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The Deal: Freedom To Not Operate A medical business
Getting your PC up and started is just the beginning of your journey as a small business person. The next step involves actively managing and using your small business to benefit you and your household. This element is often why many of you will steer away from launching a PC because quite frankly you don’t want to have the responsibilities and time commitment associated with its management. This is one of the most compelling reasons you and many others are flocking to employment rather than private practice. It’s all baked into the employment “deal” that you make when you sign that employment contract. Generally speaking, you are making the following swap as you enter into their safe harbor. Fundamental to this deal is that you don’t have to operate a medical business. In the context of private practice, I get it and fully agree. It’s why I made the choice to be employed.
But that was before I became aware of the option to own and operate my own micro-PC and use it within my employer’s safe harbor of employment via what is known as a PC-employment lite agreement. Here I don’t have to manage the entire clinical practice, employees, HR, federal and state compliance, and all the economic risks associated with 3rd parties. All I have to manage is myself and the personal-professional interests of my micro-PC. Simple, streamlined, and personal.
Time and Money
Unfortunately, the maintenance and development of a PC is a phase that is often neglected and viewed passively by physicians whose time is constantly crunched. As a micro-PC, time will always be your most important resource to manage. Your extremely high earning potential per hour will make outsourcing tasks in your life a giant arbitrage matrix as this graphic illustrates. Those tasks can as mundane as mowing your lawn to as complex as running your PC. You will get to determine which is “worth it” and what you prefer to do yourself. What you do with the extra time t is up to you, but I find that most doctors just fill it in with more work, including adding side jobs. Again the arbitrage of this results in more income for your business, and frankly, tensions between outsourcing and business growth are a never-ending battle for every small business. This will be true for you as well.
YOu Are Not Scalable
But, unlike other small businesses that have a steep climb with building consistent and predictable income, in most cases, your professional corporation will be filled with predictable high income from the beginning. That is because there is a physician shortage, so the demand for your services is high in most locations (although some urban areas can be more saturated). Thus whether you use your PC via employment lite, as a locums contractor, private practice, or as a direct care model your small business will be a financial success. The big difference for your micro-PC is that you are not scalable, meaning that you as an individual providing professional services have a ceiling on the amount of work you can do, and thus the amount of income you can generate. Small businesses that are not tied to an individual providing professional services, may have greater risks associated with their launch, but also have a much higher ceiling due to their built-in scalability.
The Minimum Approach with Business Support
This time crunch will lead you to likely outsource the maintenance of your corporation to a group of professionals who will do it for you. I think this is wise, but I want to warn you to be careful to not assemble a team of professionals who work out of silos, don’t understand doctors, or do the minimum in their scope of practice for your corporation. By minimum, I mean they will make sure you comply and follow all federal, state, and local regulations as they follow a look-back and reporting methodology. This look-back approach is a common architecture for small businesses that can lead to underutilizing your small business power. It can also fail to integrate your personal and professional goals into the structure of the business. The real challenge here is that due to your business illiteracy you will just assume their work for you is the industry norm, and quite frankly it is. You just don’t know what you don’t know. When operating like this, it’s like having an iPhone and only using it to call and text people. It is the right tool and fulfills its basic purpose, but there are so many benefits that you miss out on by not setting it up and using all of its potential powers.
This is why it is so important to hire someone familiar with physicians to help you form your PC as well as help you operate it. Ultimately the professionals that you choose to support your business should team up to look out for your business and personal interests. They should help you thrive in your professional life and help you reach financial independence faster.
Professional Support Silos Can Miss the Mark
One of the most common mistakes that a busy doctor who operates their own small business will make is to work with accounting, legal, tax, and wealth management professionals who all operate out of their own silo. Again, this is the industry norm and where you will typically land by default. This will lead to business inefficiencies that include the following:
- Lack of Comprehensive Integration. The professionals that work for you out of silos don’t talk to one another and are often unwilling to communicate with one another about your personal and business interests. In fact, your legal, tax & accounting, and wealth management professionals often view one another with haughty disdain or suspicion. They will force you to choose whose advice you will follow, and then will question you about why you did “x” when you meet with them to provide the “look back” data in relation to their professional service to you. I’m sure some of you have felt the anxiety of your tax professional telling you that your wealth manager’s recommendations were not tax-advantaged, and thus were a bad decision. When your professional support team is in silos the interconnection of business-financial-tax-investment decisions that influence your household goals lack integration and thus holistically misses the mark in terms of the net benefit to your home.
- It is reactionary rather proactive. The professionals that you hire will often take all of your personal and business data and then use it to form reports and make payments to various entities that interface with your small business. This is most commonly a look-back or as-you-go process, rather than a look-forward process. Taking the time to understand yourself and your personal-professional goals and then proactively making personal and business decisions to reach those goals is a far better approach than the reactionary look-back method. Professionals in silos are much more prone to take the easy road and do the minimum via look-back work for you. Frankly, it takes time and presence for someone to mindfully seek to understand your personal life and goals and then coach and support you with how that all interfaces within this complex business and personal architecture. But that is what an agent with a comprehensive agency will do for you as they forecast your needs and then help you build the right business and personal architecture to get you there. There have been many times over the years that my business coach wisely pointed out the unwanted downstream effect associated with what appeared to be simple short-term gain with a financial or business decision. Thus their proactive input protected me from the negative comprehensive consequences of a good decision that was cloaked within a reactionary silo.
- Control. In the end, you understand the myriad of personal and professional micro-decisions that influence your day to day operation of your business much better than any outsourced professional. They will generically do their job within their scope of service, but very rarely personalize the process as they look back over what has already happened. Honestly, no one can do this better than you, and the built-in benefit is the way your PC preserves your personal and professional autonomy as you make decisions about your small business. However, in the end, your time constraints and business skill deficits may be a hindrance to doing this yourself. You are intelligent enough to learn the necessary skills, and many DYI physicians do—-and then use the large number of automated business and personal online companies that support DYI small businesses. However doing it yourself may save you money, but it will ultimately cost you time. With your high income, gaining time for the things most important to you will help you thrive more than the small dollars that you will save as a DYI small business person. But then again, the inner satisfaction of fully controlling and managing your small business may be important to you. I think the sweet spot involves keeping you involved as the autonomous decision-maker over your small business but then outsourcing the actual day-to-day operation and implementation of those decisions.
A Comprehensive Professional Support Team
I believe the best approach to outsourcing professional support is to choose a physician-centric agency that can provide you with all of your small business needs under one roof while they keep you centrally involved as a decision-maker. In this model, you control things while they coach and support you, rather than the opposite whereby they control you and generically manage your affairs.
With this arrangement, you will have a group of professionals who seek to understand your goals and interests and then work TOGETHER to create consensus on personal and professional decisions that proactively help you reach your goals.
In this model, you are actively involved in the decision-making, but your professional team then helps implement the decisions on your behalf. I believe this model utilizes your strength as a physician, to be a decision-maker over your own corporation. This is a personalized team who works for you, all while your agent provides personal and professional-business coaching for you throughout the process. The coaching is all integrated and built-in. There are a few comprehensive agencies like this that are now starting to emerge to specifically support physicians, but SimpliMD stands out as the best due to its small business orientation. Frankly, this integrated business team is why I created SimpliMD for you. This same team of professionals helped me create and operate my own small business PC several years ago, and that is why I know they can help you just like they helped me.
It’s like hitting the “easy” button for you, as this agency makes this whole process turnkey for you. No need to fear the time and energy involved with managing your small business, as your agency keeps you centrally involved as the driver and decision-maker but executes all the management work on your behalf.
A Better Deal
This is why I love the PC-Employment lite model because it allows for the best of both worlds and provides you with a much better employment “deal” as this illustration demonstrates. You still don’t have to manage a complicated medical practice, but you do get to hold onto your professional autonomy by controlling your own micro-PC.
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