad rep, who will contact you about signing up for a Yellow Pages ad. (If you use a cell phone, you’ll have to call the Yellow Pages yourself.

Many areas have multiple phone books. I know in the Quad Cities there is a “Yellow Book” put out by McLeodUSA. You have to buy an ad separately in those books. Their ads might be cheaper, but are you going to get the same results? I would ask them what their circulation is and what their response rate is (they better know!). Get copies of each phone book for your area and call the ad reps and let them give you their sales pitch. Get a cheap ad from both for the first year and track carefully what your response is for each. Then you can decide the second year which one you want to use, or both.

The lead time on the phone books is about 2 months, so check the date on the front of the phone book. If it says “January,” for example, you would need to get your ad set by about the 1^st of November.

Important note: Don’t put an ad in a book which will be published before you get your license! You could be charged with false advertising and practicing without a license.

Planning for Practice Success has many strategies for 1st year marketing. Click HERE to see more.

Starting your chiropractic practice?  Don’t forget to build in excellent customer service.  I just wrote an article for an upcoming Chiropractic Economics issue, and I wanted to share a couple of thoughts with you about customer service.

 Some experts estimate that 15% of success comes from skills and knowledge, while 5% comes from the ability to connect with other people and engender trust and respect.  

Theodore Roosevelt said, “The most important single ingredient in the formula of success is knowing how to get along with people.”

More important than your technical ability to adjust patients, and even more important that your ability to manage a business, is your ability to create a place where patients feel they are “at home,” welcomed, and attended to.

How will you create that kind of an office? 

I was asked about where to show student loans when applying for a bank loan.

First, understand that your student loans are your personal responsibility, and they are not part of your practice.  If you don’t go into practice, you still must pay them back.  So student loans are not shown on any worksheets or financial statements related to your practice.

They do show up on your credit report, even if you are still in school or they are in deferrment, so you must show them as a liability/debt on your personal financial statement. Include the full estimated amount on the liability side.

Also include the monthly payment amount for your student loans on your personal monthly budget.  Show the amount even if you’re in deferment, so you can see what the effect will be on your budget, and how much you’ll need to take out of your practice for personal expenses.

Note:  To be sure you have all the information on personal assets and liabilities, use the SBA Personal Financial Statement form (HERE).

Another note:  Review your credit report to be sure you have included all current liabilities.  List all open credit card accounts with balances due.  You don’t have to list the ones that show a “0″ balance. 

For more information on personal financial preparation for business startup (and LOTS more information!), read Planning for Practice Success.

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