Peter G. Fernandez, DC
Your practice is busy and your patient volume is consistently where you want it. You are making a good income but you wonder, "Where do I go from here? "I want to achieve more, but I don't want more work." If this is you, read on. You are about to discover how to significantly increase your income by providing chiropractors with a much-needed service – a service that will help more DC's achieve practice success – a service you can provide with little to no additional work on your part.
Become a Practice Incubator
Incubate means to cause to develop. Incubator refers to a person or thing that incubates. In the business world, a company that leases space at affordable rates to different businesses within the same building, and provides those businesses with the use of an essential core of business services, is considered an "incubator company." These services located in the same building as the business tenants might include items such as accounting, customer billing, marketing advice, telephone answering, photocopying, fax utilization, internet and transcription services. By sharing these essential services, their cost is at a significant savings for each of the business tenants. In essence, the incubator company helps the individual businesses to develop or grow by providing them with affordable space and business support services.
Due to the significant savings in business-related expenses, incubator companies make it very easy for a new business to get started and to quickly show a profit. At a time when 80% of all new businesses are failing, businesses that start in an incubator are experiencing an 87% success rate. In addition, established businesses operating within an incubator facility grow much faster and more profitably due to the reduction in business expense and stress that an incubator affords them. With statistics like these, it is no surprise that the demand for incubator-type companies is rapidly growing.
Serve Your Profession and Make Additional Money
Turn your office into a "practice incubator." If you have extra room in your office, lease it to an independent contractor (another DC) and supply them with the essential chiropractic business services you already have in place, i.e., a CA to answer the telephone and make appointments, an insurance CA to bill and collect on patient accounts, the use of your x-ray machine, a therapy CA and use of therapy equipment, etc. You simply provide the independent doctor with the use of the staff, equipment and services you are already paying for. The only expense the independent DC would have is the fee you are charging them for your office space and services, and possibly adjusting tables if you do not already have some available. Medical centers have successfully been using this practice-incubator concept for years – they provide various medical-related services to the doctors who practice within, yet each doctor‘s practice is separately owned and independent of the others. This concept can also work for you and your independent contractor DC's practice – helping you achieve greater financial success and helping the independent contractor open and/or build their own practice.
A Right Way and A Wrong Way
It is important that you establish your "practice incubator" following the rules and guidelines that satisfy the IRS independent contractor requirements and your goal of boosting your income with little to no increase in your workload.
Your first step is to learn how to set up a mutually beneficial independent contractor relationship with another DC.
Not all independent contractor arrangements are the same. I would consider some unquestionably unethical though otherwise legal. For example, a DC having lost his entire practice came to me for help. He had worked as an independent contractor in another DC's office and with no legal recourse, was forced to leave. He had built his own practice, but due to a non-competition agreement he had made with the other DC, when he left he also had to leave his practice behind. He was devastated, he was angry, he was determined never to work as an independent contractor again. What was my advice to him? To open a new practice as an independent contractor within another DC's office. Well, if a person's fury could literally create sparks, he would have gone up in smoke along with everyone else within ten feet of him. He said to me (in less publishable words), "I was taken advantage of by the last doctor, why would you want me to go back into that same situation?" My response was, "You won't go back into the same situation because I won't let you. The independent contractor relationship can and should be a win-win for both doctors. I have helped many DC's who could not otherwise afford to open their own practice, find success and satisfaction in an independent contractor arrangement."
We negotiated a very good deal with another doctor. My client, the independent contractor, has now been there for five years, (there is no reason for him to leave) he makes good money, and the doctor who owns the facility is making good money from him. Everybody won! When done correctly and under a mutually-beneficial arrangement, bringing independent contractors into your office is a great way to generate more income simply by maximizing the use of business resources you are already paying for.
[pb]Will You Lose Patients to Your Independent Contractors?
That's a ridiculous notion. People go to doctors they know and like. If your patients know you and like the care and consideration you give them, they will not want to go to another DC. I could stand outside your office all day long offering $100 to your patients who would agree to switch doctors, replacing you with me, and none of them would accept; not because they didn't like me, they didn't know me, it would be because they know you and are happy with the care you are giving them.
I had a partner when I first started practice who was a very skilled, very good chiropractor. We shared the same hallway, x-ray room, consultation room, reception room and had our own suite of treatment rooms. Both of us also had big practices. We used to laugh at the fact that his patients didn't even look like my patients. His patients had health problems different than the patients I took care of. In other words, we attracted the patients that were naturally right for us. I never got a patient of his, and he never got a patient of mine, but yet every one of our patients knew both of us. Nobody can steal a patient away from you. Yes, you can sometimes lose a patient, but you would have lost that patient anyway.
Your Next Step
Is establishing a practice incubator something you want but you don't have enough space to do it on the scale you'd like? Other chiropractors in your position have resolved this issue by purchasing or leasing larger office spaces. They put up walls to accommodate a shared reception room, CA area, x-ray and therapy suite with enough adjusting rooms and offices for five to eight other doctors who were independent contractors. The independent contractor DC's were essentially provided with everything they needed to open and build their own independent practices.
Where to Find Independent Contractors
Given today's economic environment, there are probably more than a couple of DC's in your community searching for ways to continue practicing but at a more affordable (and profitable) level of expense. These DC's are your best source of independent contractors. These doctors will appreciate being a part of your practice incubator because they have already experienced firsthand the stress and expense of operating their practices without the advantages that your incubator provides.
Your second best source for finding independent contractors is new DC's. Today more than ever, banks are reluctant to lend the amount of money that a new DC needs to successfully open a new practice. However, starting a practice in an incubator is far less expensive than the traditional way, making it financially possible for more new DC's to open their own successful practices. With the added bonus of a fully equipped office, the practice incubator also supports the new DC's efforts in building their practices as quickly and efficiently as possible. Attractive to both the established DC wanting to reduce expense and increase profit, and the new DC wanting to open a practice and build it as quickly and efficiently as possible, you can expect a very bright and rewarding future for you and your practice incubator.
Will Independent Contractors Eventually Leave?
Why would an independent contractor want to leave and incur the enormous expense, effort, frustration and stress of starting a different office, dealing with landlords and contractors, hiring, firing and training staff, etc.? Under a fair and equitable agreement, some independent contractors will still leave, but most won't. Again, I refer back to the numerous medical centers that are using this practice-incubator concept. Doctors eventually retire from the facility but seldom do you see doctors leave for another location. To achieve the greatest financial rewards from your practice incubator, be sure to get the expert advice needed to assure that your independent contractor agreements foster a long and satisfying relationship between you and your independent contractors.
Better Than an IRA or 401K
You've worked hard and built a successful and rewarding practice. What about your retirement? Are you simply going to close the door on all that hard work? Are you going to sell your practice? What about residual income? If you have a practice incubator, you can either hire someone to run it for you and continue your stream of income, or you can sell it. A practice incubator that has been expertly established is a cash cow that many would spend serious money to purchase.
Important Considerations
In addition to the previously mentioned IRS independent contractor requirements and the actual independent contractor agreement, there are many other important considerations you will need to address in establishing a successful practice incubator. Those considerations will include the name of the clinic, sharing the cost of "other" expenses, office attire, office parking, fee splitting, marketing, insurances, etc. Once you get the advice and information that will assure you make the right choices in setting up your practice incubator, your biggest decision will be what to do with all the extra money your practice incubator will generate for you.
