Should I buy a practice or start my own?

Should I associate for a while before starting into my own practice?

What is an independent contractor position, and is that something I should do?

All of these questions are probably going through your mind as you consider what you want to do when you graduate.

Our purpose in this article is to help you sort out these questions, and give you factors to consider when deciding what to do after you graduate.

ASSOCIATE RELATIONSHIP

What chiropractors call “associating” is an employment relationship. As an associate, you are an employee in a chiropractic practice, with all the benefits and drawbacks of that relationship.

You may receive some benefits, including vacation and holiday pay, paid malpractice insurance, and attendance at seminars and conferences. Most associates receive a base salary with incentives or bonuses for bringing additional revenue into the practice. The base is typically low, so that the associate has great incentive to work hard to bring in patients and increase his or her income.

Bases range from $12,000 up to about $40,000 a year, but this number is widely variable; each situation is different.

As an associate, you work for someone else, so when you bring new patients into the practice, they belong to the hiring doctor, not you. You will need to sign a “non-compete” agreement, which will prevent you from taking patients or staff members with you when you leave, or from soliciting patients within a certain area for a specific length of time.

If you are considering staying in the area after you’re done associating, make sure you can move far enough away so you don’t have to worry about getting into a lawsuit.

You should consider associating if:

• You want to spend more time on your technique to hone your skills;
• You want to be involved in a practice so you can see how it’s done;
• You are unsure about where you want to locate;
• You don’t think you are ready for the financial responsibility of a practice; or
• You most likely will not stay in the area after you leave the associate position

INDEPENDENT CONTRACTOR

Some graduates want to own their own practice, but don’t want the overhead, and they look for an office in which they can work on their own and share resources. An independent contractor position may suit them.

As an independent contractor, you set up your own business entity (probably a sole proprietorship), and operate within another office, paying rent to the other doctor.

You have the benefit of using the staff, the equipment, and the office facilities, while the other doctor has a professional colleague to help with patients. This kind of contract works well if the other DC has space available and if he/she only works part time.

If you want to be an independent contractor, you must have a contract that spells out all of the details of the relationship, including your ability to take your patients with you when you leave.

See the Resource Page for sample contracts for associates and independent contractors.

BUYING VS. STARTING A NEW PRACTICE

As you get close to graduation, you may want to start exploring potential locations to see if there are practices available for sale. Buying an existing practice is often preferable to starting your own, for several reasons:

• You have an existing patient base and existing processes and employees who can help you get started;
• You don’t have to buy assets, such as adjusting tables, furniture, and x-ray equipment;
• It may be easier to get a loan from a bank for a “going concern” than for a startup.

But, some other factors come into play:

• Is there a practice available for sale in the area where you want to live, or are you willing to move to the location where the practice is for sale?
• Is the practice for sale at a reasonable price? It’s a tricky negotiation to get a doctor to come down to a price that’s affordable and which a bank will finance.
• Is the type of practice compatible with the practice you want? If the doctor is running a pediatrics practice, for example, and you want to start a PI practice, it might be difficult to switch gears.

Of course, you have the option of starting your own practice, which has many advantages:

• You can start slowly, working on your marketing skills and getting your practice processes in place as you go;
• You acquire your own a patient base;
• You have the ability to create the practice you really want, and you won’t have to re-work an existing practice.

Now is the time to start planning and thinking about this important decision.

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